1976 (5) TMI 110 - SC - Indian Laws

Summary

Issues Involved:
1. Misinterpretation of export permits.
2. Compliance with permit conditions.
3. Validity of confiscation proceedings.
4. Analysis and classification of rice.
5. Mens rea of the respondents.
6. Jurisdiction and authority of the Revenue Officer and Sessions Judge.
7. Standards for distinguishing broken rice from whole rice.
8. Burden of proof under Section 106 of the Evidence Act.
9. Reasoning and conclusions of the High Court.

Detailed Analysis:

1. Misinterpretation of Export Permits:
The core issue was whether the respondents understood the terms of their permits for the despatch of "broken rice (raw, boiled)" and whether they adhered to these terms. The Supreme Court observed that the respondents were regular millers and were expected to know the varieties and nomenclature of rice. The Court noted that the respondents never claimed ignorance or misunderstanding of their permits, nor did they allege being cheated by someone else.

2. Compliance with Permit Conditions:
The permits specified conditions such as the quantity of rice, the duration of the permit, and the requirement for the rice to be checked by the Assistant Grain Purchasing Officer. The respondents were accused of violating these conditions by transporting whole rice instead of broken rice. The Court emphasized that it was the respondents' duty to abide by the terms of their permits and to prove compliance when challenged.

3. Validity of Confiscation Proceedings:
The respondents challenged the confiscation proceedings under Section 6A of the Essential Commodities Act, 1955. The Supreme Court noted that the initial confiscation orders were based on an analysis report which the respondents had the opportunity to contest. The District and Sessions Judge had remanded the case for a fresh analysis in the presence of the respondents, ensuring they had a fair opportunity to present their case.

4. Analysis and Classification of Rice:
The Court discussed the analysis conducted by the Assistant Director of Marketing, who used the standard that any grain less than 3/4th of its whole length was deemed broken. The respondents did not challenge this standard during cross-examination. The Court found that the Assistant Director's method, which was based on visual inspection and the use of the Hand-book on Grading Foodgrains and Oilseeds, was reasonable and accepted by both parties.

5. Mens Rea of the Respondents:
The Sessions Judge concluded that the respondents had the mens rea to transport whole rice under the guise of broken rice, as they were aware of the distinction and attempted to manage with the officers to transport whole rice. The Supreme Court agreed with this conclusion, noting that the respondents' actions suggested an intention to contravene the permit conditions.

6. Jurisdiction and Authority of the Revenue Officer and Sessions Judge:
The High Court had held that the State Government had no right of appeal against the Sessions Judge's order. The Supreme Court did not delve into this issue as it was not argued by either side. However, the Court affirmed the Sessions Judge's decision to remand the case for a fresh analysis and upheld the Revenue Officer's authority to confiscate the rice based on the analysis results.

7. Standards for Distinguishing Broken Rice from Whole Rice:
The Supreme Court referred to the Hand-book on Grading Foodgrains and Oilseeds, which classified broken rice as pieces less than 3/4th of the whole grain. The Court found that this standard was well understood by the respondents and was reasonable for determining whether the consignment was of broken rice or whole rice.

8. Burden of Proof under Section 106 of the Evidence Act:
The Court applied Section 106 of the Evidence Act, which places the burden of proof on the person with special knowledge of the facts. The respondents, being experienced millers, were expected to know the contents of their consignment and the terms of their permits. The Court held that the respondents failed to prove that their consignment complied with the permit conditions.

9. Reasoning and Conclusions of the High Court:
The Supreme Court found the High Court's reasoning flawed, particularly its conclusion that a mixture of broken rice and whole rice did not require a permit. The Court clarified that the Regulation Order of 1964 required a permit for exporting any rice, including mixtures. The Supreme Court criticized the High Court's assumption about price differences between Andhra Pradesh and Kerala and its reliance on judicial notice without evidence.

Conclusion:
The Supreme Court allowed the appeals, set aside the High Court's judgment, and restored the orders of the Sessions Judge, which partially allowed the respondents' appeals by adjusting the percentage of broken rice and foreign matter. The Court emphasized the need for strict compliance with permit conditions and the proper application of legal standards for classification and burden of proof.