Partly allowed

State of U.P. Prin. Thru. Prin. Secy. Home Deptt. Lko. v. M/S Govind Industries Rajapur Lakhimpur Khiri Thru. Director Manish Kumar Gupta

Allahabad HC2 Aug 2023/470/2023

Case brief

AI extract

What is this about?

In criminal revision, the High Court modified the appellate order that released all seized items. It set aside the release of substandard fertilizers but allowed the release of non-agricultural goods seized without legal basis.

What did the court decide?

Appellate order releasing substandard fertilizers set aside; impugned order modified to exclude applicability to substandard fertilizer; seizure of non-agricultural goods quashed.

State of U.P. Prin. Thru. Prin. Secy. Home Deptt. Lko. Vs M/S Govind Industries Rajapur Lakhimpur Khiri Thru. Director Manish Kumar Gupta — Allahabad HC (2023) — LawSathi Research

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Neutral Citation No. - 2023:AHC-LKO:51329

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[Reserved]

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Court No. - 29

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Case :- CRIMINAL REVISION No. - 470 of 2023 Revisionist :- State Of U.P. Prin. Thru. Prin. Secy. Home Deptt. Lko. Opposite Party :- M/S Govind Industries Rajapur Lakhimpur Khiri Thru. Director Manish Kumar Gupta Counsel for Revisionist :- G.A.,Dheeraj Srivastava

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Hon'ble Mrs. Renu Agarwal,J

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The present revision is moved on behalf of the State against the opposite party M/s Govind Industries through Manish Kumar Gupta under Section 397(1) and 401(1) Cr.P.C against the judgment and order dated 01.04.2023 passed by the Additional Sessions Judge Court No. 4/ Special Judge E.C Act, Lakhimpur Kheri in appeal No 29 of 2023 whereby the release application has been allowed by the Court and appeal against the order dated 06.03.2023 is allowed.

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It is submitted by learned A.G.A for the State that the opposite party has no license of the goods which were recovered from the possession of the opposite party and forfeited according to law. At the time of inspection adulterated chemical fertilizer and duplicate wrappers were found which was not discussed in the order dated 01.04.2023. It is further submitted that without having any legal license for the manufacture of name chemical/ fertilizer. Huge quantity of adulterated fertilizers were being manufactured in-contravention of the provisions of Fertilizers (Control) Order, 1985 (in short Order 1985) Clause 12 and Clause 13 (1) (a,b and c) and Section 3/7 of Essential Commodities Act, 1955.

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It is further submitted that the above mentioned provisions are also not discussed in the impugned order. The District Magistrate constituted a team for surprise inspection of opposite party. Inspection was conducted in the presence of Manager

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Abhimanu who signed on the seizure memo. At the time of inspection 23 samples were collected and the result of 22 samples were received. The result of 12 samples were found sub-standard which is not discussed in the impugned order. If the impugned order dated 01.04.2023 is executed, then it will cause irreparable loss to the Government as well as villagers. There is strong probability that land would turn into barren land and if such adulterated fertilizers is used.

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Attention is drawn to Order, 1985 I-Schedule Rule 23 (1) (c) which runs as under;

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“23-Disposal of Non-standard fertilizers 2……..

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(a)……

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(b)…..

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(c) such non-standard fertilizer shall be sold only to the manufactures of maxtures of fertilizers or special maxtures of fertilizers or research farms of Government of Universities of such bodies”

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The above quoted provision goes to show that sub-standard fertilizers can be sold only to the research farms of the Government Universities thus, it is submitted on behalf of the State that the order of the ADM, Kheri dated 06.03.2023 is in consonance with the provisions of law. The first appellate Court committed manifest error in passing the order dated 01.04.2023, hence is liable to be set aside.

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Per contra, learned counsel for the opposite party submitted that the criminal revision filed by the State of U.P. against the impugned order dated 1.4.2023/ 18.04.2023 is in accordance with law. The opposite party has license for the manufacture of micro nutrient fertilizers. Besides so many other types of material were collected in the compound of the Govind industry. It is also submitted that Govind industries have more that 25 types of Urea and fertilizer companies/ dealership for the purpose of selling the goods. The wrappers which was recovered by the inspection team branded the name of Dayalu

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balwan which is also a brand name of Govind industries. Opposite party has proper license relating to micronutrient fertilizer, first appeal filed by the deponent alongwith all the relevant documents regarding the goods which were collected from their precinets and after inspecting all the documents learned Additional Sessions Judge Court no. 4 passed the order in accordance with law. It is further submitted that the investigating team mention one Abhimanu as firm Manager. In fact, he is not a Manager of the FIR and inspection team forcibly taken his signatures upon some of the documents and collected so many samples and materials which is not used by the industry. As per the report 9 samples are passed and one sample was returned by laboratory and 12 samples were found below standard. ADM did not pass any order regarding the seizure goods which has no connection with manufactures of fertilizers and which is infrastructure (movable goods).

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Learned Special Judge E.C. Act considered all the documents and report and mentioned in the judgment that “all the samples are passed by office of agricultural department.” It is further submitted that the opposite party approached the High Court to quash the FIR No. 1347 of 2022 under Section 419, 420, 467, 468, 471 IPC and 3/7 E.C Act, 1955 Police Station Kotwali Sadar District Lakhimpur Kheri in writ petition No. 8959 of 2022 and vide order dated 17.01.2023 the High Court directed the opposite party to cooperate in the investigation. The opposite party on 06.12.2022 contacted the investigating officer and submitted all the relevant papers manufacturing license, agency papers, GST bill form O of companies, etc and all other papers as demanded by the investigating officer. The investigating officer did not file any charge sheet till date. Opposite party operate industries with the finance from different banks and due to the seizure of company, the business has seized to operate therefore, the opposite party is unable to pay any amount to

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bank. Bank seized account/ N.P.A and also issued the notice under Section 13 (2) (4) of the Securitisation Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002, (for short SARFASI Act).

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During the course of argument learned counsel for opposite party submitted that inspection team seized all the material found in the campus of the opposite party. However 12 samples were found substandard therefore he is entitled for the release of all the articles seized except the sampe which were found substandard. It is also stated that seized goods be released in his favour except the sample which were found substandard.

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Seizure memo is filed as annexure No.3 to the counter affidavit which goes to show that the inspection team seized all the material found in factory predicts as double bed sofa, Glass , AC, Almira, Dewan bed, Led, Stationery, vehicle and everything found in the campus which is of no concern with manufacturing of substandard nano-fertilizer. The order of ADM Finance is illegal is appended as annexure No.4 to the counter affidavit. As per the order of ADM total 23 samples were collected and sent to different laboratories. After 23 sample result of 22 sample were received and 12 sample were found sub-standard. Opposite party is proprietor of Govind Industries as well as Gupta Brothers Surat and has GST bill of both the firms. The opposite party pays GST bill as per government rules.

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Learned trial court found that Ms. Govind Industries manufactures micro-nutrient under the license No. 3714 which is valid from 13.07.2021 to 12.07.2024. Hence no case under Section 3 Essential Commodities Act is found against the opposite party.

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Learned trial court held that Ms. Govind Industries was licensed only for manufacturing Micronutrient fertilizers however opposite

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party was manufacturing, stocking and transporting illegal and substandard fertilizers in the garb of license. However, learned trial court mentioned in the operation part of the order that seized goods can be sold as per provision of Section 23 of the Fertilizer Act and standard goods can be sold and sub-standard fertilizers can be sold through auction.

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From the perusal of the impugned order it transpires that the appellate court mentioned in the judgment dated 1.04.2023 that opposite party having license for manufacturing of micronutrient fertilizers was manufacturing, stocking fertilizers. Sample sent to Forensic Science laboratory was found as per standard. Hence the appeal filed by opposite party was allowed. Learned appellate court released the seized goods in favour of the appellant/opposite party.

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It is very much clear that as per Forensic Science Laboratory report 12 samples were found substandard however, learned first appellate court did not consider the report filed by the forensic science laboratory and it mislead that samples were as per standard.

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Moreover, the first appellate court did not consider the fact that in the garb of inspection total goods relating to business or not related to business ie. stationary, furniture, AC etc. were also seized by the inspection team. From the perusal of record it also transpires that licnese issued by the office of District Agricultural Office, Lakhimpur Kheri also appended as annexure No. 1 of which the opposite party was licensed to carry out the business for five years from the date of issue i.e. from 3.06.2021 to 2.06.2026. Form O and Form 4 are also available on record which goes to show that the application for license for manufacturing of micronutrient fertilizers subject to the condition that he will not stock any unauthorized and adulterated fertilizers.

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It is also submitted on behalf of the opposite party that Bank of Baroda and other banks have issued notice under Section 2(3) of the SARFASI Act, 2002 and he is unable to pay anything because everything is seized by inspection team. It is also argued on behalf of the opposite party that opposite party runs other business also and he is wholesale dealer of some other companies. The material goods and agricultural equipments and foodgrains, vehicles, furniture, electrical equipments are also seized and they are getting damaged. The deponent is suffering so may that cannot be compensated.

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From the order of ADM it is very much clear that the order is passed only in connection with the fertilizer. However the release was moved for everything seized from the campus of opposite party No2. There is no reason to seize the articles which are not substandard as per the report of laboratory.

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It transpires from the impugned order that learned appellate court misread the FSL report and release all the items which are even substandard according to FSL. Hence the order of appellate court suffers from illegality towards the release of substandard sample in favour of the opposite party however, release of remaining articles, which are seized without having any concerned with the substandard goods, is in consonance with law.

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Learned A.G.A submitted that seized goods can be disposed of in the light of Section 23 only and ADM Finance has rightly disposed of the substandard goods according to the provisions of Section 23 (1) of the Act. He further directed to dispose of the standard goods by auction. So far as Section 23 (1) of the Act is concerned goods which relates to the fertilizers can only be seized on the basis of FSL report but goods which have no concerned with the fertilizers, the agricultural team was not competent to seize those goods, hence, the seizure of goods

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apart from the agricultural fertilizers is bad in the eyes of law, hence, the judgment of trial court with regard to seizure of goods apart from the agricultural fertilizer is bad in law. The inspection team was not expected to seize the general goods from the campus of opposite party except fertilizer. Section 23(1) of the Act applies only to the substandard fertilizers.

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Hence, the revision is liable to be partly allowed.

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The order of first appellate court regarding release of substandard sample treating them to be standard fertilizers is hereby set aside. Order of the appellate court is accordingly modified to the extent that the impugned order shall not be applicable to substandard fertilizer.

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(Renu Agarwal,J.)

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Order Date :02.08.2023

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Nadeem/kkv

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Digitally signed by :- KRISHAN KUMAR High Court of Judicature at Allahabad, Lucknow Bench

State of U.P. Prin. Thru. Prin. Secy. Home Deptt. Lko. v. M/S Govind Industries Rajapur Lakhimpur Khiri Thru. Director Manish Kumar Gupta

Case brief

What is this about?

What did the court decide?

State of U.P. Prin. Thru. Prin. Secy. Home Deptt. Lko. v. M/S Govind Industries Rajapur Lakhimpur Khiri Thru. Director Manish Kumar Gupta

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

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