Quashed

Tata Chemicals Ltd. v. the Collector, Alibagh and Anr.

Bombay HC26 Jun 2014WP/1693/2014

Case brief

AI extract

What is this about?

Petitioner challenged order confiscating seized fertilizers based on initial analysis report. Court held that subsequent referee analysis report superseded initial one, negating jurisdictional basis for confiscation. High Court exercised Article 226 jurisdiction to quash order despite statutory appeal alternative.

What did the court decide?

The impugned order dated 22.3.2013 directing confiscation of seized commodity is quashed and set aside. Rule is made absolute.

Tata Chemicals Ltd. Vs the Collector, Alibagh and Anr. — Property and Title | Bombay HC (2014)

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IN THE HIGH COURT OF JUDICATURE AT BOMBAY

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CIVIL APPELLATE JURISDICTION

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WRIT PETITION NO.1693 OF 2014

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TATA CHEMICALS LTD., a Company incorporated under the Indian Companies Act, 1913 having its Registered Office at Bombay House, 24, Homi Mody Street, Mumbai – 400 001

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..Petitioner

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Versus

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The Collector, Alibag, Dist. Raigad.

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The Divisional Commissioner of Land and Revenue, Kokan Division having his office at Old Secretariat Extension Building, M.G. Road, Fort, Mumbai – 400 032, and having an office also at Kokan Bhavan, C.B.D. Belapur, Navi Mumbai (Thane District).

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Fertilizer Inspector and Divisional Quality Control Inspector, Konkan Division, Thane.

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State of Maharashtra, through the Principal Secretary,

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Ministry of Agriculture & Marketing, Government of Maharashtra.

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M/s. J.M. Baxi & Co. a partnership firm duly registered under the provisions of the Indian Partnership Act, 1932, having its Registered office at 16, Bank Street, Mumbai – 400 001 and a godown at Jasai Gavan Road, Village Gavan, Taluka – Panvel, Dist. Raigad.

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..Respondents

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Mr. V.R. Dhond, Senior Advocate a/w. Mr. Shailesh Mendon,Mr. Shahezad Kazi, i/b. Negandhi Shah & Himayatullah, for the Petitioner.

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Mr. V.S. Gokhale, AGP, for Respondent Nos.1 to 4.

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CORAM : A.S. OKA, AND A. S. CHANDURKAR, JJ.

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RESERVED ON : 17^th JUNE, 2014

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PRONOUNCED ON : 26^th JUNE, 2014

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ORAL JUDGMENT : [ PER A.S. CHANDURKAR,J.]

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Rule. Heard finally with the consent of the contesting

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parties. Considering the nature of controversy, service of notice of

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hearing on respondent No.5 is dispensed with.

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By this Writ Petition under Article 226 of the Constitution of India the petitioner challenges the order dated 22.3.2013 passed by the Collector, Raigad in proceedings under Section 6-A of the Essential Commodities Act, 1955 (for short, “the said Act”) and under Clause 28(3) of the Fertilizer (Control) Order, 1985 (for short, “the Control Order”). As the aforesaid order passed by the Collector is an appealable order, in the alternate, the petitioner has prayed that the Appellate Authority be directed to accept the appeal that was sought to be preferred by the petitioner under Section 6-C of the said Act.

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The facts giving rise to the present proceedings are that :

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The petitioner – Company, which carries on the business of manufacture and sale of chemicals and fertilizers, imported from Saudi Arabia 1000 MT of Bentonite Sulphur, a “fertilizer” as defined under the Control Order . Out of 1000 MT fertilizer, about 400 MT fertilizer was disposed of by the petitioner before passing of any order of seizure. According to the petitioner, the sample of the aforesaid fertilizer was duly analyzed by the Regional Fertilizer Control Laboratory and was found to be of “standard” certification.

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On 7.11.2012, the Fertilizer Inspector and Divisional Quality Control Inspector (respondent No.3) took samples of the said fertilizer. After obtaining an analysis report from the Fertilizer Testing Laboratory, Nashik on 10.12.2012, the respondent No.3 issued a show-cause notice dated 19.12.2012 to the respondent No.5 with whom the aforesaid fertilizers were kept being the Clearing and Forwarding Agent of the petitioner. By the said notice, a direction was issued not to sell or distribute the aforesaid fertilizer until further orders.

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The petitioner in terms of Clause 32-A(2) of Control Order preferred appeal against the analysis report dated 10.12.2012. The Collector (respondent No.1), in the meanwhile, initiated proceedings under Section 6-A of the said Act for confiscation of the seized commodities. According to the petitioner, fresh samples were sent for reference analysis in terms of Clause 32-A(2) of the Control Order. While the appeal preferred by the petitioner was pending with the Appellate Authority, the respondent No.1 passed an order on 22.3.2013 under Section 6-A of the said Act read with Clause 28 (3) of the Control Order

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directing auction of the aforesaid seized commodities. On 21.3.2013 the Joint Director, Agriculture informed the petitioner that the sample of goods that were sent for reference analysis had been declared as “standard”. According to the petitioner in view of the aforesaid, the petitioner was under an impression that the proceedings for confiscation no longer survived. However, on 19.12.2013 when steps were taken by the Joint Director, Agriculture, seeking status of the action taken pursuant to the order dated 22.3.2013 passed by the respondent No.1, the petitioner preferred an appeal against the said order under Section 6-C of the said Act along with an application for condonation of delay. According to the petitioner, the Appellate Authority at Navi Mumbai refused to accept the aforesaid appeal and in these circumstances the petitioner has filed the instant Petition seeking the reliefs aforestated.

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Shri V.R. Dhond, learned Senior Counsel appearing with

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Shri Shailesh Mendon and Mr. Shahezad Kazi, for the petitioner submitted that in view of the report of the reference analysis, the action for confiscation of the seized commodity under Section 6-A

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of the said Act would not survive as the said report superseded the first analysis report. It was submitted that though request was made to the respondent No.1 to await the report of the reference analysis, the said Authority proceeded to pass the impugned order on 22.3.2013 without granting due opportunity of hearing to the petitioner. It was submitted that in view of the guidelines issued by the Ministry of Agriculture, Government of India dated 28.3.2003 the report received from the Referee Laboratory would supersede the analysis report submitted by the first laboratory and should be treated as final. According to the learned Senior Counsel in view of the favourable report received from the Referee Laboratory, the Collector ceased to have any jurisdiction whatsoever to confiscate and thereafter direct auction of the seized commodity. It was further submitted that though the petitioner had attempted to avail the statutory remedy provided under Section 6-C of the said Act, the office of the Appellate Authority had refused to accept the aforesaid appeal. It was submitted that considering the subsequent report that was in favour of the petitioner, no useful purpose would be served in relegating the petitioner to the Appellate Authority especially when the report

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received from the Referee Laboratory superseded the analysis report on the basis of which the action under Section 6-A of the said Act was initiated. It was urged that availability of the alternate statutory remedy would not bar exercise of jurisdiction under Article 226 of the Constitution of India in these facts. In the alternate, it was submitted that in case the Court was of the view that the alternate remedy ought to be availed, then directions in that regard were required to be issued to the Appellate Authority to accept and consider the appeal of the petitioner on merits.

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Shri V.S. Gokhale, learned Assistant Government Pleader appearing for respondent Nos.1 to 4 opposed the Writ Petition. He raised a preliminary objection to the tenability of the Writ Petition on the ground that an efficacious statutory remedy was available to the petitioner under Section 6-C of the said Act. It was submitted that no justifiable reason was given by the petitioner for not availing the aforesaid remedy. It was further urged that these very facts could be brought to the notice of the Appellate Authority and in view of the guidelines issued by the Ministry of Agriculture, the appellate authority could consider these very facts and could

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pass appropriate orders if appeal was preferred by the petitioner. The learned AGP, however, did not dispute the fact that as per the reference analysis received from the Laboratory at Haryana, the commodity in question was found to be of “standard” qualification. The learned AGP supported the order passed by the respondent No.1 directing auction of the seized commodity under Section 6-A of the said Act. He, therefore, urged that the Writ Petition did not deserve to be entertained and the petitioner ought to be directed to avail the statutory remedy.

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As noted above, the respondent No.5 is the Clearing and Forwarding Agent of the petitioner. No relief is claimed by the petitioner against the said respondent.

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Before considering the challenge to the impugned order, it would be necessary to take into account the submission made on behalf of the respondent Nos.1 to 4 with regard to availability of alternate statutory remedy to the petitioner. The order dated 22.3.2013 directing confiscation and auction of the commodity in question passed under Section 6-A of the said Act is under challenge in the present Writ Petition. It is not in dispute that

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under Section 6-C of the said Act, any person aggrieved by an order of confiscation under Section 6-A can prefer an appeal within a period of one month from the date of communication of such order. Though, normally this Court would be slow in entertaining a Writ Petition when a remedy of statutory appeal is available to the petitioner, the discretion of issuing writ under Article 226 of the Constitution of India can be exercised when the facts required to be considered are not in dispute and the entire controversy can be put to an end on account of the basic jurisdictional fact being obliterated. Similarly if it is found that relegating a party to avail the alternate statutory remedy would be nothing but an empty formality, the High Court may in exercise of its discretion under Article 226 of the Constitution of India exercise the same in given facts. Thus, availability of an alternate remedy is only one of the circumstances that is required to be taken into consideration while exercising discretionary jurisdiction under Article 226 of the Constitution of India.

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Keeping these parameters in mind, the first prayer made

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in the Writ Petition of entertaining challenge as to the impugned

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order despite availability of a statutory remedy will have to be considered. For said purpose, it would be necessary to take into account the broad scheme of the relevant provisions of the said Act and the Control Order. Under Section 3 of the said Act, a power has been given to the Central Government to control production, supply, distribution etc. of the essential commodities. Under provisions of Section 3 of the said Act, the Central Government has issued the Control Order. Clause 28 of the Control Order empowers an Inspector to secure compliance with the said order. Clause 28(1) (d) reads thus :

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“(d) seize or detain any fertiliser in respect of which he has reason to believe that a contravention of this Order has been or is being or is [attempted to be committed];”

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After such seizure, the said fact has to be reported by the

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Inspector to the Collector in terms of Clause 28(3) after which the provisions of Section 6A of the said Act come into play. Clause 28(3) reads thus :

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“(3) Where any fertiliser is seized by an inspector under this clause, he shall forthwith report the fact of such seizure to the collector whereupon the provisions of Secs. 6-A, 6-B, 6-C, 6-D and 6-E of the Act, shall apply to the custody, disposal and confiscation of such

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fertilisers.”

Against the analysis report of fertilizer testing, a person

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aggrieved can prefer an appeal to the Appellate Authority under Clause 32-A (2) of the said Act. Clause 32-A(2) reads thus :

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“(2) Any person aggrieved by analysis report of fertilizer testing laboratories notified by the State Government may appeal to the appellate authority appointed under sub-clause (1) for reference analysis of such sample within thirty days from the date of receipt of analysis report.”

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Section 6A of the said Act provides for confiscation of the

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essential commodity. The said Section empowers the Collector to sell the seized commodity if it is subject to speedy and natural decay. Against the order of confiscation passed under Section 6A of the said Act, a remedy of appeal has been provided. Section

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6C(1) reads thus :

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“ 6-C Appeal: (1) Any person aggrieved by an order of confiscation under Section 6-A may, within one month from the date of the communication to him of such order, appeal to any judicial authority appointed by the State Government concerned and the judicial authority shall, after giving an opportunity to the appellant to be heard, pass such order as it may think fit, confirming, modifying or annulling the order appealed against.”

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Consideration of provisions of the said Act and the Control Order especially the provisions referred to above, it is clear that an Inspector has been given power to seize any fertilizer if he has reason to believe that there is a contravention of the Control Order. Clause-19 restricts sale of any fertilizer that is not of standard as prescribed under the said order. Under Clause 29 of the Control Order, initially analysis has to be done at a regional fertilizer Control Laboratory. However, under Clause 32A(2) any person aggrieved by aforesaid analysis report can prefer an appeal to the appellate Authority for reference analysis of the sample in question. As per the directions issued by the Ministry of Agriculture dated 28.3.2003 the report received from the Referee Laboratory supersedes the analysis report submitted by the first laboratory. Thus, the effect of the outcome of the reference analysis would have an important bearing on the action of confiscation that has commenced on the basis of the initial analysis. In the case of Govt. of A.P. and others Vs. V. Ranga Rao

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and another¹ , it was held by the Supreme Court that if a commodity is not liable to be confiscated then the question of the

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1 (2005) 12 Supreme Court Cases 274

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provisions of Section 6-A of the Act being attracted does not arise.

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In the present case, analysis report dated 10.12.2012 showed the fertilizer in question not to be of standard specification. Against the aforesaid report, the petitioner had preferred appeal under Clause 32-A(2) of the Control Order. However, in the meanwhile in terms of Section 6A of the said Act the respondent No.1 proceeded to initiate steps for confiscation of the seized commodity. It was brought to the notice of respondent No.1 that the petitioner's appeal under Clause 32-A(2) of the Control Order was pending before the appellate Authority. However, before receipt of the referee analysis order under Section 6-A of the said Act directing confiscation and sale of the seized commodity came to be passed. Shortly thereafter the report of the referee analysis was received which showed that the said fertilizer was of “standard' specification. In terms of the guidelines issued by the Ministry of Agriculture the first analysis report on the basis of which action under Section 6-A of the said Act had been initiated stood superseded. Thus the reason for confiscation of the commodity seized to exist after the report from the referee analysis

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was received. It is, therefore, clear that in such circumstances when the seized commodity was found by the appellate authority under Clause 32-A(2) of the Control Order to be of “standard” specification then the order of confiscation under Section 6-A of the said Act would in fact no longer survive. Hence, in these circumstances when the basic facts are not in dispute and the report of the reference analysis is in favour of the petitioner, no useful purpose would be served in directing the petitioner to avail the alternate statutory remedy. In our view, this is a fit case to exercise discretion under Article 226 of the Constitution of India to consider challenge to the order passed under Section 6-A of the said Act instead of relegating the petitioner to avail the statutory remedy as provided by Section 6-C of the said Act. Hence, we are not inclined to accept the preliminary objection raised on behalf of respondent Nos.1 to 4 to the tenability of the Writ Petition.

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It would be now necessary to consider challenge to the order dated 22.3.2013 passed by the respondent No.1 under Section 6-A of the said Act. Perusal of the aforesaid order indicates that the respondent No.1 assumed jurisdiction in view of the

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analysis report of the samples dated 10.12.2012 that showed that the fertilizer in question was not of standard specification. The impugned order notes that the petitioner had preferred an appeal under Clause 32-A(2) of the Control Order for reference analysis as it was not satisfied with the analysis report. It notes that though the analysis report was dated 10.12.2012, appeal under Clause 32-A(2) of the Control Order was preferred on 29.12.2012. Respondent No.1 noted that as the subsequent analysis report was not received action under Section 6-A of the said Act was being initiated. It is on that basis that a direction to sell the seized commodity by auction was issued.

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It can be seen that initiation of proceedings under Section 6-A of the said Act was in view of the analysis report dated 10.12.2012. On that basis, a show-cause notice was issued to the petitioner for initiating action of seizure. However, in the meanwhile the petitioner had preferred appeal under Clause 32A(2) of the Control Order. Though request was made by the petitioner not to proceed with the action for confiscation as the reference analysis report was awaited, the respondent No.1 did not

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accede to the same and proceeded to direct confiscation of the seized commodity. Though, the learned Senior Counsel appearing for the petitioner sought to urge that the approach of the Collector in not awaiting the report of the reference analysis was not justified and that the observations made in the impugned order were contrary to record coupled with the fact that the said order was passed without granting reasonable opportunity of being heard as required by Section 6-B(1)(c) of the said Act, it would not be necessary to go into the said aspects of the matter in view of the reference analysis report dated 8.3.2013. The said report having been obtained in an appeal preferred by the petitioner under Clause 32-A(2) and the same having effect of superseding the analysis report dated 10.12.2012 on the basis of which proceedings under Section 6-A of the said Act were initiated, it is clear that the basic jurisdictional aspect in the form of the analysis report that led to initiation of the impugned action has ceased to exist in law. The only report that can now be looked into and treated as final is the reference analysis report dated 8.3.2013 that certifies the fertilizer in question to be of “standard” specification.

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It is well settled that if the foundation of a particular action is

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based on the existence of a jurisdictional fact and said jurisdictional fact itself ceases to operate or is disturbed during pendency of the consequential action then the entire action commenced on the basis of such jurisdictional fact must fall to the ground. It is, therefore, clear that after 8.3.2013 the basis on which the fertilizer in question could be confiscated has ceased to operate. In fact, after 8.3.2013 the impugned order dated 22.3.2013 directing confiscation cannot operate as there is no violation/breach of the Control Order.

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As stated above, it is for this very reason that we have exercised jurisdiction under Article 226 of the Constitution of India to put an end to the aforesaid proceedings as their continuation would serve no useful purpose.

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In view of the aforesaid discussion, the Writ Petition is allowed. The impugned order dated 22.3.2013 passed by the respondent No.1 directing confiscation of the seized commodity is quashed and set aside. It is informed by the learned Senior Counsel, on instructions, that the fertilizers in question continue

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to be in possession of the petitioners. Hence, nothing further is required to be done in the matter. Rule is made absolute in aforesaid terms. However, in the facts of the case, there shall be no order as to costs.

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(A. S. CHANDURKAR, J.) (A. S. OKA, J.)

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Tata Chemicals Ltd. v. the Collector, Alibagh and Anr.

Case brief

What is this about?

What did the court decide?

Tata Chemicals Ltd. v. the Collector, Alibagh and Anr.

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Statutes considered

Parties & counsel

Coram

Case details

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