Partly allowed

Cummins India v. Assistant Controller ,Legal Metrology

Kerala HC23 Aug 2016WP(C)/24793/2009

Case brief

AI extract

What is this about?

Challenged final notice under Standards of Weights and Measures Act for missing mandatory declarations. Court doubted seizure from retail dealer context and evidence requirement. Set aside notice, directed further hearing for petitioners to submit evidence within one month, and stayed proceedings pending respondent's orders within two months.

What did the court decide?

Petitioners given one month to submit evidence and contentions; First respondent to pass orders within two months; Existing stay order continued.

Cummins India Vs Assistant Controller ,Legal Metrology — Property and Title | Kerala HC (2016)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT:

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THE HONOURABLE SMT. JUSTICE P.V.ASHA

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TUESDAY, THE 23RD DAY OF AUGUST 2016/1ST BHADRA, 1938

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WP(C).No. 24793 of 2009 (T)

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PETITIONER(S):

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1. CUMMINS INDIA LIMITED, KOTHRUD, PUNE- 411 038, REPRESENTED BY ITS CHANNEL MANAGER - MR.PON RENGASWAMY.

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2. RAMESH RAMACHANDRA PHANSE, SHARE HOLDER, CUMMINS INDIA LIMITED, SHIVTIRTH, PAUD ROAD, KOTHRUD, PUNE-411 038.

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BY ADVS.SRI.E.K.NANDAKUMAR, SRI.ANIL D. NAIR, SRI.P.BENNY THOMAS, SRI.K.JOHN MATHAI.

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RESPONDENT(S):

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1. ASSISTANT CONTROLLER, LEGAL METROLOGY, OFFICE OF THE ASSISTANT CONTROLLER, LEGAL METROLOGY, FLYING SQUAD, PALAKKAD.

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2. UNION OF INDIA, REPRESENTED BY ITS SECRETARY, MINISTRY OF CONSUMER AFFAIRS, CENTRAL SECRETARIAT, NEW DELHI.

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3. STATE OF KERALA, REPRESENTED BY ITS PRINCIPAL SECRETARY, GOVERNMENT OF KERALA, SECRETARIAT, THIRUVANANTHAPURAM.

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R1 & R3 BY GOVT. PLEADER SRI.GIKKU JACOB. R2 BY ADV. SRI.N.NAGARESH, ASSIST. S.G. OF INDIA.

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 23-08-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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rs.

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WP(C).No. 24793 of 2009 (T)

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APPENDIX

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PETITIONER'S EXHIBITS:-

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EXT.P1 COPY OF THE SHOW CAUSE NOTICE DATED 27/04/2009 ISSUED BY THE FIRST RESPONDENT.

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EXT.P2 COPY OF THE REPLY DATED 07/05/2009 SUBMITTED BY THE 1ST PETITIONER.

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EXT.P3 COPY OF THE LETTER DATED 18TH MAY 2009 ISSUED BY THE 1ST PETITIONER TO THE FIRST RESPONDENT.

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EXT.P4 COPY OF THE LETTER DATED 25/05/2009 SENT BY THE FIRST RESPONDENT TO THE FIRST PETITIONER.

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EXT.P5 COPY OF THE REPRESENTATION FILED ON BEHALF OF THE FIRST PETITIONER DATED 17/06/2009 BEFORE THE FIRST RESPONDENT.

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EXT.P6 COPY OF THE LETTER DATED 15/07/2009 SENT BY THE FIRST RESPONDENT TO THE FIRST PETITIONER.

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EXT.P7 COPY OF THE ORDER DATED 24/04/2006 PASSED BY THE HONOURABLE HIGH COURT OF BOMBAY IN WP(C).NO.8665/2005.

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RESPONDENT'S EXHIBITS:-

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EXT.R1A COPY OF THE SEIZURE RECEIPT.

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EXT.R1B COPY OF THE INVOICE REGARDING THE DISTRIBUTION OF THE PRODUCT MANUFACTURED IN USA.

//TRUE COPY//

P.S. TO JUDGE

rs.

P.V.ASHA J.

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W.P.(C) No.24793 of 2009

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--------------------------------------------- Dated this the 23^rd day of August, 2016

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J U D G M E N T

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The challenge is against the proceedings initiated by

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the first respondent as per Ext.P1 notice which culminated in Ext.P6.

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The first respondent conducted an inspection in the trade premises of the 1^st petitioner found that certain packages did not bear the mandatory declarations. Thereupon Ext.P1 notice was issued saying that the same constituted an offence under Section 39 of the Standards of Weights and Measures Act, 1976 r/w Section 33 of the Standards of Weights and Measures (Enforcement) Act 1985 and Rules 4, 6(1) and 23(1) of the Standards of Weights and Measures (Packaged Commodities) Rules, 1977 punishable under Section 63 of the Standards Act r/w Section 51 of the 85 Act and Rule 39 of the Rules. Petitioners were asked to show cause against the proposal to proceed for prosecution for the offences alleged.

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W.P.(C) No.24793 of 2009

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Petitioners submitted Ext.P3 reply denying the allegations in Ext.P1 notice and stating that the commodities objected in the notice are exempted under the provisions, since the same come under Chapter II Rule 2(A)(b) of the Rules, according to which the package commodities for industrial consumers or institutional consumers will not come under the provisions of Chapter II. Referring to the definition given under explanation (b), it was stated that the consumers who buy packaged commodities directly from the manufactures/packers for using the product in their industry for production are exempted from the provisions. It is the case of the petitioners that for the commodities mentioned in Ext.P1, the petitioners cannot be proceeded against under the provisions mentioned in Ext.P1; they do not sell goods through retail outlets; the objected goods are mainly dealt with for maintenance of engines under warranty, engines under AMC, engines under Comprehensive Maintenance Contracts, used at the service centers owned by the dealers and that sale is directly to the industrial user and

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W.P.(C) No.24793 of 2009

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not to a consumer within the meaning of Consumer Protection Act, 1986.

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But by Ext.P4 the Assistant Controller informed the petitioners that he had seized the commodities which were labeled fleet guards and cummins. One of the commodities was seen declared as made in USA. Hence it was stated that the Rules are applicable as in the case of other commodities which are imported, manufactured and distributed. The declarations under Rule 6(1) of the Rules were stated to be mandatory on these packages. It was the case of the first respondent that the commodities were seized directly from a dealer. Petitioners were thereupon called for a personal hearing. Thereafter the petitioners submitted Ext.P5 statement and attended the hearing wherein they re-iterated the contentions, explaining the requirement of service to be done by the company through an exclusive dealer network established all over the country. It is further stated that the Company has been providing the parts and after sale service to its customers through its dealers and the dealership is

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W.P.(C) No.24793 of 2009

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exclusive dealership and dealers do not enter into any other business and sale. It is further stated that the goods mentioned in the notice are not commodities in packaged form as defined under the Act.

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However, the first respondent did not accept the contention of the petitioner and proceeded with action issuing Ext.P6. In Ext.P6 it was stated that the facts stated by the petitioners in paragraphs 2 to 5 are to be proved by adducing proper evidence since the commodities were seized from a retail dealer. First respondent was of the view that those commodities were not eligible for any exemption from the Rules and therefore the petitioners were informed that further proceedings would be taken and that they were free to compound the case departmentally. It was at this stage that the petitioners approached this Court filing this writ petition challenging Ext.P6 mainly on the ground that the commodities do not come under the purview of the Rules so as to face the prosecution proceedings.

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The first respondent has filed a counter affidavit

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W.P.(C) No.24793 of 2009

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in tune with the impugned orders. According to the first respondent since the goods were seized from a retail dealer and not from the manufacturer, the petitioners are liable to be proceeded against under the provisions of the Enforcement Act, Standards of Weights and Measures Act as well as the Rules.

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Heard the learned counsel for the petitioners and the learned Government Pleader.

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It is seen from Ext.P6 that the first respondent himself has found it necessary that the petitioners have to establish their case by adducing proper evidence. In this view of the matter I deem it necessary that the petitioners should be given a further opportunity to adduce evidence as required in Ext.P6 by furnishing additional materials. For this purpose, I set aside Ext.P6 and direct the first respondent to consider the explanations submitted by the petitioners after affording an opportunity of hearing. The petitioners will be free to submit additional materials if any before the 1^st respondent, along with their contentions in writing within

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W.P.(C) No.24793 of 2009

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a period of 'one month' from the date of receipt of a copy of the judgment. The first respondent shall consider the same and pass orders within a further period of 'two months' from the date of receipt of the additional materials and the written contentions. Since there was an interim order passed by this Court staying further proceedings as per order dated 07.09.2009, the interim order passed by this Court will continue till orders are passed by the first respondent.

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Writ petition is disposed of as above.

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Sd/- P.V.ASHA, JUDGE.

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Cummins India v. Assistant Controller ,Legal Metrology

Case brief

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Cummins India v. Assistant Controller ,Legal Metrology

Case brief

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