CRLRC/2447/2014 of Smt.Konduru Ramadevi, W/o Rajendra Prasad Vs The State of Telangana, on 30 December 2014

ORDER:

The present Criminal Revision is filed under Sections 397 and401 CrPC aggrieved by the order dated 25.08.2014 passed in Crl.Appeal No.25 of 2013 on the file of the Principal Sessions Court,Khammam, wherein and whereunder the order passed by theCollector and District Magistrate, Khammam, ordering confiscation of100% seized stock in M.C. No.86 of 2012, was confirmed.

The facts in issue are as under :

The District Supply Officer, Khammam, submitted a report statingthat on receipt of credible information with regard to irregularities beingcarried out by M/s. Sri Lakshmi Venkateswara Paddy, Rice andGeneral Merchants, Sujathanagar village, Kothagudem Mandal, healong with his staff and mediators proceeded towards the above firmon 11.02.2012 and surprised the premises of Bhavani Rice Mill,Sujathanagar, wherein the management of Sri Lakshmi VenkateswaraPaddy Rice and General Merchants was carrying on the business. One Konduru Rajendra Prasad who was present, when questioned,disclosed himself as a Manager and husband of the proprietor of thesaid firm. He produced foodgrain licence which was valid upto31.03.2012. The records including the ‘B’ Register of the mill wasproduced. Upon cross checking the information available with theentries made in the B-Register, it was found that the Register wasmaintained from 05.11.2011 upto 11.02.2012 and custom millingpaddy details were also found in the same Register. The verificationof the ‘B’ Register shows the stock as under :

Sl.No.DescriptionStockClosing date

The inspection team found that for KMS-2011-12 the miller madepaddy purchase entries in ‘B’ Register upto 11.02.2012 without anyRyoth vouchers. It is also stated that the miller did not produce anyrelevant documents in support of purchase of 1999 quintals of paddyfrom the farmers. On verification of the custom Milling paddy receivedfrom Civil Supplies Corporation, the inspection team found that themiller has received 2290.80 qtls of CMR paddy. In view of thediscrepancies, the inspection team thought fit to weigh and measurethe broken rice, paddy and custom Milling paddy available in the millto come to a conclusion with regard to the actual stock available in themill. The following are the details found in the premises of the mill :

The main charges leveled against the petitioner herein are as under:

i)The respondents indulged in clandestine trade in Paddy andRice business illegally, as they are holding excess stockof1476.90 qtls. of Paddy, 440.68 qtls of Rice and shortage of154.90 qtls of Broken rice on the ground with reference toentries in B-Register i.e., Rice and Broken Ricedisproportionate to the Paddy milled.

ii)The Respondents are not maintaining the true and correctaccounts of the Rice Mill transactions, which resulted excessstock of 1476.90 qtls of Paddy, 440.68 of Rice and shortage of154.90 qtls of Broken Rice on the ground with reference toentries in B-Register.

iii)The Respondents delivered (540) Qtls of Levy Rice to the FCI,and sold away 775.00 Qtls in the open market. But as perclause (3) and (4) of The Andhra Pradesh Rice Procurement(Levy) Order, 1984, every miller shall sell 75% of the Ricemilled to the FCI and to sell the remaining 25% in the openmarket. Thus they sold excess rice in the open market than thelevy rice, thereby contravening clauses (3) and (4) of TheAndhra Pradesh Rice Procurement (Levy) Order, 1984.

According to condition 3(i) of the Form-B License issued underclause 3(ii) of APSC (L,S&R) order, 2008, “The Licensee shallmaintain a register containing daily accounts for eachcommodity mentioned in the license. The Register should

correctly show; (a) the opening stock on each day, (b) thequantities received on each day showing the place from whereand source from which received, (c) quantities delivered orotherwise removed on each day showing the place ofdestination; and (d) closing stock on each day”. Further,according to condition 3(ii) of Form-B License “the licenseeshall enter the particulars referred to in item (b) and item (c) ofsub-clause (i) referred to above in the register as soon asrelevant transaction takes place”; and according to condition3(iii) of Form-B License “the licensee shall complete hisaccounts of each day on the day to which they relate”.

Further, according to clause 16(1) of the A.P. RiceProcurement (Levy) Order, 1984, “Every miller or dealer shallmaintain A and B Registers, duly indicating the totaltransactions right from purchase of paddy, paddy milled, levyrice delivered out of milling/rice acquired and sale of levy freerice during the day”. In the instant case it is said that thepetitioner herein has not maintained true, correct and updatedaccounts which resulted in excess stock of 1476.90 qtls ofPaddy, 440.68 qtls of Rice and shortage of 154.90 qtls ofBroken Rice on the ground with reference to entries in B-Register. Thus, the petitioner herein is said to have violatedcondition 3 of the Form-B License issued under APSC (L, S &R) Order, 2008 and clause 16(1) of the A.P. Rice Procurement(Levy) Order, 1984.

On questioning about the huge quantity of variation in paddy, thepetitioner herein/respondent No.1 in the M.C. proceedings is said tohave stated that they have purchased paddy from the farmers, enteredthe details in ‘B’ Register but not obtained the signatures of the ryoths in the vouchers as they still have to make payments to them. Thoughthe vouchers prepared in the name of ryoths were made available andproduced before the Authorities but were not taken into considerationas they do not contain the signatures of the ryoths and V.R.O. In viewof the above, the Authorities found 1476.90 quintals of paddy, 440.68quintals of rice, 154.90 quintals of less broken rice when compared tothe actual ground stock and accordingly seized the entire stockvaluing at Rs.49,23,732/-. By an order dated 07.01.2013 the Collectorand District Magistrate, Khammam, in exercise of his power underSection 6-A of the E.C. Act ordered confiscation of the entire seizedstock to the Government. It was held that possessing 1476.90 quintalsof excess quantity of paddy, 440.68 quintals of excess quantity of rice,shortage of 154.90 quintals of broken rice on the ground contrary to theentries made in ‘B’ Register, in violation of condition No.3 of Form-Bissued under A.P. Scheduled Commodities (Licensing, Storage andRegulation) Order, 2008. Challenging the same, the accusedpreferred Criminal Appeal No.25 of 2013 before the Principal SessionsJudge, Khammam, who after analyzing the material available onrecord, confirmed the findings of the District Collector and Magistrate,Khammam. Challenging the same, the present revision is filed.

The learned counsel for the petitioner mainly submits that theexplanation given by the petitioner herein was not properly consideredby both the courts below and if the explanation is considered in theright perspective there would not be any violation of any control order. According to him, if the entries in the ‘B’ Register are taken intoconsideration with ground balance there would not be any violationwarranting confiscation of the entire stock. In any event he submitsthat this being a technical offence ordering seizure of entire stock isunwarranted.

On the other hand, the learned Public Prosecutor opposed theapplication.

A perusal of the impugned orders and also the entries made in‘B’ Register which has been placed before the Court by the learnedPublic Prosecutor, would show that the said Register was maintainedupto date i.e., till the date of search on 11.02.2012. The Authoritiesfound variation of paddy, Rice and shortage of broken rice from whathas been found in the mill. The person, who was present at thepremises, when confronted about the same, spontaneously gave anexplanation stating that they have purchased the paddy from thefarmers, entered the same in the ‘B’ Register, but failed to obtain thesignatures of the ryoths in the ryoth vouchers as they have not paidany amount to them. He produced the ryoth vouchers to theAuthorities at the time of the said inspection. The Authorities found thatthe said receipts were not signed by the ryoths. From the above, it isclear that stock received was entered in the ‘B’ Register, vouchers tothe ryoths were prepared but for some reason their signatures couldnot be taken. The explanation given was that since the amount wasnot paid their signatures were not taken.

As stated earlier, the ryoth vouchers were also produced beforethe Authorities at the time of said search. It is not the case of theprosecution that these ryoth vouchers were prepared and produced ata later point of time. Therefore, the explanation offered by thepetitioner herein, cannot be brushed aside as an afterthought. Thequestion is whether in a case of this nature it is proper for theAuthorities to confiscate the entire stock?

The material on record does not anywhere show that thepetitioner herein was indulging in black marketing or that he was in the habit of hoarding the stock. Even learned Public Prosecutor oninstructions did not dispute the above fact. In SamudralaVenkateswara Rao v. Government of India and others[[1]], this Courtheld that confiscation of entire stock is illegal and unjust where thecontravention of control orders are trivial and technical in nature. In thesaid case, the Vigilance Authorities inspected the premises on15.04.1995 and found that the petitioner therein holding 1308.15quintals of groundnut pod and oil seeds. The seizure of entire stockwas worth Rs.30,26,960/-, which was confirmed in appeal and wassubject matter of challenge before the High Court. One of thearguments which was advanced before the Court was that the nonmaintenance of separate Registers would not amount to violation ofany clause of the control orders. Taking into consideration the factsand circumstances of the case, the Court held that the confiscation ofentire seized stock is not proper since the Authorities raided thepremises on a premise that the petitioner herein was doing clandestinebusiness but did not find any material of the same. Under the abovecircumstances, the Court set-aside the entire proceedings.

In B.Seetharamayya Guptha v. The District Revenue Officer, Chittoor[[2]]a Bench of this Court having regard to the circumstancesobserved that the entire stock need not be confiscated. The Court heldthat having regard to the features of the case, opined that theconfiscation of 25% of the seized foodgrains would be adequatepunishment for the petitioner.

In Dilip Kumar v. State[[3]], a learned single Judge of this Courtheld that in the absence of a finding that the dealer was indulging inclandestine purchase or sale of essential commodities, confiscationcannot be ordered merely on the ground that there are variations in the book balance and ground stock. It was further held that mere variationbetween book balance and ground stock cannot be a ground to orderconfiscation of the entire stock.

In Iskala Venkata Narasimham v. Commissioner of Civil Supplies (Appeals, Hyderabad and others[[4]]this Court held asunder :

“It must, however, be held that when the contraventions or violations ofthe Control Order or conditions of licence are of trivial and technical nature,the Authorities cannot pass an order without due application of mind. Thatthere is no allegation of clandestine business and that there is no pricecontrol and movement control on the essential commodity seized are twoimportant mitigating circumstances which would certainly tilt the balance infavour of the licensee under the Control Order. In such an event, the lawexpects the Collector, under Section 6-A, as well as the appellate authorityunder Section 6-C of the Act, to exercise sound discretion, for an order ofconfiscation has serious consequences both on the licensee and in somecircumstances on the public at large. A reference may be made to the[5]decisions of this Court in P.Purushotham v. State of A.P.andN.Panduranga Rao v. State of A.P.[[6]]wherein this Court considered thisaspect of the matter and laid down that for violations or contraventions oftechnical and trivial nature, an order of confiscation of the entire stock or anorder of confiscation of substantial stock would not be justified.”

Keeping in view the judgments of the Court referred to above, Ishall deal with the case on hand.

Admittedly, the said premises was raided on a premise that someirregularities were being carried out by M/s. Sri Lakshmi VenkateswaraPaddy Rice & General Merchants, Sujatha Nagar village ofKothagudem Mandal. When the said premises was raided on11.02.2012, the ‘B’ Register was maintained upto date. The voucherswere also prepared and made available in the premises but thesignatures of the ryoths could not taken on the receipts as no paymentwas made to them. This explanation was given at the time of inspection itself which finds place in the panchanama. The ‘B’Register and the ryoth vouchers were also handedover to theVigilance Authorities at the time of the inspection itself. Therefore, theargument advanced by the learned Public Prosecutor that thisexplanation is an after thought, cannot be accepted.

In Samudrala Venkateswara Rao’s case, which is referred toabove, it was held that confiscation of entire stock is illegal and unjust,where the contravention of Control order is of technical in nature. Asseen from the above, in the instant case, the Vigilance Inspectornoticed variation in the book balance and the ground stock for whichthe petitioner gave an immediate explanation along with documentaryevidence, which was also incorporated in the panchanama. Asobserved earlier, It is not the case of the prosecution or the VigilanceAuthorities that the petitioner was doing clandestine business or thathe was an habitual offender or was indulging in hoarding the stock. Therefore, having regard to the facts in issue, it can be said that theoffence alleged is only technical in nature, wherein the vouchersthough prepared do not contain the signature of ryoths and V.R.O. Though the said explanation was given at the spot but was not takeninto consideration.

Conclusion

Having regard to the above circumstances, I deem it appropriateto order confiscation of only 15% of the entire seized stock in favour ofthe Government and the Revision Petitioner is entitled for the refund ofthe sale value of the remaining seized stock.

Accordingly, the criminal revision case is disposed of.

Miscellaneous petitions, pending if any, in this criminal revisionshall stand closed.

_____________________

Date: 30.12.2014GM

[1]2002(6) ALD 389[2]AIR 1977 Andhra Pradesh 103[3]2004(1) ALD (Crl.) 360 (AP)[4]2003(2) ALT 698[5]1976 APHC Notes 47[6]1976(1) An.W.R.41

C. PRAVEEN KUMAR, J