JUDGMENT
S.K. Chattopadhyaya, J.
1. This case has been referred to the Division Bench by an order of reference dated 13-12-90 for deciding the question as to whether in view of section 6-C (2) of the Essential Commodities (Bihar Amendment) Act, 1977 (Bihar Act 9 of 1978), a person is entitled to interest even in a case where, in fact, the essential commodity was sold and like a case of deemed sale.
2. For deciding the said question the factual backgrounds, in short, may be stated : On 5-2-87 3,214 tins of edible oil were seized from the premises of the petitioner and acase under Section 7 of the Essential Commodities Act, 1955 (E.G. Act in short) was instituted. Simultaneously confiscation proceeding under Section 6-A of the E.C. Act was also initiated and after confiscation order was passed, 1504 tins of edible oil were sold in an auction at Rs. 4,31,000/- and the balance tins were given in zimanama to another person. The petitioner, impugning the orders taking cognizance and refusing to discharge by the criminal Court, moved this Court in Cr. Misc. No. 1478/89 (R) and this Court by order dated 14-8-89 quashed the entire criminal prosecution including the orders impugned. The petitioner moved the appellate authority against the order of confiscation and the said authority, taking into consideration the fact that the criminal prosecution against the petitioner was quashed by the High Court, by its order dated 8-9-89 set aside the order of confiscation passed under Section 6-A of the E.C. Act. Allowing the appeal the Appellate Authority directed to return the seized articles and the sale proceeds to the petitioner. The petitioner, thereafter, moved the Collector under the Act with a prayer that the sale proceeds be returned with interest to him at the rate of 18% per annum with effect from 5-6-87. The Collector, by his order dated 8-3-90, passed an order for payment of Rs. 4,31,000/- towards the sale proceeds of 1504 tins of edible oil and Vanaspati but declined to grant interest by observing that the petitioner is at liberty to move the Appellate Authority for the said claim.
3. Mr. P. D. Agrawal, counsel appearing on behalf of the petitioner has contended that the Collector has committed an illegality in directing the petitioner to move the Appellate Authority for grant of interest because in view of the provisions as contained in Section 6-C (2) of the Bihar Act 9 of 1978 (shortly the Bihar Act) as soon as the order of confiscation was set aside by the Appellate Authority, it was incumbent upon the Collector to return the sale proceeds with interest to the petitioner. According to him when admittedly some of the seized articles were sold in auction and the sale proceeds were deposited in the Government Treasury, on setting aside the order of confiscation by the Appellate Authority, the Col-
lector was bound to follow the provisions as laid down in Section 6-C (2) of the E.C. Act and could not have directed the petitioner to move again the Appellate Authority for grant of interest. In support of his contention learned counsel relies on the decisions in the cases of Rajesh Trading Company v. State of Bihar, reported in 1988 PLJR 463, Shanti Trading Company v. State of Bihar, reported in 1988 PLJR 732 : (1989 Cri LJ (NOC) 18), Jai Kishun Sah v. State of Bihar, reported in 1988 PUR 606, V. Nagabhushana Rao v. Dist. Revenue Officer, Chilakalapudi, reported in 1979 Cri LJ (NOC) 40, Sri Krishna Oil and General Merchants and Commission Agents, Reavulapalem v. State of Andhra Pradesh, reported in 1984 Cri LJ 173, Shanker Lal Purnimal v. Commissioner of Civil Supplies, Hyderabad, reported in AIR 1988 AP 352, State of Gujarat v. Mer Parbat, reported in AIR 1991 Gujarat 185, State of M.P. v. Deena Nath, reported in 1994 (2) EFR 197, Shambhu Dayal Agrawal v. State of West Bengal, reported in 1990 (3) SCC 549 and N. Nagendra Rao and Co. v. State of Andhra Pradesh, reported in AIR 1994 SC 2663.
4. Countering the aforesaid arguments Mr. R.K. Marathia, learned G.P. 2 has strongly contended that in the facts and circumstances of the present case the provisions of Section 6-C (2) of the Act will not apply, rather, the provisions as contained in Section 6-A (5) of the Bihar Act will be applicable and thus, the petitioner is not entitled to get any interest on the sale proceeds. Learned State Counsel submits that the very intention of the Legislature in enacting the aforesaid two provisions has to be appreciated in deciding the question. He submits that where any essential commodity is sold pursuant to an order of confiscation under Section 6-A of the E.C. Act and when in appeal under Sub-clause (1) of Section 6-C, the Appellate Authority either annulling or modifying the order appealed against, directs to return the sale proceeds to the owner thereof or the person from whom it is seized, no interest is required to be paid to the person over and above the sale proceeds. Making a distinction between the provisions as laid down in Section 6-A (5) and Section 6-C (2) of the Act learned counsel submits that these two sections contemplates two different situations and in the instant case the provisions of Section 6-A (5) will be applicable and not that of Section 6-C (2) of the Bihar Act.
5. In order to appreciate the rival viewpoints the scheme of the Act may be examined. The Act was enacted to provide, in the interest of general public, for the control or production, supply and distribution of and trade and commerce in certain commodities. In the present case we are not required to examine the provisions of different sections because true interpretation of sections 6-A and 6-C is required to be considered for deciding the case in hand. For better appreciation of the provisions, aforesaid, firstly the provisions as contained in Section 6-A of Bihar Act may be looked into.
6. Under Sub-clause (1) of Section 6-A, as soqn as any essential commodity is seized in pursuance of an order made under Section 3 in relation thereto, the same shall be reported immediately to the Collector of the District in which such commodity is seized. The Collector has been empowered to inspect or cause to be inspected such commodity if he so chooses and if he is satisfied that there has been a contravention of the order, may order for confiscation irrespective of the fact that a prosecution has been instituted for such contravention or not. The Collector may confiscate the essential commodity so seized, any purchase covering or receptacle in which such commodity is found and any animal, vehicle, vessel or other conveyance used in carrying such essential commodity. However, an exception has been given in proviso to Sub-clause (1) which shows that if the producer produces any seized foodgrains or edible oils, the same cannot be confiscated under this Section but the same would be without prejudice to any action which may be taken under any other provisions of the Act. Sub-section (2) gives power to the Collector to pass order for selling of the seized essential commodity at the control led price fixed under any law if in his opinion such essential commodity is subject to speedy natural decay or it is otherwise expedient in the public interest so to do. Similarly, in respect to seized foodgrains where there is no controlled price, the Controller may order the said foodgrains to be sold through fair price shops at the price fixed by the Central Government or the State Government or may order such foodgrains to be sold by public auction.
7. From the aforesaid provisions it is clear that the Collector while passing an order for confisca-
tion may also pass order for disposal of such essential commodity which, according to him, is subject to speedy and natural decay or is required to be done in the interest of general public and for maintaining proper supply and distribution of such commodity.
8. Thus the underlying intention of the Legislature in enacting these provisions, it appears, is that the Collector can pass order for sale of the seized goods only after passing of the order of confiscation and that too if in his opinion those seized articles are perishable in nature. For example, if some iron materials like component parts and accessories of automobiles etc. are confiscated which are not subject to speedy and natural decay, the Collector may not direct for sale of those articles even after passing of the order of confiscation. If ultimately the order passed by him under Section 6-A confiscating the articles is set aside or annulled by the Appellate Authority, the same can be returned to its owner or the person from whom those were seized. On the contrary, if some perishable essential commodities like cattle fodder or pulses etc. are confiscated, the Collector may direct for sale of those commodities in the manner prescribed in the section and preserve the sale proceeds in the Government Treasury. Sub-section (5) of Section 6-A of the Bihar Act provides that where no order of confiscation is ultimately passed by the Collector, or where in an appeal against his order under Sub-section (1) of Section 6-C, the Appellate Authority requires the sale proceeds of those essential articles to be returned after deduction of all expenses of sal or the auction, the same shall be paid to the owner thereof or the person from whom it was seized. Similarly, where in the criminal case instituted for contravention of the order in respect of which order of confiscation has been made, the concerned person is acquitted, there also the sale proceeds shall be paid to the owner or the person from whom it was seized.
9. Therefore, on reading the entire provisions of Section 6-A of the Act, in my view, only reasonable conclusion which can be arrived at is that where after order of confiscation the essential commodities are sold, the amount for which those articles were sold is to be paid back after deduction of the expenses as indicated in the section. This section does not contemplate of giving interest on such amount.
10. Now let us look to the provisions as laid down in Section 6-C of the Bihar Act. Subsection (1) of this Section provides that a person aggrieved by an order of confiscation under Section 6-A may appeal to any Judicial Authority impugning the said order and the Appellate Authority, after giving opportunity of being heard, may pass such order, either confirming, modifying or annulling the impugned order. Sub-section (2) of Section 6-C which is relevant for consideration in this case reads thus :–
“Where an order under Section 6-A is modified or annulled by such judicial authority; or where in a prosecution instituted for the contravention of the order in respect of which an order of confiscation has been made under Section 6-A, the person concerned is acquitted, and in either case it is not possible for any reason to return the essential commodity’ seized, such person shall, save as provided by Sub-section (3) of Section 6-A be paid the price therefor as if the essential commodity had been sold to the Government with reasonable interest calculated from the day of the seizure of the essential commodity and such price shall be determined –
(i) in the case of foodgrains, edible oil seeds or edible oil, in accordance with the provisions of Sub-section (3-B) of Section 3.
(ii) in the case of sugar, in accordance with the provisions of Sub-section (3-C) of Section 3 and,
(iii) in the case of any other essential commodity, in accordance with the provisions of subsection (3) of Section 3.”
11. From perusal of the aforesaid clause it is apparent that where order of confiscation is modified or annulled by the Appellate Authority or the person against whom prosecution was instituted, is acquitted, such person shall be paid the price of the seized articles with reasonable interest if it is not possible for any reason to return the essential commodity so seized. In these circumstances as provided under this clause, it would be deemed that the essential commodity had been sold to the Government. Take for example a case where some essential commodities were seized which were not sold after order of confiscation was passed for some reason or the other and the said confiscation order is set aside or modified by the Appellate Authority or the prosecution against the concerned person is quashed, the authority is required under law to return the said article to the
owner. But by this time if it is found that the seized articles either have been destroyed or have become unusable, then the price of the said essential commodities will have to be given to the person concerned along with interest. This provision, in my opinion, has been inserted in this sub-clause in order to make the concerned officers vigilant regarding the nature of the commodities seized.
12. As observed earlier, if any iron materials were confiscated under Section 6-A and subsequently set aside by the Appellate Authority in exercise of its power under Section 6-C, then there is no difficulty in returning those seized iron materials to the concerned person. On the other hand, if some perishable essential com-modities are confiscated pursuant to an order of confiscation by the Collector but due to negligence or oversight those perishable articles were not sold by the Authority and they allowed it to become unconsummable by a human being, then the Legislature dictates that the price of such commodity should be paid by the Government with interest taking it to have been purchased by the Government, thus, something which is deemed or notional sale to the Government.
13. The another important factor, which cannot be lost sight of, is the saving provision as given in clause (2) of Section 6-C where it says that “such person shall, save as provided by subsection (3) of Section 6-A, be paid the price therefor as if the essential commodity had been sold to the Government with reasonable interest………..” This exception fortifies the argument
of Mr. Marathia that where pursuant to an order of confiscation the essential commodity has already been sold or auctioned, on setting aside the said order of confiscation or on acquittal of the person, he is only entitled to get the amount for which those essential commodities were sold or auctioned. In my view, the submission of Mr. Marathia is well justified. If the provisions as laid down in sub-clauses (2), (3), (4) and (5) of Section 6-A are read together it will be clear that for dealing with commodities subject to speedy and natural decay, the Legislature has conferred power to the Collector to sell the same. Similarly, even where the Collector is satisfied that in the public interest such confiscated commodities should be sold, he can do it. Moreover, proviso to Section 6-A does contemplate payment of inter-
est which is there in Sub-clause (3) of Section 6-C of the Act. The very intention of the law maker in enacting these two provisions has to be kept in mind and in my opinion, the Court cannot introduce an intention in a particular section when the same is not there.
14. The facts of Jai Kishun Sah’s case (supra) are entirely different from the facts and circumstances of the present case. In Jai Kishun Sah’s case it appears that immediately after the order of confiscation of the seized foodgrains the petitioner moved the High Court in writ application. The seized articles, it appears, were not sold pursuant to the order of confiscation and in those circumstances the High Court observed that the petitioner is entitled to return of the confiscated goods which were seized or if the articles seized have been sold, then the price of those commodities should be paid in terms of Sub-section (2) of Section 6-C. The provisions of Sub-clause (5) of Section 6-A was, probably, not brought to the notice of their Lordships because the said decision does not mention about the same.
15. Similarly, in Rajesh Trading Company’s case (supra) their Lordships relied mainly on the provisions of Section 6(2) of the Act, 1955 and in the facts and circumstances of the said case, held that the petitioner was entitled to get interest. In that case the articles were handed over to Biscoman for which payment was to be made by it but the same was not paid pursuant to some order. In these circumstances, the Division Bench held that Biscoman was liable to pay the price of the seized articles as per the contract entered into between it and the petitioner was entitled to get interest.
16. In the present case, however, the facts are different and, as indicated above, the seized essential commodities were sold after the order passed under Section 6-A by the Collector. Subsequently as per the order of the Appellate Authority the amount for which the tins of edible oil were sold, were paid to the petitioner. Thus, it cannot be said that as the seized articles were not possible to be returned for any reason and, as such, the petitioner was entitled to get interest along with the sale proceeds.
17. The import of Sub-section (2) of Section 6-C has been squarely indicated by their Lordships in the case of N. Nagendra Rao and Com. v. State of Andhra Pradesh, reported in AIR 1994
SC 2663. Their Lordships were of the view that inability to return giving rise to statutory obligation of deeming it that the goods were sold to the Government, may arise for variety of reasons and can extend to any violation on part of the Govern-‘ ment.
18. In Srikrishria Oil and General Merchant’s case (supra) though the essential commodities were confiscated but not sold and, therefore, the Division Bench held that the owner of the essential commodities is entitled to return of the articles or if converted into money, return of the money with reasonable interest.
19. Having given my anxious consideration to the facts of the present case and points of law involved therein, I am of the view that the petitioner is not entitled to get interest on the sale proceeds and when the Appellate Court has not directed for payment of interest, the refusal by the Collector was justified.
20. In the result, I find ho merit in this application and reference is answered in negative.
Loknath Prasad, J.
21. I agree.