ORDER
1. The Manager of the petitioner-rice mill filed this writ petition under Article. 226 of the Constitution of India seeking to set aside G.O.Ms. No. 416 dated 4-8-1987 passed by the 1st respondent declaring it as illegal, arbitrary and without jurisdiction.
2. The petitioner ricemill holds a valid licence under A.P. Scheduled Commodities Dealers (L.&D) Order, 1982 (hereinafter
referred to as ‘the Order’). On receipt of information that the petitioner-rice mill was indulging in clandestine business, the Inspector of Police, Vigilence Cell, Civil Supplies Department, Nizamabad, along with his staff, inspected the rice mill and checked the accounts. On verification of the book balance with that of stocks available, the following variations are noticed :
Commodity
As per ‘B’ Register
On physical verification
Variation
Paddy
133-00
197-80
64-80 Qtts. (By excess)
Rice
18-00
18-00
broken rice
18-77
18-77
During the check it was also found that the particulars noted in the triplicate way bill Nos. 13, 14, 15 and 16 were found erased with some chemical and some other particulars were written thereon. Similarly at page Nos. 4, 5, 6, 7 and 8 of the stock register the particulars noted were found erased with some chemical and some other particulars were written conveniently. As the petitioner-rice mill violated Condition No. 7 of the licence issued under Clause 3 of the Order, the Inspector of Police seized 197.80 qtls. of paddy, 18.00 qtls. of rice and 18.77 qtls. of broken rice under a panchanama. A show cause notice was issued to the petitioner-mill on 29-4-1983 as to why the seized stocks should not be confiscated for the contravention of the Order, for which the Manager of the Petitioner-mill submitted an explanation on 30-1-1981. In his explanation the Manager submitted that 104 bags of paddy stored in the house bearing No. 13-88 belongs to the Managing Partner of the mill that it was her agricultural produce but not the property of the mill. He also submitted that the produce is of the year 1982-83 from the 4 acres of land held by the wife of the Managing Partner of the Mill that it was sold in the last week of December, 1982 to one Kistanna who has
purchased the same in the name of his and if the above 104 bags of paddy is taken into account, there would not be any variation in the stock. The explanation offered by the Manager of the Rice-mill does not find favour with the primary authority. With regard to tampering of way bills and the entries in the stock register, the primary authority observed as follows :
“In the original way bill bearing Nos. 13, 14, 15 & 16 it was for the Col. (1) date of issue of way bill 2) address 3) description of goods, 4) 1 (3) No. of the vehicle 5. (a)’details of the consigner and 5(e) details of the agent found tempered with and erased with some chemicals. Further, from the perusal of the stock Register, B-Register seized from the mill premises it is seen that the page 4-5-6, 7, 8 the entries in col. (3) (opening balance of paddy) and Col. No. 15 (closing balance of paddy) are tampered with and erased with some chemicals.”
Regarding variation in the stocks, the primary authority observed :
“Regarding explanation that 104 bags of paddy which was taken into account as belonging to the mill and which was stored in the house of the respondent within the mill premises, his explanation cannot be accepted because he did not bring these facts of sale of land in December and the stock being the produce of the land of his wife to the Inspecting Officer at the time of seizure. This fact was not reported by him nor brought at the time of conducting panchanama also. Further condition (V) of the licence very clearly states that “the licensee shall keep, in the business premises mentioned in condition-2, all the records and books relating to the transactions of purchase, sale or storage for sale, so as to make them readily available to the inspecting officers for check.”
3. Ultimately the primary authority held that since the petitioner has not chosen to explain to the other charges which are very grave in nature it must be deemed that he has no valid explanation to offer and it is clearly established that he has contravened conditions 3, 5 and 7 of the licence issued under
clause 3 of the Order. On appeal, the order of confiscation of the seized stocks was confirmed by the Appellate Authority.
4. Sri B. Subhashana Reddy, the learned counsel for the petitioner-rice mill vehemently contended that the Managing Partner has properly explained with regard to the excess quantity of paddy found in the premises of the mill at the time of inspection by the authorities and the same ought to have been accepted by the two authorities below. But it is clear that at the time of the seizure of the stocks and when the panchanama was prepared, the Manager of the Mill has not brought to the notice of the inspecting officer about the 104 bags of paddy as belonging to his wife being the agricultural produce from 4 acres of land held by her. But subsequently before the primary authority the Manager has come forward with the explanation that 104 bags of paddy belonged to his wife being the produce from the agricultural land. When there is such an inconsistency in his explanation, the only inference that has to be drawn is that the belated explanation offered by the Manager of the mill is only an afterthought and he has woven out this story that the paddy belongs to his wife being the agricultural produce, only to get over the consequences of penal action. During the proceedings under Section 6-A also the petitioner could not establish that the seized stock actually belongs to his wife and he did not bring this fact to the notice of the inspecting authorities. No doubt the paddy was found in the mill premises wherein the Manager is also residing. But he has not come forward with this version at the earliest point of time or during the course of Section 6-A proceedings.
5. It is also further, contended by the learned counsel that with regard to the erasers and tampering of the entries, there was no definite finding by the appellate authority. From the record it is clear that the appellate authority has considered all the aspects. The appellate authority has observed :
“The lower Court has pointed out that the appellant herein had not chosen to explain the other charges in the 6-B show cause notice except the charge regarding variation in stock
of paddy. As observed by the lower Court, the appellant has not offered any explanation for the charge regarding the erasures and tampering found in the original way bills bearing Nos. 13, 14, 15 and 16 and as such I feel that the lower Court was right in upholding this charge.”
6. This tampering of way bills and correction of stock registers is also a strong circumstance to hold that the Manager of the mill has indulged in clandestine business. The very fact that he indulged in tampering with the way bills and made corrections in the stock registers also indicates the motive of the licencee to screen the evidence with regard to the clandestine business in the event of a check by the concerned authorities.
7. It is nextly contended by the learned counsel that the authorities below ought not to have ordered confiscation of the entire stocks and they would have confiscated only the excess stock i.e., 64-80 qtls. of paddy that was found excess at the time of inspection. In support of his contention he relied upon a decision of this Court in N. Panduranga Rao v. State of A. P., (1976) 1 Andh WR 41.
8. There is no doubt with regard to the principle enunciated in the above decision with regard to the discretion vested in the authorities in case of confiscation of the seized stocks. The primary purpose of levying penalty for contravention of the Rules or the conditions of licence is to make the licensee to be aware of the fact that in the event he is caught red-handed while indulging in unfair methods there would be severe punishment. The purpose of levying the penalty is to make the levy a deterrent and not to treat the punishment as retributive. The principle undoubtedly underlying the levy of the penalty is to make it a deterrent factor so that the offence may not be repeated. The past conduct of the person concerned is certainly a relevant factor determining what amount of penalty would be appropriate. It is clearly established that the Manager of the Mill has resorted to the unfair methods of tampering with the way bills and also the stock register and he came out with a false explanation –that too a belated one — that the excess stock
is the produce from the agricultural land held by his wife. These are all the factors to be taken into consideration for levying the penalty. Certainly these factors weighed with the authorities below to order confiscation of the seized stocks. Section 6-A of the Essential Commodities Act does not make it obligatory upon the authorities finding a person guilty of contravention of the Act, Order or conditions of licence to confiscate the entire stock. The authority may order confiscation of the entire stock or may not order confiscation of any stock at all. The Order of confiscation is a judicial order which is subject to an appeal before the appellate authority and revision to this Court and the authorities have to apply their mind and order confiscation by taking into account the conduct of the licensee past and present at the time of the seizure. The Manager of the Mill is found to be indulging in clandestine business by tampering with the way bills and also the stock register and therefore, the authorities below are perfectly justified in confiscating the entire stock. If it is found that the contravention is a trivial one, it does not warrant confiscation of the entire stock unless the authorities determine that a distinction can be drawn between unintended contravention and deliberate acts of hoarding, black marketing and clandestine transactions. Since the authorities have come to the conclusion that the contravention is a very severe one, this Court feels that the Manager of the petitioner-Mill cannot invoke the jurisdiction of this Court under Article 226 of the Constitution for the purpose of reduction in the quantum of confiscation. There are no merits in the writ petition and it is liable to be dismissed.
9. The writ petition is accordingly dismissed. No costs.
Petition dismissed.