{"id":211719,"date":"1996-02-06T00:00:00","date_gmt":"1996-02-05T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/state-of-u-p-vs-o-p-sharma-on-6-february-1996"},"modified":"2016-07-08T23:56:31","modified_gmt":"2016-07-08T18:26:31","slug":"state-of-u-p-vs-o-p-sharma-on-6-february-1996","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/state-of-u-p-vs-o-p-sharma-on-6-february-1996","title":{"rendered":"State Of U.P vs O.P. Sharma on 6 February, 1996"},"content":{"rendered":"
Supreme Court of India<\/div>\n
State Of U.P vs O.P. Sharma on 6 February, 1996<\/div>\n
Equivalent citations: JT 1996 (2), 488\t 1996 SCALE (2)356<\/div>\n
Author: K Ramaswamy<\/div>\n
Bench: Ramaswamy, K.<\/div>\n
           PETITIONER:\nSTATE OF U.P.\n\n\tVs.\n\nRESPONDENT:\nO.P. SHARMA\n\nDATE OF JUDGMENT:\t06\/02\/1996\n\nBENCH:\nRAMASWAMY, K.\nBENCH:\nRAMASWAMY, K.\nHANSARIA B.L. (J)\nG.B. PATTANAIK (J)\n\nCITATION:\n JT 1996 (2)   488\t  1996 SCALE  (2)356\n\n\nACT:\n\n\n\nHEADNOTE:\n\n\n\nJUDGMENT:\n<\/pre>\n
\t\t\t O R D E R
\n     This appeal  by special leave has been placed before us
\nby a reference. The facts are not in dispute. The appellant-
\nState has filed an F.I.R. with allegations as under:\n<\/p>\n
\t  “It  is  submitted  that  Modi
\n     Paints    and     Varnish\t  Works,
\n     manufactures Varnish  and Paints at
\n     Modinagar.\t This\tfirm  had   been
\n     buying linseed oil and other edible
\n     oils in  large quantities for quite
\n     some time, and had been storing the
\n     same  and\t utilizing  it\tfor  the
\n     manufacture of  paints and varnish.
\n     This  industrial\tunit  had   been
\n     buying and\t storing the linseed oil
\n     and other\tedible oils, and in this
\n     respect the  said\tindustrial  unit
\n     has not obtained any licence.
\n\t  The said  industrial unit  had
\n     given an  application for obtaining
\n     a\tlicence\t  in  respect  of  their
\n     business for  the purpose\tof  said
\n     oils  for\tutilizing  the\tsame  in
\n     paints  and   varnish   but   their
\n     application      was      rejected.
\n     Subsequent to  that also,\tthe said
\n     industrial\t unit  kept  purchasing,
\n     storing and utilizing the said oils
\n     and kept manufacturing said selling
\n     paints and\t varnish.  Earlier  also
\n     this firm\thad not\t made  available
\n     its  records  concerning  stock  of
\n     bills.\n<\/p><\/blockquote>\n
\t  To-day  on  4.12.1985\t in  the
\n     evening at\t about 3.30  p.m. myself
\n     Abdul   Qadir,   Senior   Marketing
\n     Inspector,\t Modinagar   under   the
\n     direction of  Sri P.K.  Upadhayaya,
\n     Addl. District  Magistrate [Supply]
\n     Ghaziabad\talong\twith  Sri  Mohan
\n     Singh,  District\tSupply\tOfficer,
\n     Ghaziabad,\t Sri   Rameshwar  Dayal,
\n     Supply  Inspector\t Modinagar,  Sri
\n     Rais   Ahmad,    Supply   Inspector
\n     Modinagar,\t  Sri\t S.K.\t Mishra,
\n     Marketing\t Inspector,   Sri   S.K.
\n     Singh,  Marketing\t Inspector,  Sri
\n     Anil  Kumar  Srivastava,  Marketing
\n     Inspector,\t Modinagar,   Sri   J.R.\n<\/p><\/blockquote>\n
     Joshi,\t Sub-Inspector,\t     Sri
\n     SamaiSingh,  Constable  No.56,  Sri
\n     Sukhbir   Singh,\tHead   Constable
\n     No.53,  Police   Station  Modinagar
\n     etc. inspected the oilstored in the
\n     oil  tankers  of  Modi  Paints  and
\n     Varnish Works, Modinagar. To verify
\n     four tanks\t oil stored  in them the
\n     oils stated  by  the  party,  three
\n     samples each  were taken from every
\n     tank total 27 samples and sealed on
\n     the spot  in the  presence\t of  the
\n     representatives  of  the  firm  Sri
\n     Kailash Chandra,  Store  Clerk  and
\n     Sri O.P.  Sharma, Factory\tManager,
\n     the stock\tregister  pertaining  to
\n     the year  1985-86 consisting of 389
\n     pages serially  numbered was  taken
\n     into custody  after the  used pages
\n     signed by\tme and\tthe said Kailash
\n     Chandra. The  stock of  stored  oil
\n     was inspected  on the  basis of the
\n     stock register  and  the  following
\n     quantities of  oil was found stored
\n     in the tanks:\n<\/p><\/blockquote>\n
     1.\t  Soyabean oil\t843 Qtls. and 57
\n     kgs.\n<\/p><\/blockquote>\n
     2.\t  Castor oil  8147 Qtls.  and 45
\n     kgs.\n<\/p><\/blockquote>\n
     3.\t  Refined Soyabean  oil 32 Qtls.
\n     & 31 kgs.\n<\/p><\/blockquote>\n
\t  The sample  fard was\tprepared
\n     of\t one   sample  each   from   the
\n     collected samples\tand after taking
\n     the signature  of every  one it was
\n     handed over  to the store clerk Sri
\n     Kailash Chandra. The stock register
\n     pertaining to  the year 1984-85 was
\n     taken into custody and according to
\n     it on  4.11.1985 they  had in their
\n     stock 2000\t kiloliters  of\t linseed
\n     oil stored\t with them. According to
\n     the   oil\t register   taken   into
\n     custody,  the  aforesaid  unit  had
\n     purchased the refines soyabean oil,
\n     soyabean oil  and linseed\toil, had
\n     stored the\t same, utilised the same
\n     for manufacturing\tof  varnish  and
\n     paints and sold the said paints and
\n     varnish. The  said oil comes in the
\n     category  of  edible  oils\t because
\n     soyabean oil  and refined\tsoyabean
\n     oil are such oils in which the food
\n     can be cooked. In this way the said
\n     unit has  utilised the  edible oils
\n     in the  manufacture of  paints  and
\n     varnish  in   illegal  manner   and
\n     without obtaining any licence.
\n\t  In this  way the said unit and
\n     the owner\tof the\tsaid unit  [Modi
\n     Industrial\t  Unit]\t   Sri\t Kailash
\n     Chandra, Store  Clerk,  Om\t Prakash
\n     Sharma, Factory  Manager  and  Modi
\n     Paints and Varnish Works, Modinagar
\n     have violated  the clause\t4 of the
\n     U.P.   Oil\t  Seeds\t  and\tOilseeds
\n     Products  Control\tOrder  1966  [as
\n     amended upto date] Government Order
\n     1284\/XXIX-E-C-L-112[US]\/77\t   dated
\n     8.3.1977 which  is published in the
\n     U.P. Gazette  dated 8th  March 1977
\n     and G.O.  No.4500\/XXIX-Section 8-22
\n     Oil\/82 dated 29.10.1982 and Clauses
\n     2, 3,  and 6  of Pulses  Edible Oil
\n     Seed  and\t Edible\t  Oil\t[Storage
\n     Control]  Order  1977  [as\t amended
\n     upto date]\t which is  a  punishable
\n     offence under  Section 3\/7\t of  the
\n     Essential Commodities Act, 1955.
\n\t  Therefore  register\ta   case
\n     against all  the aforesaid\t persons
\n     and  take\t necessary  action.  The
\n     copies  of\t  recovery   memos   and
\n     Supurdginama are  enclosed herewith
\n     accordingly  the  entire  aforesaid
\n     stored oil\t has been  given in  the
\n     custody  of   Sri\t Nand\tKishore,
\n     General Manager,  Modi  Industries,
\n     Modinagar and  the sample\tseal and
\n     the nine  sealed samples along with
\n     two stock registers are accordingly
\n     being handed  over\t by  me\t in  the
\n     police station.”<\/p><\/blockquote>\n
     The respondent  filed Criminal  Misc. Petition No.15985
\nof 1985\t in the\t High Court of Allahabad. The learned single
\nJudge of  the High  Court by  order dated  January  7,\t1986
\nquashed the  F.I.R. holding  that as per the case set out in
\nthe counter-affidavit, the respondent was not engaged in the
\nsale or\t purchase of  the oil  seeds; he has been engaged in
\nthe manufacture\t of paints  and varnishes.  Therefore, he is
\nnot a  dealer in  oil seeds  or edible oil covered under the
\nU.P. Oilseeds  and Oil-seeds  Products Control\tOrder,\t1966
\n(for  short,  the  ‘Order’].  Accordingly,  the\t prosecution
\nagainst the  respondent is  not in  accordance with law. The
\napplication was\t accordingly  allowed  and  the\t F.I.R.\t was
\nquashed. Thus this appeal by special leave.\n<\/p>\n
     The term  “dealer” has  been defined in clause 2 [g] of
\nthe Order thus:\n<\/p>\n
     “[g]  `Dealer’   means   a\t  person
\n     engaged in the business of purchase
\n     or sale  or storage for sale of oil
\n     seeds –  and oilseeds products, but
\n     does   not\t   include   the   [Food
\n     Corporation of India] the U.P. Food
\n     and      Essential\t     Commodities
\n     Corporation or  a dealer who stocks
\n     less than\t5 quintals  of\toils  or
\n     less than\t10 quintals of oil seeds
\n     or less than 25 quintals”.<\/p><\/blockquote>\n
     No dealer\tshall occupy  or  set  up  any\tpremise\t for
\npurchase or  sale or  storage for sale of oil-seeds and oil-
\nseeds products,\t except under  and in  accordance  with\t the
\nterms of  a licence  granted by the Regional Food Controller
\nunder the Order.\n<\/p>\n
     Another  Order,  viz.,  Pulses,  Edible  Oil-seeds\t and
\nEdible\tOils  [Storage\tControl\t Order],  1977\twas  issued.
\n“Dealer” under\tclause 2  [f] thereof was defined to mean “a
\nperson engaged\tin the business of purchase, sale or storage
\nfor sale  of any  pulses, edible  oil seeds  or edible oils,
\nwhether or  not in  conjunction with  any other business and
\nincludes his representative or agent”. Clause 3 thereof also
\nprovides the  mandatory requirement  of obtaining licence by
\ndealers with the following language:\n<\/p>\n
     “3.    Licensing\t of    dealers:-\n<\/p>\n
     Notwithstanding anything  contained
\n     in\t any   State  Orders  after  the
\n     expiration of  a period  of fifteen
\n     days from\tthe coming into force of
\n     this clause,  no person shall carry
\n     on business  as a\tdealer in pulses
\n     or in  edible oilseeds or in edible
\n     oils except under and in accordance
\n     with the  terms and conditions of a
\n     licence granted under a State Order
\n     if the  stocks of\tpulses or edible
\n     oilseeds  or  edible  oils\t in  his
\n     possession\t exceed\t the  quantities
\n     specified below :\n<\/p>\n
     (i) Pulses\t       10 quintals for\n\t\t   all pulses taken\n\t\t   together.\n<\/pre>\n
     (ii) Edible oils\t 5 quintals for
\n\t  including\t all edible
\n\t  hydrogenated\t oils including
\n\t  vegetable\t hydrogenated
\n\t  oils\t\t vegetable oils
\n\t\t\t taken together\n<\/p>\n
     (iii)Edible oil-\t30 quintals of
\n\t  seeds including   all edible
\n\t  groundnut in\t   oilseeds.\n<\/p>\n
\t  shell.”\n<\/p>\n
     Clause 4  imposes restriction  on possession of pulses,
\nedible oil-seeds  and edible  oils. No dealer shall, after a
\nperiod of  fifteen days\t from the  coming into force of this
\nclauses either\tby himself  or by  any person on his behalf,
\nstore or  have in  his possession at any time pulses, edible
\noil seeds  or  edible  oils  in\t excess\t of  the  quantities
\nspecified thereunder.  The  quantities\tspecified  or  stock
\nlimits – maximum and minimum – have been prescribed.\n<\/p>\n
     Admittedly, the  respondent does  not have\t any licence
\nissued under  either of\t the Orders.  Both the Orders issued
\nunder Section  3 of  the Essential  Commodities Act regulate
\n“possession  of”   ant\t“dealing   in”\tof   the   essential
\ncommodities for\t equitable distribution at fair price or for
\nsupply to the consumers. The question, therefore is: whether
\nthe respondent\tis a  dealer within the meaning of either of
\nthe Orders?  The case  of the  respondent is  that since  he
\nstored 843  quintals and  57  kgs.  of\tsoyabean  oil,\t8147
\nquintals and  45 kgs  of castor\t oil and  32 quintals and 51
\nkgs. of refined soyabean oil for the purpose of manufacturer
\nof paints  and varnish,\t he is not a dealer. That contention
\nwas accepted  by the High Court. We find that the High Court
\nis wholly  incorrect in\t that construction.  It is seen that
\nthe dealer  means  a  person  engaged  in  the\tbusiness  of
\npurchase or  sale or  storage for  sale of oil-seeds or oil-
\nseeds products. The exemption from the Order is given to the
\nFood Corporation  of India  and the  U.P. Food and Essential
\nCommodities Corporation\t as they are public undertakings for
\nregulating distribution\t of essential  commodities. They are
\nnot dealer  under the  Orders. Any  other dealer  who stocks
\nquantity less  than the\t minimal prescribed under the Orders
\nneed not obtain licence. Even a person who is engaged in the
\nbusiness of  purchasing oils or oil seeds for the purpose of
\nusing them  in another commercial products is a dealer under
\nthe definitions\t referred to hereinabove, when he stores the
\nquantity in excess of the limits prescribed by the Orders.\n<\/p>\n
     This controversy  is no  longer res integra.In State of
\nA.P. v.\t Abdul Bakhi  & Bros.<\/a>  [(1964) 7  SCR 764], a three-
\nJudge Bench  of this  Court considered\ta  similar  question
\nhaving arisen  under the  Hyderabad General  Sales Tax\tAct,
\n1950. The  respondent was  carrying on\tbusiness of  tanning
\nhides and  skins and  selling the  tanned skins.  He kept in
\nstores a  total quantity of tanning barks. He contended that
\nsince he  was not  dealing in  them but\t stored them for the
\npurpose of  manufacture, he could not be held to be a dealer
\nand that,  therefore, he  is not liable to pay the sales tax
\non its\tturnover. This Court had rejected the contention and
\nheld that  when a  person is  buying or selling a commodity-
\nspecified in  the Rule\tfor  use  as  finished\tproducts  in
\nanother commercial  use, he  is engaged\t in the\t business of
\nbuying, selling\t or supplying that commodity and, therefore,
\nhe is a dealer within the meaning of that Act.\n<\/p>\n
     In\t view  of  the\tspecific  definitions  contained  in
\nclauses 2 [g] and 2 [f] of the respective Orders there is no
\ndoubt to  conclude that\t he is a dealer under the respective
\nOrders. Since he had not obtained a licence, he is liable to
\nbe proceeded with in accordance with law. ‘
\n     Dr. Ghosh,\t learned senior\t counsel appearing  for\t the
\nrespondent, contended  that though the respondent had sought
\nfor licence,  the licence  had not  been given\tto him\tand,
\ntherefore, he  cannot be  proceeded with.  He  also  further
\ncontended  that\t  the  F.I.R.\tdoes  not  contain  all\t the
\ningredients of\tthe offence  and, therefore,  the High Court
\nwas right  in quashing\tthe  F.I.R.  It\t is  seen  that\t the
\ncomplaint is self-explanatory and has specifically mentioned
\nabout the storage of oil and oil seeds without licence under
\nthe respective\tOrders. It is not in dispute that the F.I.R.
\ndid mention  that he  purchased and  kept in store the above
\nquantity. Thus\tthe ingredients have been specified. Whether
\nhe has applied for licence or not, we are not concerned with
\nthat controversy in this case.\n<\/p>\n
     The question  then is:  whether the High Court is right
\nin its exercise of inherent power under Section 482 Cr.P.C.?
\nThis Court  in State  of Himachal Pradesh v. Pirthi<\/a> i & Anr.
\n[Crl. A.  1752 of 1995] decided on November 30, 1995 held as
\nunder:\n<\/p>\n
     “It is  thus settled  law that  the
\n     exercise of  inherent power  of the
\n     High Court\t is an\texceptional one.
\n     Great care\t should be  taken by the
\n     High  Court   before  embarking  to
\n     scrutinize\t    the\t     FlR\/charge-
\n     sheet\/complaint.\t In\tdeciding
\n     whether the  case is rarest of rare
\n     cases to scuttle the prosecution in
\n     its inception,  it first has to get
\n     into the grip of the matter whether
\n     the  allegations\tconstitute   the
\n     offence. It must be remembered that
\n     FIR is  only an  initiation to move
\n     the machinery  and\t to  investigate
\n     into cognizable  offence. After the
\n     investigation is  conducted and the
\n     charge-sheet    is\t    laid     the
\n     prosecution produces the statements
\n     of\t the  witnesses\t recorded  under
\n     Section 161  of the Code in support
\n     of the  charge-sheet. At that stage
\n     it is not the function of the Court
\n     to weigh  the pros\t and cons of the
\n     prosecution  case\tor  to\tconsider
\n     necessity of  strict compliance  of
\n     the provisions which are considered
\n     mandatory and  its effect\tof  non-
\n     compliance. It  would be done after
\n     the trial\tis concluded.  The Court
\n     has to  prima facie  consider  from
\n     the averments  in the  charge-sheet
\n     and the  statements of witnesses on
\n     the  record   in  support\t thereof
\n     whether court could take cognizance
\n     of the  offence, on  that\tevidence
\n     and proceed further with the trial.
\n     If it  reaches a conclusion that no
\n     cognigisable offence is made out no
\n     further act could be done except to
\n     quash the charge sheet. But only in
\n     exceptional cases,\t i.e. in  rarest
\n     of\t rare\tcases\tof   mala   fide
\n     initiation of  the\t proceedings  to
\n     wreak private  vengeance process of
\n     criminal is  availed of in laying a
\n     complaint or  FIR itself  does  not
\n     disclose  at   all\t any  cognisable
\n     offence – the court may embark upon
\n     the   consideration   thereof   and
\n     exercise the power.\n<\/p><\/blockquote>\n
\t  When the  remedy under Section
\n     482 is  available, the  High  Court
\n     would be  loath and  circumspect to
\n     exercise  its  extraordinary  power
\n     under Article 226 since efficacious
\n     remedy under  Section  482\t of  the
\n     Code is  available. When  the Court
\n     exercises its  inherent power under
\n     Section 482 the prime consideration
\n     should only be whether the exercise
\n     of\t  the power  would  advance  the
\n     cause of  justice or it would be an
\n     abuse of  the process of the court.
\n     When investigating\t officer  spends
\n     considerable time\tto  collect  the
\n     evidence  and  places  the\t charge-
\n     sheet  before  the\t Court,\t further
\n     action   should   not   be\t  short-
\n     circuited by  resorting to exercise
\n     inherent power to quash the charge-
\n     sheet.  The  social  stability  and
\n     order requires  to be  regulated by
\n     proceeding against\t the offender as
\n     it\t is   an  offence   against  the
\n     society as\t a whole.  This cardinal
\n     principle should  always be kept in
\n     mind    before    embarking    upon
\n     exercising\t inherent   power.   The
\n     accused  involved\tin  an\teconomic
\n     offence destablises the economy and
\n     causes  grave   incursion\ton   the
\n     economic  planning\t of  the  Stats.
\n     When the  legislature entrusts  the
\n     power  to\tthe  police  officer  to
\n     prevent organized commission of the
\n     offence or offences involving moral
\n     turpitude or crimes of grave nature
\n     and are  entrusted\t with  power  to
\n     investigate    into  the  crime  in
\n     intractable terrains  and secretive
\n     manner    in    concert,\t greater
\n     circumspection and care and caution
\n     should be\tborn in mind by the High
\n     Court   when   it\t exercises   its
\n     inherent  power.\tOtherwise,   the
\n     social order  and security would be
\n     put in  jeopardy and to grave risk.
\n     The accused  will have field day in
\n     establishing  the\teconomy\t of  the
\n     State  regulated under the relevant
\n     provisions.<\/p><\/blockquote>\n
     In State  of Bihar v. Rajendra Agrawalla<\/a> [Crl. A. No.66
\nof 1996] decided on January 18, 1996, this Court observed as
\nunder:\n<\/p>\n
     “It has  been held by this Court in
\n     several  cases  that  the\tinherent
\n     power of  the court  under\t Section
\n     482  of   the  Code   of\tCriminal
\n     Procedure should  be very sparingly
\n     and cautiously  used only\twhen the
\n     court comes  to the conclusion that
\n     there would  be manifest  injustice
\n     or there  would  be  abuse\t of  the
\n     process of the court, if such power
\n     is not  exercised. So  far\t as  the
\n     order of cognizance by a Magistrate
\n     is concerned,  the\t inherent  power
\n     can   be\t exercised   when    the
\n     allegations    in\t   the\t   First
\n     Information Report or the complaint
\n     together with  the other  materials
\n     collected\t during\t   investigation
\n     taken at  their face  values do not
\n     constitute the  offence alleged. At
\n     that stage\t it is\tnot open for the
\n     court either  to shift the evidence
\n     or appreciate the evidence and come
\n     to the  conclusion\t that  no  prima
\n     facie case is made out.”\n<\/p><\/blockquote>\n
     In Mushtaq\t Ahmad v.  Mohd. Habibur Rehman Faizi & Ors.<\/a>\n<\/p><\/blockquote>\n
[JT 199 (1) 656] this Court held as under:\n<\/p>\n
     “… According  to\t the  complaint,
\n     the   respondents\t  had\t thereby
\n     committed\tbreach\t of   trust   of
\n     Government money. In support of the
\n     above  allegations\t  made\tin   the
\n     complaint\tcopies\t of  the  salary
\n     statements of  the relevant periods
\n     were produced. In spite of the fact
\n     that   the\t   complaint   and   the
\n     documents annexed\tthereto\t clearly
\n     made out  a, prima\t facie, case for
\n     cheating,\tbreach\t of  trust   and
\n     forgery, the  High Court  proceeded
\n     to\t consider  the\tversion\t of  the
\n     respondents  given\t  out  in  their
\n     petition filed  under Section  482,
\n     Cr.P.C.  vis-a-vis\t  that\tof   the
\n     appellant\tand   entered  into  the
\n     debatable area of deciding which of
\n     the version  was true,  – a  course
\n     wholly impermissible…”.<\/p><\/blockquote>\n
     We accordingly  hold that\tthe High Court has committed
\ngrave error  of law  in quashing  the F.I.R.  The High Court
\nshould be loathe to interfere at the threshold to thwart the
\nprosecution exercising its inherent power under Section 482,
\nCr.P.C. or  under Articles  226 and 227 of the Constitution,
\nas the\tcase may  be, and  allow the  law to  take  its\t own
\ncourse.\n<\/p>\n
     The appeal\t is accordingly\t allowed. The  order of\t the
\nHigh Court  is set  aside. Investigating Officer is directed
\nto complete  the investigation\twithin four  weeks from\t the
\ndate of\t the receipt of this order and the appropriate Court
\nwould dispose of the case within six months therefrom.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India State Of U.P vs O.P. Sharma on 6 February, 1996 Equivalent citations: JT 1996 (2), 488 1996 SCALE (2)356 Author: K Ramaswamy Bench: Ramaswamy, K. PETITIONER: STATE OF U.P. Vs. RESPONDENT: O.P. SHARMA DATE OF JUDGMENT: 06\/02\/1996 BENCH: RAMASWAMY, K. BENCH: RAMASWAMY, K. HANSARIA B.L. (J) G.B. PATTANAIK (J) CITATION: JT […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-211719","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nState Of U.P vs O.P. 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