STATE OF WEST BENGAL & ORS. versus CALCUTTA HARDWARE STORES AND ORS.

S'lA'D! OP WEST BERGAL & ORS. v. CALCDrTA llAllWARE S'l'Olll!S & ORS.

FEBRUARY 20, 1986 [A.P. SEN AND B,C, RAY, JJ,]

Constitution of India - Article 226 - Ad interim exparte orders - Grant of - Restraint Restraint and circumspection - Necessary.

orders - Grant of - Restraint Restraint and circumspection - Necessary. 600 metric tonnes of tin plates worth about Ila. 60 laths were seized frDll the respondent-firm. Prosecution wu launched [-]by the State Government against the respondents under ss. 7 and 8 of the Essential eo->clities Act 1955 for violation of parqraph 3(2) of the West Bengal Declaration of Stocks and Prices of Essential ColllllOdities Order 1977 and under sa.1208 and 420 of the Indian Penal Code 1860. Show cauae notices for confiscation of the seized goods were alao issued by the Additional Collector under a.6A of the Act. --

In the Writ Petition under Article 226 before the High Court the respondents moved an application for release of the seized goods which wu rejected by Single Judge. In appeal the Divi•ion Bench set aside the interlocutory order of the Single Judge and directed the release of the seized goods to the respondent• on their furnishing of bank guarantee of lla.5 laldla in the form of fixed deposit recepits and also on furnishing sec1irity of illllovable property being O. 71 acre of land aituate at Police Station Titaghur District 24 pargana.

Allowing the appeal of the State to this Court,

lllU>i 1. Although the powers of the High Court under Art.226 are far and wide and the Judges mat ever be vigilant to protect the citizens against arbitrary executive action, noaetheleH, the Judges have constructive role and therefore, there is always the need to use such extensive powers with due circumpection. There has to be in the larger public interest an element of self-ordained restraint. It was diatresaing that despite long line of decisions of Supreme Court deprecating the cursory manner of passing suc11it-interlocutory orders for the mere asking, the High Court -

suc11it-

should have passed the impugned order in the 1118111U!r that it did. [370 C-ll; 367 ~]

2. 'lbe sd interf.a order of the Division llem:h of the High Court was illegal and invalid. The result of the order was that the respondents under threat of contempt secured release of valuable seized uterial practically furnishing little or uo security. The observations of the Division Bench which bad the effect of prejudgiug the whole issue before the Siugle Judge who 'IJU seized of the wr-it petitiou, as alao foreclosiug the trial of the respondents for c:omieaiou of the alleged offences bad also uo legality and propriety. [367 C; 367 G-H; 368 A]

Sillgari Jtmidpa\tcy • on. v. Au'lmdn ·nu • On., [1984] 2 s.c.c. 436; Aaaiatant Collector of Central l:a;ia, Chndn lqar lfeat lleDgal v. llllll1op India r.t. ·Ltd. • Ora., [1985) 1 S.C.C. 260; State of lajatlum ' Ora. Vo '8/a. llllaika l'l:CljleA"tiea & Anr., [1985) 3 S.C,C. 217; Sil:lgari JtmlcfpaJity, ntaaimr hper llil1a eo. Ltd. v. State of 0r1ua. [1983) 2 s.c.c. 433; lJaion of India •· OnaJ. lfoellen ll11l8 Ltd., [1984) 2 S.C.C. 646; IJaion of India v. Jain Slmdh V_,at.i Ltd., C,A.No. 11450/PJ and 9-ria Tndfng Co. Pwt. I.td. •• . S. Saoiael, [1984] 4 s.c.c. 666; relied upon.

CIVIL APPELLATE JURISDICTION : Civil Appeal No. 627 of 1986,

From the Judgment and Order dated 11th December, 1985 of the Calcutta High Court in F.M.A.T. No. 4053 of 1985,

D.N. Mukherjee and H.K. Puri for the Appellants.

Bhola Nath Sen, Bhasker Sen, B.P. Singh, v. Sheker, S, Roy and L.P. Agarwala for the Respondents.

The Order of the Court was delivered by

SEN, J. We had allowed the appeal at the conclus.ion of hearing of January 31, 1986. We now proceed to give the reasons therefor.

In this appeal by special leave the short point is as to the legality and propriety of an ad-interim order dated

December ll, 1985 passed by Division Bench of the Calcutta High Court consistiug ·of R.N. Pyne and Aj it Kumar Sen Gupta, JJ, setting aside an interlocutory order of Padma Khastgir, J, dated November 6, 1985, By the impugned order, the learned Judges have directed the release to the respondents of more or less 600 metric tonnes of tin plates which, according to the State Government, are worth nearly about Rs,60 lakhs, seized from them for alleged contravention of item 24, schedule l to the West Bengal Declaration of Stocks and Prices of Essential c.,_,.iities Order, 1997 and which, according to the respondents, are nothing but waste material, on condition set out by them, namely, on the furnishing of bank guarantee of Rs.5 lakhs in the form of fixed deposit receipts and also on furnishing security of immovable property being 0.71 acre of land situate at Police Station Titaghur, District 24 Pargana.

The learned Judges while making the impugned order have unfortunately made certain observations which seek to prejudge the issues involved in the prosecution launched against the respondents by the State Government for committing alleged offences punishable under ss.7 and 8·of the Essential Commodi-ties Act, 1955 for violation of the mandatory provisions of paragraph 3(2) of the West Bengal Declaration of Stocks and Prices of Essential Commodities Order, 1977 and of having comuiltted alleged offences punishable under ss.1208 and 420 of the Indian Penal Code, 1860. They have gone to the extent of observing that the notices for confiscation of the seized goods were issued by the Additional Collector, 24 Paragana Alipore under s.6A of the Act without any basis in that they do not answer the description of tin plates, tin plates waste waste or defective tin free steel sheets and therefore were not essential commodities within the meaning of s.2(a) of the Act and tbe said Order issued thereunder.

Looking to the seriousness of the charges and the circumstances attendant upon the seizure of the huge quantity of tin plates, the learned Single Judge had very rightly and properly refused to grant the application for release of the seized goods. It is rather surprising that the learned Judges in hearing an appeal from an interlocutory order should have passed the impugned order directing release of the seized goods without affording an opportunity to the State Government_.r-H to file return to the writ petition. There is material on

record to show that the seized goods are essential commodi-ties, namely, Notification No. S0.508(E)/ESS/lron & Steel '-2A dated 1.7.1985 issued by the Government of India, Ministry of Steel, Mines & Coal, and examination report dated November 13, 1985 by the Appraiser (Metal Expert).

We are greatly distressed that the learned Judges despite long line of decisions of this Court starting from Siliguri lbrlcipality & Ors. v. Amalendu Das & Ors. [1984] 2 s.c.c. 436 to Assistant Collector of Central Excise, <llarulan Nagar West Bengal v. Dunlop India Ltd. & Ors. [!985] l s.c.c. 260, down to State of Rajasthan & Ors. v. K/s Swaika Properties & Anr. [1985] 3 S.C.C. 217 deprecating the cursory manner of passing such interlocutory orders for the mere asking, should have passed the impugned order in the manner that they did. It seens that the pronouncements of this Court have had little effect on them. The result "of this has been that the respondents under threat of contempt secured release ~~ of such valuable seized material practically furnishing little or no security. We are really amazed that the State Government -1 should have been compelled to release the goods as per the directions of the learned Judges. What makes it worse is that the respondents are facing prosecutions under s.3 read with ss. 7 and 8 of the Essential Commodities Act as also under ss.!20B and 420 of the Indian Penal Code, and have also been served with notice by the Additional Collector under s.6A of the Act to show cause why the seized material should not be confiscated to Government. It is needless to stress that the question whether the seize~ goods answer the description of tin plates, tin plates waste waste or waste material etc. or ~ whether the respondents had committed contravention of paragraph 3(2) of the West Bengal Declaration of Stocks and \· Prices of Essential Commodities Order issued under s.3(1) of the Act, which is an offence punishable under ss.7 and 8, are all questions to be gone into and tried before the learned Special Judge, 24 Paragana, Alipore before whom the trial is pending. That apart, the observations Call in question the validity of the action of the Additional Collector in serving notice of confiscation under s,6A of the Act with respect to the seized goods. We do not see legality and propriety of making these observations by the learned Judges which have -- the effect of prejudging the whole issue before the learned Single Judge who ts seized of the writ petition, as also

forec.losing the trial of the respondents for commission of the alleged offences.

In somewhat similar circumstances, Chinnappa Reddy, J. speaking for the Court in llulilop India Ltd. 's case, after referring to the earlier decisions in Siligud Municipality, Titaghur Paper Mills Co. Ltd • v. State of Orissa [1983] 2 S.C.C. 433 Union of India v. Oswal Woollen Mills Ltd. [1984] 2 S.C.C. 646, Union of India v. Jain Shudh Vanaspsti Ltd. C.A. No.11450/83, anci Samaria& Trading Co. Pvt. Ltd. v. s. Sallllel [1984] 4 S.C.C. 666, expressed strong disapproval of the practice prevailing in the High Court of granting such ad-interim orders which practically have the ef feet of the grant of the main relief in the petition under Art. 226 of the constitution, and observed :"We have come across cases where the collection of public revenue has been seriously jeopardised and budgets of governments and Local Authorities aff ir-matively prejudiced to the point of precariousness consequent upon interim orders made by courts. In fact, instances have come to our knowledge where Governments have been forced to explore further .sources for raising revenue, sources which they would rather well leave along in the public inter-est, because of the stays granted by courts. We have come across cases where an entire Service is left in stay of flutter and unrest because of interim orders passed by courts, leaving the work they are supposed to do in state of suspended animation. We have· come across cases where buses - and lorries are being run under orders of court though they were either denied permits or their permits had been cancelled or suspended by Trans-port Authorities. We have come across cases where liquor shops are being run under interim orders of court. We have come across cases where the collec-tion of monthly rentals payable by excise contrac-tors has been stayed with the result that at the end of the year the contractor has paid nothing but made his profits from the shop and walked out. We have come across cases where dealers in food grain.a • and essential commodities have been allowed to take -

back the stocks seized from them as if to , permit them to continue to indulge in the very practices which were to be prevented by the seizure. We have come across cases where .land reform and important welfare legislations have been stayed by courts. Incalculable harm has been done by such interim orders. All this is not to say that interim orders may never be made against public authorities. There are, of course, cases which demand that interim orders should be made in the interests of justice. Where gross violations of the law and injustices are perpetrated or are about to be perpetrated, it is the bounden duty of the court .to intervene and give appropriate interim relief. In cases where denial of interim relief may lead to public mis-chief, grave irreparable private injury or shake citizen's faith in the' impartiality of public administration, court may well be justified in granting interim relief against public au.thority. But since the law presumes that public authorities function properly and bona fide with due regard to the public interest, court must be circumspect in·· granting interim orders of far-reaching dimensions or orders causing administrative, burdonsome incon-venience or orders preventing collection of public revenue fot no better reason than that the parties have come to the court alleging prejudice, incon-venience or: harm and that prim facie case has been shown. -There can be and there are no hard and fast rules. -But prudence, discretion and circums-pection are called for. There are several other vital considerations apart from the existence of prims facie case. There is the question of balance of convenience. There is the question of_ irrepara-ble injury. There is the question of the public interest. There are many such factors worthy of consideration."

Quite recently, this court in Swaika 'Properties' case reiterated

"It is to be deeply regretted that despite series of decisions of this Court deprecattng the practice

prevalent in the High Court of passing such interlocutory orders for the llM!re asking, the learned Single Judge should have passed the impugned ad interim ex parte prohibitory order the effect of which, as the learned Attorney-General rightly complains, was virtually to bring to standstill developllM!nt sche.., of the Urban ImprovellM!nt Trust, Jaipur viz, Civil Lines Extension Sche..,, irrespective of the fact whether or not the High Court had sny territorial jurisdiction to entertain petition under Article 226 of the Constitution. Such arbitrary exercise of power by the High Court at the public expense reacts against the developllM!nt and prosperit:y of the country and is clearly detrillM!ntal to the . ' national interest."

Although the power of the High Court under Art.226 of the Constitution are far and wide and the Judges must ever be vigilant to protect the citizens against arbitrary executive action, nonetheless, the Judges have constructive role and therefore there is always the need to use such extensive powers with due circumspection. There has to be in the larger public interest sn elellM!nt of self-ordained restraint. We hope and· trust that the High Court would hereafter use its powers to grant such ad-interim l!X1>&rte orders with greater circumspection.

The appeal must therefore succeed and is allowed. The order passed by the Division Bench dated December 11, 1985 is set aside and that of the learned Single Judge dated November ' 6, 1985 dismissing the application for release of the seized goods is restored. We direct that the High Court shall take illlnediate steps to recover back the seized property from the respondents including the two vehicles bearing registration nos. USY 6342 and WBQ 6688 if they have been delivered in pursuance of the orders passed by the learned Judges to respondents. The respondents shall pay the costs of the appellants. Costs quantified at Rs.5,000,

Appeal allowed.