Gopavarapu Srinivasa Rao vs. The State Of Andhra Pradesh

Held

The Court directed the respondents to release the seized stock, subject to the petitioner furnishing immovable property security, either belonging to the petitioner or his family members, for the value of the seized stock, provided the stock had not yet been auctioned. The Court found it appropriate to dispose of the writ petition in the interests of justice, considering the petitioner's submission that obtaining a bank guarantee was difficult and their willingness to provide immovable property security. The reasoning implicitly acknowledges the petitioner's contention regarding the difficulty of furnishing a bank guarantee and the alternative security offered, thereby modifying the original demand. The ratio is that when a petitioner offers viable alternative security (immovable property) for seized goods, and obtaining a bank guarantee is demonstrably difficult, the authorities should consider such alternatives to ensure justice, especially if the goods are not yet auctioned.

Facts

The petitioner, a rice trader, purchased paddy and loaded 300 Quintals of raw rice for transportation. The lorry was intercepted, and 305.20 quintals of rice were seized on the allegation that it was PDS rice. A case was registered under Section 7 of the Essential Commodities Act, and proceedings under Section 6-A were initiated. The petitioner applied for the release of the seized stock, and the respondent issued an order directing the petitioner to furnish a Bank Guarantee of Rs. 5,00,000/- for its release. The petitioner filed a writ petition challenging this order, arguing that the seized rice was not PDS rice and that obtaining a bank guarantee would be difficult. The petitioner offered to furnish third-party immovable property security instead.

Key Issues

1. Whether the action of the respondent in demanding a Bank Guarantee of Rs. 5,00,000/- for the release of seized stock is arbitrary, illegal, and unjust, particularly when the petitioner is willing to furnish third-party immovable property security? (Question of law and fact, turning on principles of natural justice and statutory powers of seizure and release under the Essential Commodities Act). Petitioner's arguments: The seized rice is not PDS rice, as evidenced by truck sheets showing it as Grade-A Sortex variety. Paddy and rice do not fall under the purview of the Essential Commodities Act, making the seizure, criminal case registration, and Section 6-A proceedings illegal and arbitrary. Obtaining a bank guarantee is difficult, and the petitioner is ready to provide immovable property security. Revenue/State's arguments: Not recorded in the judgment.