M/S Jai Shree Om Bana Rudrakash Bio Fuels vs. State Of Rajasthan

Held

The Court held that the petitioner had a license to conduct the retail business of biodiesel, and it was an admitted position that biodiesel does not fall under the category of Petroleum Products. Consequently, the Court found that offences under the Essential Commodities Act were not made out against the petitioner. The Court also observed that the proceedings initiated by the police authority did not appear to be bona fide and lawful. Therefore, the petition filed by the petitioner deserved to be allowed. The Court quashed FIR No. 26/2022 registered at Police Station Shrinagar, District Ajmer, for the offences under Sections 3, 7, 4, 8 of the Essential Commodities Act and Sections 420, 285, 379, 411, and 120B of the IPC, along with consequential criminal proceedings. The ratio decidendi is that a criminal proceeding initiated under the Essential Commodities Act and IPC against a licensed retailer of biodiesel, which is not classified as a petroleum product, without proper sampling and in contravention of established government clarifications, is not bona fide or lawful and warrants quashing.

Facts

The petitioner, M/s Jai Shree Om Bana Rudrakash Bio Fuels, a sole proprietorship engaged in the retail sale of Biodiesel, filed a petition under Section 482 Cr.P.C. seeking to quash FIR No. 26/2022. This FIR was registered at Police Station Shrinagar, District Ajmer, for alleged offences under Sections 3, 7, 4, 8 of the Essential Commodities Act and Sections 420, 285, 379, 411, and 120B of the IPC. The petitioner argued that the FIR was false and frivolous, highlighting their valid license for retail biodiesel sales granted by the State of Rajasthan and their GST registration. They contended that the State Government's order dated 13.07.2021 clarified that biodiesel is not an explosive and not governed by the Petroleum Rules, 2002, permitting storage up to 30,000 Lt. The petitioner asserted that biodiesel is not a petroleum product, thus no offence under the Essential Commodities Act was made out, and criminal proceedings should not be initiated without sampling the biodiesel.

Key Issues

1. Whether the FIR No. 26/2022 registered for offences under the Essential Commodities Act and IPC is liable to be quashed, considering the petitioner's valid license for retail biodiesel sales and the State Government's clarification regarding biodiesel not being a petroleum product or explosive. Petitioner's Arguments: The petitioner argued that the FIR was false and frivolous. They possessed a valid license for retail biodiesel sales and GST registration. They relied on a State Government order dated 13.07.2021 stating that biodiesel is not an explosive and not governed by the Petroleum Rules, 2002, and that storage up to 30,000 Lt. is permissible. They contended that biodiesel is not a petroleum product, therefore, no offence under the Essential Commodities Act is made out. Furthermore, they argued that as per State Government directions, no criminal proceedings or FIR should be registered against a licensed retail seller of biodiesel without sampling. They cited State of Haryana & ors. vs. Ch. Bhajan Lal & ors., Ms Kotyark Industries Pvt. Ltd. anr. vs. State of Raj., and M/s Royal Energy Ltd. vs. M/s. Indian Oil Corp. Ltd. & ors. Respondent's Arguments: The State opposed the petition, arguing that the proceedings conducted by the police authority were as per the Act. They submitted that after investigation, the police found offences under the Essential Commodities Act and IPC, and the search operation was lawful. They cited Vishnu Kumar vs. State of UP and ors.