Deepak Agarwal vs. The State Of Madhya Pradesh

Held

The Court held that the confiscation proceedings were premature and erroneous. It noted that the Junior Supply Officer admitted in cross-examination that the applicants were valid license holders for trading agricultural produce, possessed GST registration, and that rice is an agricultural product with identical color and quality to PDS rice in the market. The Court relied on Supreme Court judgments in *Kailash Prasad Yadav* and *Shambhu Dayal Agarwala*, emphasizing that confiscation requires a violation of orders made under Section 3 of the Essential Commodities Act, and that the power to confiscate is discretionary. The Court found that determining whether the seized rice belonged to the PDS was a matter of evidence to be decided by the trial court in the pending criminal case. The Additional Collector lacked jurisdiction to decide this fact at the confiscation stage. Therefore, the impugned orders of confiscation by the Additional Collector and the Additional Sessions Judge were set aside. The Court directed that confiscation proceedings should not be finalized until the disposal of the criminal case, and the matter should be decided thereafter. The issue of whether the rice belonged to the PDS was expressly left to be decided by the trial court.

Facts

The applicants, Deepak Agarwal and M/s Pankaj Trading Company, are challenging an order of confiscation of 364.85 quintals of rice bags. The raid was conducted on June 24, 2020, by the Food Supplies Inspector, who found rice bags suspected to be from the Public Distribution Scheme (PDS) at the applicants' business premises. The District Collector ordered the confiscation of the seized rice on September 21, 2021. An appeal before the Additional Sessions Judge, Neemuch, affirmed the Collector's order. The applicants then filed a criminal revision petition before the High Court, arguing that the seized rice was an agricultural product acquirable in the market and that no scientific evidence proved it belonged to the PDS. The State opposed the petition.

Key Issues

1. Whether the confiscation of seized rice was permissible at this stage, given the pending criminal case against the applicants and the lack of definitive evidence proving the rice belonged to the PDS (turning on Section 6A of the Essential Commodities Act, 1955)? Petitioner's arguments: The applicants contended that the Junior Food Supply Officer admitted in cross-examination that the seized rice could be similar to PDS rice and available in the market. They argued that the First Appellate Court failed to appreciate that rice is an easily acquirable agricultural product and that the prosecution lacked scientific evidence to prove the rice was from the PDS. They asserted that the findings of the lower courts were not just and proper. Respondent's arguments: The State opposed the prayer, submitting that the impugned order passed by the First Appellate Court was just and proper and did not warrant interference by this Court.