Smt. Y. Renuka

Fair Crl. A. No. 94 of 2016

IN THE COURT OF THE PRL. SESSIONS JUDGE :

KARIMNAGAR

PRESENT: SMT. RENUKA YARA,

PRL. SESSIONS JUDGE,

K A R I M N A G A R.

CRIMINAL APPEAL NO. 94 OF 2016

SATURDAY, the 25 th DAY of FEBRUARY, 2017

From which Court the::Spl. Judl. Magistrate of 1st Appeal is preferred.Class (Excise), Karimnagar.

Number of the case in::C.C. No.348 of 2009 that Court. Number of the Appeal::Crl. Appeal No.94 of 2016

Name and description of::Bhavani Hire Purchase theand Finance (R) having its Appellant/Complainant. Regd. Office at Door No.8-5- 302, Kothirampur locality of Karimnagar Town and District, represented by its Clerk Sandiri Giribabu, S/o Balaiah, aged 33 yrs.

Nameofthe::1. Burugu Venkatamma, Respondents/State.W/o Narsimha Reddy, aged about 57 yrs., Occ: Housewife, R/o Parlapally Village,Thimmapur Mandal,Karimnagar District.

2.The State represented by Public Prosecutor, District and Sessions Court, Karimnagar.

Sentence and Law The complaint was under which it was::dismissed and the appellant imposed in the Lowerwas acquitted under Sec.255 Court.(1) Cr. PC., for the offence punishable under Sec.138 of N.I. Act.

Whetherconfirmed,::In the result, the appeal modified or reversedisdismissedandthe

Page 2 of 13 Fair Crl. A. No. 94 of 2016 and if modified, thejudgment passed by the modification.learned Spl. Judl. Magistrate of1stClass(Excise), KarimnagarinC.C. No.348/2009, dt.20.01.2016 acquittingthe respondent/accused of the offence punishable under Sec.138 of N.I. Act., is hereby confirmed.

This appeal coming before me on today for hearing, upon perusing the grounds of appeal and the record of evidence and proceedings, upon duly considering the same, after hearing of Sri I. Madhukar Rao, counselfor the appellant and Sri M.Bhaskara Rajashekhar, Advocate for the respondent, I do adjudge and pass the following:-

-: J U D G M E N T :-

This is an appeal preferred aggrieved by the

Judgment of acquittal passed by the learned Spl. Judl.

Magistrate of 1st Class (Excise), Karimnagar in C.C. No.348

of 2009, dt.20.01.2016 acquitting the respondent/accused for the offence punishable under Sec.138 of N.I. Act.

(Note : The complainant/appellant is referred as appellant and the respondent/accused is referred as respondent) 2.00.The appellant gave a complaint under Sec.200 of Cr. PC., alleging that the respondent borrowed an amount of Rs.3,50,000/- under Loan Account No.654 by executing a registered mortgage deed bearing document

No.83/2007 before the Registrar, Karimnagar. The outstanding amount due was Rs.5,46,628/- payable by the respondent as on 24.06.2008. In discharge of part of payment of due amount, the respondent issued cheque

Page 3 of 13 Fair Crl. A. No. 94 of 2016 bearing No.217161, dt.25.06.2008 drawn on Oriental Bank of Commerce for an amount of Rs.2,00,000/-. The respondent promised that she will maintain sufficient balance in the account. However, when the cheque was presented for realization, the same was dishonored as “funds insufficient” in the account of the respondent. The dishonor of cheque was intimated to the appellant by the bank through memo, dt.26.06.2008.

2.01.The appellant got issued a legal notice on 30.06.2008 as required under Sec.138-B of N.I. Act demanding payment of the due amount within (15) days from the date of receipt of the notice. However, the respondent neglected to pay the due amount even after expiry of (15) days after receipt of the notice. In the circumstances, the complaint was lodged alleging that the respondent issued the cheque knowing fully well that there were no funds in the account and therefore, liable to be prosecuted under Sec.138 of N.I. Act.

3.00.On filing of the complaint, the learned Addl.

Judl. Magistrate of 1st Class, Karimnagar, took cognizance of the offence punishable under Sec.138 of N.I. Act against the appellant vide C.C. No.1245/2008.

4.00.Subsequently, the case was transferred to the

Court of Spl. Judl. Magistrate of 1st Class (Excise),

Karimnagar, where it was renumbered as C.C.348 of 2009.

Page 4 of 13 Fair Crl. A. No. 94 of 2016 5.00.On appearance of respondent/accused before the trial Court, copies of all the relevant documents were furnished to her as contemplated under Sec.207 of Cr. PC.

Thereafter, the respondent/accused was examined under

Sec.251 of Cr. PC., and the substance of accusation for the offence punishable under Sec.138 of N.I. Act was read over and explained to her in Telugu. The respondent/accused pleaded not guilty and claimed to be tried.

6.00.The appellant/complainant got examined

PWs.1 and 2. Further, the appellant got marked Ext.A-1/

Original cheque bearing No.217161, dt.25.06.2008, Ext.P- 2/cheque return memo, Ext.P-3/office copy of Legal Notice, dt.30.06.2008,Ext.P-4/postalreceiptNo.3627, dt.30.06.2008,Ext.P-5/postalacknowledgment, dt.01.07.2008, Ext.P-6/certified copy of mortgage deed bearing document No.83/2007, dt.17.01.2007.

7.00.Afterclosureofevidence,the respondent/accused was examined under Sec.313 Cr. PC., and confronted with the incriminating evidence deposed against her by the complainant. The respondent/accused denied the incriminating evidence and reported defence evidence on her behalf.

Page 5 of 13 Fair Crl. A. No. 94 of 2016 8.00.The respondent/accused got examined DWs.1 to 3 and got marked Ext.D-1/Legal Notice, Ext.D-2/Reply

Notice, Ext.D-3/Postal receipt, Ext.D-4/Acknowledgement and Ext.D-5/Receipt.

9.00.The appellant got himself examined as PW.1 restating the facts of the case with respect to advancing loan of Rs.3,50,000/-, issuance of cheque to repay the same, and dishnour of cheque for want of funds in the account of the respondent. It was also acknowledged that the respondent executed a mortgage deed bearing document No.83/2007, dt.17.01.2007 as security for repayment of the loan amount. In cross-examination it is elicited that being a Finance Company, blank cheques are obtained for security purpose at the time of advancing the loan amount. The specific suggestion is given that blank cheques were obtained from the son of the respondent as security. Another issue is the actual amount that is payable by the respondent to the appellant. According to the appellant, the due amount is Rs.5,46,628/- upto 24.06.2008, i.e. the date of filing of the complaint. While, so, the respondent’s claim is that at 2% interest per month, the due amount would come to Rs.4,67,366-59 Ps., on deduction of Rs.60,000/- which was already paid. PW.2 is the Manager, State Bank of Hyderabad and he deposed that the appellant is a Hire Purchase and Finance firm

Page 6 of 13 Fair Crl. A. No. 94 of 2016 having current account at S.B.H., Rampur Branch of

Karimnagar.

10.00.As against this evidence, the respondent who examined himself as DW.1 deposed that she did not obtain any loan from the complainant except that her son, i.e.

DW.2, was due to pay some amount to one Thirupathi. On advise that one Rajeshwar Reddy would give amount by keeping land as security, she mortgaged her land to provide amount to her son by affixing her signature on some white papers and cheques. DW.1 deposed that she did not give cheque for Rs.2.00 lakhs by filling it. Further,

DW.1 deposed that DW.2 paid an amount of Rs.60,000/- and Ext.D-1 is the notice issued by her to the complainant and Ext.D-2 is the reply notice. DW.2 is the son of DW.1 and he deposed that the land was mortgaged on 17.01.2007 and on the same day, five cheques of the appellant and promissory notes were obtained. Likewise, two cheques signed by DW.2 and promissory notes were obtained. DW.2 deposed that Ext.P-1 was the cheque given at the time of mortgage of property and admitted that cheques were given unfilled by making signatures on them. In cross-examination, it is admitted that DW.2 obtained loan of Rs.3,50,000/- by mortgaging Ac.6.23 gts., of land, that Rs.60,000/- was paid to the appellant and the remaining amount was due. DW.2 stated that the

Page 7 of 13 Fair Crl. A. No. 94 of 2016 respondent did not give cheque for Rs.2.00 lakhs. DW.2 signed on the mortgage deed as a witness. DW.3 supported the evidence of DWs.1 and 2 stating that blank cheques were signed and handed over to the appellant at the time of execution of mortgage deed as security for repayment of the loan. The signature of DW.3 is not taken on any of the documents and the presence of DW.3 was not mentioned in any of the communication between the appellant and the respondent.

11.00.On the basis of the aforementioned evidence, the learned Spl. Judl. Magistrate of 1st Class (Excise),

Karimnagar held that there is admission on the part of

DWs.1 and 2 that loan of Rs.3,50,000/- was obtained by executing Ext.P-6/Mortgage Deed. The signature on

Ext.P.1/Cheque is admitted by the respondent/accused and also her son DW.2. On the basis of presumption available, it was held that as per Sec.20 of N.I. Act, the person signing a negotiable instrument and giving to another, either wholly or having blank thereon, an incomplete negotiable instrument, gives prima facie authority to the holder thereof to make or complete the negotiable instrument for any amount specified. It was held that the judgment of Hon’ble Apex Court in Sudhir Kumar Bhalla

Vs. Jagdish Chand reported 2008 ACR 841 is not attracted on account of dishonor of cheque issued for security. It

Page 8 of 13 Fair Crl. A. No. 94 of 2016 was held that as per Sec.138 of N.I. Act, there is presumption that Ext.P-1/Cheque was drawn on the date which it bears, i.e. 25.06.2008, and that the same was issued for discharge of legally enforceable debt. Further, on examining the date of cheque, the legal notice and the reply notice, it was held that the legal notice was issued in compliance with the ingredients of Sec.138 of N.I. Act.

11.01. The only point that was held not proven by the appellant was that Ext.P-3/Notice does not mention specific amount that has to be paid by the respondent. On perusal of Ext.P-3/Notice, at paragraph No.4, it is stated that – “Therefore, by virtue of this legal notice I hereby call upon and demand you to pay the said amount covered under the dishonored cheque to my client within 15 days from the date of receipt of this notice.” The contents of

Ext.P.3/Notice when perused along with the oral evidence of PWs.1, 2 and 3 and DW.s.1 and 2 show that a blank cheque vide Ext.P-1 was issued at the time of executing

Ext.P-6/Mortgage Deed. Therefore, the respondent would have no knowledge about the date of filling up the blank cheque or the amount filled in the blank cheque. It was incumbent upon the appellant to mention the amount for which the cheque was presented and dishonored. In the instant case, the respondent would have no clue about the amount for which cheque was presented and dishonored and the amount to be paid within 15 days on receipt of

Page 9 of 13 Fair Crl. A. No. 94 of 2016 legal notice (Ext.P-3). This situation, as held by the learned Spl. Judl. Magistrate of 1st Class (Excise),

Karimnagar is covered under the judgment reported in 2006 (3) Bank J 313 Kerala between Bank of Baroda Vs.

Philip, wherein it was held that mere intimation that the cheque was dishonored for want of funds is not a notice for demand of amount. Also, as held by the Hon’ble Apex

Court in the case between Suman Sethi Vs. Ajay Churiwal and another reported in Crl. L.J. 1931, a notice containing omnibus demand without specifying the amount due under the dishonored cheque would fail to meet the legal requirement and can be regarded as bad. In the instant case, the respondent had no knowledge about the date on which the blank cheque issued by her was filled up and the amount for which it was filled up. The legal notice under

Ext.P-3 does not have any mention about the specific amount that was demanded to be paid by the respondent.

Thus, learned Spl. Judl. Magistrate of 1st Class (Excise),

Karimnagar, held that the appellant failed to prove the ingredients of Sec.138 (b) of N.I. Act and dismissed the complaint acquitting the respondent under Sec.255 (1) Cr.

PC. Hence, this appeal.

12.00.In grounds of appeal, it is contended that the legal notice was issued under Sec.138 (b) of N.I. Act demanding to pay the cheque amount within 15 days from

Page 10 of 13 Fair Crl. A. No. 94 of 2016 the date of receipt of legal notice. However, the respondent received the notice but failed to repay the amount. By referring to the evidence of DWs.1 and 2, it is contended that the cheque was issued at the time of taking loan as security and therefore, the complaint is maintainable to recover the debt under the cheque. As such, pleaded that the trial Court failed to appreciate the facts in proper perspective and acquitted the respondent.

13.00.Heard both sides. Perused the record.

14.00.Now the point for determination is :-

Whether the judgment of acquittal passed by the learned Spl. Judl. Magistrate of 1st Class (Excise), Karimnagar in C.C. No.348/2009, dt.20.01.2016 is erroneous in facts and law and therefore, liable to be set aside ? 15.00.POINT :

During arguments in appeal, it was argued that the only issue to be considered is, whether the cheque is secondary security or not by the counsel for the appellant.

While so, the learned counsel for the respondent argued that the legal notice issued was immature notice and PW.1 admitted obtaining blank cheque from the respondent. On the basis of aforementioned arguments, the respective parties opposed and supported the judgment passed by the learned Spl. Judl. Magistrate of 1st Class (Excise),

Karimnagar in C.C. No.348/2009, dt.20.01.2016.

Page 11 of 13 Fair Crl. A. No. 94 of 2016 16.00.On perusal of the facts and circumstances leading to the filing of the complaint, the oral evidence and the documentary evidence, it is seen that both the parties are in agreement to the extent that the appellant advanced loan of Rs.3,50,000/- to the respondent on execution of

Mortgage Deed under Ext.P-6 for repayment of said loan amount @ 2% interest per month to be paid within two years. According to Ext.P-6, the loan amount was to be paid within two years from the date of execution of mortgage deed, i.e. 17.01.2007. As per Ext.P-6, the respondent had two years time from 17.01.2007 to repay the loan amount, i.e. till 16.01.2009. Without waiting for completion of the period stipulated under Ext.P-6, the complainant/appellant filled up the cheque on 25.06.2008 for Rs.2.00 lakhs and presented the same for realization.

This, as contended by the learned counsel for the respondent, is premature presentation of the cheque

before completion of the period stipulated under Ext.P-6.

By virtue of the fact that taking loan is admitted by both the respondent and her son (DW.2), no issue can be made out for taking the blank cheque from the respondent.

Further, Sec.13 (b) of N.I. Act states that the payee or the holder in due course of the cheque, as the case may be, makes a demand for the payment of the said amount of money by giving a notice, in writing, to the drawer of the

Page 12 of 13 Fair Crl. A. No. 94 of 2016 cheque, (within thirty days) of the receipt of information by him from the bank regarding the return of the cheque as unpaid.

17.00.As held by the learned Spl. Judl. Magistrate of 1st Class (Excise), Karimnagar, Ext.P-1/Cheque does not contain the amount of Rs.5,46,628/- as on the date of filing of the complaint nor does it contain the amount of

Rs.4,67,366/-, which was the due amount as on the date of presentation of the cheque. Instead, the cheque contains the amount filled as Rs.2,00,000/-. There is no knowledge to the respondent about filling up of the cheque and its presentation and the amount claimed by the appellant.

Therefore, the learned Spl. Judl. Magistrate of 1st Class (Excise), Karimnagar, has rightly held that the complainant/appellant failed to prove the ingredients of

Sec.138 (b) of N.I. Act and the notice is bad in law. As such, this Court does not see any infirmity in appreciation of facts and law by the learned Spl. Judl. Magistrate of 1st

Class (Excise), Karimnagar, acquitting the respondent for the offence punishable under Sec.138 of N.I. Act.

Therefore, the judgment passed by the learned Spl. Judl.

Magistrate of 1st Class (Excise), Karimnagar in C.C.

No.348/2009, dt.20.01.2016 deserves to be confirmed.

Page 13 of 13 Fair Crl. A. No. 94 of 2016 18.00.In the result, the appeal is dismissed and the judgment passed by the learned Spl. Judl. Magistrate of 1st

Class (Excise), Karimnagar in C.C. No.348/2009, dt.20.01.2016 acquitting the respondent/accused of the offence punishable under Sec.138 of N.I. Act., is hereby confirmed.

Dictated to the Stenographer, transcribed by him,

corrected and pronounced by me in open Court, on this the 25th day of February, 2017.

Prl. Sessions Judge, Karimnagar.

-:-

Fair Crl. A. No. 79 of 2016

IN THE COURT OF THE PRINCIPAL SESSIONS JUDGE

KARIMNAGAR

PRESENT:- SMT. RENUKA YARA ,

Prl. Sessions Judge, Karimnagar.

SATURDAY, THE 25 th DAY OF FEBRUARY, 2017

CRIMINAL APPEAL NO. 79 OF 2016

From what court the:The Collector (CS), Karimnagar. Appeal is preferred Number of the case in :FileNo.G3/986/2014, that Court.dt.19.03.2016.

Name of the :Thammishetty Ravi @ appellant/Ravinder, S/o Vaikuntam, complainantaged 45 yrs., R/o Vallampatla Village, Ellanthakunta Mandal, Karimnagar District.

Name of the :1. The State of Telangana respondentthrough the Asst. Grain PurchasingOfficer, Karimnagar, through the Public Prosecutor, Sessions Court, Karimnagar.

2. Tammishetty Satyam @ Sathaiah, S/o Vaikuntam, aged 43 yrs., Occ : Agriculture, R/o Vallampatla Village,Ellanthakunta Mandal,Karimnagar District.

3. Challa Chandra Reddy, S/o Gopal Reddy, aged 55 yrs., Occ : agriculture, R/o VallampatlaVillage, EllanthakundaMandal, Karimnagar District.

4. Challa Laxma Reddy, S/o Gopal Reddy, aged 53 yrs., Occ : Agriculture, R/o VallampatlaVillage, EllanthakuntaMandal, Karimnagar District.

Sentence and law:It was ordered to confiscate under which it was40% of the seized stock imposed in the Lowerbelonging to the appellant in Court.favour of the Government and

Page 2 of 12 Fair Crl. A. No. 79 of 2016 a penalty of Rs.50,000/- was imposed on the owner of auto trolley bearing No.APB-5222.

Whether confirmed, :In the result, the appeal is Reversed or modified.partly allowed, confirming the Judgment of the learned Collector (CS), Karimnagar passed in case No.G3/986/2014, dt.19.03.2016, but the order of confiscation of 40% of the seized stock imposed on the appellant is modified to that of imposition of penalty of Rs.10,000/-(Rupeesten thousand only). On payment of penalty as ordered above, the seized stock of 7.00 quintals of red gram belonging to the appellant or its value shall be released to him forthwith. The order as to the confiscation of 40% of the seized stock of remaining red gram, i.e. 8.00 quintals, 20.00 quintals and 36.00 quintals respectively, is confirmed.

This appeal coming before me on 27.01.2017 for final hearing and disposal in the presence of Sri K. Mahender, Advocate for the appellant, Sri Kacham Ramesh, Advocate for the respondents No.2 to 4 and of Public Prosecutor for the respondent/State; and upon perusing the proceedings and upon hearing both sides and after duly considering the same, this Court delivered the following:-

-:: J U D G M E N T ::-

This is an appeal preferred under Sec.6-C of

Essential Commodities Act, 1955 by the appellant aggrieved by the Judgment passed by the learned Collector (CS), Karimnagar in File No.G3/986/2014, dt.19.03.2016 ordering confiscation of 40% of the seized stock of red gram belonging to the appellant, 8.00 quintals, 20.00 quintals and 36.00 quintals belonging to the respondents

No.2 to 4 respectively.

Page 3 of 12 Fair Crl. A. No. 79 of 2016 2.00.The facts of the case are that on credible information, the Asst. Grain Purchasing Officer, Karimnagar along with three others proceeded to Vallampatla Village of

Ellanthakunta Mandal on 20.04.2014 and conducted enquiry at M/s Laxmi Kirana Merchants, Vallampatla village owned by Thammishetty Ravi, i.e. the appellant herein.

One person was found to be attending to business and he revealed that he does not have licence for hoarding the red gram in his shop. On physical verification, it was found that the whole red gram is loaded in Ashok Leyland Lorry bearing No.APB-5222 parked in front of the shop. The lorry contained 142 bags filled with red gram. Said bags were weighed in the presence of mediators and the owner and it was found that the total red gram was weighing 7.00 quintals. The driver Pesara Harinath stated that he works as driver for Thammishetty Ravi (the appellant herein) who engaged the lorry to transport red gram from Vallampatla to Siddipet. The vehicle belongs to P. Mahesh of Siddipet,

Medak District. On enquiry, it was found that the appellant engaged in clandestine business of hoarding red gram and thereby contravened clause 2K (1) (4) and

Clause 3 of APSD (LS&R) Order 2008 and the stock was seized under the cover of panchanama and a case was booked under Sec.6-A of E.C. Act. The seized tock was handed over to Ellanki Bhaskar, Proprietor of M/s Saptagiri

Page 4 of 12 Fair Crl. A. No. 79 of 2016

Industries, Thangellapalli Village. Subsequently, the

Tahsildar, Ellanthakunta vide Proc. No.G3/986/2014, dt.06.05.2014 took possession of the seized stock and direction was given to him to dispose of the stock. The owner of the seized vehicle filed petition for release of the vehicle and the same was released on furnishing bank guarantee for Rs.1,50,000/-.

2.01.A show cause notice was issued to the appellant calling for explanation.

2.02.The appellant submitted written explanation stating that his brother and himself are residents of

Vallampatla Village, having agricultural land and the red gram was raised in their own land. The red gram was intended to be sold in Siddipet market. Accordingly, Lorry bearing No.APB-5222 was hired on 20.04.2014 and the red gram was loaded in it. Without heeding to the request of the appellant, the respondents have conducted panchanama alleging that the appellants are engaged in clandestine business of red gram without having licence.

2.03.The appellant along with his brother

Thammishetty Satyam and the co-agriculturists Challa

Chandra Reddy and Challa Laxma Reddy approached the

Hon’ble High Court vide W.P. No.13934/2014 and orders

Page 5 of 12 Fair Crl. A. No. 79 of 2016 have been passed on 29.04.2014 staying auction of seized stock pending enquiry under Sec.6-A of E.C. Act, with a direction to dispose of the petition and release the seized stock by passing appropriate orders.

3.00.On hearing the arguments of the parties, the learned Collector (CS), Karimnagar disposed of the case confiscating 40% of the seized stock and imposed penalty of Rs.50,000/- on the owner of the vehicle. Hence, this appeal.

4.00.In grounds of appeal, it is contended that the appellant is running a petty kirana shop in the village besides doing agriculture in his lands. The red gram is not a commodity to be sold to the customers in the village.

Running of kirana shop is not material fact and allegation made that the business is done without licence was held unreasonable. It is pleaded that their own red gram was loaded in the vehicle. Claiming red gram to be their own produce for sale in Siddipet market, the appellant and his brother have produced patttadar passbook and certificate from V.R.O. about raising of red gram in their respective lands and sought release of seized stock. Without taking action on the petition, the learned Collector (CS) passed the impugned judgment under appeal. Therefore, the appellant and the respondents No.2, 3 and 4 jointly filed

Page 6 of 12 Fair Crl. A. No. 79 of 2016

W.P. seeking release of seized stock. The Hon’ble High

Court directed the lower Court to dispose of the representation and for release of the seized stock, but the orders were not complied with.

4.01.The appellant and the respondents No.2, 3 and 4 pleaded that show cause notice was not issued and no opportunity was given to them for hearing and the same is violation of principles of natural justice. Without considering the representation, dt.25.04.2014, the learned

Collector (CS) passed the impugned judgment arbitrarily.

4.02.Further, it is pleaded that on the basis of report, dt.04.01.2016 that the appellant and his brother have given their lands on lease to one Kamatam Kanakaiah who raised cotton crop in said lands, the learned Collector (CS) passed the judgment straightaway confiscating 40% of the seized stock and claimed the same to be violation of principles of natural justice.

4.03.The appellant and the respondent No.2 denied having given their land on lease to Kamatam Kanakaiah to raise cotton crop. The appellant and the respondents No.2 to 4 filed Certificate issued by V.R.O. certifying that the red gram was raised in their respective lands. Said certificate was filed along with representation, dt.25.04.2014.

Page 7 of 12 Fair Crl. A. No. 79 of 2016

However, said certificate was not given any credence. The appellant was surprised to see that the respondent No.1 stated that he purchased 71.00 quintals of red gram from 10 to 12 farmers of the village at 3500/- per quintal and denied respondent No.2 having given such a statement.

Lastly, it is pleaded that Clause 2K (1, 2, 4, 10) of the

Control Order has no relevance at all to the present case.

While so, Clause 2K (1, 2, 4, 10) of the Control Order is relevant with the issue and renewal of licence. Further, it is claimed that the said Order exempts farmers, agriculturists, ryots from the purview of Control Order.

Therefore, it is contended that as per evidence on record which shows that the appellant and the respondents No.2 to 4 are agriculturists, the stock is their own produce and therefore, the judgment is unjust and prayed that the same be set aside.

5.00.Heard both sides.

6.00.Now the point for consideration is :-

Whether the Judgment of the learned Collector (CS), Karimnagar in File No.G3/986/2014, dt.19.03.2016 ordering confiscation of 40% of the seized stock of red gram belonging to appellant in favour of the Government, is erroneous in facts and law and therefore, liable to be set aside ?

Page 8 of 12 Fair Crl. A. No. 79 of 2016 7.00.POINT :-

The admitted fact is that 71.00 quintals of red gram was seized from the vehicle bearing No.APB-5222.

The only point for consideration is, whether said red gram was raised by the appellant and the respondents No.2 to 4 in their own agricultural lands or the same was procured illegally from the farmers without licence. According to the statement of the appellant recorded in the presence of witnesses, 71.00 quintals of red gram @ Rs.3500/- per quintal was purchased to be sold at Siddipet Market. The lorry was hired for transporting the said 71.00 quintals of red gram and 142 bags of red gram were loaded. The appellant admitted that he does not have food grains licence. However, purchased red gram worth

Rs.2,48,000/- and a case has been booked against him under Sec.6-A of E.C. Act. The appellant pleaded that he is not aware that selling of red gram is an offence. The driver by name Pesara Harinath merely deposed that he provided lorry on hire and the lorry was loaded with 142 plastic bags containing 71.00 quintals of red gram.

8.00.The record contains the representation for release of the seized stock along with Certificates issued by the V.R.O., Vallampatla Village stating that the appellant has Ac.1-27 gts., of land in Sy. No.287 and 292 and raised

Page 9 of 12 Fair Crl. A. No. 79 of 2016 red gram of 7.00 quintals during the year 2013-14. The respondent No.2 owns land to an extent of Ac.1-27 gts., in

Sy. No.287 and 292 and raised 8.00 quintals of red gram during the year 2013-14. The respondent No.3 is the owner of Ac.5-12 gts., in Sy. No.233/A and raised 20.00 quintals of red gram during the year 2013-14. The respondent No.4 is the owner of Ac.7-12 gts., in Sy.

Nos.246/A, 248/A and 254/A and raised 36.00 quintals of red gram during the year 2013-14. Further, the appellant and the respondents No.2 to 4 filed copies of pattadar passbooks showing their ownership over agricultural lands.

In said backdrop, the learned Collector (CS), Karimnagar got an enquiry conducted by Deputy Tahsildar, Sircilla and the Deputy Tahsildar submitted report stating that Sy.

No.287 consisting of Ac.0-29 gts., Sy. No.292 consisting of

Ac.0-38 gts., Sy. No.287 consisting of Ac.0-29 gts., and Sy.

No.292 consisting of Ac.0-38 gts., is owned by the appellant and his brother. Said land is being cultivated for the past four years by one Kamatam Kanakaiah by raising cotton crop. The report of Dy. Tahsildar is supported by the statement of said Kamatam Kanakaiah wherein he stated that he took said land on lease from Thammishetty

Ravi and is raising cotton crop for the past four years.

This evidence on record is contradictory. The V.R.O., certified that the appellant and his brother Thammishetty

Satyam are raising red gram. While so, the Deputy

Page 10 of 12 Fair Crl. A. No. 79 of 2016

Tahsildar submitted a report stating that the appellant and his brother leased their land to one Kamatam Kanakaiah and cotton crop is raised in said land. The Certificates issued by the V.R.O. do not have supporting documents whereas the report submitted by the Deputy Tahsildar is supported by the statement of Kamatam Kanakaiah who took said land on lease from the appellant and his brother.

To that extent, the claim of the appellant and his brother having raised 7.00 quintals and 8.00 quintals of red gram in their lands is falsified. While so, there is no evidence about the remaining 55.00 quintals allegedly raised by the respondents No.3 and 4, i.e. Challa Chandra Reddy and

Challa Laxma Reddy. However, the statement of the appellant himself claiming that he purchased 7.00 quintals of red gram from the farmers @ Rs.3500/- per quintal can be relied upon to believe that the red gram seized does not belong to the respondents No.3 and 4. In case that was the case, the respondents No.3 and 4 also should have preferred an appeal against the impugned judgment of the learned Collector (CS), Karimnagar. Such is not the case.

Therefore, the statement of the appellant, the report of the

Deputy Tahsildar, Sircilla and the statement of Kamatam

Kanakaiah show that the seized red gram was procured by the appellant from the farmers without licence. Therefore, the claim of the appellant that said red gram was raised in their own land is not sustainable. Accordingly, the finding

Page 11 of 12 Fair Crl. A. No. 79 of 2016 of the learned Collector (CS) is sustainable. However, seizing of 40% of the stock imposed on the appellant seems unjust and disproportionate and the same needs to be modified with that of fine of Rs.10,000/-. The point is accordingly answered.

9.00.In the result, the appeal is partly allowed, confirming the Judgment of the learned Collector (CS),

KarimnagarpassedincaseNo.G3/986/2014, dt.19.03.2016, but the order of confiscation of 40% of the seized stock imposed on the appellant is modified to that of imposition of penalty of Rs.10,000/- (Rupees ten thousand only).

On payment of penalty as ordered above, the seized stock of 7.00 quintals of red gram belonging to the appellant or its value shall be released to him forthwith.

The order as to the confiscation of 40% of the seized stock of remaining red gram, i.e. 8.00 quintals, 20.00 quintals and 36.00 quintals respectively, is confirmed.

Dictated to Stenographer, transcribed by him,

corrected and pronounced by me in the open court on this the 25th day of February, 2017.

Prl. Sessions Judge Karimnagar.

Page 12 of 12 Fair Crl. A. No. 79 of 2016 -:-

Fair Crl. A. No. 56 of 2016

IN THE COURT OF THE PRINCIPAL SESSIONS JUDGE

KARIMNAGAR

PRESENT:- SMT. RENUKA YARA ,

Prl. Sessions Judge, Karimnagar.

SATURDAY, THE 25 th DAY OF FEBRUARY, 2017

CRIMINAL APPEAL NO. 56 OF 2016

From what court the:TheCollector(CS), Appeal is preferredKarimnagar. Number of the case in :FileNo.G3/91/2016, that Court.dt.24.02.2016.

Name of the appellant/:V. Ramesh Kumar, S/o complainantRamaswamy, aged 46 yrs., R/o Shivanagar, Warangal Town and District.

Name of the :The State of Telangana respondentthrough the Asst. Grain PurchasingOfficer, Karimnagar,throughthe Public Prosecutor, Sessions Court, Karimnagar.

Sentence and law:It was ordered to confiscate under which it was35% of HSD Oil stock seized imposed in the Lowerfrom the tanker bearing No.AP- Court.31-Y-1737 to the Government and a penalty of Rs.10,000/- was imposed on appellant.

Whether confirmed, :In the result, the Reversed or modified.appeal is partly allowed, confirming the Judgment of the learned Collector (CS), Karimnagar passed in case No.G3/91/2016, dt.24.02.2016, but the order of confiscation of 35% of the seized stock imposed on the appellant is modified to that of imposition of penalty ofRs.10,000/- (Rupees ten thousand only) and the penalty of Rs.10,000/- imposed on the appellant is

Page 2 of 10 Fair Crl. A. No. 56 of 2016 modified and reduced to Rs.5,000/-(Rupeesfive thousand only).

On payment of penalty as ordered above, the entire seized stock or its value shall be released to the appellant and the remaining fine amount shall be refunded to him forthwith.

This appeal coming before me on 27.01.2017 for final hearing and disposal in the presence of Sri K. Mahender, Advocate for the appellants and of Public Prosecutor for the respondent/State; and upon perusing the proceedings and upon hearing both sides and after duly considering the same, this Court delivered the following:-

-:: J U D G M E N T ::-

This is an appeal preferred under Sec.6-C of

Essential Commodities Act, 1955 by the appellant aggrieved by the Judgment passed by the learned Collector (CS), Karimnagar in File No.G3/91/2016, dt.24.02.2016 ordering confiscation of 35% of the HSD Oil stock seized from the Tanker bearing No.AP-31-Y-1737 and imposing penalty of Rs.10,000/- on the appellant.

2.00.The facts of the case are, on 28.01.2016, at 06.00 P.M., when the S.I. of Police, Sulthanabad, was conducting vehicle checking at Shastrinagar, Poosala

Village, Sulthanabad Mandal, one HSD oil tanker bearing

No.AP-31-T-1737 was found going towards Karimnagar from

Peddapally. Said tanker was intercepted and the documents were sought to be verified. During verification,

Page 3 of 10 Fair Crl. A. No. 56 of 2016 it was found that the tanker driver P. Bapu Rao has indulged in clandestine business in selling of HSD oil of 3520 liters to one Mohammad Ajju of Keshavapatnam

Mandal by cutting off lock patti and after decanting the diesel, closed the cutting with M-seal paste and diverted

HSD tanker in wrong route. The police took custody of the

Tanker along with the driver and the cleaner.

2.01.Upon receiving this information, the Asst. Grain

Purchasing Officer rushed to the spot and conducted enquiry. On enquiry, said P. Bapu Rao disclosed that he is the driver of the vehicle and second person is Mandi Raju, cleaner of the vehicle. Further, it is disclosed that on 28.01.2016, at 09.00 A.M., he got loaded 20,000 liters of

HSD oil to deliver the same to Singareni Collieries Co. Ltd.,

Srirampur, Adilabad District. When the vehicle reached

Keshavapatnam, at 11.00 A.M., approached one

Mohammad Ajju to sell 3500 liters of HSD oil illegally for an amount of Rs.56,000/- for his personal gain. Mohammad

Ajju cut the lock patti and decanted HSD oil into plastic drums and later pasted the broken lock patti with M-seal and thereafter, the vehicle started towards Sriramur to deliver the balance 16,480 liters of diesel. Said Bapu Rao apprehended that the vigilance officials who are conducting vehicle check may find out about the oil theft.

Page 4 of 10 Fair Crl. A. No. 56 of 2016

Therefore, he returned the vehicle towards Keshavapatnam to restore 3500 liters of HSD oil from Mohammad Ajju.

2.02. On examination by the Asst. Grain Purchasing

Officer, it was found that the lock patti was sealed with M- seal paste. Thereafter, the Asst. Sales Manager, BPCL,

Karimnagar contacted higher officials for obtaining master key available at BPCL Depot, Warangal. On 02.02.2016, the Asst. Grain Purchasing Officer proceeded to

Sulthanabad, opened the tanker with the help of Asst.

Sales Manager, BPCL, Karimnagar to calculate the balance

HSD oil in the tanker. On verification of four compartments of tanker, it was found that each compartment has 880 liters diesel less, i.e. total 3500 liters was found to be less. Upon questioning, the driver and the cleaner admitted that they have drawn 3500 liters of

HSD oil and sold the same to Mohammad Ajju of

Keshavapatnam. The act of said Bapu Rao amounts to contravention of clause 3 (1), 3 (3) (a), 3, 3 (4) 3 (6), 3 (7), 4, 7 and 9 of Motor Spirit and High Speed Diesel (Regulation and Supply, Distribution and Prevention of

Malpractices) Order, 2005. The seized oil stock was worth

Rs.7,80,034/-. The tanker was seized under the cover of panchanama and a case was booked under Sec.6-A of E.C.

Act. The tanker was handed over to M/s Sri Laxmi

Page 5 of 10 Fair Crl. A. No. 56 of 2016

Narasimha Filling Station, Poosala Village of Sulthanabad

Mandal for safe custody.

2.03.A show cause notice was issued to Vollala

Ramesh Kumar, i.e. the appellant herein, calling for explanation as to why penalty should not be imposed on him.

2.03.The matter came up for hearing on 24.02.2016.

The driver of the tanker attended the Court.

3.00.Upon hearing the learned counsel for the appellant, the learned Collector (CS), Karimnagar passed judgment confiscating 35% of the seized stock available in the tanker and imposed penalty of Rs.10,000/- on the appellant, who is the owner of the tanker. Hence, this appeal.

4.00.In grounds of appeal, it is pleaded that the crux of the prosecution case is pilferage of 3500 liters of HSD oil from the vehicle by the driver of the vehicle and sale of the same to one Md. Ajju. When said fact is held to be genuine, the driver of the vehicle and Md. Ajju who purchased pilfered oil are liable to criminal act. By pilferage, the driver of the vehicle actually caused loss to the appellant. The appellant is the sufferer as he is

Page 6 of 10 Fair Crl. A. No. 56 of 2016 responsible for transporting the oil to the destination as an authorized contractor. While so, by leaving the driver of the vehicle and Md. Ajju who purchased the pilfered oil, a case is booked against the appellant. When the same was pleaded before the learned Collector (CS), Karimnagar and prayed for release of the stock, the learned Collector (CS) has passed the impugned judgment confiscating 35% of the seized stock and imposing penalty of Rs.10,000/- for not possessing Form-F Certificate with oil tanker. It is pleaded that there is absolutely no evidence to prove that the appellant has contravened any of the Control Order.

Further, it is pleaded that the appellant who has the responsibility to deliver the stock was compelled to remit confiscated 35% stock value worth Rs.2,73,012/- and penalty of Rs.10,000/- for release of stock and vehicle.

Thereafter, said stock and tanker were released vide

Orders in Proc. No.G3/91/2016, dt.25.02.2016. Thereafter, the appellant delivered the stock to the consignor as per the invoice issued by BPCL. Hence, the appellant prayed that the judgment be set aside as the same is not sustainable in law.

5.00.Heard both sides.

6.00.Now the point for consideration is :-

Page 7 of 10 Fair Crl. A. No. 56 of 2016

Whether the Judgment of the learned Collector (CS), Karimnagar in File No.G3/91/2016, dt.24.02.2016 ordering confiscation of 35% of the seized stock of HSD oil belonging to appellant in favour of the Government and imposition of penalty of Rs.10,000/- on the appellant being the owner of oil tanker bearing No.AP-31-Y- 1737, is erroneous in facts and law and therefore, liable to be set aside ?

7.00.POINT :-

There is a panchanama showing seizure of the vehicle in the presence of mediators G. Muthu, N. Pradeep and P. Venkati. On enquiry, the driver by name P. Bapu

Rao disclosed that on 28.01.2016, the tanker bearing

No.AP-31-Y-1737 was loaded at 11.00 A.M., and at

Keshavapatnam, the driver approached one Md. Ajju for selling HSD oil. The driver and said Md. Ajju cut the dispensing lock and took eight barrels of diesel and thereafter fixed the lock with M-seal and the tanker started going towards Mancherial. When the vehicle reached

Godavarikhani, it was found that the vigilance officials are conducting vehicle check. Due to fear, the driver went back to Keshapavatnam to refill the sold diesel from Md.

Ajju. At that time, the tanker was intercepted by the police. The driver of the vehicle disclosed that, for his personal gain for Rs.56,000/- he sold 3500 liters of HSD to

Page 8 of 10 Fair Crl. A. No. 56 of 2016

Md. Ajju. The cleaner of the tanker M. Raju also confirmed the statement given by Bapu Rao. According to the statement of M. Bapu Rao, he sold HSD oil to Md. Ajju of

Keshavapatnam for his personal gain. There is absolutely no evidence by the driver to make an inference that the appellant herein was involved in the sale of HSD oil to Md.

Ajju. Likewise, the cleaner also deposed that 1760 liters was illegally sold to Md. Ajju for personal gain.

8.00.During the hearing, the driver stated that his mother was operated and in view of the requirement of money, he got involved in pilferage of oil and deposed that there was no involvement of the contractor. Upon going through the record, it was found that the contractor was doing business in transporting petroleum products without obtaining Form-F Certificate and the same amounts to illegal transaction and contravention of Secs.3 (1), 3 (3)

(a), 3, 3 (4) 3 (6), 3 (7), 4, 7 and 9 of Motor Spirit and High

Speed Diesel (Regulation and Supply, Distribution and

Prevention of Malpractices) Order, 2005. Further, it was held that the charges are proven against the appellant and the judgment was passed ordering confiscation of 35% of seized stock in favour of the Government and penalty of

Rs.10,000/- was imposed on the owner of the tanker.

Page 9 of 10 Fair Crl. A. No. 56 of 2016 9.00.On perusal of entire evidence available on record, the appellant, as contended, is the sufferer on account of illegal pilferage of diesel by his driver Bapu Rao and cleaner M. Raju. While so, transportation of the diesel without obtaining Form-F Certificate is violation of provisions of Motor Spirit and High Speed Diesel (Regulation and Supply, Distribution and Prevention of

Malpractices) Order, 2005. Transportation of diesel without obtaining Form-F Certificate is certainly a contravention and liable to be penalised. However, ordering confiscation of 35% of the seized stock seems harsh and disproportionate with the offence committed.

Therefore, the quantum of penalty is liable to be modified to that of fine of Rs.10,000/-. Further, the penalty of

Rs.10,000/- imposed on the owner of the tanker, i.e. the appellant herein, is also disproportionate with the offence committed and therefore, is liable to be modified with that of fine of Rs.5,000/-. The point is accordingly answered.

10.00.In the result, the appeal is partly allowed, confirming the Judgment of the learned Collector (CS),

Karimnagar passed in case No.G3/91/2016, dt.24.02.2016, but the order of confiscation of 35% of the seized stock imposed on the appellant is modified to that of imposition of penalty of Rs.10,000/- (Rupees ten thousand only) and the penalty of Rs.10,000/- imposed on the appellant is

Page 10 of 10 Fair Crl. A. No. 56 of 2016 modified and reduced to Rs.5,000/- (Rupees five thousand only).

On payment of penalty as ordered above, the entire seized stock or its value shall be released to the appellant and the remaining fine amount shall be refunded to him forthwith.

Dictated to Stenographer, transcribed by him,

corrected and pronounced by me in the open court on this the 25th day of February, 2017.

Prl. Sessions Judge Karimnagar.

-:-

Fair Crl. A. No. 11 of 2016

IN THE COURT OF THE PRINCIPAL SESSIONS JUDGE

KARIMNAGAR

PRESENT:- SMT. RENUKA YARA ,

Prl. Sessions Judge, Karimnagar.

SATURDAY, THE 25 th DAY OF FEBRUARY, 2017

CRIMINAL APPEAL NO. 11 OF 2016

From what court the:The Collector (CS), Karimnagar. Appeal is preferred Number of the case in :FileNo.G3/1050/2014, that Court.dt.23.05.2015.

Name of the appellant/:1. Yellanki Veeran complainantKumar, S/o Bhadraiah, aged 35 yrs.,

2. Yellanki Bhadraiah, S/o Veeramallaiah, aged 58 yrs., Both are R/o Karimnagar Town and District.

Name of the :The State of Telangana through respondentthe Food Inspector, Huzurabad through the Public Prosecutor,

Sessions Court, Karimnagar.

Sentence and law:It was ordered to confiscate under which it was100% of the seized stock imposed in the Lowerbelonging to the appellant Court.No.1 in favour of the Government and a penalty of Rs.30,000/- was imposed on appellant No.2, owner of the TataAceVanbearing No.AP-15-TB-7443.

Whether confirmed, :In the result, the Reversed or modified.appeal is partly allowed, confirming the Judgment of the learnedCollector(CS), Karimnagar passed in case No.G3/1050/2014, dt.23.05.2015, but the order of confiscation of 100% of the seized stock imposed on the appellant No.1 is modified to

Page 2 of 10 Fair Crl. A. No. 11 of 2016 that of imposition of penalty of Rs.10,000/- (Rupees ten thousand only) and the penalty of Rs.30,000/- imposed on the appellant No.2 is modified to Rs.5,000/-(Rupeesfive thousand only).

This appeal coming before me on 27.01.2017 for final hearing and disposal in the presence of Sri K. Mahender, Advocate for the appellants and of Public Prosecutor for the respondent/State; and upon perusing the proceedings and upon hearing both sides and after duly considering the same, this Court delivered the following:-

-:: J U D G M E N T ::-

This is an appeal preferred under Sec.6-C of

Essential Commodities Act, 1955 by the appellants No.1 and 2 aggrieved by the Judgment passed by the learned

Collector (CS), Karimnagar in File No.G3/1050/2014, dt.23.05.2015 confiscating 100% of the seized commodities belonging to the appellant No.1 in favour of the Government holding that the appellant No.1 contravened the provisions of Clause 17 (A) APS PDS (Control) Order, 2008 and imposing penalty of Rs.30,000/- on the appellant No.2, owner of the Tata Ace Van bearing

No.AP-15-TB-7443.

2.00.Initially, on 28.04.2014, on credible information that PDS rice is being transporting illegally from Thadikal

Village of Keshavapatnam Mandal, the Food Inspector,

Huzurabad, conducted search and noticed one Tata Ace

Van bearing No.AP-15-TB-7443 loaded with rice. On

Page 3 of 10 Fair Crl. A. No. 11 of 2016 enquiry, the driver disclosed his name as Vadloori Naresh and also informed that he purchased PDS rice from

Lambada people of Vankayalagudem Village at the instance of his owner Yellanki Veeran Kumar (the appellant

No.1 herein) at Rs.1,200/- per quintal and said rice is being transported to Maharashtra for being sold at higher price.

The rice was weighed and found to be 18.80 quintals packed in 39 plastic bags. The complainant, i.e. the Food

Inspector, Huzurabad, on suspicion that the appellant is indulging in clandestine business of purchasing and selling

PDS rice for illegal gain in contravention of Clause 17 (A) of

APS PDS (Control) Order, 2008, seized rice worth

Rs.28,200/- under the cover of panchanama and a case was booked under Sec.6-A of E.C. Act. The Tata Ace Van was handed over to SHO of P.S. Shankarapatnam and the

PDS rice was handed over to Godown Officer under acknowledgment. Since the seized commodity was perishable in nature, the rice was ordered to be sold and to remit the sale proceeds into the temporary account through challan.

2.01.A show cause notice was issued to the appellants under Sec.6-B of E.C. Act, but they did not submit their written explanation. Subsequently, one

Yellanki Bhadraiah (the appellant No.2) filed a petition for release of the seized vehicle. The seized vehicle was releasedonfurnishingbankguarantee

Page 4 of 10 Fair Crl. A. No. 11 of 2016

No.0306141GFIN0002, dt.12.06.2014 for Rs.28,200/- vide

Proc. No.G3/1050/2014, dt.13.06.2014.

3.00.The appellants did not show up at the time of proceedings before the learned Collector (CS), Karimnagar.

4.00.On perusing the report and the material available on record, it was held that the appellants indulged in clandestine business of purchasing and selling of PDS rice from cardholders in contravention of Clause 17 (A) of APS PDS (Control) Order, 2008. Hence, confiscation of 100% of the seized commodity was ordered and a penalty of Rs.30,000/- was imposed on the owner of Tata

Ace Van bearing No.AP-15-TB-7443. Hence, this appeal.

5.00.In grounds of appeal, it is stated that the respondents are claiming to have issued show cause notice directing the appellants to appear during the enquiry on 19.02.2015, but the same is denied and pleaded that the impugned judgment was passed without giving any opportunity for making representation. Further, it is pleaded that the judgment of the learned Collector (CS) shows that Clause 17 (A) of APS PDS (Control) Order, 2008 has been contravened which pertains to interruption or interference with the process of smooth distribution of scheduled commodities under Public Distribution System.

Page 5 of 10 Fair Crl. A. No. 11 of 2016

It is contended that even if the statement of the driver to the effect that rice was purchased from Lambada people is believed to be correct, the same does not attract any provision of law. Once PDS stock is distributed to the cardholders, the process of distribution of stock under PDS to the intended beneficiary is over, if the beneficiary intends to sell the commodity, it cannot regarded as an offence. It is contended that there is no provision of law restricting the cardholders for compulsory self-consumption of stock under PDS. Lastly, it is contended that the transportation of meager quantity of 18.80 quintals is not an offence under any provision of law and the allegation that there is illegal transportation and sell of PDS rice is a baseless. Hence, prayed that the impugned judgment be set aside.

6.00.Heard both sides. Perused the record.

7.00.During arguments in appeal, the learned counsel for the appellants contended that 18.80 quintals of rice has been seized on the mere suspicion that the same is PDS rice. Further, the appellants denied the driver giving statement at the time of inspection that the rice is purchased from cardholders. Lastly, it is contended that purchase of PDS rice from cardholders is not an offence.

The learned counsel for the appellants relied upon the

Page 6 of 10 Fair Crl. A. No. 11 of 2016

Judgment rendered by Hon’ble High Court of Judicature at

Hyderabad for the State of Telangana and the State of A.P., in W.P. Nos.7811/2016 and Batch between Maimuna

Begum and the State of Telangana, wherein while referring to Clause 17 (A) of APS PDS Control Order, 2008, the

Hon’ble High Court made it clear that it gets attracted

when there is interruption of food grains from the stage of

FCI godown till it reaches the end beneficiary, i.e.

cardholders and said provision does not comprehend any activity relating to any commodity once it reaches the cardholder.

8.00.The learned Public Prosecutor submitted written arguments stating that the grounds set forth in the appeal are baseless, since the appellants were issued with show cause notice on 31.05.2014 and an opportunity for hearing was already provided to them vide Notice, dt.27.01.2015 to attend the Court on 19.02.2015.

However, the appellants did not avail the opportunity.

Further, it is argued that the appellants purchased PDS rice from the cardholders to transport the same to Maharashtra

State to sell the same at higher price through vehicle bearing No.AP-15-TB-7443. Therefore, it is concluded stating that there was clandestine business of purchasing, selling and transportation of PDS rice illegally for unlawful

Page 7 of 10 Fair Crl. A. No. 11 of 2016 gain and the same amounts to contravention of Clause 17 (A) of APS PDS (Control) Order, 2008.

9.00.Now the point for consideration is :-

Whether the Judgment of the learned Collector (CS), Karimnagar in File No.G3/1050/2014, dt.23.05.2015 ordering confiscation of 100% of the seized stock belonging to appellant No.1 in favour of the Government and imposition of penalty of Rs.30,000/- on the appellant No.2 being the owner of vehicle No.AP-15-TB-7443, is erroneous in facts and law and therefore, liable to be set aside ?

10.00.POINT :-

As per the material available on record, on reliable information, the Food Inspector, Huzurabad intercepted the Tata Ace Van bearing No.AP-15-TB-7443 with (39) rice bags, i.e. 18.80 quintals of rice and suspected the same to be PDS rice. During inspection, the suspected PDS rice was recovered under the cover of panchanama. The statement of the driver was recorded and the driver stated that he procured rice from Thadikal and Vankayalagudem Villages from Lambada cardholders purchased at Rs.1,200/- per quintal at the instance of

Yellanki Veeran (the appellant No.1). The driver stated that he is in no way responsible for the rice procured in the vehicle. The driver stated that the Tata Ace Van bearing

Page 8 of 10 Fair Crl. A. No. 11 of 2016

No.AP-15-TB-7443 is registered in the name of Yellanki

Bhadraiah (the appellant No.2), who is father of Yellanki

Veeran. As per the endorsement on the show cause notice, it is proven that the appellants have received the show cause notice well within the time on 21.06.2014.

However, the appellants have not file any written explanation to the allegations made against them with respect to indulging in clandestine business of purchasing and selling of PDS rice. The appellants pleaded as per

Clause 17 (A) of APS PDS Control Order, 2008, no fair price shop dealer or cardholder or any person shall be allowed to cause interruption or interference with the process of smooth distribution of scheduled commodities and any such attempt of would be deemed as interference and amounts to an offence punishable under Sec.8 of E.C. Act.

In the instant case, there is no allegation that the appellants have diverted PDS rice from being delivered to the cardholders who are entitled to receive the subsidized rates. The allegation made is that the appellants have purchased the rice from the cardholders who purchased from fair price shops to be sold at higher price in

Maharashtra State. As such, the appellants pleaded that once the distribution process is over and the stock reaches the beneficiary and the cardholders sell the commodity, the same cannot constitute offence under any law.

Page 9 of 10 Fair Crl. A. No. 11 of 2016 11.00.From the facts and circumstances of the case, it is seen that the Government with an intention of providing food to poorer sections of the society, is providing PDS rice at subsidized rates. While so, the beneficiaries are selling the same to persons like the appellants for their own gain. Therefore, the total blame for transportation of alleged PDS rice to Maharashtra cannot be fixed on the appellants. Part of the responsibility for the situation is on the appellants and part of the fault is on the part of the cardholders. Hence, confiscation of 100% seized stock belonging to the appellant No.1 seems harsh and therefore, the same is liable to be modified to that of imposition of fine of

Rs.10,000/-. The appellant No.2 who provided vehicle for transportation of PDS rice cannot be deemed to be innocent and he is also liable to be imposed a penalty of

Rs.5,000/-. The point is accordingly answered.

12.00.In the result, the appeal is partly allowed, confirming the Judgment of the learned Collector (CS),

KarimnagarpassedincaseNo.G3/1050/2014, dt.23.05.2015, but the order of confiscation of 100% of the seized stock imposed on the appellant No.1 is modified to that of imposition of penalty of Rs.10,000/- (Rupees ten thousand only) and the penalty of Rs.30,000/- imposed on the appellant No.2 is modified to Rs.5,000/- (Rupees five thousand only).

Page 10 of 10 Fair Crl. A. No. 11 of 2016

On payment of penalty as ordered above, the entire seized stock or its value shall be released to the appellant No.1.

Dictated to Stenographer, transcribed by him,

corrected and pronounced by me in the open court on this the 25th day of February, 2017.

Prl. Sessions Judge Karimnagar.

-:-

Fair Crl. A. No. 55 of 2016

IN THE COURT OF THE PRINCIPAL SESSIONS JUDGE

KARIMNAGAR

PRESENT:- SMT. RENUKA YARA ,

Prl. Sessions Judge, Karimnagar.

SATURDAY, THE 25 th DAY OF FEBRUARY, 2017

CRIMINAL APPEAL NO. 55 OF 2016

From what court the:The Collector (CS), Karimnagar. Appeal is preferred Number of the case in :FileNo.G3/1623/2014, that Court.dt.26.08.2015.

Name of the appellant/:1. Gunda Anjaneyulu, S/o complainantLingaiah, aged 57 yrs., Proprietor of Shiva Sai Industries, Godavarikhani Town,Ramagundam Mandal,Karimnagar District.

2.Komirivenu Madhu, S/o Ranga Rao, aged 35 yrs., R/o Addaguntapalli Village, RamagundamMandal, Karimnagar District.

Name of the :The State through the Asst. respondentSupply Officer, Karimnagar, through the Public Prosecutor,

Sessions Court, Karimnagar.

Sentence and law:It was ordered to confiscate under which it was75% of the seized stock of BPT imposed in the Lowerrice belonging to the appellant Court.No.1 in favour of the Government and a penalty of Rs.50,000/- was imposed on appellant No.2, owner of Eicher Van bearing No.AP-15-TA-2787.

Whether confirmed, :In the result, the Reversed or modified.appeal is partly allowed, confirming the Judgment of the learnedCollector(CS), Karimnagar passed in case No.G3/1623/2014,

Page 2 of 8 Fair Crl. A. No. 55 of 2016 dt.26.08.2015, but the order of confiscation of 75% of the seized stock imposed on the appellant No.1 is modified to that of imposition of penalty of Rs.10,000/- (Rupees ten thousand only) and the penalty of Rs.50,000/- imposed on the appellant No.2 is modified to Rs.1,000/-(Rupeesone thousand only). On payment of penalty as ordered above, the entire seized stock or its value shall be released to the appellant No.1 and the bank guarantee submitted by the appellant No.2 for release of the vehicle shall be released to him forthwith.

This appeal coming before me on 27.01.2017 for final hearing and disposal in the presence of Sri K. Mahender, Advocate for the appellants and of Public Prosecutor for the respondent/State; and upon perusing the proceedings and upon hearing both sides and after duly considering the same, this Court delivered the following:-

-:: J U D G M E N T ::-

This is an appeal preferred under Sec.6-C of

Essential Commodities Act, 1955 by the appellants No.1 and 2 aggrieved by the Judgment passed by the learned

Collector (CS), Karimnagar in File No.G3/1623/2014, dt.26.08.2015 confiscating 75% of the seized stock of BPT rice belonging to the appellant No.1 in favour of the

Government and imposing penalty of Rs.50,000/- on the appellant No.2, owner of the Eicher Van bearing No.AP-15-

TA-2787.

Page 3 of 8 Fair Crl. A. No. 55 of 2016 2.00.On 09.09.2014, on credible information, one

Eicher Van bearing No.AP-15-TA-2787 was intercepted and on verification, it was found that the owner-cum-driver was carrying 71.54 quintals of BPT rice without permit.

Further, it was found that as per the directions of proprietor of M/s Shiva Sai Industries, Ramagundam, he loaded 71.54 quintals of BPT rice in plastic bags at 25 kgs., and brought to M/s Shiva Sai Rice Depot, Ramnagar, Karimnagar. It was suspected that the appellants have contravened

Clause 2K (4) of APSCD (LS&R) Order, 2008 and condition 7

(i) of the licence issued under the above order vide Memo

No.07/CS-1 (1)/2014, dt.21.06.2014. The rice was seized under the cover of panchanama along with Eicher Van.

The rice was handed over to Sri V. Veera Kumar, Proprietor of M/s Sai Traders, Ramnagar, Karimnagar and the Eicher

Van was deposited with the S.I. of Police, Karimnagar-II

Town.

2.01.Thereafter, a show cause notice was issued to both the appellants calling for written explanation. The appellants did not submit written explanation.

3.00.On hearing the arguments, the learned

Collector (CS), Karimnagar, disposed of the case ordering confiscation of 75% of the seized stock belonging to the appellant No.1 and imposed a penalty of Rs.50,000/- on the appellant No.2. Hence, this appeal.

Page 4 of 8 Fair Crl. A. No. 55 of 2016 4.00.In grounds of appeal, it is stated that the show cause notice was not served on the appellant No.1. It is claimed that the appellant No.1 was in USA from 31.04.2016 to 21.06.2015, therefore, was not served with the show cause notice and it is incorrect to state that he attended the personal hearing and admitted his guilt. It is claimed that the judgment under appeal was passed without giving an opportunity of hearing to the appellants in violation of principles of natural justice.

4.01.Further, the appellants disputed applicability of

Clause 2K (4) of APSC (LS&R) Order, 2008 and condition 7

(i) of the licence under the said order. In addition, the appellants pleaded that the Government’s procurement policy of paddy and rice was issued vide G.O. Ms. No.31, dt.21.10.2013 and there is no need to obtain any permit for movement of preferred rice with the State. It is also contended that Clause 2K (4) of APSCD (LS&R) Order, 2008 defines “Dealer in relation to food grains” and the condition 7 (i) of the licence prohibits the licensee entering into speculative business. Without considering the applicability of relevant sections, the appellant contended that the judgment was passed ordering confiscation of 75% of the seized stock amounting to Rs.1,39,503/- and penalty of Rs.50,000/- was imposed on the owner of the Eicher Van.

Page 5 of 8 Fair Crl. A. No. 55 of 2016

On the basis of the aforementioned arguments, the learned counsel for the appellants prayed that the judgment of learned Collector (CS), Karimnagar be set aside.

5.00.In reply, the learned Public Prosecutor submitted written arguments supporting the judgment stating that as per the Government Memo No.07/CS-1 (1)/2014, dt.21.06.2014, super fine referred variety of rice shall be allowed to on permit to be issued by the Collectors as in the case of levy free rice. The appellant No.1 did not obtain permit to sell BPT rice and sent 71.54 quintals of

BPT rice in 292 plastic bags @ 25 kg., from his mill to Sai

Rice Depot, Ramnagar, Karimnagar. Further, the learned

Public Prosecutor argued that the condition 7 (i) of licence of APSCD (LS&R) Order, 2008 prohibits transactions involving purchase, sale or storage for sale of all or any of the scheduled commodities in a speculative manner to ensure supply of scheduled commodities in the market.

As such, contended that confiscation of 75% of the seized rice belonging to the appellant No.1 and penalty of

Rs.50,000/- on the appellant No.2 was imposed by taking lenient view. Hence, prayed that the appeal be dismissed.

6.00.Now the point for consideration is :-

Whether the Judgment of the learned Collector (CS), Karimnagar in File No.G3/1623/2014, dt.26.08.2015 ordering

Page 6 of 8 Fair Crl. A. No. 55 of 2016 confiscation of 75% of the seized stock belonging to appellant No.1 in favour of the Government and imposition of penalty of Rs.50,000/- on the appellant No.2 being the owner of vehicle No.AP-15-TA-2787, is erroneous in facts and law and therefore, liable to be set aside ?

7.00.POINT :-

Briefly, the facts of the case are that the Asst.

Supply Officer, Karimnagar, along with his staff proceeded to Ramnagar locality of Karimnagar on credible information, on 09.09.2014, and took up verification of vehicles. During said verification, the Eicher Van bearing

No.AP-15-TA-2787 was found with BPT rice. The appellant

No.2, who is the owner-cum-driver of the vehicle, produced a bill for 71.54 quintals of BPT rice, R.C. Book and driving licence, but did not produce valid documents like permit issued by the competent authority and way bill for transportation of rice. The transportation was done by the appellant No.1, who is the proprietor of M/s Shiva Sai

Industries, Ramagundam.

8.00.The learned counsel for the appellants referred to G.O. Ms. No.31, dt.21.10.2013 and guidelines issued by the Government for decentralized procurement of paddy and rice. More particularly, G.O. Ms. No.31, dt.21.10.2013 states that super fine preferred variety of rice shall be sold

Page 7 of 8 Fair Crl. A. No. 55 of 2016 within the State only as this has a good demand from the public and the available rice of these varieties meets only a part of the demand. There shall be no need to obtain any permit for movement from one district to another for superfine preferred varieties rice within the State.

9.00.During the proceedings before the learned

Collector (CS), the appellant No.1 appeared and admitted that he was transporting the rice from Godavarikani to

Karimnagar Town without waybill and permit.

Transportation of BPT superfine rice is held to be contravention of Government Memo No.07/CS.1/2014, dt.21.06.2014. On perusal of said Govt. Memo, it requires the traders to obtain permit while transporting the superfine preferred varieties of rice. Since permit was not obtained, the appellant No.1 has contravened the order of theGovernmentvideMemoNo.07/CS.1/2014, dt.21.06.2014. However, confiscation of 75% of the seized stock is hash and the same needs to be modified with that of fine of Rs.10,000/-. Further, the appellant

No.2 cannot be held liable for the offence committed by the appellant No.1. According to the statement of appellant No.2, he merely provided the vehicle for transportation, but in no way connected with the superfine rice being transported without permit. Therefore, imposition of penalty of Rs.50,000/- imposed on the

Page 8 of 8 Fair Crl. A. No. 55 of 2016 appellant No.2 seems unjust and unreasonable and the same is to be reduced to Rs.1,000/-. The point is accordingly answered.

10.00.In the result, the appeal is partly allowed, confirming the Judgment of the learned Collector (CS),

KarimnagarpassedincaseNo.G3/1623/2014, dt.26.08.2015, but the order of confiscation of 75% of the seized stock imposed on the appellant No.1 is modified to that of imposition of penalty of Rs.10,000/- (Rupees ten thousand only) and the penalty of Rs.50,000/- imposed on the appellant No.2 is modified to Rs.1,000/- (Rupees one thousand only).

On payment of penalty as ordered above, the entire seized stock or its value shall be released to the appellant No.1 and the bank guarantee submitted by the appellant No.2 for release of the vehicle shall be released to him forthwith.

Dictated to Stenographer, transcribed by him,

corrected and pronounced by me in the open court on this the 25th day of February, 2017.

Prl. Sessions Judge Karimnagar.

-:-