Nathuni Sah vs The State of Bihar, The Secretary, Food Supply and Commerce Department, Government of Bihar and The Collector

D.S. Dhaliwal, J.—This writ petition is for issuing a direction to the Respondents directing them to pay interest in respect of the price of the essential commodities seized from the Petitioner''s custody and auction sold under their orders on the ground that since the Petitioner has been acquitted and the confiscation order has been set aside by the State Government, he is entitled to not only the price of the auction-sold goods but also to the interest thereon as contemplated by Section 6C(2) of the Essential Commodities Act (hereinafter referred to as ''the Act'').

It appears that during the course of a raid on 3.9.1989 certain essential commodities in the form of oil seeds, food grains and pulses were recovered and seized from the possession of the Petitioner. The Petitioner was, thus, prosecuted for an offence u/s 7 of the Act. Confiscation proceedings were also started in respect to the said seized commodities u/s 6A of the Act. The seized commodities were auction-sold on 12.12.1989 for a total sum of Rs. 1,35,530.65 which was deposited in Government Treasury. The Petitioner was acquitted by the Special judge of the charge vide judgment and order dated 30th November, 1992 and as a consequence thereof the Secretary, Food Supply and Commerce Department, Government of Bihar vide order dated 12.3.1993 (Annexure-2) set aside the confiscation order of the Collector in terms of Section 6C of the Essential Commodities Act. Thereafter the Collector vide order dated 3.11.1993 (Annexure-3) ordered for payment of the sale proceeds of the seized commodities to the Petitioner. As no interest was paid on the said amount, the Petitioner filed an application before the Collector, Vaishali for payment of interest to him on the aforesaid amount at the rate of 15 per cent per annum from the date of seizure, in terms of Section 6C(2) of the Act, which application was dismissed.

I have heard the learned Counsel for the Petitioner and Junior Counsel to Government Advocate.

Perusal of the order (Annexure-2) passed by the Secretary, Department of Food, Supply and Commerce, Government of Bihar in appeal filed by the Petitioner against the confiscation order goes to show that the appeal was allowed in terms of Section 6C(2) of the Act on the ground that the Petitioner has been acquitted of the charges in the criminal case by the Special Judge. Section 6C of the Act clearly lays down that in a case of setting aside of confiscation proceedings, where it is not possible for any reason to return the seized commodities, the person from whom the commodities have been seized will be entitled to the price of the essential commodities sold by the Government and also to a reasonable interest thereon calculated from the date of seizure. Thus, it was obligatory upon the Collector to return to the Petitioner not only the price of the seized commodities but also the interest thereon at reasonable rate from the date of seizure till the date of payment. Petitioner in this case claimed interest at the rate of 15 per cent per annum which cannot be said to be unreasonable in view of the fact that Section 7A of the Act stipulates an interest at the same rate in respect of any amount found due to the Government from any person under the Act.

Junior Counsel to Government Advocate appearing for the State contends that the Petitioner is not entitled to interest because he did not press his application for claiming of the interest which he had filed before the Collector as is indicated in Annexure-4, the copy of the order dated 26.9.1994/16.11.1994. Learned Counsel for the Petitioner however, vehemently contended that no such concession was made by the Counsel for the Petitioner in the Court of the Collector. He further submitted that in case the Petitioner had made statement for not pressing the petition there was no reason as to why the order on the application could not have been passed on 26.9.1994 and there was no occasion to keep the order reserved and subsequently announced on 16.11.1994.

I find merit in this contention of the learned Counsel for the Petitioner. No statement of the Counsel for the Petitioner appearing before the Collector has been recorded by the Collector in respect to non-pressing of the application. Had the Counsel for the Petitioner agreed not to press the application on the date of argument i.e. 26.9.1994, the application should have been dismissed then and there on that very date. Moreover Section 6C(2) of the Act casts a statutory duty on the Collector to return the amount along with reasonable interest.

In the result, the petition is allowed and a direction is issued to the Collector, Vaishali to make payment of interest @ 15 percent per annum to the Petitioner on the principal amount of Rs. 1,35,530.65 from the date of seizure i.e. 5.9.1989 upto 3.11.1993 when the order for payment was made. Since the payment of interest has already been sufficiently over-delayed, the Collector is directed to make payment of interest within two months from the date of communication of this order.