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Judgment
E. Padmanabhan, J.—The writ petitioner prays for the issue of a writ of certiorari to call for the proceedings of the first respondent in G.O.
2D No. 70 Co-operation Food and Consumer Protection Department, dated 22.8.96 and the proceedings of the 2nd respondent in K. No.
366998/K8 dated 31.3.2000 and quash the same.
The writ petitioner is a wholesale dealer in Kerosene and supply the same to ration shops for distribution under Public Distribution System,
besides he is permitted to sell to the public through permit holding cart vendors in open market. The Special Tahsildar inspected the petitioner''s
firm on 3.9.92 at 12.10 p.m., perused the register, physically verified the stock of Kerosene with the help of dipper and found 20 litres of shortage
of Kerosene as against the book stock. The inspecting authority made an endorsement of stock deficit and such deficit is less than the permissible
limit of 2%, besides 1% leakage. On 3.9.92, the District Supply Officer and the 2nd respondent came to the petitioner''s premises and inspected
the records. During that time, a load of Kerosene came to the petitioner''s shop and the same was unloaded in that premises. The Kerosene was
unloaded into the Kerosene tank. Closely following the inspection, the 2nd respondent and the District Supply Officer came for inspection on the
same day within an hour. According to them, there is an excess stock of 709 litres of kerosene, after giving consideration of 2% either shortage or
excess, as permitted by calibration, it was taken as 211.5 litres of kerosene as excess stock. It is stated that such a conclusion has been arrived at
not on the basis of actual measurement of the kerosene stock, but on the basis of approximate measure with dip rod.
The 2nd respondent by proceedings dated 15.11.92 ordered confiscation of 211.5 litres u/s 6-A of The Essential Commodities Act, forfeited
the security deposit and suspended the wholesale dealer''s licence for a period of 60 days. As against the said proceedings, the petitioner preferred
an appeal u/s 6-C before the first respondent. The appellate authority, by G.O. 2D No. 70 Co-operation, Food and Consumer Protection Dept.,
dated 22.8.1996 confirmed the proceedings of the 2nd respondent and dismissed the appeal. Being aggrieved, the present writ petition has been
filed.
Heard Mr. C. Prakasam, learned counsel appearing for the writ petitioner and Ms. D. Malarvizhi, learned Government Advocate appearing for
the respondents.
The 2nd respondent, original authority, it is pointed out, has proceeded on the assumption that the petitioner has violated Clause 7 (4) of The
Tamil Nadu Kerosene (Regulation of Trade) Order, 1973, read with licence condition No. 5. There is no dispute about the opening stock on
3.9.92 and the arrival of 12,000 litres on 3.9.92. There is no dispute about the sale effected on 3.9.92. As per the accounts, there should be a
balance of 18,725 litres of kerosene in stock, but actually, according to the Tahsildar, there is a stock of 19,434 litres and excess being 709 litres.
After allowance of 2%, what has been concluded by the original authority being that there is an excess of 211.5 litres of kerosene. It is the
contention of the writ petitioner that without actually measuring the contents of barrels, the Inspecting Officer assumed that the particular barrels
contained 200 litres of kerosene, while factually it was less than 200 litres and, therefore, actually there is no excess stock at all. That apart, just
prior to the second inspection there was an inspection and no excess has been detected.
It is rightly pointed out that the report of the Taluk Supply Officer, who has inspected the dealers licence premises has not been furnished to the
petitioner. For a total stock of 18,725 litres, 211.5 litres of excess stock of kerosene alleged is not based upon actuals, but on approximation only.
The Taluk Supply Officer, as rightly contended has not actually measured the stock, but has arrived at the approximate value by using the dip rod.
It is not as if 211.5 litres of public distribution system kerosene has been diverted or there was an attempt to sell in black-market. Assuming there
is an excess of 709 litres, when compared to the total storage of 18,725 litres, it is not even 3% difference and it is based on approximate
measurement. It is rightly contended that it cannot be assumed that the petitioner was in possession of excess stock of kerosene. There was no
complaint by the retailers to whom the petitioner has supplied kerosene alleging that the petitioner has supplied kerosene with a defective
measurement or shortage in quantity than billed.
The approach of the respondents that there has been under-weighment of kerosene to retailers also is without any materials and it is based upon
surmises or conjectures, which is an error apparent on the face of the record. It has been rightly pointed out that there has been no such complaint
nor the show cause notice issued to the petitioner refers such imputation as the basis for such an action. Calibration error has been taken as 2% on
the total stock of 24,875 litres, but there is no material to show that the total stock has been actually measured and it is only an approximate
measurement. The assumption that due to under-weighment of supply only there is excess stock is not based upon any material nor there was any
complaint nor anyone has complained that the petitioner has cheated the retailers. Having issued a show cause notice for alleged violation on the
particular allegation, it is not open to the respondent to assume that the petitioner is guilty of different violation, viz., under-weighment of supply.
The ground level tank and the barrels were not actually measured and the report of the Tahsildar also is an approximate measurement by dipping a
rod in the ground level tank. Therefore, if at all there was only a marginal error in such measurement, which would go to show that there is no
excess stock at all.
Clause 7 (4) of The Tamil Nadu Kerosene (Regulation of Trade) Order, 1973, reads thus :-
Every wholesaler or retailer shall keep and maintain a true and correct account and such other record as may be specified by the authorised
officer from time to time.
The original authority has proceeded on the assumption that Clause 7 (4) has been violated. It has been nowhere stated that there has been a
failure to maintain a true and correct account, nor the accounts maintained by the petitioner have been found to be a false one. Condition No. 5 of
the licence reads thus :-
5) The wholesales shall maintain a register of daily account showing correctly all transactions of kerosene in his possession. It shall show -
(a) the opening stock on each day ;
(b) the quantities and the brands received on each day showing the names of the suppliers ; and
(c) the quantities sold, delivered or otherwise disposed of on each day showing the places of destination and the name of the consignor
Note : When a licence is registered as a retailer dealer, the stock issued for retail trade should also be entered in the transactions and a separate
account maintained for the retail sales.
(d) The closing stock on each day.
A reading of Condition No. 5 of the licence and the allegations or imputations will not establish that the petitioner has violated Condition No. 5
of the licence. Thus in any view of the matter, the impugned proceedings of the respondents suffer with error apparent on the face of the record
and they are based on mere surmises and conjectures. At any rate, there being no complaint of short measure and there being no falsification of
records or accounts and there being no manipulation, for the alleged excess of 1%, which also is arrived at only on estimate and not by actual
measurement, it cannot be said that the petitioner has violated either Clause 7 (4) of the order or Condition No. 5 of the licence. Both the
respondents have misdirected themselves in this respect and over-enthusiastically they have ordered confiscation, forfeited the security deposit and
suspended the licence.
Assuming that there a negligible excess, there is no reason at all to forfeit the security deposit as well as confiscate the alleged excess and also
suspend the licence. The same is not in accordance with Clauses 18 and 19 of The Tamil Nadu Kerosene (Regulation of Trade) Order. At any
rate, even for such a negligible excess when compared to substantial stock, it is highly arbitrary to confiscate the alleged excess stock as well as
suspend the licence and forfeit the security deposit, which is not warranted on the facts of the case. In the present case, even assuming there was
excess, already suspension of the licence has been given effect to and that itself would be a sufficient deterrent on the petitioner.
It is not as if there has been any deliberate commission or omission on the part of the petitioner warranting confiscation, forfeiture and
suspension on the facts. This action is clearly arbitrary and no reasonable authority on the materials would have arrived at such a finding or
conclusion. The impugned proceedings, as already pointed out, is vitiated by non-application of mind, vitiated by error apparent on the face of the
record and it is an arbitrary exercise of power.
In the result, the writ petition is allowed. The impugned proceedings of the 2nd respondent as affirmed by the first respondent are quashed.
Consequently, there will be a direction to the respondents to pay the value of 211.5 litres of kerosene and refund the security deposit forfeited
within a period of three months from the date of this order. Parties shall bear their respective costs. Consequently, connected miscellaneous
petition is closed.