Summary
The appellants' conviction under Section 3 read with Section 7 of the Essential Commodities Act for storing diverted Government-quota cement was set aside because, by the date of the alleged offence in 1994, price and distribution controls on cement and the State's delegated licensing power had been withdrawn, and the prosecution proved no subsisting control order whose breach could be an offence.
Issues
- Whether a conviction under Section 7 of the Essential Commodities Act could stand when no control order under Section 3 relating to cement was operative on the date of the alleged offence.
- Whether the conviction could be altered to an offence under the Indian Penal Code at the appellate stage.
Provisions considered
- Section 3 read with Section 7, Essential Commodities Act, 1955Held that a conviction under Section 7 requires contravention of a subsisting order made under Section 3; as no such order relating to cement was operative or proved on the date of occurrence, the prosecution lacked a statutory foundation. (¶¶ 15.2, 16, 17, 19, 25)
- Section 5, Essential Commodities Act, 1955Noted that the State's 1973 licensing order rested on powers delegated under this section, and that the delegation as regards regulation of retail cement distribution by licences or permits was rescinded by S.O. 624(E) of 07.08.1990. (¶¶ 15.3, 15.5)
- Section 222, Code of Criminal Procedure, 1973Observed that a trial court may convict for a minor offence proved on the facts without a specific charge if its ingredients are established and no prejudice is caused, but that this exercise was not undertaken and the High Court could not substitute an IPC conviction for the first time in appeal. (¶¶ 26, 27)
Held
- By the Cement Control (Amendment) Order, 1989 the Central Government removed price and distribution control of cement and omitted the operative paragraphs of the Cement Control Order, 1967, and by S.O. 624(E) dated 07.08.1990 the delegation to States to regulate retail cement distribution by licences or permits was rescinded; State-level licensing controls therefore stood withdrawn. (¶¶ 15.4, 15.5)
- On the date of the alleged offence, 24.03.1994, neither the 1967 Order nor the State's 1973 licensing order operated so as to attract Section 7, and the prosecution placed no subsisting control order or restriction on record; the prosecution was therefore misconceived, and the courts below erred in proceeding only on appreciation of evidence without examining the legal effect of decontrol. (¶¶ 16, 17)
- Applying Kolhapur Canesugar Works, where a provision is omitted without a saving clause proceedings founded on it cannot continue; absent any subsisting control or saving provision on the date of occurrence, the conviction and sentence could not stand, and the remaining contentions did not need to be decided. (¶¶ 18, 19, 20)
- Diversion or dishonest retention of Government-supplied cement may still attract offences under the Indian Penal Code depending on the evidence, and the investigating agency ought to have invoked those provisions; but the High Court, hearing an appeal against conviction for a distinct statutory offence, could not substitute an IPC conviction for the first time, and the lapse lay with the investigating agency. (¶¶ 22, 25, 26, 27)
Result
Criminal appeals allowed; convictions and sentences set aside; bail bonds cancelled and any fine paid to be refunded.