Absence of Black-Marketing Allegations Precludes Confiscation of Essential Commodities for Minor Technical Breaches of Stock Maintenance

Following a telephonic tip regarding illegal storage, the applicant-State inspected the respondent's godowns (Nos. 3, 4, & 5).

Authorities found 17.80 quintals of wheat and 240 quintals of rice (total 257.80 quintals).

Alleged irregularities included the absence of a name board, an "afterthought" rent agreement, failure to maintain an updated stock register, and the presence of empty Food Corporation of India (FCI) bags suggesting potential adulteration or diversion of PDS grains.

On 09.09.2009, the Additional Collector ordered the confiscation of the grains.

The respondent appealed this order, and the Additional Sessions Judge, Ahmedabad, set aside the confiscation on 12.12.2011.

The State subsequently filed this revision application challenging the acquittal of the goods.

1. Whether the mere finding of technical irregularities like non-maintenance of registers or presence of empty FCI bags justifies the confiscation of essential commodities in the absence of evidence of black-marketing.

2. Whether the findings of the lower appellate court regarding the non-applicability of the Public Distribution System (Control) Order, 2001, to a private godown without a license were legally sound.

Section 6A of the Essential Commodities Act, 1955, regarding the power to confiscate seized commodities.

Gujarat Essential Commodities Dealers (Control) Order, 1977, and the Public Distribution System (Control) Order, 2001, noting that these orders typically apply to license-holding shopkeepers distributing to ration card holders.

Judicial principle established in Karan Oil Industries v. District Collector, Jamnagar (1996) and N. Nagender Rao & Co. v. State of Andhra Pradesh (1994), which holds that technical breaches or failure to maintain registers do not warrant confiscation if there are no specific allegations of black-marketing.

The Court observed that the State failed to prove that the seized grains were specifically meant for the Public Distribution System or that the respondent was a licensed dealer under the 1977 Order.

While the presence of empty FCI bags was noted, the Court held that this alone does not prove the grain was Government property or meant for ration card holders.

The Court reasoned that technical irregularities—such as an outdated stock register or lack of a display board—are not "grave enough" to justify the extreme measure of confiscating 257.80 quintals of grain.

Since the State could not establish that the respondent was actively indulging in black-marketing, the court determined that the confiscation order was disproportionate and legally unsustainable.

The Court dismissed the Revision Application and upheld the judgment of the Learned Additional Sessions Judge, affirming the order to release the confiscated grain to the respondent.