SHAILENDRA KUMAR GUPTA Vs. STATE

JUDGEMENT

(1.) This is an application under Section 482 Cr. P. C. praying that the proceedings against the applicants in criminal case State v. Shailendra Kumar Gupta and others, under Section 7 of the Essential Commodities Act pending in the court of Special Magistrate, Lucknow be quashed. It appears that a charge-sheet dated 29th July, 1978 was filed against the applicants by the Inspector of Police SPE, CBI, CIU, New Delhi in the court of Special Magistrate, Luckuow under Sec. 7 of the Essential Commodities Act (hereinafter referred to as the Act) read with clause 7 of the Iron and Steel (Control) Order, 1956 (hereinafter referred to as the Order) in which it was stated that the applicants were the partners of M/s Pradhan Strip Mills in the city of Kanpur and that they had not utilized iron and steel material to the extent of 100. 115 Mts. valued at Rs. 1,74,100/- which was acquired and allocated towards the construction of a factory. They had thus committed a breach of clause 7 of the Order which was punishable under Sec. 7 of the Act. Clause 4 and 1st paragraph of clause 7 of the Order are as follows: - " 4. Acquisition.- No person shall acquire or agree to acquire any iron or steel from a producer, a stockholder or a person holding stocks of iron and steel except under the authority of and in accordance with the conditions contained in a quota certificate or permit issued by the Controller or under the authority of and in accordance with the conditions contained or incorporated in a general or special written order of the Controller. " " 7. Use of iron and steel to conform to conditions covering acquisition. A person acquiring iron or steel in accordance with the provisions of Cl. 4 shall not use the iron or steel otherwise than in accordance with any conditions contained or incorporated in the document which was the authority for the acquisition. " The first paragraph of clause 7 of the Order prohibits the use of the iron or steel which has been acquired in accordance with the provisions of clause 4 of the Order against the conditions of the permit. In the present case, there is no allegation in the charge-sheet that the applicants used the iron and steel, which they had acquired, against the condition of the permit. The only allegation is that they had not utilised it for the construction of a factory. The non-user of the iron and steel acquired in accordance with the provisions of clause 4 of the Order does not amount to a breach of clause 7 of the Order. It is only when the iron and steel is used otherwise than in accordance with the conditions of the permit that a breach of clause 7 of the Order is committed. In these circumstances, even if the facts- alleged in the charge-sheet are accepted, the applicants have not violated the provisions of clause 7 of the order. No offence under Section 7 of the Act is, therefore, made out against them. I am fortified in my view by the decision of the Supreme Court in State of U. P. v. Ramagya Sharma Vaidya (A. I. R. 1966 S. C. 78), in which it has been held; - " There is no provision in the Control Order requiring that iron or steel acquired under the Control Order should be utilised within a specific time. If it had been the intention to include keeping or storing within the word 'use' there would have been some provision regarding the period during which it would be permissible to keep or store the iron, for it is common knowledge that building operations take some considerable time and are sometimes held up for shortage of material or other reasons. Further the word 'use' must take its colour from the context in which it is used. In clause 7 the expression "use in accordance with the conditions contained" suggests something done positively e. g. , utilisation or disposal. Mere 'non-use', in our opinion, is not included in the word 'use'. " Further under Section 10 of the Act where a company contravenes an order under Section 3 of the Act only the persons who at the time the contravention was committed were incharge of and were responsible to the company for the conduct of the business of the company shall be deemed to bi guilty of the contravention and shall be liable to be proceeded against and punished. A partnership firm is included in the definition of 'company' in the Explanation to Section 10 of the Act. In the present case, it is only alleged in the charge-sheet that the applicants were the partners of M/s Pradhan Strip Mills who were allotted the iron and steel under clause 4 of the Order for the construction of a factory. It is not alleged that they were responsible to the partnership firm for the conduct of the business of the firm. Even if the allegations in the charge-sheet be accepted, no offence under Section 7 of the Act is made out against them on this ground as well. The result, therefore, is that even if all the allegations made in the charge-sheet are accepted no offence under Section 7 of the Act read with clause 7 of the Order is made out against the applicants. This application is accordingly allowed and the proceedings against the applicants in criminal case State v. Shailendra Kumar Gupta and others, under Section 7 of the Act pending in the court of Special Magistrate, Lucknow are quashed. .