Appeal
Appeal against the confirmation of conviction by the High Court
1. The appellants herein, Manoj (A1) and Prakash (A2), who are related to each other as nephew and uncle, were tried and convicted for the offences punishable under Section 3 read with Section 7 of the Essential Commodities Act, 1955 and were sentenced to undergo rigorous imprisonment for one year and to pay a fine of Rs. 100/-, in default thereof to undergo further rigorous imprisonment for one month, by judgment dated 03.04.2000 passed by the Special Judge, Aurangabad in Special Case No. 22 of 1994. Aggrieved thereby, the appellants preferred Criminal Appeal No. 166 of 2000 before the High Court of Judicature at Bombay, Bench at Aurangabad. The High Court dismissed the appeal and affirmed the judgment of conviction and sentence passed by the trial Court. Hence, the present criminal appeals.
Case of the prosecution
2. The prosecution case is that the Public Works Department of the State Government had awarded the work of construction of a Khar passage in cement concrete along the Kannad – Bahirgaon Road, Aurangabad to Bharat Majdoor Credit Cooperative Society. After obtaining the work order, the Chairman of the said Society, Madhukar (A3) is alleged to have sublet the work to Prakash Vyenkatrao (A4). At the relevant time, Sadashiv (A5) and one more accused (A6) were working as peons in the PWD godown at Aurangabad.
3. As per the terms of the contract, the PWD was required to supply 850 bags of cement from Government quota to the contractor (A3) for execution of the work. Accordingly, the Deputy Engineer of PWD, Ramesh Jaiswal (P.W.8) issued the first indent for supply of 400 bags of cement in the first week of March 1994. However, according to the prosecution, the second indent of 400 bags of cement released from the PWD godown did not reach the work site.
4. It is further alleged that on 24.03.1994, P.S.I. Kadam (P.W.2) of Kranti Chowk Police Station, Aurangabad received secret information that two trucks carrying Government quota cement were stationed near Hari Masjid at Mondha, Aurangabad and that the cement bags were being unloaded at Mistri Traders with the intention of black-marketing them. Acting on the said information, P.S.I. Kadam conducted a raid and intercepted two trucks bearing registration Nos. MHF-6625 and MHB-5061 which were found parked on the road between two shops, namely, Mistri Traders and Maharashtra Agro Industries, allegedly belonging to the appellants.
5. During the raid, the appellants were allegedly found in possession of 365 bags of cement of Government quota. The remaining 25 bags of cement were allegedly recovered on 28.04.1994 from the shop of Maharashtra Agro Industries. During investigation, it was further alleged that Sadashiv (A5) had delivered the cement bags to the appellants and had received 10 bags of cement as commission.
6. P.S.I. Kadam lodged a complaint with Kranti Chowk Police Station for the offences punishable under Section 3 read with Section 7 of the E.C. Act against the appellants and four other accused persons. Upon completion of investigation, a chargesheet was filed and the case was taken on file as Special Case No. 22 of 1994.
Trial and conviction
7. During trial, the prosecution examined 17 witnesses and relied upon oral and documentary evidence as well as material objects. Upon appreciation of the evidence on record, the trial Court convicted Accused Nos. 1, 2, 3 and 5 for the offences under Section 3 read with Section 7 of the E.C. Act and sentenced each of them to undergo rigorous imprisonment for one year and to pay a fine of Rs.100/-, in default thereof to undergo further rigorous imprisonment for one month. Accused Nos. 4 and 6 were acquitted of the charges.
High Court affirmed the conviction
8. The conviction and sentence so recorded by the trial Court were affirmed by the High Court in the appeal filed by the appellants. Consequently, the appellants have approached this Court by way of the present criminal appeals.
Analysis
11. We have considered the rival submissions and perused the materials available on record.
Accused 4 and 5 are working as peons in the Public Works department
12. Admittedly, there was a contract for construction of a Mori in cement concrete on the Kannad – Bahirgaon Road, which was allotted to Accused No.3, who was the Chairman of Bharat Mazdoor Cooperative Society. According to the prosecution, the said Society further entrusted execution of the work to Accused No 4. Accused Nos. 5 and 6 were working as Peons in the Public Works Department godown at Aurangabad.
Accused 1 and 2 purchased cement for government work but unauthorisedly stored in their godown
13. The specific allegation against the appellants (Accused Nos. 1 and 2) is that they purchased cement at a concessional or controlled rate from Accused Nos. 3 and 4 which was meant exclusively for execution of Government work, with the intent to sell the same at a higher price and that such cement was unauthorisedly stored in their godown. On this basis, it is alleged that the appellants committed offences punishable under Section 3 read with Section 7 of the E.C. Act. The criminal proceedings initiated against them culminated in their conviction and sentence of one year rigorous imprisonment with a fine of Rs. 100/-, which was affirmed by the High Court. Therefore, the appellants are before this Court.
14. The principal contention urged by the learned senior counsel for the appellants is that in view of the Cement Control (Amendment) Order 1989, all restrictions on sale, purchase, possession and storage of cement stood lifted with effect from 01.03.1989. Consequently, dealing in cement did not constitute any offence on the date of the alleged incident, i.e., 24.03.1994. It was further contended that once statutory control over cement was withdrawn, there was no surviving order under Section 3 of the E.C. Act whose contravention could attract penal consequences under Section 7, rendering the prosecution fundamentally unsustainable.
15. To appreciate the aforesaid submission, it is necessary to briefly notice the statutory framework governing control and regulation of cement at the relevant point of time.
15.1. Cement is a commodity of vital importance to economy and infrastructure development. Under the Industries (Development and Regulation) Act, 1951, cement is a “Scheduled Industry” within the meaning of Section 3(1). By notification dated 24.11.1962, cement was declared an “essential commodity” under Section 2(a) of the E.C. Act, thereby subjecting it to statutory control in public interest.
15.2. In exercise of powers conferred under Section 3 of the E.C. Act, the Central Government promulgated the Cement Control Order, 1967, which laid down an exhaustive framework for regulation of production, supply, distribution and pricing of cement. The object of the said Order was to ensure equitable distribution of cement at fair prices and to prevent hoarding, diversion and black-marketing, particularly during periods of scarcity.
15.3. In terms of Section 5 of the E.C. Act, the Central Government delegated its powers in respect of cement being a commodity other than foodstuffs to the State Governments. Pursuant thereto, the State of Maharashtra issued the 1973 Order providing for licensing, regulation of storage and sale of cement, and penal consequences under Section 7 of the E.C. Act for contravention thereof.
15.4. Subsequently, by S.O. 168(E) dated 01.03.1989, the Central Government substantially withdrew price and distribution control over cement and deleted several operative clauses of the Cement Control Order, 1967. The relevant notification expressly brought the said decontrol into effect from 01.03.1989. For better appreciation, the same is reproduced below:
“MINISTRY OF INDUSTRY AND COMPANY AFFAIRS (Department of Industrial Development) ORDER New Dehi, the 1st March, 1989 …………….”
15.5. Further, by notification dated 07.08.1990, the delegation of powers to the State Government to regulate retail distribution of cement through licenses or permit was expressly rescinded. As a result, State-level licensing and regulatory controls over cement distribution also stood withdrawn. For ease of reference, the same reads as under:
“MINISTRY OF FOOD AND CIVIL SUPPLIES (Department of Civil Supplies) ORDER New Delhi, the 7th August, 1990 ………..”
Neither the order of state licensing regime was in operation to attract penal consequences under EC Act
16. In the present case, the alleged offence is stated to have occurred on 24.03.1994. On that date, neither the Cement Control Order, 1967 nor the Maharashtra State licensing regime under the 1973 Order operated so as to attract penal consequences under Section 7 of the E.C. Act. Significantly, the prosecution has failed to place on record any subsisting control order, notification, or statutory restriction in force on the relevant date, violation of which could constitute an offence under Section 3 of the E.C. Act.
17. Therefore, the prosecution launched against the appellants under the E.C. Act was wholly misconceived. Both the trial Court and the High Court failed to examine the legal effect of decontrol and proceeded solely on an appreciation of evidence, ignoring the absence of a statutory foundation for the offence. Such an approach strikes at the root of the conviction and renders the same unsustainable in law.
18. The legal position is no longer res integra. In Kolhapur Canesugar Works Ltd. v. Union of India9 , this Court authoritatively held that where a statutory provision is unconditionally omitted without a saving clause, all proceedings founded upon such provision must lapse. The relevant observation reads as under:
“The position is well known that at common law, the normal effect of repealing a statute or deleting a provision is to obliterate it from the statute book as completely as if it had never been passed, and the statute must be considered as a law that never existed. To this rule, an exception is engrafted by the provisions of Section 6(1). If a provision of a statute is unconditionally omitted without a saving clause in favour of pending proceedings, all actions must stop where the omission finds them, and if final relief has not been granted before the omission goes into effect, it cannot be granted afterwards. Savings of the nature contained in Section 6 or in special Acts may modify the position. Thus the operation of repeal or deletion as to the future and the past largely depends on the savings applicable. In a case where a particular provision in a statute is omitted and in its place another provision dealing with the same contingency is introduced without a saving clause in favour of pending proceedings then it can be reasonably inferred that the intention of the Legislature is that the pending proceeding shall not continue but a fresh proceeding for the same purpose may be initiated under the new provision.”
Conclusion
Accused acquitted
19. Applying the aforesaid principle, in the absence of any subsisting statutory control or saving provision operative on the date of the alleged incident, the prosecution of the appellants under the E.C. Act is legally untenable. On this ground alone, the conviction and sentence imposed upon the appellants are liable to be set aside.
Post Judgment observation of Hon’ble Supreme Court
21. Before parting with the matter, we deem it appropriate to record certain observations. This case is illustrative of a prosecution founded on an incorrect appreciation of the statutory framework. The gravamen of the allegation against the appellants was unauthorised purchase, possession and storage of cement allegedly procured through Government or controlled supply channels meant exclusively for public works.
22. It must however be clarified that although regulatory control over cement stood rescinded at the time of the alleged offence, and the appellants could not, therefore, be prosecuted under the provisions of the Essential Commodities Act, 1955, acts such as diversion of Government-supplied cement meant for public works, dishonest retention thereof, or unauthorised dealing in such Government property may still attract penal consequences under the Indian Penal Code, depending upon the nature of the evidence led and the specific ingredients of the offences that are established.
23. In the present case, the prosecution examined seventeen witnesses including truck drivers, officers of the Public Works Department, and police officials forming part of the raiding party. The Courts below have concurrently recorded findings that cement earmarked for Government work and supplied at concessional rates was diverted from the Government godown and found stored in premises connected with the appellants, without any lawful authority.
Courts below failed to furnish explanation or documentary justification for the possession of cements in accused’s godown
24. Both the trial Court and the High Court further held that the appellants failed to furnish any satisfactory explanation or documentary justification for such possession. These findings are essentially factual and are supported by the evidence on record.
25. Nevertheless, in the absence of any subsisting statutory order under Section 3 of the E.C. Act on the date of the alleged occurrence, a conviction under Section 7 thereof is legally impermissible. That said, this was a case where the investigating agency ought to have invoked appropriate provisions of the Indian Penal Code, having regard to the nature of the allegations and the evidence collected.
Trial court is empowered to convict in the absence of specific charge for minor offence under section 245 BNSS
26. In a given case, where the facts proved disclose commission of a minor offence, the trial Court is empowered under Section 222 of the CrPC (corresponding to Section 245 of the Bharatiya Nagarik Suraksha Sanhita, 2023) to record a conviction for such minor offence even in the absence of a specific charge, provided the essential ingredients thereof are established beyond reasonable doubt and no prejudice is caused to the accused.
27. The prosecution, however, did not culminate in any such exercise, nor can the High Court, in an appeal against conviction under a distinct statutory offence, substitute the conviction by invoking provisions of the Indian Penal Code for the first time. The lapse, therefore, lies squarely at the door of the investigating agency.
Criminal appeals allowed
28. With the above observations, the Criminal Appeals are allowed. The judgment of conviction and sentence passed by the Courts below are set aside. The bail bonds, if any, executed by the appellants shall stand cancelled and the fine amount, if paid, shall be refunded to them.
Resources
Judgments cited or involved
- Prakash Babu Raghuvanshi v. State of Madhya Pradesh (2004) 7 SCC 490: Cited to argue that a conviction under Section 7 of the Essential Commodities (E.C.) Act requires proof of an operative order under Section 3.
- Salekh Chand and another v. State of Uttar Pradesh AIR 1960 SC 283: Cited for the principle that a conviction cannot be sustained if the prosecution fails to prove the controlled price prevailing on the date of the alleged sale.
- Malkiat Singh and another v. State of Punjab (1969) 1 SCC 157: Cited to contend that Section 7 of the E.C. Act penalizes attempts or abetment, but not mere preparation, such as the possession of cement bags without proof of sale.
- Kolhapur Canesugar Works Ltd. v. Union of India (2000) 2 SCC 536: Quoted extensively to establish that when a statutory provision is omitted without a saving clause, it is treated as if it never existed, causing all related legal proceedings to lapse.
Acts and Sections
Essential Commodities Act, 1955 (E.C. Act)
- Section 2(a): Declares cement as an “essential commodity”.
- Section 3: Grants power to the Central Government to control production, supply, and distribution of essential commodities.
- Section 3(c) and (d): Specifically empowers regulation of price and distribution.
- Section 5: Relates to the delegation of powers from the Central Government to State Governments.
- Section 7: Provides penalties for the contravention of orders issued under Section 3.
Code of Criminal Procedure, 1973 (CrPC)
- Section 222: Empowers the trial court to record a conviction for a minor offence even if not specifically charged.
- Section 313: Relates to the power of the court to examine the accused to explain circumstances appearing in evidence.
Indian Evidence Act, 1872
- Section 78: Regarding the proof of official documents.
- Section 81: Establishes a presumption of genuineness for Gazette notifications.
Other Relevant Acts and Sections
- Industries (Development and Regulation) Act, 1951: Sections 18G and 25 were cited regarding the introduction of levy on cement and the power to make amendments to control orders.
- Probation of Offenders Act, 1958: Mentioned by the appellants’ counsel as a plea for leniency.
- Bharatiya Nagarik Suraksha Sanhita, 2023: Section 245 is noted as the modern equivalent to Section 222 of the CrPC.
Statutory Orders and Control Orders
- Maharashtra Cement (Licensing and Control) Order, 1973: Clauses 3, 4, 5, 7 (licensing), Clause 8 (storage restrictions), and Clause 21 (price prohibitions).
- Cement Control Order, 1967: Clauses 10 and 12, along with various amendments (1982, 1987, 1989), which regulated the distribution and pricing of cement.
Party
Manoj vs. State of Maharashtra & Anr - Criminal Appeal No. 1630 of 2015 with Criminal Appeal No. 1631 of 2015 - 2026 INSC 152 - February 13, 2026 - Hon’ble Mr. Justice B.V. Nagarathna and Hon’ble Mr. Justice R. Mahadevan.
