DEPUTY COMMISSIONER, DAKSHINA KANNADA DISTRICT versus RUDOLPH FERNANDES

Citation: [2000] 2 S.C.R. 24 · Decided: 29-02-2000 · Supreme Court of India · Bench: B.N. KIRPAL · Disposal: Appeal(s) allowed

Judgment (excerpt)

A 
DEPWY COMMISSIONER, DAKSHINA KANNADA DISTRICT 
B 
c 
D 
E 
F 
G 
v. 
RUDOLPH FERNANDES 
FEBRUARY 29, 2000 
[B.N. KIRPAL AND M.B. SHAH, JJ.] 
Essential Commodities Act, 1955 : S. 6-A( 1) second proviso. 
Confiscation of vehicle-Fine payable-Jn lieu of confiscation-Limit 
of-Held : Is limited to market price of the vehicle and not to the market price 
of the essential commodity carried in such vehicle-The contrary view taken by 
the High Court on the analogy of S.115(2) of Customs Act is erroneous-
Further, it is within the discretion of the competent authority to fix such 
reasonable amount considering the facts and circumstances of each case-
Customs Act, 1962, S.115(2). 
Essential Commodities Act-Object of-Held : To deter a person from 
illegally dealing in an essential commodity and, consequently, impose a deter-
rent penalty against such person. 
Interpretation of Statutes : 
Basic Rules-Legislative intent-Determination of-Object of an Act-
Preamble and other Sections of the Act-Consideration of-Held : Can be 
taken into consideration in order to determine the legislative intent. 
' 
In these two appeals the respondents' vehicles carrying commodities 
were intercepted and seized by the Police. Proceedings under Section 6-A 
of the Essential Commodities Act, 1955 were initiated before the appellant-
Deputy Commissioner. During the pendency of the proceedings, the re-
spondent applied for interim release of the vehicles and the same was 
granted on payment of a certain amount as fine based on the market price 
of the vehicles. That order was challenged by the respondents before the 
High Court on the ground that imposition of such fine was illegal and 
onerous. 
The High Court on the analogy of Section 115(2) of the Customs Act, 
1962 held that the second proviso to Section 6-A(l) of the Essential Com-
H 
modities Act, 1955 provided for levy of fine limited to the market price of 
24 
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DY. COMMR. DAKSHINA KANNADA DISIT. v. RUDOLPH FERNANDES 
25 
the essential commodities and not the market price of the vehicle. The 
A 
High Court, therefore, directed release of the vehicles on payment of fine 
based on the market price of the essential commodities. Hence this appeal. 
The following question arose before this Court : 
Whether fine in lieu of confiscation contemplated under the proviso 
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to Section 6-A(l) of the Essential Commodities Act, 1955 provides for levy 
of fine on the basis of market value of the confiscated vehicle or on the 
basis of the market price of the essential commodity sought to be carried 
by such vehicle? 
Allowing the appeal, this Court 
HELD : 1. The object of the Essential Commodities Act, 1955 is to 
deter a person from illegally dealing in an essential commodity and, conse-
quently, impose a deterrent penalty against a person dealing in them 
illegally. While doing so, the law takes care to prevent the owner of any 
vehicle from aiding or assisting such an illegal activity. [128-H; 29-AJ 
2. The second proviso to Section 6-A(l) of the Act is required to be 
considered in the light of the Preamble and Sections 6-B, 6-C, 6-D and 7 of 
the Act. There may be some ambiguity in Section 6-A(l). But it cannot be 
c 
D 
said that the measure of fine is related to the market price of the essential 
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commodity on the date of its seizure. It nowhere provides that fine should 
not exceed market price of the essential commodity on the date of seizure 
of fine vehicle. What is to be confiscated is the vehicle and, therefore 
measure of the would be relatable to the market price of the vehicle on the 
date of the essential commodity sought to be carried by such vehicle. This 
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would also be consistent with the scheme of Section 7, which provides for 
levy of penalty. It also empowers forfeiture to the Government any pack-
age, covering or receptacle in which the property is found and in addition 
any animal, vehicle, vessel or other conveyance used in carrying the com-
modity. Hence, a measure of fine which is required to be levied in lieu of 
confiscation under second proviso to Section 6-A(l) would be relatable to 
the market price of the vehicle and not of the seized essential commodity 
and the fine amount in lieu of confiscation is not to exceed the market price 
of the vehicle on the date of seizure of essential commodity. It is within the 
discretion of the competent authority to fix such reasonable amount con-
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sidering the facts and the circumstances of each case. [29-G; 30-B-G] 
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