District Collector's Sanction Not Necessary For Initiating Prosecution Under Section 7 Of Essential Commodities Act: Kerala High Court

Justice Murali Purushothaman said that under Section 7 of the Act, the power to impose penalty  is vested with the court and it is not for the District Collector to decide whether a person has committed offence under the Act warranting penal action.

"No sanction of the District Collector is necessary for initiating prosecution under Section 7 of the Act,” said the court.

The court was dealing with two petitions challenging the notices issued by the District Collector, Ernakulam to the petitioners alleging violation of provisions of the Liquefied Petroleum Gas (Regulation of Supply and Distribution) Order, 2000 for unauthorisedly selling Liquified Petroleum Gas (LPG).

In a surprise inspection conducted at the premises of Rajan Kadathukadavil, one of the petitioners, 11 LPG cylinders supplied for commercial use were seized. As Rajan failed to produce any bill, invoice, or other documents supporting such storage of LPG cylinders, the District Collector alleged violation of clause 6 of the LPG (Regulation of Supply and Distribution) Order, 2000 and Section 3 of the Essential Commodities Act, 1955 and warrants penal action under Section 7 of Act.

The District Collector later issued an order stating that the LPG distributor Sithara Indane Gas committed an offence under Section 3 by conniving with Rajan for "illegal business of selling LPG, warranting penal action under Section 7 of the Act". The DC further accorded sanction for prosecuting the licensee and also directed the Indian Oil Corporation Ltd to initiate action under the Marketing Discipline Guidelines, 1998 for LPG Distributorships. 

The DC held Rajan guilty of conducting unauthorized business of selling LPG which is prohibited under Clause 6 of Order 2000, and said he has committed offence under Section 3 of the Act warranting penal action under Section 7 of the Act. Sanction was also given for his prosecution

In response to the petitions challenging his action, the DC said LPG being an essential commodity is regulated under the Act and as Rajan is not an authorized dealer of LPG, there are violations of provisions of the Act and hence the order is valid.

However, Justice Purushothaman said the court has the power to impose a penalty under the Act and not the District Collector.

"Under Section 7 of the Act, the power to impose penalty is upon the Court and not on the District Collector. Section 10A of the Act provides that every offence punishable under the Act shall be cognizable. Section 11 provides that no Court shall take cognizance of any offence punishable under the Act except on a report in writing of the facts constituting such offence made by a person who is a public servant or any person aggrieved or any recognised consumer association," said the court, adding no sanction of the District Collector is necessary for initiating prosecution under Section 7 of the Act. 

Allowing the writ petitions, the court held that the order passed by the District Collector is without jurisdiction. "The question as to whether commercial LPG is regulated under the Act and other contentions of the parties are left open," it added.

Case Title: Sithara Indane Gas V Union of India

Citation: 2023 LiveLaw (Ker) 58