MP High Court Holds Excise Act Provision Allowing DM To Confiscate Vehicle With Illegal Liquor & Denying Defence To Owner As Ultra Vires

The Madhya Pradesh High Court has declared Section 47A MP Excise Act–which empowers the DM to confiscate a vehicle and deprives the owner from relying on the defence of knowledge regarding use of vehicle–as ultra vires to the right to practice a profession (Article 19(1)(g)) and right to property (Article 300) under the Constitution. With regard to the confiscation power of DM under Cow Progeny Act–the constitutionality of which was not under challenge, the Court held that though the proceedings for confiscation can be initiated parallel to criminal trial, but no confiscation order can be passed before conclusion of trial. A full bench of former Chief Justice Suresh Kumar Kait, Justice Sushrut Arvind Dharmadhikari (who is now judge of the Kerala High Court) and Justice Vivek Jain in its 69 page order said:“We are not oblivious of the menace of local smuggling and inter State smuggling of stolen liquor, country made liquor and spurious liquor, which violate the provisions of Excise Act and tends to hamper regulatory regime of supply of liquor and in some cases, may make liquor unfit for human consumption available to public. However, on one hand the menace has to be curbed but it has to be curbed in a lawful and reasonable manner and not in unreasonable manner by framing an unconstitutional and disproportionate law. By not opening the defence of knowledge to the owner of the vehicle and giving right to the executive to pass an order of confiscation even before conviction in the Court of law by the offender and the owner of the vehicle may or may not be an accused in the offence, then it would amount to a travesty of justice and deprivation of right to property of the owner violating Article 300-A and if the vehicle is used for business of hire carried out by the owner then it also amounts to violation of his right to trade and business under Article 19(1)(g) of Constitution of India, as well is a disproportionate legislation.” The court thus held that writ petitions are maintainable once an order is passed by the DM confiscating vehicles under M.P. Excise Act or Cow Progeny Act (as the case maybe), before conclusion of trial, as it is without jurisdiction.BackgroundA reference was made due to different opinions by various benches, on whether during pendency of criminal case before the Court of law, the confiscation of the vehicle used in the offence can be made by parallel proceedings to be conducted under the Excise Act or under the Cow Progeny Act.It was also considering constitutional validity of Section 47A of M.P. Excise Act on the ground that enables parallel confiscation proceedings even prior to offence being proved in Court and it does not leave appropriate defences open for the owner of the property, which violates Articles 300-A and 19 (1) (g) of the Constitution.Article 47-A of M.P. Excise ActSection 47-A empowers the collector to order confiscation of intoxicants, materials, conveyance etc., if he is satified that an offence under Section 34 (Penalty for unlawful manufacture, transport, possession, sale etc) has been committed and where the quantity of liquor found at the time or in the course of detection of such offence exceeds fifty bulk litres.Section 47-A (3)(b) states that no such order shall be passed unless the Collector issues notice in writing to the person from whom such materials have been seized and to any person staking claim to and to any other person who may appear before the Collector to have an interest in it. However, this may not necessarily be the person whose vehicle was being used to carry or transport such contraband goods. Thus, the Court noted that Section 47-A which relates to confiscation order provides no defence which is open to the owner of the vehicle that the vehicle was being used for such offence without his knowledge or connivance.In other Acts owner has defence of knowledge against executive's right to confiscate vehicleThe Court further looked into the provisions of other enactments wherein similar provisions for confiscation of seized materials, vehicles etc. have been laid down like the Indian Forest Act, Narcotic Drugs and Psychotropic Substances Act, 1985, Essential Commodities Act 1955, Central Goods and Services Tax, 2017 etc.Taking into consideration the provisions on confiscations of different legislative schemes, the Court noted that wherever executive has been given parallel right to confiscate the vehicles, tools, receptacles, boats etc. used in the commission of offence, then a defence is kept open for the owner of the vehicle and material that it was used without his knowledge or connivance and that neither he nor his agents had such knowledge or connivance and had taken all due care and precautions for the same.Where defence is absent confiscation can take place only after convictionIt was noted that in enactments where such defence is not provided, confiscation can take place only on orders of the Criminal Court trying the offence and...

MP High Court Holds Excise Act Provision Allowing DM To Confiscate Vehicle With Illegal Liquor & Denying Defence To Owner As Ultra Vires

Anukriti Mishra

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