Police Failure To Apply IPC Provisions Results In Acquittal Of Contractor for Stockpiling Decontrolled Cement : Supreme Court

The Supreme Court has set aside the conviction of a contractor accused of stockpiling cement meant for a public works project, holding that investigative lapses in failing to invoke IPC provisions against the contractor resulted in an untenable conviction under the Essential Commodities Act, since no statutory or regulatory control over cement existed at the relevant time.

“…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.”, observed a bench of Justices BV Nagarathna and R Mahadevan, while setting aside the Bombay High Court's Aurangabad Bench order which upheld the trial court's decision to convict Appellants under Section 7 of the Essential Commodities Act, for alleged stockpiling the cement.

The Appellants were prosecuted for allegedly possessing and black-marketing cement supplied under a government road construction project. Acting on a tip-off, the police conducted raids on March 24, 1994, seizing 365 bags of cement from premises linked to the appellants, with an additional 25 bags recovered later. The prosecution alleged that the cement formed part of a “government quota” diverted for sale in the black market.

In 2000, the trial court convicted both accused under Section 3 read with Section 7 of the EC Act, sentencing them to one year of rigorous imprisonment and a fine of ₹100. Their appeal was dismissed by the High Court in 2014, leading to the present appeals before the Supreme Court.

On the issue of stockpiling of the cement meant for the government work, the judgment authored by Justice Mahadevan said that no conviction under the Essential Commodities Act could sustain, as the cement possessed by them was effectively decontrolled in 1989 via government notification.

“in the absence of any subsisting statutory order under Section 3 of the E.C. Act on the date of the alleged occurrence (in 1994), a conviction under Section 7 thereof is legally impermissible.”, the court held.

The important aspect discovered by the Court was regarding the investigation lapse on the part of the agency, failing to invoke the IPC provisions against the Appellants. The failure to apply the correct law, the Court remarked, resulted in the appellants facing criminal proceedings for over three decades for an act that was not an offence under the statute cited.

“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.”, the court said.

“The lapse, therefore, lies squarely at the door of the investigating agency”, the court noted.

That being said, the Court allowed the appeal and set aside the judgment of conviction and sentence passed by the Courts below.

Cause Title: MANOJ VERSUS STATE OF MAHARASHTRA & ANR. (with connected matter)

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Appearance:

For Appellant(s) : Mr. Sudhanshu Chaudhary, Sr. Adv. Dr. Aditya Sondhi, Sr. Adv. Mr. Samarjit G Pattnaik, Adv. Mr. Rahul Totala, Adv. Mr. Gaurav Vutts, Adv. Mr. Nikhil Runwal, Adv. Ms. Kashish Seth, Adv. Mr. Anubhav Kumar, Adv. Mr. Rijuk Sarkar, Adv. Mr. Faisal Sherwani, AOR

For Respondent(s): Mr. Aaditya Aniruddha Pande, AOR Mr. Siddharth Dharmadhikari, Adv. Mr. Shrirang B. Varma, Adv. Mr. Bharat Bagla, Adv. Mr. Sourav Singh, Adv. Mr. Aditya Krishna, Adv. Mr. Adarsh Dubey, Adv. Ms. Chitransha Singh Sikarwar, Adv.