IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 02ND DAY OF APRIL 2019 BEFORE THE HON’BLE MR. JUSTICE JOHN MICHAEL CUNHA CRIMINAL PETITION NO.437 OF 2016 BETWEEN:
SRI. RAMESH G. BHATI S/O LATE GANESH G BHATI AGED ABOUT 35 YEARS IMPORTERS AND EXPORTERS, KUDUMALLIGE-577 232 THIRTHAHALLI TALUK, SHIVAMOGGA DISTRICT (BY SRI: M V RAMESH JOIS, ADVOCATE) AND AGRICULTURAL PRODUCE MARKET COMMITTEE THIRTHAHALLI -577 432 BY ITS SECRETARY, SHIVAMOGGA DISTRICT ... PETITIONER ... RESPONDENT (BY SRI: A C BALARAJ, ADVOCATE) THIS CRL.P IS FILED U/S.482 CR.P.C PRAYING TO QUASH THE CRIMINAL PROCEEDINGS INITIATED AGAINST THE PETITIONER IN C.C.NO.852/2015 ON THE FILE OF THE PRL. CIVIL JUDGE AND JMFC, THIRTHAHALLI (VIDE ANNEXURE-A).
THIS CRL.P COMING ON FOR ADMISSION THIS DAY, THE COURT MADE THE FOLLOWING:-
O R D E R Petitioner/Complainant is aggrieved by the initiation of proceedings against him for the offences under Sections 8, 65, 66 punishable under Sections 114, 117, 117A of Karnataka Agricultural Produce Marketing (Regulation and Development) Act, 1966(for short ‘the Act’).
Heard learned counsel for the petitioner and learned counsel for the respondent.
2. Insofar as the offence under Section 8 of the Act is concerned, learned counsel for the petitioner submits that by virtue of amendment to Section 72 of the Act, the licence to carry on the trade in market yard is done away with and therefore, the petitioner is not liable for prosecution under Section 8 of the Act.
3. Learned counsel appearing for the respondent however has disputed the submissions and would submit that by amendment of Act No.5 of 2014, even though word ‘trade’ is omitted in Section 72 of the Act, Section 72(4) of the Act requires every trader to obtain a trader licence to carry on the trade within the market yards and therefore the prosecution launched against the petitioner is justified and does not suffer from any illegalities as sought to be contended.
4. There can be no dispute with regard to the fact that Section 72 of the Act was amended by Act No.5 of 2014 w.e.f. from 04.01.2014. The word ‘trader’ has been omitted by Act No.5 of 2014. But the said omission does not do away with the requirement of sanction to conduct trade within the market yard. By Act No.5 of 2014, sub-section (4) was inserted in Section 72 of the Act. Amended sub-section (4) of Section 72 reads as under:-
“72(4). The Director of Agricultural Marketing or the Officer authorized by him may grant a trader license in such manner and in such form as may be prescribed to operate as trader in any of Agricultural Produce Marketing Committee yards/private markets in the State. The existing licensee shall obtain a fresh trader licence within a period of six months from the date of commencement of the Karnataka Agricultural Produce Marketing (Regulation and Development) (Second Amendment) Act, 2013.”
5. By virtue of the aforesaid amendment, the petitioner was required to obtain a fresh trade licence within a period of six months from the date of commencement of Amendment Act, 2013 so as to operate trade within Agricultural Produce Marketing Committee yards/private markets in the State. Undisputedly, as on the date of the inspection, petitioner did not possess licence either under Section 72(1) or under Section 72(4) of the Amended Act. Therefore, the prosecution of the petitioner for the said offences is well justified and does not warrant interference by this Court.
6. Insofar as the offence under Section 66 of the Act is concerned, the allegations against the petitioner is that at the time of inspection on 01.09.2015, the petitioner failed to produce the Books of account in respect of the business carried on by him in notified agricultural produce.
7. Learned counsel for the petitioner submits that the petitioner was maintaining all the requisite Books of Account, but, in view of the absence of the Accountant at the time of the inspection, the petitioner was unable to produce the said Books of Account during inspection by the authorities, but, on receipt of notice by the respondent, he has produced all the Books of Account under acknowledgment as reflected in Annexure-E, therefore, the petitioner has not committed any offences entitling his prosecution for the offence punishable under section 117-A of the Act.
8. Learned counsel for the respondent however submits that in view of sub-section (2) of Section 66 of the Act, Books of account maintained by the petitioner were required to be open for inspection at all times by such officers and servants authorized by the State Government. The panchanama prepared during the inspection clearly disclose that at the time of inspection, the petitioner was unable to produce the Books of Account in respect of the transaction carried on by him, which therefore, prima-facie constitute the offence under Section 66 of the Act.
I have considered the submissions.
9. Section 66(2) of the Act requires the trader to make available all accounts and registers maintained by him open to inspection at all reasonable times by such officers and servants. But the said section does not specify the consequences for failure to produce the Books of account at the time of the inspection.
10. A reading of Section 117-A would indicate that if the trader fails to produce the documents without any reasonable cause, he renders himself liable for punishment under Section 117-A of the Act for contravention of Section 66. Section 117-A of the Act reads as under:-
“117-A – Penalty for contravention of Section 66- If any person carrying on business in notified agricultural produce, fails without any reasonable cause-
(i) to produce or caused to be produced accounts and documents or (ii) to furnish or caused to be furnished information, which he is required to produce or as the case may be, to furnish under Section 66, he shall, on conviction, be punishable with fine which may extend to one thousand rupees].”
11. A conjoint reading of Section 66 and 117-A of the Act would show that if the trader is able to show reasonable cause for non-production of Books of account at the time of the inspection, the same would not render him liable for punishment provided under Section 117-A of the Act. In the instant case, the records indicate that based on the inspection report, a notice was issued to the trader on 02.09.2015 asking him to produce the Books of account within 24 hours. In obedience to the said notice, within 24 hours, the trader/petitioner has produced the Books of account as reflected in Annexure-E. The said Books of account are seen to have been produced under a covering letter wherein it is stated that all books, invoices and ledger extract maintained by the petitioner have been produced before the Secretary, APMC, Thirthahalli. Therefore, the petitioner having substantially complied with the requirement of Section 66 of the Act, in my view, he is not to be proceeded with for contravention of the said offence punishable under Section 117-A of the Act. To this extent, the petition deserves to be allowed.
12. Coming to the proposed prosecution of the petitioner for the offence under Section 65 of the Act is concerned, respondent- APMC has not passed any Assessment order determining the liability by the petitioner to pay the market fees due by the petitioner. The records produced before the Court indicate that based on the Books of account submitted by the petitioner, notice was issued to the petitioner intimating that he was liable to pay a sum of Rs.12,15,584/-. Section 137-A of the Act provides for an appeal against any original order of the Chairman or the Secretary passed under the Act. Without passing any Assessment order, the respondent have initiated criminal prosecution against the petitioner alleging contravention of Section 65 of the Act. The Market Committee has not passed any Assessment order nor has it determined any market fee payable by the petitioner. The respondent having not passed any Assessment order cannot proceed to prosecute the petitioner on the assumption that the petitioner has contravened Section 65 of the Act. Moreover, any order passed by the committee being an appealable order in terms of Section 137-A of the Act, by the impugned action, the appeal remedy provided to the petitioner has been taken away. In any event, based on the notice issued by the Secretary of APMC, criminal prosecution could not have been launched against the petitioner for the alleged contravention of Section 65 of the Act. Therefore, in my view, the prosecution initiated against the petitioner for the alleged contravention of Section 65 also cannot be sustained.
Consequently, the petition is allowed-in-part. The proceedings initiated against the petitioner for the alleged offences punishable under sections 66A and 65 of the Act are hereby quashed. The proceedings initiated against the petitioner for the offence under Section 8 of the Act shall be proceeded with in accordance with law.
Liberty is reserved to the respondent-Agricultural Produce Market Committee to proceed against the petitioner for violation under Section 65 of the Act, if any, in accordance with law.
Sd/- JUDGE *mn/-