The Supreme Court has set aside the conviction of a contractor accused of stockpiling cement meant for a public works project. The Court held that the prosecution could not sustain the conviction under the Essential Commodities Act, 1955, because cement was not under statutory control at the relevant time.
The Bench also noted that the investigating agency failed to invoke appropriate provisions of the Indian Penal Code. As a result, the appellants faced criminal proceedings for more than three decades under an inapplicable statute.
A Bench comprising Justice BV Nagarathna and Justice R Mahadevan overturned the order of the Aurangabad Bench of the Bombay High Court. The High Court had upheld the trial court’s decision convicting the appellants under Section 7 of the Essential Commodities Act for alleged stockpiling of cement.
The Court observed:
“…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…”
Allegations of Diversion of Government Cement
The prosecution alleged that the appellants possessed cement supplied under a government road construction project. It further claimed that they intended to divert the cement for black marketing.
Acting on a tip-off, the police conducted raids on March 24, 1994. During the raid, officers seized 365 bags of cement from premises linked to the appellants. Later, the police recovered an additional 25 bags.
The prosecution asserted that the cement belonged to a “government quota” and had been diverted for illegal sale.
Trial Court Conviction and High Court Dismissal
In 2000, the trial court convicted both accused under Section 3 read with Section 7 of the Essential Commodities Act. It sentenced them to one year of rigorous imprisonment and imposed a fine of ₹100.
However, the appellants challenged the conviction before the High Court. The High Court dismissed their appeal in 2014. Consequently, the appellants approached the Supreme Court.
Cement Decontrolled Since 1989
Justice Mahadevan, who authored the judgment, held that the conviction could not stand. The Court noted that the government had effectively decontrolled cement through a notification issued in 1989.
Therefore, no statutory order under Section 3 existed at the time of the alleged offence in 1994.
The Court held:
“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.”
Investigative Lapse in Not Applying IPC Provisions
The Supreme Court also highlighted a serious lapse in investigation. The agency failed to invoke IPC offences that could have been relevant.
The Bench clarified that although prosecution under the Essential Commodities Act was not possible, diversion of government property could still attract penal consequences under the IPC.
The Court stated:
“although regulatory control over cement stood rescinded…acts such as diversion of Government-supplied cement meant for public works…may still attract penal consequences under the Indian Penal Code…”
The Court further remarked:
“The lapse, therefore, lies squarely at the door of the investigating agency.”
Conviction Quashed
In view of the absence of statutory control over cement, the Supreme Court allowed the appeals. It set aside the conviction and sentence imposed by the courts below.
Cause Title: Manoj versus State of Maharashtra & Anr. (with connected matter)
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.
