# STATE OF U.P v. O.P. SHAR°MA

- **Citation:** [1996] 2 S.C.R. 236
- **Court:** Supreme Court of India
- **Decided:** 1996-02-06
- **Case number:** Criminal Appeal No. 190of1988
- **Bench:** K. Ramaswamy, B.L. Hansaria, G.B. Pattanaik
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-u-p-v-o-p-shar-ma-13920
- **Pages:** 9

## Headnote

U.P. Oilseeds and Oil-seeds Products Control Order 1966/Pulses,
Edible Oil-seeds and Edible oils (Storage Control Order);
C
Clause 2(g)/2 (f), 3, 4--Dealel'-Who is-Even a person who is engaged
in the business of purchasing oils or oilseeds for the purpose of using them
in other commercial products when. he stores the quantity in excess of the
limits prescribed by the orders.
D
Code of Criminal Procedure, 1973:
S.482-fnherent power-£xercise of-High Court should be loathe to
inteifere at the threshold to thwart the prosecution-Should allow law to take
its own course.
State of A.P. v. Abdul Bakhi and Bros., [1964) 7 SCR 764; State of
E Himachal Pradesh v. Prithi Chand & Anr., [1995] 6 Suppl.; State of Bihar v.
F
Rajendra Agarwala, [1996) 1 SCR and Mushtaq Ahmad v. Mohd. Habibur
Rehman Faizi & Ors., JT (199) 1 656, relied on.

## Text

A
STATE OF U.P.
v.
O.P. SHAR°MA.
FEBRUARY 6, 1996
B
[K. RAMASWAMY, B.L. HANSARIA AND G.B. PATTANAIK, JJ.]
U.P. Oilseeds and Oil-seeds Products Control Order 1966/Pulses,
Edible Oil-seeds and Edible oils (Storage Control Order);
C
Clause 2(g)/2 (f), 3, 4--Dealel'-Who is-Even a person who is engaged
in the business of purchasing oils or oilseeds for the purpose of using them
in other commercial products when. he stores the quantity in excess of the
limits prescribed by the orders.
D
Code of Criminal Procedure, 1973:
S.482-fnherent power-£xercise of-High Court should be loathe to
inteifere at the threshold to thwart the prosecution-Should allow law to take
its own course.
State of A.P. v. Abdul Bakhi and Bros., [1964) 7 SCR 764; State of
E Himachal Pradesh v. Prithi Chand & Anr., [1995] 6 Suppl.; State of Bihar v.
F
Rajendra Agarwala, [1996) 1 SCR and Mushtaq Ahmad v. Mohd. Habibur
Rehman Faizi & Ors., JT (199) 1 656, relied on.
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No.
190of1988.
From the Judgment and Order dated 7.1.86 of the Allahabad High
Court in Crl. M.A. No. 15985 of 1985.
Anis Ahmad Khan, for AS. Pundir for the Appellant.
G
Dr. Shankar Ghosh, T. Patra, Ramesh Singh and Ms. Bina Gupta for
the Respondents.
The following Order of the Court was delivered : ·
This appeal by special leave has been placed before us by a referH ence. The facts are not in dispute. The appellant-State has filed an F.I.R.
236
'.;
-
STATEv. O.P.SHARMA
237
with allegations as under :
A
"It is submitted that Modi Paints and Varnish Works, manufactures Varnish and paints at Modinagar. This firm had been buying
linseed oil and other edible oils in large quantities for quite some
time, and had been storing the same and utilising it for the
manufacture of paints and varnish. This industrial unit had been B
buying and storing the linseed oil and other edible oils, and in this
respect the said industrial unit has not obtained any licence.
The said industrial unit had given an application for obtaining
a licence in respect of their business for the purpose of said oils C
for utilising the same in paints and varnish but their application
was rejected. Subsequent to that also, the said industrial unit kept
purchasing, storing and utilising the said oils and kept manufacturing said selling paints and varnish. Earlier also this firm had not
made available its records concerning stock of bills.
D
To-day on 4.12.1985 in the evening at about 3.30 p.m. myself Abdul
Qadir, Senior Marketing Inspector, Modinagar under the direction of Sri
PK Upadhayaya, Addl. District Magistrate (Supply) Ghaziabad along
with Sri Mohan Singh, District supply Officer, Ghaziabad, Sri Rameswer
Dayal, Supply Inspector Modinagar, Sri Rais Ahmad, Supply Inspector E
Modinagar, S.K. Misra, Marketing Inspector, Sri S.K. Singh, Marketing
Inspector, Sri A.nil Kumar Srivastava, Marketing Inspector, Modinagar, Sri
J.R. Joshi, Sub-Inspector, Sri Samai Singh, Constable No. 56, Sri Sukhbir
Singh, Head Constable No. 53, Police Station Modinagar etc. inspected the
oil stored in the oil tankers of Modi paints and Varnish Works, Modinagar. F
To verify four tanks oil stored in them the oils stated by the party, three
samples each were taken from every tank total 27 samples and sealed on
the spot in the presence of the representatives of the firm Sri Kailash
Chandra, Store Clerk and Sri O.P. Sharma, factory Manager, the stock
register pertaining to the year 1985-86 consisting of 389 pages serially
numbered was taken into custody after the used pages signed by me and G
the said Kailash Chandra. The stock of stored oil was inspected on the
basis of the stock register and the following quantities of oil was found
stored in the tanks :
1. Soyabean oil 843 Qtls. and 57 kgs.
H
238
SUPREME COURT REPORTS
(1996] 2 S.C.R.
A
2. Castor oil 8147 Qtls, and 45 kg.
B
c
D
E
F
G
H
3. Refined Soyabean oil 32 Qtls. & 31 kgs.
The sample fard was prepared of one sample each from the
collected samples and after taking the signature of every one it was
handed over to the store clerk Sri Kailash Chandra. The stock
register pertaining to the year 1984-85 was taken into custody and
according to it on 1.11.1985 they had in their stock 2000 kiloliters
of linseed oil stored with them. According to the oil register taken
into custody, the aforesaid unit had purchased the refines soyabean
oil, soyabean oil and linseed oil, had stored the same, utilised the
same for manufacturing of varnish and paints and sold the said
paints and varnish. The said oil comes in the category of edible
oils because soyabean oil and refined soyabean oil are such oils in
which the food can be cooked. In this way the said unit has utilised
the edible oils in the manufacture of paints and varnish in illegal
manner and without obtaining any licence.
In this way the said unit and the owner of the said unit (Modi
Industrial Unit) Sri Kailash Chandra, Store Clerk, Om Prakash
Sharma, factory Manager and Modi Paints and Varnish Works,
Modinagar have violated the clause 4 of the U.P. Oil Seeds and
Oilseeds Products Control Order 1966 (as amended upto date)'
Government Order 1284/XXIX-E-C-L-112(US)/77 dated 8.3.1977
which is published in the U.P. Gazette dated 8th March 1977 and
G.O. No. 4500/XXIX-Section-8-22 Oil/82 dated 29.10.1982 and
Clauses 2, 3, and 6 of Pluses Edible Oil Seed and Edible Oil
Storage Control) Order 1977 (As amended upto date) which is a
punishable offence under Section 3/7 of the Essential Commodities
Act, 1955.
Therefore register a case against all the aforesaid persons and
take necessary action. The copies of recovery memos and
Supurdginama are enclosed herewith accordingly the entire
aforesaid stored oil has been given in the custody of Sri Nand
Kishore, General Manager, Modi Industries, Modinagar and the
sample seal and the nine sealed sampled along with two stock
registers are accordingly being handed over by me in the police
station."
_\·.
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STATEv. 0.P.SHARMA
239
The respondent filed Criminal Misc. Petition No. 15985 of 1985 in A
the High Court of Allahabad. The learned single Judge of the High Court
by order dated January 7, 1986 quashed the F.I.R. holding that as per the
case set out in the counter-affidavit, the respondent was not engaged in the
sale or purchase of the oil seeds; he has been engaged in the manufacture
of paints and varnishes. Therefore, he is not a dealer in oil seeds or edible B
oil covered under the U.P. Oil-seeds and Oil-seeds Products Control
Order, 1966 (for short, the 'order'). Accordingly the prosecution against
the respondent is not in accordance with law, The application was accordingly allowed and the F.I.R. was quashed. Thus this appeal by special leave.
The terms "dealer" has been defined in clause 2 (g) of the Order thus: C
"(g) 'Dealer' means a person engaged in the business of purchase
or sale or storage for sale of oil seeds and oilseeds products, but
does not include the (Food Corporation of India) the U.P. Food
and Essential Commodities Corporation of a dealer who stocks
less than 5 quintals of oils or less than 10 quintals of oil seeds or D
less than 25 quintals".
No dealer shall occupy or set up any premises for purchase or sale
or storage for sale of oil-seeds and oil-seeds products, except under and
in accordance with the terms of a licence granted by the Regional Food E
Controller under the Order.
Another Order, viz., Pulses, Edible Oil-seeds and Edible Oils
(Storage Control Order), 1977 was issued. "Dealer" under clause 2 (f)
thereof was defined to mean "a person engaged in the business of purchase,
sale or storage for sale of any pulses, edible oil seeds or edible oils, whether F
or not in conjunction with any other business and includes his representative or agent". Clause 3 thereof also provides the mandatory requirement of obtaining licence by dealers with the following language :
3. Licensing of'dealers: Notwithstanding anything contained in any G
State Order, after the expiration of a period of fifteen days from
the coming into force of this clause, no person shall carry on
business as a dealer in pulses or in edible oilseeds or in edible oils
except under and in accordance with the terms and conditions of
a licence granted under a State Order if the stocks of pluses or
edible oilseeds or edible oils in his possession exceed the quantities H
240
SUPREME COURT REPORTS
[1996J 2 S.C.R.
A
specified below :
(i)
Pulses
10 quintals for all pulses
taken together.
(ii)
Edible
oils
including 5 quintals for all edible oils
B
hydrogenated vegetable oils
including hydrogenated
vegetable oils taken together
(iii) Edible oil-seeds including 30 quintals of all edible
groundnut in shell".
oilseeds.
Clause 4 imposes restriction on possession of pulses, edible oil- seeds
C and edible oils. No dealer shall, after a period of fifteen days from the
coming into force of this clause, either by himself or by any person on his
behalf, store or have in his possession at any time pulses, edible oil seeds
or edible oils in excess of the quantities specified thereunder. The quantities specified or stock limits - maximum and minimum. - have been
D prescribed.
Admittedly, the respondent does not have any licence issued under
either of the Orders. Both the Orders issued under Section 3 of the
Essential Commodities Act regulate "possession of' and "dealing in" of the
essential commodities for equitable distribution at fair price or for supply
E to the consumers. The question, therefore, is : whether the respondent is
a dealer within the meaning of either of the Orders? The case of the
respondent is that since he stored 843 quintals and 57 kgs. of soyabean oil,
8147 quintals and 45 kgs of castor oil and 32 quintals and 51 kgs. of refined
soyabean oil for the purpose of manufacturer of paints and varnish, he is
F
not a dealer. That contention was accepted by High Court. We find that
the High Court is wholly incorrect in that construction. lt is seen that the
dealer names a person engaged in the business of purchase or sale or
storage for· safe of oil-seeds or oil-seeds products. The exemption from the
Order is given to the Food Corporntion of India and the U.P. Food and
Essential Commodities Corporation as they are public undertakings for
G regulating distribution of essential commodities. They are not dealer under
the Orders. Any other dealer who stocks quantity less than the minimal
prescribed under the Orders need not obtain licence. Even a person who
is engaged in the business of purchasing oils or oil seeds for the purpose
of using them in another commercial products is a dealer under the
H definitions referred to hereinabove, when he stores the quantity in excess
-
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STATEv. O.P.SHARMA
241
of the limits prescribed by the Orders.
This controversy is no longer res integra. In State of A.P. v. Abdul
Bakhi & Bros., (1964] 7 SCR 764, a three-Judge Bench of this Court
considered a similar question having arisen under the Hyderabad General
Sales Tax Act, 1950. The respondent was carrying on business of tanning
hides and skins and selling the tanned skins. He kept in stores a total
quantity of tanning barks. He contended that since he was not dealing in
them but stored them for the purpose of manufacture, he could not be held
to b e a dealer and that, therefore, he is not liable to pay the sales tax on
its turnover. This Court had rejected the contention and held that when a
person is buying or selling a commodity specified in the Rule for use as
finished products in another commercial use, he is engaged in the business
of buying, selling or supplying that commodity and, therefore, he is a dealer
within the· meaning of that Act.
A
B
c
In view of the specific definitions contained in clauses 2 (g) and 2 (t)
of the respective Orders, there is no doubt to conclude that he is a dealer D
under the respective Orders. Since he had not obtained a licence, he is
liable to be proceeded with in accorda~ce with law.
·
Dr. Ghosh, learned senior counsel appearing for the respondent,
contended that though the respondent had sought for licence, the licence E
had not been given to him and, therefore, he cannot be proceeded with.
He also further contended that the F.I.R. does not contain all the ingredients of the offence and, therefore, the High Court was right in
quashing the F.l.R. It is seen that the complaint in self-explanatory and has
specifically mentioned about the storage of oil and oil seeds without licence
under the respective Orders. It is not in dispute that the F.I.R. did mention F
that he purchased and kept in store the above quantity. Thus the ingredients have been specified. Whether he has applied for licence or not,
we are not concerned with the controversy in this case.
The question then is: whether the High Court is right in its exercise G
of inherent power under Section 482 Cr. P.C.? This Court in State of
Himachal Pradesh v. Pilthi Chand & Anr., (1995) 6 Suppl., held as under:
"It is thus settled law that the exercise of inherent power of the
High Court is an exceptional one. Great care should be taken by
the High Court before embarking to scrutinise the FIR/charge- H
A
B
c
D
E
F
G
H
242
SUPREME COURT REPORTS
(1996) 2 S.C.R.
sheet/complaint. In deciding whether the· case is rarest of rare cases
to scuttle the prosecution in its inception, it first has to get into
the grip of the matter whether the allegations constitute the offence. It must be remembered that FIR is only an initiation to move
the machinery and to investigate into cognisable offence. After the
investigation is conducted and the charge-sheet is laid the prosecution produces the statements of the witnesses recorded under
Section 161 of the Code in support of the charge-sheet. At that
stage it is not the function of the Court to weight the pros and
cons of the prosecution case or to consider necessity of strict
compliance of the provisions which are considered mandatory and
its effect of non-compliance. It would be done after the trial is
concluded. The Court has to prima f acie consider from the averments in the charge-sheet and the Statements of witnesses on the
record in support thereof whether court could take cognizance of
the offence, on that evidence and proceed further with the trial. If
it reaches a conclusion that no cognigisable offence is made out
no further act could be done except to quash the charge .sheet. But
only in exceptional cases, i.e. in rarest of rare cases of mala fide
initiation of the proceedings to wreak private vengeance process
of criminal is availed of in laying a complaint or FIR itself does
not disclose at all any cognisable offence - the court may embark
upon the consideration thereof and exercise the power.
When the remedy under Section 482 is available, the High
Court would be loath and circumspect to exercise its extraordinary
power under Article 226 since efficacious remedy under Section
482 of the Code is available. When the Court exercises its inherent
power under Section 482 the prime consideration should only be
whether the exercise of the power would advance the cause of
justice or it would be an abuse of the process . of the court. When
investigating officer spends considerable time to collect the
evidence and place the charge-sheet before the Court, further
action should not be _short-circuited by resorting to exercise inherent power to quash the charge-sheet. The social stability and
order requires to be regulated by proceeding against the offender
as it is an offence against the society as a whole. This cardinal
principle should always be kept in mind before embarking upon
exercising inherent power. The accused involved in an economic
..
,
STATE v. O.P. SHARMA
243
offence destablises the economy and causes grave incursion on the A
economic planning of the· State. When the legislature entrusts the
power to the police officer to prevent organised commission of the
offence or offences involving moral turpitude or crimes of grave
nature and are entrusted with power to investigate into the crime
in intractable terrains and secrative manner in concert, greater B
circumspection and care and caution should be born in mind by
the High Court when it exercises its inherent power. Otherwise,
the social order and security would be put in jeopardy and to grave
risk. The accused will have field day in destablising the economy
of the State regulated under the relevant provisions.
In State of Bihar v. Rajendra Agrawalla, [1996} SCR this Court observed as under :
c
"It has been held by this Court in several cases that the inherent
power of the court under Section 482 of the Code of Criminal
Procedure should be very sparingly and cautiously used only when D
the court comes to the conclusion that there would be manifest
injustice or there would be abuse of the process of the court, if
such power is not exercised. So far as the order of cognizance by
a Magistrate is concerned, the inherent power can be exercised
when the allegations in the First Information Report or the comE
plaint together with the other materials collected during investigation taken at their face value, do not constitute the offence alleged.
At that stage it is not open for the court either to shift the evidence
· or appreciate the evidence and come to the conclusion that no
prima fade case is made out."
F
In Mushtaq Ahmad v. Mohd. Habijur Rehman Faizi & Ors., JT 199 1
656 this Court held as under :
"..... According to the complaint, the respondents had thereby G
committed breach of trust of Government money. In support of
the above allegations made in the complaint copies of the salary
statements of the relevant periods were produced. In spite of the
fact that the complaint and the documents annexed thereto clearly
made out a, prima facie, case for cheating, breach of trust and
forgery, the High Court proceeded to consider the version of the H
A
B
244
SUPREME COURT REPORTS
[1996) 2 S.C.R.
respondents given out in their petition filed under Section 482, Cr.
P.C. vis-a-vis that of the appellant arid entered into the debatable
area of deciding which of the version was true, - a course wholly
impermissible ...... "
We accordingly hold that the High Court has committed grave error
of law in quashing the F.l.R. The High Court should be loath to interfere
at the threshold to thwart the prosecution exercising its inherent power
under Section 482. Cr. P.C. or under Articles 226 and 227 of the Constitution, as the case may be, and allow the law to take its own course.
The appeal is accordingly allowed. The order of the High Court is
C set aside. Investigating Officer is directed to complete the investigation
within four weeks from the date of the receipt of this order and the
appropriate Court would dispose of the case within six months therefrom.
G.N.
Appeal allowed.
'