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

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.

Background

A 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 Act

Section 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 vehicle

The 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 conviction

It 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 undisputedly, after conviction by the Court of law.

“In our opinion, if confiscation takes place without the owner of the vehicle having a defence available with him that the vehicle was used without his knowledge or connivance and that he and his agents had taken all care and precautions to prevent such use of vehicle, then the confiscation would be a mere formality and though a power of adjudication has been given to the Collector but that power is only a cosmetic power and not a real power.”, the Court said.

The Court further said, “If such a power to pass order for confiscation without considering the defence of the owner pleading lack of knowledge or connivance, is given to the Court trying the offence, then, in our considered opinion, it would have different colour.”

The Court opined that when the confiscating authority would be the Court trying the offence, then all the facts shall be before the Court at the time of confiscation and the Court can take an appropriate decision whether to pass order for confiscation or not and that power would be proportionate and reasonable.

MP Excise Act disporportionately empowers executive to confiscate vehicle

In the present case, the power given to Executive (and not to a judicial authority i.e. Trial Court) to pass order for confiscation even during pendency of trial, and not opening the defence of lack of knowledge and connivance to the owner of the vehicle has been challenged.

“This power, in our considered opinion, does not amount to a valid power within the limits of authority set out under Article 19 (6) of the Constitution of India, and amounts to giving away a disproportionate power to the Executive wing of the State, violating the fundamental right guaranteed by Article 19(1)(g) and Constitutional right, conferred by Article 300-A, and is therefore, liable to be interfered by this Court. It being a disproportionate legislation violating Constitutional provisions, Section 47-A of the M.P. Excise Act 1915 deserves to be and is hereby declared ultra-vires Articles 19(1)(g) and 300-A of the Constitution of India.”, the Court said.

S 100 CrPC applied confiscate vehicle under Cow Progency Act which is irrelevant

Section 11(5) of the Act says that in case of violation of Sections 4 (Prohibition of slaughter of cow progeny), 5 (Prohibition on possession and transport of beef), 6 (Prohibition on transport of cow progeny for slaughter), 6-A (Prohibition of export of cow progeny and grant of permit), 6-B (Prohibition of transporting cow progeny via Madhya Pradesh and grant of transit permit), the police can seize the vehicle and the DM shall confiscate it. 

The Court noted that no particular procedure for confiscation proceedings has been laid down in Section 11, nor any specific provision for hearing any person including owner of vehicle has been laid down.

Referring to the M.P. Govansh Vadh Pratishedh Rules, 2012, the court noted that Rule 5 relates to confiscation by DM and does not relate to any particular procedure to be followed, any particular person to be noticed or a defence to be taken by a person in the confiscation proceedings. The rule only states that DM shall confiscate vehicle etc. as per Section 100 CrPC. 

The court however noted that Section 100 CrPC relates to search and seizure and not confiscation.

“It is really surprising that how the procedure of Section 100 Cr.P.C. can be borrowed for the purpose of confiscation of vehicles and articles, which is totally irrelevant for the said purpose. No doubt search and seizure can take place by following procedure under Section 100, but it is beyond comprehension of this Court that by following the provisions of Section 100 for search and seizure, confiscation can take place by the District Magistrate.”, the Court said.

The Court noted that the Act and Rules only provide for an enabling provision for confiscation. Though the constitutionality of the Act was not under challenge before the bench, it said that though the proceedings for confiscation can be initiated and proceeded parallel to criminal trial, but no confiscation order can be passed before conclusion of criminal trial. The court said that DM can confiscate the vehicle only if conviction is recorded in criminal trial and involvement of vehicle and knowledge/connivance of the owner is proved in the criminal trial.

Case Title: Ramlal Jhariya Versus The State Of Madhya Pradesh And Others, Writ Petition No. 11356 Of 2024