R. M. SAHAI, J. : - - (1.) Is the State vicariously liable for negligence of its officers in discharge of their statutory duties, was answered in the negative by the High Court of Andhra Pradesh on the ratio laid down by this Court in Kasturi Lal Ralia Ram Jain v. State of U. P. while reversing the decree for payment of Rs. 1,06,125.72 towards value of the damaged stock with interest thereon at the rate of 6% granted by the trial Court for loss suffered by the appellant due to non -disposal of the goods seized under various control orders issued under the Essential Commodities Act, 1955 (hereinafter referred to as 'the Act'). But for determining correctness of the view taken by it, the High Court -granted certificate under Article 133(1) of the Constitution of India as the case involved "substantial questions of law, of general importance". Although the claim of the appellant was negative mainly on the sovereign power of the State, but, that was only one of the reasons, as the High Court further held that the goods of the appellant having been seized in the exercise of statutory power for violation of the Control Orders and the seizure having been found, by the appropriate authorities, to be valid at least for part, no compensation was liable to be paid to the appellant for the goods which were directed to be returned. The further questions, therefore, that arise for consideration are, whether seizure of the goods in exercise of statutory powers under the Act immunises the State, completely, from any loss or damage suffered by the owner. Whether confiscation of part of the goods absolves the State from any claim for the loss or damage suffered by the owner for the goods which are directed to be released or returned to it.
(2.) Since the High Court did not interfere with the findings recorded by the trial Court and decided the appeal as a matter of law, it is not necessary to narrate the facts in detail, except a gist of it so far it is helpful in deciding the issues in question. It has been found and is not disputed that the appellant carried on business in fertilizer and foodgrains under licence issued by the appropriate authorities. Its premises were visited by the Police Inspector, Vigilance Cell on 11 -8 -1975 and huge stocks of fertilizers, foodgrains and even non -essential goods were seized. On the report submitted by the Inspector, the District Revenue Officer (in brief 'the DRO') on 31 -8 -1975, in exercise of powers under Section 6 -A of the Act, directed the fertiliser to be placed in the custody of Assistant Agricultural Officer (in brief 'AAO') for distribution to needy riots and the foodgrains and non -essential goods in the custody of Tehsildar for disposing it of immediately and depositing the sale proceeds in the Treasury. The AAO did not take any steps to dispose of the fertiliser. Therefore, the appellant made applications on 17 -9 -1975 and 21 -9 -1975 before the DRO and on 11 -2 -1976 before AAO that since no steps were being taken the fertiliser shall deteriorate and shall be rendered useless causing huge loss to the appellant. Request was made for diverting the fertiliser either to the places mentioned by the appellant as the demand was more there or to release it in its favour for disposal and deposit of the sale price. But neither any order was passed by the DRO nor any action was taken by the AAO. On 29 -6 -1976 the proceedings under Section 6 -A of the Act were decided and the stock of horsegram (foodgrain) was confiscated as the appellant's license had been cancelled. As regards fertiliser it was held that the explanation of the appellant for difference in stock was not satisfactory. The only violation of Control Orders found was improper maintenance of accounts. In consequence of this finding, rather in absence of any material to prove that the appellant was guilty of any serious infringement such as black marketing or adulteration or selling at higher price than the controlled price, the Collector was left with little option except to direct confiscation of part of the stock and the rest was released in favour of the appellant. That the confiscated stock and the rest was released in favour of the appellant. That the confiscated stock was only nominal, shall be clear from a comparative chart of the stock seized and released : Stock seized (bags) Stock confiscated (bags) 1. Ammonium Sulphate 392 29 2. Ammonium Phosphate 6 2 3. Puskhhal (12 -6 -6) 787 x 4. Super Phosphate 1247 x 5. Mutate of Potash 15 5 6. Super Phosphate 135 bags of 40 kgs each 4 7. " 125 bags of 50 kgs each 12 8. Urea 2 3 9. Ammonium Phosphate 581(19.5; 19.5; 0) x 10. Complex 17:17:17 121 x 11. Complex 14:28:14 36 x 12. Mixture 0:12:80: 13 x The appropriate authority while directing release of the stock or equivalent value therefore made it subject to consent of the Vigilance Officer. But this condition was deleted on 15 -10 -1976 in appeal filed by the appellant.
(3.) Despite Collector's order and the order passed in appeal by the Sessions Judge, the AAO did not release the stock and the efforts of the appellant with the Chief Minister, Revenue Minister, Agriculture Minister and various other departmental heads did not yield any result. However, the AAO issued a notice in the last week of March 1977 to the appellant to lake delivery of the stock released in its favour. But when the appellant went to lake delivery it found that the stock had been spoilt both in quality and quantity. Therefore, after getting its objection endorsed by the officer concerned the appellant came back and made a demand for value of the stock released by way of compensation. When no response came it gave notice and filed the suit for recovery of the amount which has given rise to this appeal. The suit was contested amongst other grounds on sovereign immunity of the State, discharge of statutory duty in good faith, absence of any right to claim damages when seizure has been found to be valid for part of the goods, absence of any right to claim value of the goods as the only right an owner of the goods has to gel back the stock irrespective of its condition, etc.;