No power with district collector to impose penalty for shortfall of LPG cylinders: Kerala High Court

The Essential Commodities Act, 1955 is an law empowering the government to regulate the production, supply, distribution, and pricing of essential goods to ensure availability and prevent hoarding or black marketing. It covers essential items like foodstuff, drugs, petroleum products, and fertilizer. The act enables central/state governments to set stock limits, fix prices, and confiscate goods to protect consumer interests.

‘No jurisdiction, no authority’

• The district collector has, in the impugned order, imposed two liabilities on the petitioner.
• The first imposition is the penalty of Rs 500, while the second is to recover the cost of the shortfall in the
• LPG cylinders found at the time of the inspection, which was quantified as Rs 2.13 lakh.
• As far as the jurisdiction of the district collector to impose a penalty of Rs 500 is concerned, it is a settled principle of law that under the Essential Commodities Act, 1955, the District Collector has no jurisdiction or authority to impose a penalty or fine. Such a power is vested only with the Court.
• Therefore, the imposition of a penalty of Rs 500 by the impugned order is without authority and, hence, is liable to be interfered with.
• Petitioner has also been imposed with a liability of Rs.2,13,374 being the value of cylinders found to be short at the time of inspection.
• Petitioner questions the jurisdiction of the district collector to impose such a liability on him.
• On an appreciation of the provisions of the Essential Commodities Act as well as the provisions of the Liquefied Petroleum Gas (Regulation and Supply and Distribution) Order, 2000, it is explicit that there is no power on the district collector to impose a liability for the shortfall of LPG cylinders found at the time of inspection.
• This Court is satisfied that the impugned order is without any authority or jurisdiction and is hence liable to be set aside in its entirety.

What was the case?

• The case stemmed from a surprise inspection conducted in June 2014 at the petitioner’s LPG agency, during which officials reported irregularities including improper maintenance of stock registers and a shortage of LPG cylinders.
• The petitioner denied the existence of such defects regarding non-maintenance of stock register properly and shortage of commercial as well as domestic cylinders.
• Following the inspection, proceedings were initiated and culminated in an order directing the dealer to pay a penalty and compensate for the alleged shortfall of cylinders.
• Challenging the order, the petitioner argued that the District Collector had no jurisdiction either to impose a penalty or to recover the cost of the alleged shortage.
• The State, however, contended that the action was taken after due process, including issuance of notices and an opportunity of hearing, and that the irregularities justified the penalties imposed.