The Supreme Court has set aside the conviction of two men accused of illegal possession and black-marketing of government quota cement, holding that on the date of the alleged offence in 1994, there was no operative control order governing cement under the Essential Commodities Act, 1955 (EC Act).
The Bench of Justice B.V. Nagarathna and Justice R. Mahadevan allowed the criminal appeals filed by Manoj and Prakash, who had been convicted more than two decades ago by a trial court in Maharashtra and whose convictions were affirmed by the Bombay High Court.
The case arose from a 1994 incident in Aurangabad, where police claimed to have intercepted two trucks allegedly carrying government quota cement meant for public works. The prosecution alleged that the cement was diverted from a Public Works Department (PWD) project and was being unloaded near commercial premises with the intention of black-marketing.
During a raid, 365 bags of cement were allegedly seized from premises linked to the appellants, with another 25 bags recovered later. The accused were charged under Section 3 read with Section 7 of the EC Act, which penalises contravention of government orders regulating essential commodities.
In 2000, a Special Court convicted the appellants and sentenced them to one year’s rigorous imprisonment with a fine of ₹100. The Bombay High Court later upheld the conviction, prompting the present appeals before the Supreme Court.
The principal question before the Supreme Court was whether any valid and operative control order relating to cement existed on 24 March 1994, the date of the alleged offence, whose violation could attract punishment under the EC Act.
The appellants argued that the Central Government had substantially deregulated cement through the Cement Control (Amendment) Order, 1989. Key provisions governing price fixation, distribution, storage and licensing were omitted with effect from 1 March 1989. Subsequently, in 1990, the Central Government rescinded the delegation of powers to State Governments to regulate retail cement distribution through licences.
As a result, there was no surviving order under Section 3 of the EC Act regulating cement at the time of the alleged incident.
The Court held that once statutory control over cement stood withdrawn, there was no subsisting order under Section 3 of the EC Act whose contravention could be punished under Section 7. The prosecution failed to place on record any valid notification or control order in force on the relevant date. Both the trial court and the High Court erred in focusing solely on evidence of possession without examining whether the statutory foundation for the offence existed.
The Bench relied on settled law that when a statutory provision is unconditionally omitted without a saving clause, proceedings based on that provision cannot continue unless expressly preserved.
Accordingly, the Court concluded that the entire prosecution under the EC Act was legally misconceived.
While acquitting the appellants under the EC Act, the Supreme Court made an important observation: acts such as diversion of government-supplied cement meant for public works, dishonest retention, or unauthorised dealing in government property may still attract offences under the Indian Penal Code, depending on evidence and circumstances.
The Court noted that although regulatory control over cement had ceased, investigating agencies should have considered invoking appropriate IPC provisions if diversion or misappropriation of government property was made out.
However, since the case before it concerned only offences under the EC Act, and no alternative charges had been framed or proved, the Court could not substitute the conviction with IPC offences at this stage.
Case Details
Case Title: Manoj Versus State Of Maharashtra & Anr.
Case No.: Criminal Appeal No. 1630 Of 2015
Date: 13/02/2026
Read More: Meerut DGGI Busts Fake ITC Export Refund Scam Routed Through Andaman & Nicobar Registrations
