KRISHNA RICE MILLS ETC Vs. JOINT DIRECTOR

JUDGEMENT

(1.) THESE ten appeals on certificates granted by the Andhra Pradesh High Court raise common questions and will be dealt with together. The brief facts necessary for present purposes are these. On June 6, 1957, a notification was issued by the Central Government under s. 3(3A) of the Essential Commodities Act, No. 10 of 1955, (hereinafter referred to as the Act). The notification said that in the opinion of the Central Government it was necessary to control the rise in prices and prevent the hoarding of rice and paddy in the States and Union territories. Consequently the Central Government directed by the notification that the price at which rice or paddy shall be sold in any locality in the said States and Union territories in compliance with an order made with reference to cl. (f) of sub-s. (2) of the said s. 3 shall be regulated in accordance with the provisions of sub-s. (3A). This order applied amongst other States to the State of Andhra Pradesh and was to be in force for a period of three months. On July 31, 1957, the Central Government made another notification directing that the powers conferred on it by s. 3 of the Act to make orders providing for the matters specified in cl. (f) and for the matters specified in cls. (h), (i) and (j), insofar as they relate to cl. (f) of sub-s. (2) of s. 3 in relation to stocks of , rice and paddy held in any locality in the State of Andhra Pradesh shall be exercisable also by Shri K. S. Krishnan, Deputy Director (Food), Government of India, Vijayawada. This order was also to be in force for three months. Further on the same day the Central ;Government issued another notification by which in pursuance of cl. (iv) of sub-s. (3A) of s. 3 of the Act, the Central Government authorised the said Shri Krishnan to determine the average market rate of rice and paddy prevailing in any locality in the State of Andhra Pradesh.On August 20, 1957, Shri Krishnan in exercise of the powers conferred upon him by the notifications mentioned above directed a number of rice millers in Tadepalligudem to sell to the Assistant Director (Food), Government of India, certain quantities and kinds of rice at the price calculated in accordance with cls. (iii) and (iv) of sub-s. (3A) of S. 3 of the Act. In consequence of this order, such quantities of rice as were ordered to be sold were delivered to the Assistant Director (Food) on various dates upto September 13, 1957. It may be mentioned that there was no control of price upto September 13, 1957 and in consequence the price to be paid to the rice millers had to be determined under S. 3 (3A) (iii) (c) read with S. 3 (3A) (iv) of the Act. This is the first period with which we are concerned in the present appeals. It may be mentioned that prices are claimed to have been fixed by Shri Krishnan for the rice procured under the orders passed on August 20, 1957 and on subsequent dates in accordance with the provisions of the Act in September 1957. The appellants dispute that the prices have been properly fixed under the provisions of the Act and that is the first matter to be considered in these appeals, the details of which we shall refer to later.

(2.) ON September 14, 1957, the Central Government issued a notification fixing the, maximum price at which rice and paddy of various kinds was to be sold in any one transaction of more than ten maunds in the districts of Krishna, West Godavari and East Godavari in the State of Andhra Pradesh under cl. (c) of sub-s. (2) of S. 3 of the Act. Following this fixation the Deputy Director made requisitions between September 14, 1957 and December 29, 1957 of different varieties of rice from various appellants under the powers vested in him by the notifications already referred to under cl. (f) of sub-s. (2) of s. 3 of the Act and fixed prices therefore. He claims to have fixed price therefore in accordance with S. 3 (3A) of the Act, though actually the maximum prices fixed by the Central Government were paid. The contention of the appellants with respect to this period is that the notification fixing price and the action taken thereunder is hit by Art. 14, Art. 19(1) (f) and (g) and Art. 31(2) of the Constitution and therefore they are entitled to the rates prevailing in the market at the time.On December 30, 1957, after the new rice crop had come into the market, the Central Government issued another notification by which maximum prices were refixed in the districts of Krishna, West Godavari, East Godavari and Guntur in the State of Andhra Pradesh under s. 3 (2) (c) of the Act. These prices were less than the maximum prices fixed on September 14, 1957. Thereafter there was more pro- curement of rice by the Deputy Director (food) from the various appellants and he claims to have fixed prices therefore in accordance with the provisions of s. 3(3A) of the Act, though actually he paid the maximum price fixed in the notification of December 30, 1957. The contention of the appellants with respect to this period also is that the prices fixed by the Central Government are hit by Art. 14, Art. 19 (1 ) (f) and (g) and Art. 31 (2) of the Constitution. In addition, it is contended that the reduced prices fixed on December 30, 1957 could not and should not have applied to rice purchased by the appellants between September 14, 1957 and December 29, 1957, when higher market prices were prevailing under the notification of the Central Government dated September 14, 1957. The appellants therefore along with a large number of other rice millers filed writ petitions before the High Court. With respect to the first period, the appellants prayed that the Deputy Director be directed to fix the price of rice requisitioned from them at the rate calculated with reference to the average of the market rate prevailing at Tadepallegudem during the period of three months immediately preceding the date of the notification after giving notice and opportunity to the appellants to make their representation regarding the price to be fixed, as it was contended that the Deputy Director had fixed the price for this period arbitrarily and without regard to the provisions of the Act. As to the subsequent two periods after the Central Government had fixed the maximum price, the appellants prayed that the Deputy Director be directed to fix fair prices having regard to the prevailing market rates on the relevant dates on which the stocks of paddy and rice were requisitioned and that this should be done after giving opportunity to the appellants to make their representation in the matter. The notifications issued by the Central Government fixing maximum prices were attacked on the ground that the power vested by the Act in the Central Government to impose controls was an arbitrary power without limitation and wag therefore an unreasonable restriction and hit by Art. 19(1). It was also contended that the price fixation was hit by Art. 14 as the order of the Central Government applied to certain districts in the State of Andhra Pradesh and not to others. Reliance was also placed on Art. 31(2) of the Constitution which, it was said, was not complied with. Lastly with respect to the period after December 30, 1957, it was urged that at any rate procurement should have been at prices fixed in the notification of September 14, 1957 with respect to the stocks purchased by the appellants between that date and December 29, 1957 and not at the rate fixed by +, he notification dated December 30, 1957.These contentions were controverted on behalf of the Deputy Director (Food), Vijayawada and it was claimed that the prices were fixed in accordance with the provisions of the Act. It was also contended that neither the act nor the orders passed thereunder for procurement of rice in these particular cases were hit by Art. 14, Art. 19(1) (f) and (g) and Art 31(2). Lastly it was contended that the entire procurement during the period after December 29, 1957 was rightly made at prices fixed in the notification dated December 30, 1957.

(3.) WE shall first take up the contention based on cls. (f) and (g) of Art. 19(1). It is said that the provisions of the Act impose unreasonable restrictions on the right to acquire, hold and dispose of property, and to practice any profession, or to carry on any occupation. trade or business. We are of opinion that there is no force in this contention. It is unnecessary for us to give elaborate reasons for this conclusion, as the Act and its predecessors. namely, the Essential Supplies (Temporary Powers) Act, 1946 have already been upheld by this Court. The Essential Supplies (Temporary Powers) Act was upheld in Harishankar Bagla v. The State of Madhya Pradesh(1) while the Act was upheld in Union of India v. M/s. Bhanamal Gulzarimal.(2) As a matter of fact in Bhanamal Gulzarimal's case(2) ss. 3 and 4 of the Act were not specifically challenged on account of the earlier deci- sion in Harishanker Bagla's case.(3) It is therefore too late in the day for the appellants to challenge the validity of ss. 3 and 4 of the Act on the ground that they violate the fundamental rights guaranteed under Art. 19 (1) (f) and (g). As already indicated, ss. 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946 were in terms similar to ss. 3 and4 of the Act and were upheld by this Court in Harishankar Bagla scase. [1955] 1 S.C.R. 380.) Therefore, for the reasons given in Harishanker Bagla'scase, ( [1960] 2 S.C.R. 627. ) which were accepted in Bhanamal Gulzarilal's case, (2) we hold that ss. 3 and 4 of the Act are not hit by Art. 19(1) (f) and (g) of the Constitution.The next attack on the orders passed under the Act is that they violate Art. 14 of the Constitution inasmuch as they relate only to certain districts in the State of Andhra Pradesh and not to others. The short answer to this contention is that the districts to which the orders applied are surplus rice producing districts in the State of Andhra Pradesh and that is why the orders were confined to those districts. It was unnecessary to apply the orders to other districts for the control of price in those districts Would economically result in stabilising prices in other districts of the State also. These districts therefore obviously form a class by themselves and fixation of maximum price in these districts would subserve the purpose of s. 3(1) of the Act. The argument based on Art. 14 therefore must be repelled.