T C N MENON Vs. UNION OF INDIA

JUDGEMENT

(1.) THE question, in one form or other, that arises in these writ applications is as to whether Clause. 5 (2) of the Motor Cars (Distribution and Sale) Control Order, 1959 introduced in that Order by the motor Cars (Distribution and Sale) Control (Second Amendment) Order, 1965, should be declared as unconstitutional, void and ultra vires the powers conferred by S. I8-G of the Industries (Development and Regulation) Act, 1951 (65 of 1951 ).

(2.) TO understand the contentions it is necessary to read clause. 5 (2) as it stood before the amendment. It ran thus: "every such applicant shall also furnish along with the application a written guarantee from a bank undertaking to pay to the dealer at the time when the motor car is ready for delivery to the applicant a sum of rupees two thousand: Provided that, in the case of. a person whose name appears in the books of the dealer as an applicant for the purchase of motor car at the commencement of this Order, the guarantee may be furnished within thirty days of such commencement. Provided further that, where the bank guarantee furnished by a person expires before the delivery of the car, the guarantee may be renewed by that person within thirty days of the date of such expiry. " This provision has been changed by the amending Order referred to as follows: " (2) Subject to the provisions of sub clause (2b), every applicant shall also furnish along with the application a Post Office savings Bank Pass Book from a post office evidencing the fact that he has opened a Security Deposit Account in the post office for a sum not less than rs. 2000/- and pledged to the dealer. (2a) When the Motor Car is ready for delivery, the dealer shall send intimation of that fact in writing to the pledger applicant along with the Post Office Savings Bank Pass Book and an authority authorising the pledger applicant to withdraw the money from the post office. (2b) Where, at the commencement of the Motor Cars (Distribution and Sale) Control (Second Amendment) Order, 1965, the name of any person appears in the books of the dealer as an applicant for the purchase of a motor Car, such person shall, within sixty days of such commencement, furnish such Post Office Savings Bank Pass Book as is referred to in sub-clause (2) in lieu of the bank guarantee already furnished to the dealer, and thereupon the dealer shall release the bank guarantee forthwith: Provided that the Controller may, having regard to the circumstances of any case and the purposes to be served by this Order, extend, by order in writing, the said period of sixty days to such further period as he deems fit. "

(3.) I shall read S. 18-G and refer to the relevant provisions of the Order before discussing these contentions. "18-G. Power to control supply, distribution, price, etc. , of certain articles. (1) The Central Government, so far as it appears to it to be necessary or expedient for securing the equitable distribution and availability at fair prices of any article or class of articles, relatable to any scheduled industry, may, notwithstanding anything contained in any other provision of this Act, by notified order, provide for regulating the supply and distribution therefor and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1), a notified order made thereunder may provide (a) for controlling the prices at which any such article or class thereof may be bought or sold; (b) for regulating by licences, permits or otherwise the distribution, transport, disposal, acquisition, possession, use or consumption of any such article or class thereof; (c) for prohibiting the withholding from sale of any such article or class thereof, ordinarily kept for sale; (d) for requiring any person manufacturing, producing or holding in stock any such article or class thereof to sell the whole or part of the articles so manufactured or produced during a specified period or to sell the whole or a part of the articles so held in stock to such person or class of persons and in such circumstances as may be specified in the order; (e) for regulating or prohibiting any class of commercial or financial transactions relating to such article or class thereof which in the opinion of the authority making the order are, or if unregulated are likely to be detrimental to public interest; (f) for requiring persons engaged in the distribution and trade and commerce in any such article or class thereof to mark the articles exposed or intended for sale with the sale price or to exhibit at some easily accessible place on the premises the price-lists of articles held for sale and also to similarly exhibit on the first day of every month, or at such other time as may be prescribed, a statement of the total quantities of any such articles in stock; (g) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters; and (h) for any incidental or supplementary matters, including, in particular, the grant or issue of licences, permits, or other documents and the charging of fees therefor. (3) Where, in pursuance of any order made with reference to clause (d) of sub-section (2), any person sells any article, there shall be paid to him the price therefor (a) where the price can consistently with the controlled price if any, be fixed by agreement, the price so agreed upon; (b) where no such agreement can be reached the price calculated with reference to the controlled price, if any, fixed under this section; (c) where neither clause (a) nor clause (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale. (4) No order made in exercise of any power conferred by this section shall be called in question in any court. (5) Where an order purports to have been made and signed by an authority in exercise of any power conferred by this section, a court shall, within the meaning of the Indian Evidence Act, 1872, presume that such order was so mads by that authority. Explanation In this section, the expression 'article or class of articles' relatable to any scheduled industry includes any article or class of articles imported into India which is of the same nature or description as the article or class of articles manufactured or produced in the scheduled industry. " The Order enjoins that "no manufacturer shall after the commencement of this Order, sell or otherwise dispose of, or offer to sell or otherwise dispose of any description of motor cars manufactured by him whether manufactured before or after such commencement or whether in assembled or unassembled condition, except in accordance with the order made by the Controller under clause. 3. " Clause 3 provides: "the Controller may, from time to time by order: (a) fix quotas of motor cars for meeting the requirements of the Government, or of any public authority or of any class of persons having regard to the nature of their work or duties, or of specified regions in India, and different quotas may be fixed for different purposes or for different descriptions of motor cars. " and clause S enacts: "every person desirous of purchasing a motor car shall apply to a dealer in the form set out in Schedule-II. "