BADRI PRASAD SAH Vs. STATE OF BIHAR

JUDGEMENT

(1.) In this application under Article 226 of the Constitution the validity of the following order of the Deputy Commssioner of Dumka dated the 26th March 1966 (Annexure C) is under challenge : --

(2.) The Essential Commodities Act (hereinafter referred to as the Act) was passed by the Parliament in 1955 mainly for the purpose of controlling the production, supply and distribution of, and trade and commerce in, certain commodities including foodstuffs. Section 3 of the Act conferred power on the Central Government to provide by order for regulating or prohibiting the production, supply and distribution of Essential and trade and commerce therein. This power was intended to bp utilised for the purpose of maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices. Sub-section (2) of Section 3 of the Act enumerated various matters which could be provided in that Order and Clause (d) of that sub-section is as follows:-- "for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption, of, any essential commodity"

(3.) In exercise of the powers conferred by Section 3 of the Act, the Government of Bihar, as the delegated authority of the Central Government made the Bihar Food-grains Dealers' Licensing Order. 1966 (hereinafter referred to as the Order) on the 7th January, 1966. The Order consists of twelve clauses. The scheme of the Order appears to be to require every wholesale dealer and retail dealer in food-stuffs to take out licence and to carry on his business in accordance with the terms and conditions of that licence. Clauses 4, 5, 6, 7, 8, 9, 10, 11 and 12 are in the nature of consequential and ancillary provisions, the main Clause being Clause 3. The form of the licence either for wholesale dealer or retail dealer as given in Forms B and C shows that the licenses should keep a register of daily accounts showing the stock on each day, the quantity received, the quantity delivered and the closing balance. Paragraph No. 7 of Form B requires the licensee not to withhold from-sale supply of foodgrains, or to charge excessive profit, There are other provisions which are meant to prevent huge accumulation of stocks by these dealers with a view to corner the market and push up the price. I may refer in particular to sub-para (v) of para 7 of the licence which says that a whole-sale dealer shall not keep in his stock any foodgrains in a quantity exceeding one thousand quintals continuously for a period exceeding one week. Similarly, the corresponding para relating to retail dealer's licence (Form C), namely, sub-para (v) of para 6 requires the retail licensee not to keep in his stock any foodgrains in a quantity exceeding one hundred quintals continuously for a period exceeding one week. Para 10 of the whole-sale dealer's licence and para 9 of the retail dealer's licence require the licensee to comply with any direction that may be given to him by the appropriate authority in regard to "purchase, sale and storage for sale of foodgrains" and other matters. Thus the scheme of the Order is apparent. By insisting on every wholesale dealer and retail dealer taking out an appropriate licence under the Act the authorities are enabled to control the storage, sale and purchase of foodgrains. Restrictions are put on the sale of foodgrains and storage of foodgrains by the dealers and their marginal profit is also fixed. They are also required to maintain a register showing daily accounts as regards the opening stock, quantities received, quantities delivered and the closing stock. In addition, they are required to comply with the directions that mav be given by appropriate authorities as regards purchase, sale and storage for sale of foodgrains. Stringent provisions are made for punishing those licensees who contravene the conditions of the licence. Apart from the penalty of cancellation of the licence and criminal prosecution, they incur the risk of their stock of foodgrains being confiscated under Clause (b) of Sub-section (i) of Section 7 of the parent Act. There can thus be no doubt that if the provisions of the Order are carefully enforced, it will be possible for the authorities to maintain a steady supply of food-grains in the open market and secure their equitable distribution and availability at fair prices. There can also be no doubt about the competence of the Parliament to pass the Act. It is derived from entry 33 (b) of List III of the Seventh Schedule which is as follows; "Trade and commerce in, and the production, supply and distribution of (b) foodstuffs, including edible oil-seeds and oils.