THANMAL SURANA Vs. UNION OF INDIA

JUDGEMENT

(1.) THESE petitions for writs have been presented by certain commission agents and grain merchants of Ganganagar District. The common question raised in these applications is the constitutional validity of Sections3 and 5 of the Essential commodities Act, 1955 - (Act X of 1955 hereinafter called the Act) and certain orders and notifications issued thereunder.

(2.) THE relevant facts are brief. On 12-6-1958, the Central Government issued order No. 201 (25)/ 58-PY. 11 in exercise of the power conferred by Clause (c) of sub-section (2) of Section 3 of the Act. The order is called the Gram (Rajasthan)Price Control Order, 1958. It extends to the whole of the district of Shri ganganagar in the State of Rajasthan. By the order in question, the maximum price at which gram could be sold in wholesale quantity in the district was fixed at rs. 10. 50 per maund. This was exclusive of the cost of gunny bags. The Order also laid down specifications as to the average quality of the gram for which the maximum price had been determined. A day earlier, the Central Government had issued on 11-6-1958 a notification under Section 5 of the Act delegating powers under Section 3 of the Act to the respondent Gurbaksh Singh, Deputy Director (Food), Government of India. In pursuance of this authority, the said Deputy Director called upon the petitioners to declare all the stocks of gram held by them whether in their possession or in possession of their agents or pledged with any other person or any bank and also the place or places where such stocks were located. The petitioners submitted the declarations required. Then followed certain orders directing the petitioners to sell out of the stock of" gram held by them large quantities to Government agents and in some of the cases even to other authorised persons. The Legislative authority for these orders as also the orders themselves have been accordingly challenged by the petitioners on various grounds as being void and without jurisdiction. It is contended that the Essential commodities Act under Sections 3 and 5 gives unfettered and uncanalised power to the Central Government for making any order that it thinks fit and even for delegating that power without laying down any principle or criteria for the exercise of such power. It is, therefore, urged that it amounts to an unreasonable restraint on the fundamental right of the petitioners to carry on trade and occupation or to hold and dispose of property and it is hit by Article 19 (1) (f) and (g) of the Constitution and is not saved by any of the clauses mentioned therein. It is contended that under Section 5 of the Act, the Central Government is given the right to delegate its power to make orders under Section 8 to any officer or authority subordinate to the Central Government or such State Government or such officer or authority subordinate to a State Government, as may be specified in that direction; there is thus no restraint upon the power of delegation and sub-delegation either. It is further contended that in substance, the notification directing the petitioners to sell to Government agents or to other specified individuals amounts to confiscation of property without laying down any principle for payment of compensation and that the price fixed by virtue of the order issued by the Central government is wholly arbitrary and has been fixed without any reference to any known data. It is submitted that the petitioners themselves purchased their stocks of gram for higher prices and are now being compelled to part with them at a much lower price to their detriment. It is also urged that the Central Government had no reason to discriminate in respect of the Ganganagar District and the petitioners who carry on trade in that locality and that any such discrimination was violative of the provisions of Article 14 of the Constitution.

(3.) FOR a correct appraisal of the arguments advanced on behalf of the petitioners, it is necessary to examine the provisions of the Essential Commodities Act which is the parent legislation and the main source of authority for the subsequent orders. It should be remembered that even after the termination of the War, it was considered necessary in public interest that the Centre should continue to have the same legislative powers as it had earlier to control the maintenance and supply of essential commodities. The Constitution (Third Amendment) Act had not become law when the Essential supplies (Temporary Powers) Act, 1946 expired and, therefore an Ordinance was promulgated to take effect on 26-1-1955, which provided for the regulation of trade and commerce in and the production, supply and distribution of essential commodities. The present Act, the Essential Commodities Act (No. 10 of 1955) replaced the central Ordinance and at the same time included within the definition of "essential commodities" those commodities which had been left out earlier in the Ordinance by reason of lack of legislative power. The present Act follows in a large measure the pattern of the earlier legislation of 1946. The Act itself underwent two amendments. By Amendment Act (No. 13 of 1957), in Section 3 of the Act, after sub-section (3), Sub-section (3a) was inserted. By another amendment, which came into effect on 17-9-1957 (Act No. 28 of 1957) Clause (f) was added to Subsection (2) of Section 3 of the Act. The preamble to the Act shows that it was an Act to provide in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain commodities. The crucial section in the Essential commodities Act is Section 3 and Sub-section (1) of that section furnishes the key-note to the purpose and object of the legislation and its underlying policy. It provides that if the Central Government is of opinion that it is necessary or expedient for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may, by order, provide for regulating or prohibiting the production supply and distribution thereof and trade and commerce therein. It is obvious, therefore, that Section 3 does not give an unchartered and unlimited liberty of action to the Central Government; but in the very first subsection postulates the conditions under which the Central Government is empowered to act and not otherwise. Sub-section (2) enumerates the nature of the orders which the Central Government is empowered to pass without prejudice to the generality of the powers conferred by Sub-section (1 ). For instance, the order may provide, amongst others, for regulating by licences, permits or otherwise the production or manufacture of any essential commodity; it may provide for cultivation of any waste or arable land, and for otherwise maintaining or increasing the cultivation of food crops; for controlling the price at which any essential commodity may be bought or sold; for regulating the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity; for requiring any person holding in stock any essential commodity to sell the whole or a specified part of the stock to such person or class of persons and in such circumstances as may be specified in the order. Clauses (c) and (f) of Sub-section (2) are particularly relevant for purposes of these applications, because, it is to be noticed, that acting under the provisions of clause (f), the petitioners were called upon to declare their stock and directed to sell the gram held by them to Government agency or such other persons specified in the order, while under Clause (c) the Government controlled and fixed the price at which gram was to be sold. Sub-section (3) of this section lays down that if any persons sells any essential commodity in compliance with an order made under Clause (f) of Sub-section (2), there shall be paid to him the price therefor as thereinafter provided; and in the various clauses of that sub-section, the principles according to which the prices have to be paid are enumerated. The clauses provide that where the price is agreed upon, the agreed price is payable, of course, consistently with the controlled price, if any, fixed under the section. Where there is no such agreement, the price calculated with reference to the controlled price; and where there is neither an agreed price, nor a controlled price, the price calculated at the market rate prevailing in the locality at the date of sale.