1. Prosecution for selling iron and steel above maximum prices fixed by notification under the Iron and Steel Control Order, 1941 and Essential Supplies (Temporary Powers) Act, 1946. (Para 2 , 3 , 4 )
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1961 Supreme(SC) 24
SUPREME COURT OF INDIA
20th January, 1961
B.P. SINHA, C.J.I., S.K. DAS, A.K. SARKAR, N. RAJAGOPALA AYYANGAR AND J.R. MUDHOLKAR, JJ.
Bhagwati Saran and another, Appellants
Versus
The State of U.P., Respondent.
Criminal Appeal No. 16 of 1959.
Advocates appeared
Mr. R. V. S. Mani, Advocate, for Appellants; M/s. G. C. Mathur and C. P. Lal, Advocates, for Respondent.
Advocates:
C.P.LAL, G.C.MATHUR, R.V.S.Mani
C.P.LAL, G.C.MATHUR, R.V.S.Mani
A report for taking cognizance under Section 11 of the Essential Supplies (Temporary Powers) Act, 1946, need only sufficiently designate the contravention and does not require the detail of a charge-sheet. Rational classification of dealers for price control is valid and not discriminatory under Article 14.
Headnote:(A) Essential Supplies (Temporary Powers) Act, 1946 - Section 11 - Iron and Steel Control of Production and Distribution Order, 1941 - Clause 11-B - Cognizance of offences - Report by public servant - Requirement of "facts constituting such offence" - The function of the report is to provide a basis for the Magistrate to take cognizance and to eliminate private prosecutions; it is not intended to serve as a charge-sheet or contain all evidence to be proved at trial - If the contravention is sufficiently designated in the report, the statutory requirements are satisfied. (Para 17)
(B) Constitution of India - Article 14 - Discrimination - Differentiation between different classes of stockholders regarding price maxima and special conditions, such as cutting charges and credit facilities, does not per se constitute discrimination - There is no presumption that different rules for differently situated groups are unequal; the party alleging unjustifiable discrimination must establish it to the satisfaction of the Court. (Para 15)
(C) Administrative Law - Rule-making power - Power to fix maximum prices - The power to fix prices for different categories of dealers allows for rational sub-classification to ensure essential commodities are available to consumers at reasonable prices - Such classification is not ultra vires the rule-making power conferred by the Control Order. (Para 14)
Facts of the case:
Appellants, acting as stockholders of iron and steel, were prosecuted for selling materials in excess of the maximum prices fixed by a government notification. The appellants challenged the framing of charges on the grounds that the police report failed to meet the statutory requirements for taking cognizance under the Act, and that the notification fixing the prices was ultra vires the Controller's power and discriminatory under the Constitution.
Findings of Court:
The court found that the police report sufficiently designated the offence to allow the Magistrate to take cognizance. It further held that the classification of stockholders and the associated price differences and conditions were rational and did not violate the right to equality.
Issues: Whether the police report contained the "facts constituting the offence" as required by Section 11 of the Act; whether the notification fixing maximum prices was ultra vires the Controller's power; and whether the notification was discriminatory under Article 14 of the Constitution.
Ratio Decidendi: A report for taking cognizance under Section 11 of the Act needs only to provide a basis for the Magistrate to act and does not need to be as detailed as a charge-sheet. Furthermore, rational classification of dealers for the purpose of price control of essential commodities is a valid exercise of administrative power and does not violate Article 14 unless unjustifiable discrimination is proven.
Result: Appeal dismissed.
Legal Category Hierarchy
- constitutional law
- administrative law
- crime and sentencing
- practice and procedure
Table of Contents
2. Validity of police report under Section 11 of the Act, constitutionality of price-fixing notifications under Article 14, and whether notifications were ultra vires the Control Order. (Para 5 , 8 , 12 , 15 , 17 )
3. Controller may rationally sub-classify dealers for price fixing; differentiation in conditions does not per se violate Article 14; Section 11 reports need not be exhaustive charge-sheets. (Para 14 , 15 , 17 )
4. A report for taking cognizance under Section 11 of the Act must sufficiently designate the contravention but need not contain the detailed evidence required for a charge-sheet. (Para 17 )
5. Appeal dismissed. (Para 19 )
6. What is the required level of detail in a report for taking cognizance under Section 11 of the Essential Supplies (Temporary Powers) Act, 1946?
The report must be in writing by a public servant and sufficiently designate the contravention to provide a basis for cognizance. It is not required to be a detailed charge-sheet or contain the specific evidence, such as exact dates and quantities, needed to prove guilt at trial. (Para 17 , 18 )
7. Can the Controller sub-classify dealers when fixing maximum prices under the Iron and Steel Control Order, 1941?
Yes. The Controller can draw distinctions between classes of dealers based on rational grounds, such as the difference between wholesale and retail operations, to ensure essential commodities are available to consumers at reasonable prices. (Para 14 )
8. Does the application of different special conditions to different classes of stockholders violate Article 14 of the Constitution?
No. Differentiation is not necessarily discrimination. There is a presumption that different rules for differently situated groups are not unequal treatment unless the party alleging discrimination establishes an unfair or irrational basis for the distinction. (Para 15 )
Judgment
AYYANGAR, J. : Having heard the learned counsel for the appellants in full we did not consider it necessary to call on the respondent since, we were clearly of the opinion that the contentions raised in the appeal possessed no merit.
2. The legality of a prosecution for contravention of the notification fixing the maximum prices at which certain categories of iron and steel could be sold is the subject-matter of this appeal. The appellants are two in number, related to each other as husband and wife. The second appellant - Sushila Devi - is " a Registered Stockholder" and is stated to be the proprietor of the firm "Balwanat Devi Sushila Devi" situated in Sultanpur in Uttar Pradesh and the first appellant- Bhagwati Saran her husband, the manager of the said firm.
3. There has bee some previous history before the present prosecution was initiated but it is sufficient for the purposes of this appeal to start with the report to the Judicial Magistrate Amathi by the officer incharge of the Police station, Sultanpur, dated August 20, 1955. It was headed "Offence - Section 11-B Iron and Steel Control Order, 1941" and set out the following facts:
"Bhagwati Saran used to work as a Karinda in the firm of Balwanta Devi Sushila Devi and had all along been doing sales and purchases at the shop, and also issued receipts under his signatures. Shrimati Sushila Devi is the wife of accused Bhagwati Saran and she was the proprietor. Balwanta Devi has died. Hence she alone is the proprietor. In the course of investigation it was also revealed that Bhagwati Saran had from time to time sold some iron-bars on behalf of this firm after receiving price more than the control rate, which he had all along been getting printed, and had been getting some other receipts checked fictitiously under the Control Act from the office of the Supply Officer. An information relating to it was given to Shri P. M. Kapoor, the then D. M. Sultanpur, by his munim Kalapnath and on it a case was registered at this police station and the investigation was made................................ On the report of the P. P. the S. P. ordered another charge-sheet to be submitted under S. 8 of the Essential Commodities Ordinance of 1955. Hence this charge-sheet under S. 11-B (III). Iron and Steel Control of Production and distribution Order, 1941, read with S. 8 of Essential Commodities Ordinance of 1955 is sent against both the accused. The accused persons after being arrested were released on bail. It is, therefore, prayed that the accused persons after being summoned may be punished".
4. The report further stated that 4 volumes of cash memos, and 5 volumes of register of Permits were deposited in the Malkhana and would be produced in evidence and followed it with a list of 13 prosecution witnesses. The Judicial Magistrate registered the case and issued summons to the accused on September 16, 1955, the case being directed to be called on September 30, 1955. The accused were thereafter examined before the Magistrate under S. 364 of the Criminal Procedure Code on March 23, 1956, and on the next day the Magistrate framed a charge against them which read as follows:
"That you between 10th January 1952 and 27th February 1952, in Sultanpur sold 11 Cwt. 12 Ib. iron bars on 11th January 1952 and 3 Cwt. iron-bars on 18-2-52 and 6 Cwt. Iron bars on 26th February 1952 at the rate of Rs. 21-3-9 per Cwt. though the controlled rate as notified in Government of India Gazette dated 1st July 1952, for the commodity was Rs 21-2-4 per Cwt. and thus you charged Rs. 1-15-0, Rs. 2-2-3 and Rs. 4-4-6 respectively excess and more than the controlled price and thereby committed an offence punishable under S. 7, E. S. Temp. P. Act 1946 read with S. 11-B (iii) of Iron and Steel Control of Production and Distribution Order of 1941 and I hereby direct that you be tried by the said Court on the said charge".
The two appellants thereupon moved the Court of the Sessions Judge, Sultanpur, to revise the order o
