Judgment

GROVER, J. :- (for himself and on behalf of Hegde J:) These petitions under Art. 32 of the Constitution were filed by Premier Automobiles Ltd., Hindustan Motors Ltd. and Standard Motor Products of India Ltd., manufacturers of Fiat, Ambassador and Standard motor cars respectively and two of the dealers of such cars. The petitioners challenged the fixation of fair price of the said three passengers cars by the Government of India by the Motor Car (Distribution and Sale) Control (Amendment) Order 1969 promulgated under S. 18G of the Industries (Development and Regulation) Act 1951, hereinafter called the "Order" and the "Act" respectively. The ex-factory prices of the three cars were fixed as follows :

Hindustan Ambassador : Rs. 15,316.00

Fiat 1100-D : Rs. 14,325.00

Standard Herald 4 Door : Rs. 14,003.00

2. These prices were inclusive of dealer s commission but did not include the excise duties, Central Sales tax and local taxes, if any, and transport charges. The manufacturers or dealers were prohibited from selling or offering for sale or otherwise transferring or disposing of the motor cars for a price exceeding the price given in the order. The order was made after taking into consideration the recommendations of the Tariff Commission to whom the question of determination of a fair price of motor cars had been referred by the Central Government under clause (d) of S. 12 of the Tariff Commission Act 1951.

3. On May 5, 1970 after hearing the petitions for some days this court recommended to the Government to appoint a Commission for the purpose of suggesting a fair price for the three cars by taking into consideration all relevant matters. On May 27, 1970 the Government of India constituted a Commission consisting of Shri Sarjoo Prasad a retired Judge of the Patna High Court as Chairman, Shri R. K. Khanna Chartered Accountant and Brig. V. Minhas Director of Inspection (Vehicles), Deptt. Of Defence Production as Members. By a notification dated June 5, 1970 all the provisions of the Commission of Enquiry Act 1952 were made applicable to the Commission. The Car Price Enquiry Commission, hereinafter called the Commission devoted a good deal of labour and attention to the matter of fixing a fair price of the three cars. Its report consists of two volumes. The first volume contains the main report and the second volume contains the appendices.

4. The Commission in its report has adverted to the historical background in which the car industry came to be controlled in our country. It will be useful to notice the salient facts. Till the year 1928 motor vehicles were purchased directly from abroad or through agents and dealers in India. From 1928 till the early forties General Motors India Ltd. and Ford Motor Company of India Ltd. used to assemble trucks and cars from components imported from United States in completely knocked down condition called C. K. D. by way of abbreviation. Hindustan Motor Ltd. Calcutta and the Premier Automobiles Ltd. Bombay, two of the petitioners before us, were established in 1942 and 1944 respectively with a programme for progressive manufacture of complete automobiles. These companies entered into technical collaboration with foreign manufacturers as did the Standard Motor Products of India Ltd. In the Industrial Policy Resolution of 1949 of the Government of India automobiles and trucks were classed among industries of importance which would be subject to regulation and control by the Central Government. In 1949 the Government decided that the import Government should be allowed only in C.K.D. condiction. In March 1952 the Government asked the Tariff Commission to enquire into the question of grant of protection to the automobile industry in India. The Tariff Commission submitted its report in 1953 recommending that only those companies which had an approved manufacturing programme should be allowed to continue their operation which recommendation was accepted by the Government. In August 1955 the