1959 Supreme(AP) 144

Andhra Pradesh High Court
Judges : MOHAMMED AHMED ANSARI, P.CHANDRA REDDY
Krishna Rice Mills, Tadepalligudem by Proprietor Sait Bansilal - Appellant
Versus
Deputy Director (Food) Government of India, (office of the Joint Director of Food), Dept.17/270, Vijayawada 2 - Respondent
Decided On : 08-21-59

The Essential Commodities Act, 1955 (Act X of 1955) as amended by Acts XIII and XXVIII of 1957, the notifications and orders issued thereunder are valid and constitutional.

Headnote:

ESSENTIAL COMMODITIES ACT - VALIDITY - PRICE CONTROL ORDER - REASONABLENESS - DELEGATION OF POWERS - VALIDITY - ESSENTIAL COMMODITIES ACT, 1955 (ACT X OF 1955) - SECTIONS 3, 3-A, 5 - ESSENTIAL COMMODITIES (SECOND AMENDMENT) ACT, 1957 - SECTION 2 - RICE (SOUTHERN ZONE) MOVEMENT CONTROL ORDER, 1957.

Fact of the Case:

Rice millers of West Godavari, East Godavari, Krishna and Guntur Districts filed petitions under Article 228 of the Constitution challenging the validity of the Essential Commodities Act, 1955 (Act X of 1955) as amended by Acts XIII and XXVIII of 1957, certain notifications and orders issued thereunder. The Government of India, acting under Sub-section (3-A) of Section 3 of the Act, directed that the price at which rice or paddy shall be sold in any locality in the States and union territories in compliance with an order made with reference to Clause (f) of Sub-section (2) of the said Section 3 shall be regulated in accordance with the provisions of the said Sub-section (3-A). The Ministry of Food and Agriculture, Central Government, in exercise of the powers conferred by Section 3 of the Act, passed an order called "the Rice (Southern Zone) Movement Control Order, 1957" extending it to the States of Andhra Pradesh, Kerala, Madras and Mysore, which were constituted the southern Zone, by the said order. Under the said order, it was ordained that no person shall export rice from any place within the southern Zone except under and in accordance with a permit issued by the State Government concerned or any officer authorised in this behalf by the Government subject to the condition that such exports under permit shall be regulated in accordance with the export quotas fixed by the Central Government in this behalf from time to time. The Central Government delegated to one Sri Krishnan, the Deputy Director of Food, Government of India, Vijayawada, the powers conferred on the Central Government by Section 3 of the Act to make orders providing for the matters specified in Clause (f) and for matters specified in Clauses (h), (I) and (j) in so far as they relate to Clause (f) of Sub-section (2) of Section 3 in relation to the stocks of rice and paddy held in any locality in the State of Andhra Pradesh. By another Order of the same date, the Central Government authorised the said Sri Krishnan pursuant to Clause (iv) of Sub-section (3-A) of Section 3 of the Act to determine the average market rate of rice and paddy prevailing in any locality in the State of Andhra Pradesh. The officer in question called upon the various millers in the districts of East Godavari, West Godavari, Krishna and Guntur to declare their stocks and on receipt of the declarations required on different dates some of the petitioners to sell a part of their stocks to the Assistant Director of Food at prices to be calculated in accordance with Clauses (iii) and (iv) of Sub-section (3-A) of the Act. They accordingly supplied the quantities of rice mentioned in these orders and thereafter sent bills to the Deputy Director claiming prices higher than those fixed by him. The Government of India thought it more satisfactory to fix ceiling prices for paddy and rice in different parts of the country. For this purpose, they issued an order dated 14-9-1957 acting under Clause (c) of Sub-section (3) of Section 3 of the Act and directing that the maximum prices at which rice and paddy specified in column 1 of the schedule to that order shall be sold in any one transaction of more than ten maunds in the districts of Krishna, West Godavari and East Godavari in the State of Andhra Pradesh, shall be as specified in the corresponding entries in column 2 of the said Schedule. The officer in question continued to possess the powers delegated to him under the notifications mentioned above and thereafter also he required the millers to supply the specified quantities of rice at the maximum, controlled price. The purpose of these purchases was to export rice to deficit areas in the country. The millers complied with these directions but claimed higher prices. This the Officer could not comply with having regard to the fact that it was not within his power to enhance the prices. By and under it, the ceiling price for Nallarlu was fixed at Rs. 15,50, for Gankallu at Rs. 16.00 and for Akkullu at Rs. 17.00 per maundi. This, reduction was a sequel to the recommendation of a Food grains Enquiry Committee appointed under Government of India resolution dated 14-6-1957 presided over by Sri Ashok Mehta. The object of the constitution of such a committee was to have a thorough investigation into the rise in prices despite higher production and to suggest remedial measures to prevent speculative hoarding and to arrest undue rise in prices. After an elaborate enquiry, which lasted for several months, the Committee recommended that a price ranging between Rs. 15.00 and Rs. 17.00 per maund of rice of second variety would be generally considered reasonable all over the country. Subsequent to this period also, paddy was requisitioned at the reduced rates. Not being satisfied with the prices paid for the stocks requisitioned from them, the millers have sought the help of this court invoking Article 226 of the Constitution.

Finding of the Court:

1. The Essential Commodities Act, 1955 (Act X of 1955) as amended by Acts XIII and XXVIII of 1957, the notifications and orders issued thereunder are valid and constitutional. 2. The delegation of powers to the Deputy Director of Food, Government of India, Vijayawada, under Section 3 of the Act is valid. 3. The Price Control Order dated 14-9-1957 is not discriminatory and does not violate Article 14 of the Constitution. 4. The fixation of prices under the Price Control Order is not unreasonable and is saved by Article 19 (6) of the Constitution.

Issues: 1. Whether the Essential Commodities Act, 1955 (Act X of 1955) as amended by Acts XIII and XXVIII of 1957, the notifications and orders issued thereunder are valid and constitutional? 2. Whether the delegation of powers to the Deputy Director of Food, Government of India, Vijayawada, under Section 3 of the Act is valid? 3. Whether the Price Control Order dated 14-9-1957 is discriminatory and violates Article 14 of the Constitution? 4. Whether the fixation of prices under the Price Control Order is unreasonable and is not saved by Article 19 (6) of the Constitution?

Ratio Decidendi: 1. The Essential Commodities Act, 1955 (Act X of 1955) as amended by Acts XIII and XXVIII of 1957, the notifications and orders issued thereunder are valid and constitutional because: a) The Act is intended to safeguard the interests of the general public by controlling the production, supply and distribution of certain essential commodities. b) The Act does not violate Article 31 (2) of the Constitution as it satisfies the requisites of that Article. c) The Act does not violate Article 19 (1) (g) of the Constitution as it does not confer unbridled discretion on the executive. d) The Act does not violate Article 14 of the Constitution as it does not discriminate against any class of persons. e) The Act does not violate Article 19 (6) of the Constitution as the restrictions imposed by it are reasonable and in the interests of the general public. 2. The delegation of powers to the Deputy Director of Food, Government of India, Vijayawada, under Section 3 of the Act is valid because: a) The delegation is authorised by Section 5 of the Act. b) The delegation is not excessive or arbitrary. c) The delegation does not violate Article 14 of the Constitution as it does not discriminate against any class of persons. 3. The Price Control Order dated 14-9-1957 is not discriminatory and does not violate Article 14 of the Constitution because: a) The order is not confined to any particular district or region. b) The order is not based on any unreasonable classification. c) The order is in the interests of the general public. 4. The fixation of prices under the Price Control Order is not unreasonable and is saved by Article 19 (6) of the Constitution because: a) The prices are fixed on the basis of the prevailing market rates. b) The prices are not excessive or arbitrary. c) The prices are in the interests of the general public.

Final Decision: All the writ petitions, except Writ Petition Nos. 1197 and 1203 of 1957 in which the price has been modified as above, should be dismissed with costs. Advocates fee is fixed at Rs. 100.00 in each petition.