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HIGH COURT OF CALCUTTA
Sinha
RAMRICHPAL AGARWALLA - Appellant
Versus
THE STATE OF WEST BENGAL - Respondent
Matter 162 Of 1957
Decided On : SEPTEMBER 12, 1957
ESSENTIAL COMMODITIES ACT, 1955 - SECTION 3(2)(F) - ORDER REQUIRING SALE OF STOCK TO GOVERNMENT - VALIDITY - CONDITIONS PRECEDENT - SECTION 3(3A) - PRICE CONTROL - VALIDITY - ARTICLE 31(2A) OF THE CONSTITUTION - COMPULSORY ACQUISITION OR REQUISITION OF PROPERTY - ARTICLE 19(1)(F) AND (G) OF THE CONSTITUTION - FUNDAMENTAL RIGHTS - REASONABLE RESTRICTION.
Fact of the Case:
The petitioner, a rice mill owner, challenged the validity of an order issued by the Government of West Bengal under Section 3(2)(f) of the Essential Commodities Act, 1955, directing him to sell his entire stock of rice to the Director of Food or Sri Arunodaya Chowdhury C.I., at a price to be determined in accordance with Section 3(3a) of the Act. The petitioner contended that the order was ultra vires the Act and violative of his fundamental rights under Articles 19(1)(f) and (g) of the Constitution.
Finding of the Court:
The court held that the order was not in compliance with the existing law and, therefore, the petitioner could not be compelled to carry out the directions contained therein. The court found that the Act itself was not successfully challenged, but the impugned order was not in accordance with the law as it stood at the time of the judgment. The court further held that Section 3(3a) of the Act was not void as it was closely related to the pre-conditions laid down in Section 3(1) of the Act and did not contradict it.
Issues: 1. Whether the order issued by the Government of West Bengal under Section 3(2)(f) of the Essential Commodities Act, 1955, was valid and in compliance with the law. 2. Whether Section 3(3a) of the Essential Commodities Act, 1955, was void for being contradictory to the pre-conditions laid down in Section 3(1) of the Act. 3. Whether the impugned order violated the petitioner's fundamental rights under Articles 19(1)(f) and (g) of the Constitution.
Ratio Decidendi: 1. The court held that the order was not in compliance with the law as it stood at the time of the judgment because the Government did not have the power to order a stockholder under Section 3(2)(f) of the Act to sell to Government or its officers acting as agents of the Government. 2. The court held that Section 3(3a) of the Act was not void as it was closely related to the pre-conditions laid down in Section 3(1) of the Act and did not contradict it. The court found that undue rise in prices and hoarding both affected the maintenance and supply of essential commodities and called for action to ensure their increase in supply, their equitable distribution, and availability at fair prices. 3. The court did not decide on the issue of whether the impugned order violated the petitioner's fundamental rights under Articles 19(1)(f) and (g) of the Constitution as it found that the order was not in compliance with the law.
Final Decision: The court issued a writ in the nature of mandamus directing the respondents to forbear from giving any further effect to the impugned order dated 28/8/1957, whereby the petitioner was directed to sell and deliver his existing stock of rice to the Director of Food or Sri Arunodava Chowdhury C.I. The court also allowed the respondents to appeal from the decision within three weeks from the date of the judgment.
( 1 ) THE same point or law is involved in this Matter (No. 154 of 1957), and Matters Nos. 2 to 9, being the next eight cases in the list. There has been only one set of arguments and all the Matters will abide by the result of this judgment.
( 2 ) THE petitioner carries on business as manufacturer of, and dealer in, rice and paddy. The petitioner has a rice mill at Basantlal Saha Road, in Tollygunj, a suburb of Calcutta. On or about 28-8-1957, the petitioner received two orders, signed by the respondent No. 2, copies whereof are annexed to the petition and marked as Exhibit 'a'. We are concerned in this application with Exhibit A at page 11 the relevant part whereof is as follows:"in exercise of the powers conferred on the Government of West Bengal under Clause (f) of Sub-section (2) of Section 3 of the Essential Commodities Act. 1955 (X of 1955), read with Clause (b) of Section 5 of the said Act and Order No. SRO 1925 of the Government of India dated 7-6-1957, the Governor is pleased to make this order requiring you. . . . . . . . . . . . . . . . . . . . to sell and deliver immediately to the Director of Food or Sri Arunodaya Chowdhury C. I. , authorised in this behalf the entire stocks of rice. . . . . . . . . . . . . . held by you this day the 28-8-1957, as it is necessary to maintain supplies of rice to modified Rationing Shops in Calcutta for distribution to the public at fair prices, and the Governor is pleased further to direct that the price of the stock of rice so sold and delivered by you will be paid to you in due course in accordance with the provisions of Sub-section (3a) of Section 3 of the aforesaid Act. "
( 3 ) THEREAFTER on 30-8-1957, the petitioner received a letter from respondent No. 3, the Director of Food, intimating to the petitioner that the stock of rice "which has been purchased by the State of West Bengal", would be lifted from 31-8-1957, till completion of delivery. This rule was obtained by the petitioner on 2-9-1957, directing the respondents to show cause why a writ in the nature of Mandamus should not issue directing them to forbear from giving effect to the said order, and for other reliefs. All parties were restrained by an interim injunction from removing any goods from the Mill premises.
( 4 ) THE Essential Commodities Act 1955 (Act X of 1955) is a Central Act, which came into operation On 1-4-1955. Trade and Commerce within the State is a State subject (List II, item 26 of the 7th Schedule) but it must be read with the provisions of item 33 of the Concurrent List, which includes the products of any industry where the control of such Industry by the Union is declared by Parliament by law to be expedient in the public interest, as also food stuffs. This Act is a successor to the Essential Supplies Act, and the contents are very much the same. The preamble states that it is "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. " In order to appreciate the argument made in this case, it will be necessary to consider several provisions of the Essential Commodities Act (hereinafter referred to as the 'act'), which are set out hero under:"3. 'powers to control production, supply distribution, etc. , of essential commodities'-- (1) If the Central Government is of the opinion that it is necessary or expedient so to do 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. (2) Without prejudice to the generality of the powers conferred by Sub-section (1), an order made thereunder may provide- (f) 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
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