Patna High Court
Kashi Prasad Harilalka vs Joint Secretary, Government Of India, ... on 6 September, 1980
Equivalent citations: 1981(29)BLJR189
JUDGMENT Sarwar Ali, J.
1. In this writ application the petitioner, partner of a registered firm, challenges the validity of Sugar (Retention and Sale of recognised Dealers) Order 1979 (the "Retention order"). He also prays that the demand notice (Annexure 3 issued by respondent No. 5, in the purported exercise of power under the Retention Order) should be directed to be cancelled or withdrawn.
2. The petitioner carries on business in sugar. He purchases sugar from different Sugar Mills in the State of Bihar and Uttar Pradesh. The sugar so purchased is sold by him in wholesale to various dealers. On 17-12-1979 when the Retention Order came into force the petitioner had a stock of 770 bags. On 22-12-1979 the petitioner was told, in Annexure-3, that 65 percent of sugar in the stock of petitioner and the quantity that had been despatched to him should be sold to the State Government. The rest of the stock could otherwise be sold by the petitioner. As already stated the Retention Order and Annexure-3 are both under challenge in this writ application.
The Legal Background:
3. The Essential Commodities Act, 1955 as the preamble itself indicates, is a law promulgated "in the interest of general public for the control of production, supply and distribution of trade and commerce in certain commodities. "Section 3(1) of the Act confers wide powers. Its states:
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 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.
Sub-section (2) says that without prejudice to the generality of the power conferred by Sub-section (1) an order may be made to provide for matters enumerated therein. Section 3(2)(c) empowers the making of order "for controlling the price at which any essential commodity may be bought or sold". Sub-clause (f) authorises the making of an order "for requiring any person holding stock in any essential commodity to sell the whole or a specified part of the stock to the Central Government or a State Government or to an officer or agent of such Government or to such other person or class of persons and in such circumstances as may be specified in the order." Section 3(3) which deals with the price which is to be paid to a person selling an essential commodity in compliance with an order made with reference to Section (2)(f) of the Act, is as follows;
Where any person sells any essential commodity in compliance with an order made with reference to Clause (f) of Sub-section (2), there shall be paid to him the price therefor as herein provided (a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon the agreed price;
(b) where no such agreement can be reached, the price, calculated with reference to the controlled price, if any;
(c) where neither Clause (a) nor Clause (b) applies the price calculated at the market rate prevailing in the locality at the date of sale.
4. I would now mention the relevant provisions of the Retention Order. The preamble of the Order states that the making of the order is necessary and expedient for securing equitable distribution and availability of sugar at fair price and that the order has been issued in exercise of powers under Section 3(2)(f) of the Essential Cammodities Act (hereinafter referred to as the 'E. C. Act').
Clause 2 (a) defines recognised dealer as follows:
2 (a) 'recognised dealer' means a person carrying on the business of purchasing, selling or distributing sugar, and licensed under the Order relating to licensing of sugar dealers for the time being in force in a State or Union Territory.
Clause 3 States that every recognised dealer shall retain 65 percent of the stock of sugar held by him at the close of business on the commencement of the Retention Order for the purpose of sale to the State Government or other agency as mentioned in the said clause The explanation of the said clause includes within the purview of Clause 3 even despatches to the recognised dealer. Clause 3(3) deals with the price to be paid for sale by a recognised dealer under the provisions of the order and may be quoted:
(3) Where a recogaised dealer sells sugar under the provisions of this Order, there shall be paid to him the price therefor as hereinafter provided;
(a) where the price can, consistently with the controlled price fixed under Clause 4 be agreed upon, the agreed price;
(b) where no such agreement can be reached, the price calculated with reference to such controlled price.
Clause 4 states; "Controlled price: For the purpose of Clause 3, the controlled price of sugar shall be rupees two hundred and eighty only per quintal."
5. I shall now refer the relevant provisions of the Bihar Sugar, Dealers Licensing Order, 1963 and the Sugar (Control) Order, 1966, these having direct bearing on the first contention raised in this case, Section 5 of the Essential! Commodities Act authorises the delegation of power by the Central Government in relation to making of orders under Section 3 and is as follows;
Delegation of powers. The Central Government may, by notified order, direct that the power to make orders under Section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable also by-
(a) such officer or authority subordinate to the Central Government; or
(b) such State Government or such officer or authority subordinate to a State Government, as may be specified in the direction.
The power of making orders was delegated to the State Government. In pursuance of the said delegation the State of Bihar, like other States, made Bihar Sugar Dealers Licensing Order 1963. It authorised the issue of licence to a dealer as defined in the order by the licensing authority. In 1966 Central Government promulgated Sugar (Control) Order, 1966 (the 'Sugar Control Order'). Clause 17 of this order, which is the repealing and saving clause, is to the following effect:
(1) The Sugar (Control) Order, 1955 and any Order made by the Central Government or a State Government or any authority regulating or prohibiting the production, supply and distribution of sugar and trade or commerce therein are hereby repealed except as respects things done or omitted to be done under any such Order before the commencement of this Order.
(2) Notwithstanding such repeal, an Order made by any authority, which is in force immediately before the commencement of this Order and which is consistent with this Order, shall continue in force and all appointments made, prices fixed, licences and permits granted, and directions issued under any such Order and in force immediately before such commencement shall likewise continue in force and be deemed to be made, fixed, granted or issued in pursuance of this order.
The meaning of this repealing and saving clause will be one of the moot questions in this case.
'Recognised Dealer'.
6. I shall now state and deal with the first contention raised by Shri Sirdharata Shankar Ray appearing for the petitioner. It was contended that recognised dealer is a person who holds a licence under an order relating to licensing of sugar dealers for the time being in force. Thus if there is no order relating to licensing of sugar dealers in force on the date of coming into force of the Retention Order, no person can be said to be a recognised dealer, And if he is not a recognised dealers, Clause 3 which relates to retention of stock by a recognised dealers, for sale to the Government would be inapplicable. The only law relating to licensing of sugar Dealers in the State of Bihar was Sugar Dealers Licensing Order 1963 (the 'Licensing Order'). It stood repealed by virtue of Clause 17(1) of the Sugar Control Order, 1966 (the "Sugar Control Order"). In this situation neither the petitioner nor any other parson dealing in sugar could be said to be a recognised dealer within the meaning of the Retention Order. It was accepted that orders not inconsistent with the Sugar Control Order made by 'any authority' is saved by Clause 17(2). But the Bihar Sugar Licensing Order 1963, it is urged, is not an order made by "any authority" within the meaning of Clause 17(2). It was contended that the expression 'authority' in Clause 17 on the Sugar Control Order does not include a State or Central Government. The expression 'authority' used therein is in contradistinction to State Government OF Central Government, What is saved by Clause 17(2) is only an order made by 'any authority', which expression does not include Central Government or State Government. In support of the contention it was emphasised that the Control Order aforesaid as also the E. C. Act makes a distinction between Central Government or State Government and "any authority", Reliance in this connection was placed on Clause 15 and 17(1) of the Order and Section 5 of the E. C. Act.
7. So far as the argument based on Clause 15 and Section 5 of the E. C. Act is concerned, it may be disposed of shortly. The expression used in both of them are not authority simpliciter, but authority of a Central Government or State Government as in the case of the Control Order, and authority subordinate to Central Government or authority subordinate to State Government as Section 5 of the E. C. Act. The expression 'authority' simpliciter cannot be equated with the expression officer or authority of the relevant Government or officer or authority subordinate to the said Government. Had the expression 'authority' simpliciter been used in these two sections the argument might have to be considered at greater length.
8. The only argument, therefore, which requires serious consideration is based on Clause 17(1) of the Sugar Control Order. The argument is that in Clause (1) the Central Government, State Government and authority have been taken to be distinct entities. Thus the expression 'authority' does not include Central Government or the State Government. It must be held that the legislature has used the expression authority in Sub-clause (2) also in the same sense as in Sub-clause (1). For this general proposition reliance was placed on the two decisions of the Supreme Court in N.T. Veluswami Thevar v. G, Raja Nainar and Ors. and in Raghubans Narain Singh v. The Uttar Pradesh Government through Collector of Bijor A.I.R. 1967 S.C. 465.
9. The main question in this case, and indeed in others, where a question of statutory construction arises, is to interpret the language of the statutory instrument "according to the intent of them that made it" (4 Co. Inst. 330). In order to determine the said intent we have to interpret the words used by the draftsman. A number of rules have been evolved to help the Courts to discover the intent. Although there is no fixed hierarchy amongst these rules, nevertheless the foremost amongst them is what has been described as the first and foremost elementary rule of construction, which is also called the golden rule. It requires the words to be interpreted in their ordinary and natural meaning. The first question then is; What is natural and ordinary meaning of the expression 'authority'? The etymological meaning of the expression 'authority' is; "A body in-vested with power to command or give ultimate decision or enforce the obedience or having a legal right to command and be obeyed." (See Rajasthan State Electricity Board v. Mohan Lal . This would, obviously, include Central and State Government. What then is the reason suggested for giving a go by to the golden rule and give a restricted meaning to the expression 'authority', The reason suggested is that 'authority' as used in Clause 17(2) has to be given the same meaning as in Clause 17(1), It does not include the State and Central Government. Learned Counsel for the petitioner relies on the rule of construction that the same word in different parts of the same section or statute have to be given the same meaning. But this, it must be appreciated, is only a presumption and that too a weak one. Craise on Statute Law says "the presumption that the same words are used in the same meaning is, however, very slight". Maxwell in interpretation of Statute says "but the presumption is not of much weight. The same word may be used in different sense in the same statute, and even in the same section". The view expressed in these two authoritative text books has been approved by the Supreme Court in Shamrao Vishnu Parulekar and Anr. v. The District Magistrate and Ors. . It is, therefore, clear that the rule of interpretation relied upon by Sri Ray is not of much assistance, if the context points in a different direction, in my view, the scheme of the Sugar Control Order, 1966 itself excludes the applicability of the asid rule.
10. Looking at the various provisions of the Sugar Control Order it is clear that the order envisages not only regulation of production of sugar but also contemplates issuance of directions to recognised dealers in relation to various matters mentioned in the order. If the argument of learned Counsel for the petitioner is accepted it would mean that by virtue of repeal of the Licensing Order there was in existence no recognised dealer within the definition of the Sugar Control Order, and yet in the various provisions of the order it was dealing with recognised dealers who become virtually extinct on promulgation of the Sugar Control Order, Law does not, it must be appreciated, make provisions in vain.
11. Clause 5 of the Control Order envisages the issue of general or special order to a recognised dealer regarding, inter alia, maintenance of stocks storage, sale, making of weighment and distribution of any kind of sugar. Indeed wherever the expression procedure has been mentioned in this order, it is followed by the words "or recognised dealer". This is clear from a perusal of Clauses 10, 11, 12, 13 and 14 of the Order, which deal with the power of calling information etc. (Clause 10), power of inspection, entry, storage, sampling seizure etc., (Clause 11), procedure for drawing samples (Clause 12), certificate regarding samples drawn etc. (Clause 13) and compliance of Orders (Clause 14). The Scheme of the Control Order, therefore, in my view, conclusively establishes that the order contemplates the existence of recognised dealers. This could only be on the basis that the orders relating to licensing of sugar dealers remained in force even after coming into force of the Sugar Control Order. It may be stated that it was neither asserted nor could it be asserted that there is anything in the licensing order which could be said to be inconsistent with the Sugar Control Order.
12. Sri R. B, Mahto, Additional Advocate General appearing on behalf of the State of Bihar emphasised that even in the Essential Commodities Act, which may be called the parent law, the expression 'authority' has been used in the literal and etymological sense. It includes State and Central Governments. He referred to Section 13 of the E. C. Act which is:
Presumption as to orders where an order purports to have been made and signed by an authority in exercise of any power conferred by or under this Act, a Court shall presume that such order was so made by that authority within the meaning of the Indian Evidence Act, 1972.
He contended that the expression 'authority' in the refers to all authorities who have power conferred by or under the E. C. Act. The Central Government has been conferred with powers to make orders in conformity with the provisions of the Act. The State Government may be given and has in fact been given, similar power under the Act. It is, therefore, in my opinion clear that the expression 'authority' as used in Section 13 of the E. C. Act includes Central or State Governments. In my view, the learned Additional Advocate General is right in contending that if the word 'authority' has a wide import in parent legislation it should not be given; at least in the present context, a restricted meaning in the Sugar Control Order, 1966. The learned Additional Advocate General was also right, in my opinion, in contending that the very purpose of the Sugar Control Order would be defeated if recognised dealers ceased to be in legal existence on the promulgation of the Sugar Control Order. The Sugar Control Order not only contemplates control and regulation of the production of sugar, but also envisages regulation and control of the activities of the dealers in sugar. The control of production coupled with control of distribution are the dual instruments through which sugar was sought to be made available to the public. They are the two pillars on which the Control Order rests. If one of them is taken away the whole edifice will fall down. It would be against all canons of interpretation to give a restricted meaning to an expression if the purpose of the law would be virtually frustrated by giving such a meaning. It has been rightly said that the surest way of "eliminating irrelevant meaning is to look to the statutory objective." Here the statutory objective, in my opinion, unmistakably points out to the existence of recognised dealer rather than their cemplete absence from the scene, that being essential to the 'Venture at hand'.
13. The question may be examined from another point of view. If the interpretation given by the petitioner is accepted the result would be that the orders of authorities other than the Central and State Government would be saved by virtue of the saving clause, namely, Clause 17(2), but orders of the delegator, namely, the Central Government or State Governments would not be saved. During the course of argument no reason was assigned for this distinction nor can I discern any. This would lead to anomaly. If anomaly can be avoided by giving a purposive interpretation to the expression, I would be quite willing to perform the exercise. More so where this can be done by resort to primary and elementary rule of interpretation.
14. So at the end of day I am clearly of the view that the expression "authority" in the saving Clause 17(2) of the Sugar Control Order must be given its ordinary, natural and etymological meaning. I find no reason for departing from the plain meaning of the word. Such a meaning does not lead to anomaly. It, on the other hand, advances the statutory objective. The golden rule in this case must be accepted and applied. It is certainly not one of those cases where "the golden rule yields to instrument of baser metal" (Same word having the same meaning in the section).
15. I must now briefly refer to the cases cited by Shri Ray in support of his contention. Three of the cases are single Judge decisions of this Court. in Sitaram Agrawal v. State of Bihar Cr. Misc. 2551 of 1975. the learned single Judge held that the sugar licensing order must be held to have been repealed by the Sugar Control Order, 1966. The reasons for the conclusion are those which have already been dealt with. For the reasons which I have already given I respectfully differ from the view taken in the said case. Similar is the position in respect to the other two cases, namely, Bishwanath Singhania v. State of Bihar Cr. Misc. 2725 of 1978.; and sheo Nandan Prasad v. State of Bihar Cr. Misc. 1611 of 1976. These two cases do not give any new reason. The other case cited was a decision of the Calcutta High Court in Satya Narain Agrawal v. State Cr. Misc. Nos. 879, 880 of 1976. The view expressed therein was that the definition of dealer as given in the West Bengal Sugar Dealers Licensing Order 1963 (which is basically similar to that of the Bihar Licensing Order) was inconsistent with the provisions as made in the Sugar Control Order, 1966. The judgment does not spell out the inconsistency. During the course of argument nothing was shown which would lead the conclusion that the Bihar Sugar Dealers Licensing Order was inconsistent with the provisions of the Sugar Control Order. The said judgment of the Calcutta High Court also states, following two earlier decisions of the Calcutta High Court that the West Bengal Sugar Dealers Licensing Order shall be deemed to have been repealed by the Sugar Control Order. These decisions were not available to us. In any event, for the reasons already given I respectfully differ with the view taken in the Calcutta decision.
Is Retention Order ultra vires of the Essential Commodities Act ?
16. The next contention of the learned Counsel for the petitioner may be summarised thus; The Retention Older has been made under Section 3(3) of the E. S. Act. The order could, therefore, only direct sale, in the facts and circumstances of the case, at a controlled price. Controlled price is the price at which any essential commodity may be bought or sold. This is the requirement of Section 3(2)(c) of the E. C. Act. Controlled price cannot be the price referable to a particular transaction. It has to be of general application. Nor can the procurement price be equated with the controlled price. The Retention Order States that for the purpose of Clause 3, the controlled price shall be Rs. 280/-. Thus the price fixed is only for the purpose of Clause 3. It is the price for a particular transaction which is not what is envisaged in Section 3(2)(c) of the E. C. Act. The price in reality is a procurement price, which is being called controlled price in order to fulfil the requirement of law.
17. Section 3(2)(c) of the E. C. Act empowers an order to be made for controlling the price at which any essential commodity may be bought and sold. The language of the section is wide and general. This has been recognised by the Supreme Court in M/s. Diwan Sugar and General Mills (Pvt.) Ltd. v. Union of India . The argument before the Supreme Court was that the said clause was applicable only to the stage of retail sale and not to the stage of production. This was repelled and it was held that Section 3(2)(c) of the E. C. Act which specifically speaks of controlled price is very general in terms and its generality could not be cut down.
18. Even if there was no high authority against the contention of the petitioner, in my view, the contention cannot be accepted. "Words and particularly general words, cannot be read in isolation; their colour and content are derived from their context". Attorney General v. Prince Ernest Augustus of Hanover 1957 A.C. 436. The object of the E. C. Act is to secure essential commodity for the consumer i. e., the general public at a fair price. It is in that context that the power to fix price at which essential commodity may be bought or sold has been conferred under the Act. It may be that control on price may be necessary only in a particular area or region. It may also vary from region to region. To read limitation in the generality of the power conferred under the section is to hamper the very object of the legislation. The suggested interpretation on behalf of the petitioner would, instead of advancing the purpose of the Act, be an unnecessary obstacle in dealing with the mischief which the law was intended to remedy.
19. The evil which the law (E. C. Act) aims at eradicating is the nonavailability of the essential commodities to the general public at a fair price. In order to protect the public against this evil the Act contemplates control and price fixation. In my opinion in order to make the remedy effective and protection secure, wide and expansive meaning should be given to the words used by the legislature. The generality of the power conferred under the Section 3(2)(c) should not be curtailed.
20. It is also not correct, in my view, to say that the Retention Order was for a particular transaction. The order envisages the purchase of 65 percent of stock of sugar throughout the country. In that sense it was a law of general application, although limited to a particular point of time. Learned Counsel referred to a decision of the Supreme Court in Sri Meenakshi Mill v. Union of India . He placed reliance on paragraph 71 of the judgment, I do not find anything in the said paragraph which supports the contention of the petitioner. Reliance was also placed on the case of Sitaram Jwala Prasad and Anr. v. State of Uttar Pradesh . U. P. Coarse Foodgrains (Levy Order) 1974 required dealers to sell 50 percent foodgrains to the Government. The order fixed the price at 74 rupees per quintal. The argument was that no price had been fixed in respect of foodgrains in question under Section 3(2)(c) of the E. C. Act. This argument was accepted and it was pointed out that the controlled price contemplated in Clause (1) of Sub-section (3)(B) of the E. C. Act has to be with reference to either the grade of foodgrains or its variety. If the Government issues the direction that 50 percent of the foodgrains are to be sold it will have to pay to the seller a price as contemplated either in Clauses (i)(ii) of Sub-section (3)(B) of the E. C. Act. It was in this context that it was observed that whatever price is mentioned in the foodgrains (Levy) Order does not automatically become the controlled price for grade or variety of the concerned foodgrains as contemplated by Clause (1). In my view, therefore, the question for consideration in the said case was different from what has to be considered in the instant case. Here the controlled price has been defined in the Retention Order and fixed by it. Moreover, in view of the decision of the Supreme Court in Diwanchand Sugar Mills' case (supra) the generality of the power under Section 3(2)(c) of the E. C. Act cannot be cut down. It is not necessary that the controlled price should be fixed by one order, and other restrictions imposed by a separate order. The two can be combined in one. I know of no principle which prohibits exercise of several powers by one order or notification.
Infraction of the Article 19(1)(g) of the Constitution.
21. It was next contended that the Retention Order is violative of Article 19(1)(g) of the Constitution as the petitioner had to sell the sugar in his stock as also in the process of despatch at a loss. It was pointed out that at the relevant time the ex-factory price of sugar in Bihar was Rs. 298/- per quintal. The cost of transport was between 15 to 20 rupees per quintal. Thus the cost price of the sugar purchased by the petitioner or under despatch to him comes to Rs. 313 to 318 rupees per quintal. Factually, however, the cost price of the petitioner was Rs. 335 to 367 per quintal. To sell the sugar under the Retention Order at Rs. 280 would obviously entail a loss to the petitioner. The fixation of price at Rs. 280/-per quintal could not therefore be said to be a reasonable restriction on the right of the petitioner to carry on trade and business.
22. The ex-factory price of sugar was Rs. 298/- per quintal. If the petitioner purchased sugar at a price higher than the controlled price, as he claims to have done in this case, I do not think that it should be taken note of for the purpose of examining the morit of the contention regarding infringement of Article 19(1)(g) of the Constitution. Shri Ashwini Kumar Sinha, Senior Standing Counsel for the Union of India in reply to the contention raised pointed out that the petitioner himself accepts in paragraph 25 of the petition that the market price of the Sugar is Rs. 475 per quintal. That the recognised dealers have been required to sell under the Retention Order is only 65 percent of the stock. The remaining 35 percent can be sold at the market price. On the statement of the petitioner himself it is clear that the market price was Rs. 475 per quintal. In the circumstances there would be factually no loss to the petitioner as a result of the coming into force of the Retention Order. It was further contended that even assuming that some loss was sustained, the mere fact that at one point of time there is some loss to the petitioner would not amount to unreasonable restriction on the right of the petitioner to carry on trade or business.
23. In my view, both the contentions of Shri Sinha are sound and fit to be accepted. Taking 100 quintals to be the stock for the purpose of testing the argument, I find that the cost price of 100 quintals at Rs. 318 per quintal comes to Rs. 31,800/-. Under the Retention Order out of 100 quintals 65 quintals have to be sold at the rate of Rs. 280/-. This comes to Rs. 18,200/-. The remaining 35 quintals, on the petitioner's own case, could be sold in the market at Rs. 475/- per quintal. The sale price for this comes to Rs. 16,625/-. The total sale price of 100 quintals thus comes to Rs. 34.825/-. It is thus clear that there is no loss to the petitioner if he sells 65 quintals at the controlled rate as given in the Retention Order and the remaining 35 percent at the market price. It is well known that when there is partial control of any commodity the burden as a result of control is more than offset by the trading community adjusting the price of non-controlled portion of the commodity controlled. There is thus no factual basis for the assertion that the sale of sugar by virtue of the Retention Order would result in loss.
24. Shri Sinha is also, in my view, right in contending that in order to fulfil the constitutional requirement it is not necessary that the State should see that at no point of time there is loss to a businessman or trader, while exercising powers of control under the provisions, of the Essential Commodities Act. This is clear even with reference to the cases referred to in course of argument by the learned Counsel for the petitioner. In Meenakshi Mills Ltd. v. Union of India A.I.R. 1974 S.C. 266. Ray C. J. emphasised that "the dominant object and purpose of the legislation claiming equitable distribution and availability at fair price is completely lost sight of if profit and producer's returns are kept in the forefront." In the matter of fixation of price it was pointed out that the producer may have to bear losses in the same way as he does when he suffers losses on account of economic forces operating in the business. What was said in respect of the producer would be equally applicable to a recognised dealer. In M/s. Prag Ice Oil Milts v. Union of India . Chandrachud, C.J. clearly said that reasonable return on investment or a reasonable rate of profit is not the sine-qua non of the validity of the action taken in furtherance of the powers conferred by Section 3(1) and Section 3(2)(c) of the Essential Commodities Act. In relation to the argument that the petitioners in the case before the Supreme Court would suffer loss in view of the price fixed by the Mustard Oil (Price Control) Order, the learned Chief Justice said..."we are of the opinion that the circumstances that the petitioners may have to suffer a loss over a short period immediately following upon promulgation of the price control order will not render the order constitutionally invalid. The interplay of economic factors and the laws of demand and supply are bound eventually to have their impact on the pattern of price prevailing in the market". Learned Chief Justice also referred with concurrence to the observation of Ray, C. J. in Meenkshi Mills case (supra) to the following effect;
In determining the reasonableness on a restriction imposed by law in the filed of industry, trade or commerce, it has to be remembered that the mere fact that some of those who are engaged in those are alleging loss after the imposition of law will not render the law unreasonable. By its very nature industry or trade or commerce goes through periods of prosperity and adversity on account of economy and sometimes social and political factors. In a generally free economy when controls have to be introudced to ensure availability of consumer goods like food-stuff, cloth and the like at a fair price, it is an impracticable proposition to require the Government to go through the exercise like that of a Commission to fix the price.
Thus it is clear that the mere fact that at a given point of time the price fixation may result in some loss to a trader does not necessarily lead to the conclusion that there is unreasonableness in the fixation of controlled price for essential commodities. The dominant purpose of the Retention Order is to ensure the availability of sugar, an essential commodity, to the general public at a fair price through public distribution system. If in achieving this object, the interest of the common man, which ranks first in priority is given precedence over other considerations, like the profit to the trader at a particular point of time, it cannot be said that the fixation of control price transgresses the constitutionally permitted limit. It must, however, be emphasised that the petitioner has not been able to show that on account of the Retention Order the petitioner or persons similarly placed, have suffered or likely to suffer any actual loss.
25. Learned Counsel for the petitioner referred to the decision of the Supreme Court in Premier Automobiles Ltd. v. Union of Indian A.I.R. 1972 S.C. 1690. in order to show that what was fixed was not a fair price and hence constituted infraction of Article 19(1)(g) of the Constitution. Reference was made to paragraph 34 of the judgment. What was being considered there was the concept of fair price under Section 18 (g) of the Industries (Development and Regulation) Act, 1951. Here the question is not what is the fair price for the sugar which was sought to be purchased under the Retention Order. Moreover the learned Chief Justice has clearly stated in Prag Ice Oil Mill's case that the judgment in premier Automobiles cannot be treated as a precedent and cannot afford any appreciable assistance in the decision of price fixation cases.
26. Sri Ray next referred to the decision in Panipat Co-operative Sugar Mills v. Union of India and relied on paragraph 30 of the judgment, which deals with the determination of fair price under Section 3(3)(c) of the E. C. Act. The question there under consideration was whether the price that had been fixed was in conformity with the provisions of the said section. The observation made is in view of the four factors (which included reasonable return to the industry) that have to be taken into consideration while fixing the price as required by the section itself. The observations relied upon cannot, therefore, be of assistance in deciding the question under consideration. Learned Counsel for the petitioner also placed reliance on the following observation of the Supreme Court in paragraph 65 of the Meenakshi Mills' case.
If the price of yarn of cloth fixed in such a way as to enable the manufacturer or producer to recover his cost of production and secure the reasonable margin of profit no aspect of infringement of fundamental right can be said to arise, This observation does not mean that the converse is true. This is amply clear from the observations in the same judgment which I have already quoted. It is, therefore, not possible to hold on the basis of the decisions relied upon by the petitioner that there was any infringement of the fundamental rights guaranteed under Article 19(1)(g) of the Constitution.
27. During the course of argument it was suggested that the Retention Order does not cast any obligation on the State to purchase the Sugar directed to be retained by a recognised dealer. Further there is no time schedule given for the purchase. Thus a recognised dealer may have to keep in his stock sugar for a considerably long time thus blocking his capital without any return. I do not think that the argument can be accepted. Clause 3 clearly states that the recognised dealer has to retain the stock of sugar "for the purpose of sale to the State Government." The scheme of the order is to secure equitable distribution and availability of sugar at a fair price. It is implicit, therefore, that the sugar has to be purchased by a State Government in conformity with Clause 3(3) of the Retention Order. It is also implicit that the purchase has to take place within a reasonable time, for, if it is not so done, the scheme of distribution and availability of sugar to the general public cannot be achieved. Although there is no averment that there was any unreasonable delay on the part of the State Government, nevertheless I must observe that if there is such a delay, the aggrieved party would have a right to invoke the writ jurisdiction of the Court and pray for a writ of mandamus directing the State or other authorities mentioned in Clause 3(3) to purchase the sugar from a recognised dealer.
Article 300-A of the Constitution-Whether violated ?
28. The last contention which was urged on behalf of the petitioner is that the Retention Order is ultra vires of Article 300-A of the Constitution. It was contended that under Article 300-A no one can be deprived of property save by authority of law. A law must be both for public purposes and must also provide for just compensation. If it fails to do either it is not law within the meaning of the article. It was also contended that a legislation acquiring or requisitioning property is covered by Entry 42 of List HI of the 7th schedule of the Constitution. Such a law must provide for payment of just compensation otherwise it would not be within the entry aforesaid. Learned Counsel for the petitioner referred to an Article by Professor P.K. Tripathi entitled.; "Right of Property after 44th Amendment. Better protected than ever before" A.I.R. 1980 Jour. p. 49. and stated that he adopts it as a part of his argument.
29. The argument that a law for acquisition or requisition of property under entry 42 aforesaid must provide for adequate compensation cannot be accepted at least with reference to the entry as on the date of coming into force of the Constitution. The argument advanced in State of Bihar v. Kameshwar Singh , that the payment of just compensation was a pre-requisite for bringing the law under Entry 42, aforesaid was repelied. (See the observations of Patanjali Sastri, C. J. in paragraph 12, Mahajan, J., in Paragraph 41, Das, J., in Paragraph 91 and Chandrashekara Aiyar, J., in Paragraph 121). Is the position different now that Articles 31(1) and (2) of the Constitution have been deleted ? The general rule of interpretation as stated in Maxwell (12th Edition page 85) is as follows:
The words of an Act will generally be understood in the sense which they bore when it was passed. They are to be construed, it has been said, "as if we had to read it a day after it was passed ?" though this does not prevent old words from being applied to things not known or invented at the time of enactment.
This rule, applicable to the construction of Statutes would, in my opinion, apply while interpreting the provisions of the Constitution, In view of the decision of the Supreme Court in Kameshwar Singh's case it has to be held that it was not the requirement of Entry 42 of the IIIrd list (before the recent amendment of the Constitution) that the law for acquiring or requisitioning of property should provide for just compensation. If that was not the meaning of the entry then it cannot have a different meaning now, because of certain constitution amendments. The meaning of the entry must remain the same. This is on the assumption that entry 42 aforesaid has relevance in the present context.
30. The expression law in Article 300-A of the Constitution means, in my opinion, State made or enacted law. This has been so held by the Supreme Court with reference to Article 21 (See Vidya Verma v. Sheonarain . No decision has been brought to our notice which takes a contrary view in relation to the meaning of the expression law even in Article 21. Similar must be the position with respect to the newly enacted Article 300-A of the Constitution. Of course, if the law infringes some other provision of the Constitution like Article 14, it would be unconstitutional. To illustrate if the property of A is given to B without there being any public purpose such law would obviously be discriminatory. But the mere fact that the law does not provide for full compensation would not make such a legislation without the authority of law within the meaning of Article 300-A of the Constitution. The last contention of the petitioner also cannot, therefore, be accepted.
31. Learned Counsel appearing for the Union of India relied on two unreported decisions. They are; M/s. Kasturi Lal Rakesh Kumar and Ors. v. Union of India C.W.P. No. 25, of 1980., decided by a Bench of the Delhi High Court on 2 (-3-1980, and a single Judge decision of the Rajasthan High Court in M/s. Chand Bihari Lal Heeralal v. Union of India S.B.C.W.P. No 6 of 1980. Since these two decisions take a view similar to those expressed by me, it is not necessary to deal with them in detail.
32. In his reply Sri S.B. Sanyal made reference to certain cases which were not cited by Sri Ray in his opening address. Naturally, therefore, the counsel for respondents had no opportunity to meet them. I am, therefore, refraining from considering them in detail. It is sufficient to say that having gone through them I do not find myself persuaded to change the view I have expressed.
33. I my view therefore, the petitioner has not been able to successfully assail the Retention Order, or Annexure 3 which admittedly was in pursuance of the powers under the said Order. This application is, accordingly, dismissed, but in the circumstances without cost.
Shivanugrah Narain, J.
1. I agree that this application be dismissed and also almost entirely with the reasons given by my learned brother for the aforesaid conclusion. As, however, we have differed from the view taken by some learned Judges of this Court and of other High Courts and a question of vires of the Sugar (Retention of the Sale and recognised Dealers) Order 1979 Thereinafter called "Retention Order") has been raised, I wish to State some of the reasons for the conclusion in my own words.
2. It cannot be doubted that the expression 'any authority' in Sub-clause (ii) of Clause 17 of the Sugar Control Order 1966, (hereinafter called "the Control Order"), in its plain, ordinary, natural meaning includes the Central Government as also the State Government. As my learned brother has pointed out, and indeed it is manifest, the expression 'authority' in its etymological meaning includes the Government. Indeed Government is the most obvious and foremost example of authority; it is 'authority' par excellence. Further, the expression 'authority' is not accompanied or qualified by any restrictive words. On the other hand, it is preceded by the general word 'any' which prima facie shows that the expression 'authority' has been used in its widest possible sense as meaning each and every authority. We cannot depart from "the plain natural meaning of the expression 'authority' unless, to use the words' of Viscount Haldane L. C. in Attorney General v. Milne (1914-15) A.E.R. 1061 (H.L.)., reading the statute as a whole the context directs us to do so" (at page 1063). Now, as my learned brother has shown, if I may say so with respect, very clearly and lucidly, the context not only direct us to do so, but reinforces the conclusion that the expression 'authority' has been used as including with its ambit 'the Central or the State Government'. The expression 'authority' occurs in Clause 17(2) a provision, the object of which is to continue the existence of all orders which are not inconsistent with 'the Control Order'. That object would be saved more completely and effectually by saving all orders which are not inconsistent with 'the Sugar Control Order', irrespective of the fact whether they are made by the Central or the State Government or by any other authority. Indeed, there seems to be no conceivable reason for saving such orders only if they are made, not by the Central Government or the State Government, but by some other authority. Clauses 5, 10 to 14 of 'the Control Order provide for issue of directions etc., to recognised dealers, which expression according to the definition of recognised dealer in Clause 2 (d) "means persons carrying on the business of purchasing, selling or distributing sugar and licensed under the Order relating to licensing of sugar dealers for the time being in force in a State or Union territory". The Sugar Control Order, 1966, therefore, postulates the continued existence of recognised dealers and as it makes no provision for licensing of sugar dealers, it postulates the continued existence of Orders relating to the licensing of sugar dealer of the time being in force in a State or Union territory on the date of the promulgation of this Order. The Order relating to the licensing of sugar dealers in force in Bihar on the date the Sugar Control Order, 1966 was passed. viz. The Bihar Sugar Dealers Licensing Order, 1963 is an Order made by the State Government. Presumably, the Licensing Orders in force on that date in other States are also made by the State Government for by G. S. R. No. 888 dated 28-6-1961, in exercise of the powers under which the Bihar Sugar Dealers' Licensing Order was made, the Central Government had delegated its power to make Orders under Clauses (a), (b), (d), (e), (f)(h), (i), (j), of Section 3(2) of the Act which include the power to make Licensing Orders only to State Government and not to any other authority. If the expression 'authority' is held not to include the State Government, the provisions of 'the Control Order' so far as they relate to giving directions etc., to recognised dealers would become nugatory and the scheme of control which is two-pronged, namely, control of production and also of distribution through recognised dealers, would be greatly hampered if not frustrated.
3. The presumption that the expression 'authority' in Sub-clause (ii) of Clause 17 of 'the Control Order' has been used in the same sense as in Sub-clause (1) of Clause 17 or Clause 5 thereof where it is used in contradistinction to Central or State Government is on general principles not of much weight especially as in one of section of the parent Act, Section 13, Essential Commodities Act, 1955, the expression 'authority' obviously includes the Central or State Government also and is clearly displaced by the context, I am not also impressed by the argument that if the expression 'authority' is held to include the Central or the State-Government also, the words 'the Central Government or State Government Sub-clause (i) of Clause 17 would be rendered a more surplusage. It is a familiar method of drafting to specify certain species of the genus of which they are the species and Clause 1 is drafted in accordance with that method. Further in holding that the expression 'authority' includes the Central or the State Government we are not adding any words or expressions in Sub-clause (ii). but merely giving to the aforesaid expression its wide natural meaning. Therefore, the contention of Sri Ray that the said interpretation offends the general principle that 'casus omissus' cannot be supplied, is plainly untenable.
4. The next contention of Sri Ray that Clause 4 of the Retention Order which fixes the price payable to the recognised dealer for sales of 65 percent of sugar held by him on the relevant date to the Government or its nominee etc., is ultra vires Section 3(3) of 'the Act' is equally unsound. Section 3(2)(f) empowers the Government to make an order providing for requiring any person engaged in the production or in the business of buying or selling of any essential commodity to sell the whole or part of the quantity held in the stock, produced or received by him, or which is likely to be produced or received by him, to the Central or the State Government or to an officer or an agent of such Government or to a Corporation owned or controlled by such Government or to such other person or persons as may be specified in the Order, Section 3(3) provides for the price to be paid to him where any person sells any essential commodity in compliance with an order made with reference to Clause (f) of Sub-section (2). According to this Subfsection, the price payable would be either the Controlled price if any, or the agreed price if consistent with the controlled price and in the absence of both, the market price. Section 3(2)(c) empowers the Central Government to make an order providing "for controlling the price at which any essential commodity may be bought or sold" in a case which is not governed by Section 3A, 38 or 3C of the Act. Admittedly, this case is not governed by those sections. The controlled price has, therefore to be fixed by an order made under Section 3(2)(c) of the Act. The agrument put forward by Sri Ray is that the controlled price which can be fixed under Section 3(2)(c) is the price at which an essential commodity may be bought or sold, and the price at which an essential commodity may be bought or sold is the price at which it can be bought or sold generally, that is to say, the price of all sales and purchases generally of that commodity. The price fixed for a particular transaction of sale or a particular category of sales only or for a particular category of purchases only cannot be regarded as the price at which the commodity may be bought or sold and, therefore, cannot, he argues, be regarded as the controlled price fixed under Section 3(2)(c) of the Act. In the present case, the price has been fixed only for a particular category of sale, namely, the sales from the stock of a dealer to be sold to the Government or to the other persons specified in the Retention Order and that too of a part of the stock, namely 65 percent of the stock, of a particular date. The price of other categories of sales are not fixed, Therefore, the price fixed, it is argued, is not the 'controlled' price fixed at which the consumer could purchase sugar. The contention, therefore, that price fixed by Clause 4 of the Retention Order cannot be regarded as controlled price is based on the assumption that unless the prices are fixed for all sales and purchases generally. it cannot be regarded as the controlled price fixed in exercise of the powers conferred by Section 3(2)(c), or in other words on the premise that the price fixed for sales of a particular category of sales and purchases cannot be regarded as the controlled price.
5. In my opinion, the contention must be negatived in view of the decision of the Supreme Court in M/s Diwan Sugar and General Mills Ltd. v. The Union of India (supra). In that case, the notification of the Central Government by which it had fixed factory prices of sugar produced by Sugar Mills in Punjab, U.P. and North Bihar was impugned as ultra vires Section 3 of the Act. A two-fold argument was advanced. Firstly, it was urged that the Act did not authorise the Central Government to fix ex-factory prices; it only authorised the Government to fix the price which ultimately the consumer has to pay. Secondly, it was argued that even if the ex-factory prices could be fixed, the notification was bad as it had failed to fix prices for the ultimate consumer which must be done under the Act. Both these arguments wore overruled by the Supreme Court. Referring to the first argument, K.N. Wanchoo, J., as he then was who spoke for the Supreme Court in that case observed: -
The object of Section 3 is undoubtedly to secure essential commodities at fair prices for the general public, i.e., the consumer. It is well known that there are three kinds of prices prevalent in the market for a commodity like sugar, namely, ex-factory price, whole sale price and retail price....Now there is no doubt that the object of the Act is to secure essential commodities for the consumer, i.e., the general public, at fair prices; but it docs not follow from this that this object can only be achieved if retail prices are fixed and that there is no other way of achieving it. In any case, Clause (c) of Section 3(2) which speaks specifically of control of price is very general in terms. It provides for fixation of price at which any essential commodity may be brought or sold it does not specify the stage at which the price should be fixed. Therefore, we are of opinion that the control provided under clause (c) of Section 3(2) is control at any of the three stages mentioned above. There is no reason to cut down the generality of the words used in Clause (c) so as to make them applicable only to the last stage, namely, the retail price.
The second contention was negatived in these words;
It is then urged that even if the power is there to fix prices at all stages, the Act requires that the price must be fixed for the consumer, where it is fixed at an earlier stage or not. There are no words in Section 3(1) or Section 3(2)(c) of the Act, which compel such an interpretation. It is true that the object of the Act is to ensure fair prices for the consumer; but if fair price for the consumer can be ensured by fixing the ex-factory price, there is no reason why the Government should go on also to fix the whole sale or retail price....In law, we see no warrant for holding that under Section 3(1) and Section 3(2)(c) of the Act, the Government must not only fix ex-factory prices but also whole-sale and retail prices. What prices that Government will fix depend upon their estimate of the situation, which would serve the object of the Act. We are. therefore, of opinion that there is no force in this contention either". (At page 631 of the report).
6. The aforesaid decision of the Supreme Court, therefore, is a clear authority for the proposition that clause (c) of Section 3(2) is very general in terms and there is no reason to cut down the generality of the words used in Clause (c) so as to make it applicable to the last stage namely the retail price and that the price may be controlled at any of the three stages, namely ex-factory price, whole sale price and the retail price. It is also an authority for the proposition that Section 3(2)(c) does not compel the Government to fix prices at all the three stages and that what prices the Government will fix depends upon their estimate of the situation which would serve the object of the Act, namely, ensuring fair prices for the consumers. In terms, the Supreme Court held that the. Government was not obliged to fix the price payable by the consumer and it could fix merely the ex-factory price. Now if, as it must be held, what prices the Government will fix, depend upon their estimate of the situation and Clause (c) of Section 3(2) is very general in terms, I can see no reason for so construing Section 3(2)(c) as would prevent the Government from fixing merely the levy price of sugar in stock of a particular dealer on a particular date and that too in respect of only a portion thereof, if the Government is of the opinion that fixing the said price will enable it to ensure fair price to the consumer. Further, it must be remembered that by the levy Sugar Supply (Control) Order, 1979, and the Sugar (Price Determination of 1978-1979 Production) Order, 1979 and Sugar (Price Determination of 1979-1980 Production) Order 1979 which were promulgated on the same day as the Retention Order Viz. 17-12-1979 and together with the Retention constitute the scheme of dual price policy of sugar, the price of sugar called levy sugar' which the Mills were required to supply to the Government and the price at which the levy sugar was to be sold by recognised dealer were both fixed. It is not urged that fixing the price of levy sugar alone would not enable the Government to ensure fair price for the consumer. The argument that in fixing the prices merely of the levy sugar the Government exceeded the power to fix price conferred upon it by Section 3(2)(c) or that the levy price fixed is not the controlled price' which it is authorised to fix under Section 3(2)(c) must, therefore, be overruled.
7. In support of the argument, the learned Counsel for the petitioner relied upon a bench decision of the Karnatak High Court in Joe Pareira's case which is based on an earlier decision of the Mysore High Court in MIS A S Kasarkod and Sons v. The State of Karnataka W.P. No. 2126 of 1974. and relied upon certain observations of the Allahabad High Court in Sitaram Jwala Prasad's case (supra). In Joe Pareira's case (supra) it was no doubt held that the control prices fixed under clause (c) of Section 3(2) must be applicable to all sales and purchases and should not be intended to control the price of a particular type of transaction and, therefore, the price specified for levy paddy in the Karnataka Paddy Procurement (Levy) Order. 1966 which fixed the prices for a particular type of transaction, namely the compulsory sale by the grower to the State cannot be regarded as the control price fixed thereunder. That decision does not give any independent reason for so construing clause (c) of Section 3(2) of the Act. It adopts the reasons given in the earlier decision in M/S A.S. Kasarkod and Sons v. State of Karnataka, (supra) the observations in which have been extracted in that decision at page 14 of the report and run as follows: -
The price fixed under Clause (c) of Section 3(2) in respect of an essential commodity is, in my opinion, intended to control all sales and purchases generally of that commodity. If Clause (c) of Section 3(2) is intended to control the price of a particular category of sales only or a particular category of purchases only, then the very object of controlling the price, namely, making that commodity available at fair prices, will be frustrated. I am unable to accept the contention that under Clause (c) of Sub-section (2) of Section 3 of the Act the Government can control only the price at which an essential commodity should be sold under clause (f) of that Sub-section, without controlling the price at which all other sales or purchases of that commodity can take place.
8. Thus, the only reason given for the decision is that Clause (c) of Section 3(2) is intended to control prices of all sales and purchases generally of an essential commodity and that if it is regarded as intended to control the price of a particular category of sales and purchases, then the very object of controlling the price, namely, making that commodity available at fair prices will be frustrated. This reasoning is clearly erroneous and is contrary to the opinion of the Supreme Court in M/S Diwan Sugar and General Mills' case (Supra). In that case as I have pointed out, the Supreme Court specifically stated that it was not correct that the object of securing essential commodity for the general public at fair prices "Can only be achieved if retail prices are fixed and that there is no other way of achieving it"...what prices the Government will fix will depend upon their estimate of the situation which would serve the object of the Act. Unfortunately, the aforesaid decision of the Supreme Court was not brought to the attention of the learned Judges of the Karnataka High Court in Pareira's case (supra) and the decisions referred to thereunder or of the learned Judges of the Allahabad High Court in the decision reported in. Sitaram Jawala Pd. and Anr. v. State of V. P. (supra).
9. Their Lordships of the Karnataka High Court also relied in support of their conclusion on certain observations of the Supreme Court in Bihar Cotton Mills Ltd. v. Union of India, (supra), in which it was pointed out that the Contol Price has to retain equilibrium in the supply and demand of the commodity and the fair price fixed must be fair not only from the point of view of the consumer but also from the point of view of the producer though the predominant consideration must be the interest of the consumer or the general public. The aforesaid observations of the Supreme Court were made with reference to the fixation of price under Section 3 (c) of the Act and has no bearing on the interpretation of Section 3(2)(c), the controlled price fixed under which, as pointed out in the said decision itself (at page 382 of the report) is different from the price fixed under Sections 3A, 3B and 3C. With great respect to their Lordships of the Karnataka High Court, I am unable to accept the view expressed the rein as correct.
10. The aforesaid view of the Mysore and Karnataka High Courts was expressly dissented from by a bench of Andhra Pradesh High Court in Venkateshwar Rice Mills and Ors. v. Andhra Pradesh and it was held that the expression 'Control' in Section 3(2)(c) of the Act was very wide and empowered the Government to fix the procurement price of an essential commodity, and the price fixed for procurement of Paddy was 'controlled' price. It was recognised by their Lordships of the Allahabad High Court in Sitaram Jwala Prasad's case (supra), and it is not disputed by Sri Ray, that it is open to the Government to fix the controlled price and to require a certain percentage of the essential commodity to be sold to the State Government at that price in one and the same Order. It must, there fore, be held that the price fixed by the Retention Order for the levy sugar is validly fixed in exercise of the powers conferred by Section 3(2)(c) and is the 'controlled' price within the meaning of the expression as used in Section 3(3) of the Act. The same view has been expressed by a bench of the Delhi High Court in M/s Kasturi Lal Rakesh Kumar and Ors. v. Union of India, (supra) and by a learned Judge of the Rajasthan High Court in M/s Chand Bihari Lal Heeralal v. Union of India (supra). The second contention of Sri Ray must, therefore, also fail.
11. As regards the contention that the Retention Order contravenes Article 19(1)(g) of the constitution I am in entire agreement with my learned brother that merely because the dealer is required to sell 65 percent of the stock of sugar, using the word 'stock' in the extended sense given in Clause 2 of the Retention Order, at a Price below the price for which he purchased the aforesaid stock of sugar, does not make the restriction imposed by the Retention Order on his right to carry on trade in sugar which is obviously in the interest of the general public, an unreasonable restriction especially as he is left free to sell the sugar which he would receive thereafter and the remaining 35 percent of the stock of that date also at any price which he chooses and can obtain in the market and thus recoup the loss sustained on the sales of the said 65% of the stock. That, however, requires more serious consideration as if the Retention Order is an unreasonable restriction on the right of the dealer to carry on trade in sugar because while it compels the dealer to retain 65 percent of the stock for sale to the State Government etc. at less than the cost price it does not in express terms impose a corresponding obligation on the State Government to purchase the aforesaid frozen stock and does not fix the price at which the State Government shall sell it to the consumer and thus leaves it free to sell it at exorbitant rate and indulge in profiteering. My learned brother has held that though in express terras an obligation has been imposed on the State Government to purchase the sugar directed to be retained by a recognised dealer and within a reasonable time, such an obligation is implicit in the Order which must be construed in the light of its purpose which is to secure equitable distribution and availability of sugar at a fair price. I am not prepared to dissent from this interpretation of Clause 3. I would like to add that Clause 3 provides that the dealer shall retain 65 percent of the stock of sugar held by him at the close of business on the date of commencement of this Order for the purpose of sale to the State Government etc., but it does not specifically State how long the recognised dealer shall continue to retain the aforesaid stock of sugar. I am of the opinion that the intention that the dealer shall continue to retain that sugar for ever cannot be imputed to the authority. Therefore, it must be held that the obligation imposed by Clause 3 on the recognised dealer to retain the sugar is an obligation the sugar for a reasonable time. The principle is well-settled that if no time is specified by a statute for the purpose of doing an act required by the statute to be done, it should be presumed that the act is required to be done within a reasonable time. See the decision in Murat Patwar's case, A.I.R. 1948 Pat. 135 F.S., 138. It, therefore follows that if within a reasonable time the stocks are not purchased by the State Government etc., the liability imposed by the Retention Order on the dealer to retain the said stock ceases and the dealer becomes free to sell the freezed stock thereafter in the open market. Such a restriction cannot be regarded as unreasonable.
12. It is true that the Retention Order does not fix the price at which the State Government or its officers or agent would sell the sugar which it has purchased at the price specified in Clause 4 from the recognised dealer, but it does not follow that the State Government etc., are left free to profiteer. The Retention Order like all Orders made under the Act has for its object maintaining or increasing of supply of an essential commodity, namely, sugar and for securing its equitable distribution and availability at fair prices. The power to requisition the stock of any essential commodity has thus been vested for the purpose of securing equitable distribution and availability of sugar at fair price. If in exercise of the powers conferred by Clause 3, Sugar is procured by the State Government etc., from the recognised dealer at less than the cost price and utilised by it for profiteering and not for securing its equitable distribution and availability at fair prices, the power of compulsory purchase of the sugar vested in the State Government under the Retention Order would be used not for the purpose sanctioned by the Order, but for extraneous and collateral purposes. And such exercise of power could legally be struck down by the Courts as malqfide exercise of power. Further, there is no allegation that the Government has utilised the aforesaid powers under the Retention Order to indulge in profiteering. We may not presume that the State Government will abuse its power. The Retention Order may not, therefore, be regarded as imposing an unreasonable restriction on the right to carry on trade in sugar merely because it does not specify the price at which the sugar purchased under the Retention Order would be made available to the consumer by the State Government.
13. The decision of the Supreme Court in State of Rajsathan, v. Nathmal in which a part of Clause 25 of the Rajasthan Foodgrains Control Order 1945 which enabled the authority to requisition at the rate fixed, by it for sales to Government the stock of foodgrains frozen by the first part of Clause 33 was held to be ultra vires Article 19(1)(g) and Article 31(2) of the constitution apparently lends some support to the argument that the restriction imposed by the Retention Order is unreasonable. But it is distinguishable, That part of the Order was interpreted by the Supreme Court as vesting unrestrained authority in the Government to requisition the stocks of foodgrains at any rate fixed by it and also to dispose it of at any rate fixed in its discretion. It was also established that Government had used the power to make exorbitant profit. In the present case, the rate has been fixed by the order itself and, as my learned brother has shown, the rate fixed is such that by selling the remaining 35 percent of the stock at market rate the dealer can recoup the loss sustained on the sale of the aforesaid 65 percent of the stock of sugar and earn a net profit. There is not even a whisper that the powers have been utilised for profiteering. It follows, therefore, that the Retention Order is not ultra vires Article 19(1)(g) of the Constitution.
14. The last contention of Sri Ray that the Retention Order contravenes Article 300A of the constitution which provides that no person shall be deprived of his property save by authority of law is plainly untenable. The argument advanced is that under the Retention Order the dealer is deprived of 65 percent of his stock of a particular date without authority of law. Now the deprivation, if any, is in exercise of the power under the Retention Order. It can, therefore, be held to be without any authority of law only if the Retention Order is not law. Now the expression 'law' simpliciter has not been defined in the constitution or in the General Clauses Act, 1897. The expression 'existing law., however, has been defined in Article 366 of the Constitution and the expression 'law' in 'existing law, means 'any law' ordinance, order, by, law, rule or regulation by any legislature authority or person having power to make such a law, ordinance, order bye-law, rule or regulation'. The Retention Order being an Order made in exercise of the powers conferred by Section 3 of the Act is, therefore, obviously 'law' within the meaning of expression 'law' in Article 300A which should have the same meaning as the expression 'law' in existing law' unless it suffers from any constitutional defect. It was conceded by Sri Ray that if the Retention Order does not, as I have already held, contravene Article 19(1)(g) of the Constitution, it does not infringe any constitutional provision restricting the power of the Parliament to make law. He, however, contends that the Retention Order is ultra vires the Constitution as it is beyond the legislative competence of the Parliament and, therefore, necessarily of the Central Government, in as much as it is not legislation with respect to Entry 42 of list III which reads "acquisition and requisitioning of property". It is not legislation with respect to acquisition and requisitioning of property, the argument runs, because payment of just compensation is inherent in the power of acquisition and the requisitioning of property and just compensation for the taking of 65 percent of the stock is not provided by the Retention Order.
15. This argument is completely misconceived. Firstly, the Essential Commodities Act, 1955 and the Orders made in due exercise of the powers conferred upon the Central Government under Section 3 of the Act cannot be held to be beyond the legislative competence of the Parliament merely because it is, as contended by Sri Ray, not covered by Entry 42 of list III of the Constitution. Under Entry 97 of list I of the 7th Schedule, the Union legislature, that is to say, the Parliament has residuary powers of legislation and even if the law passed by it is not covered by any specific Entry in List I or List III, it would not be beyond the legislative competence of Parliament unless it is legislation with respect to an Entry in List II, the State List, in respect of which the State legislature has the exclusive power to legislate. In such a situation the legislation would be covered by Entry No. 97 of List I. It is not contended that Retention Order is legislation with respect to any entry in the State List.
16. Secondly, the argument ignores that the legislative competence of the Parliament to enact the Essential Commodities Act, 1955 and of the Central Government to promulgate or the Orders made thereunder even in so far as they provide for compulsory sale of stock of essential commodities cannot be successfully impeached as they are legislation with respect to Entry 33 of List III. That the Essential Commodities Act, 1955 was enacted by parliament in exercise of the legislative powers conferred upon it by the Constitution and is legislation with respect to Entry 33 of List III was specifically held by the Supreme Court in Tikaramji's case A.I.R. 1956 S.C.J. 625. In that case, it was observed that the Act was enacted by Parliament in exercise of concurrent legislative power under Entry 23 of List III as amended by the constitution (Third Amendment) Act, 1954 and further that "Parliament was well within its powers in legislating in regard to sugarcane and the Central Government was also well within its powers in issuing the Sugarcane Control Order, 1955 in the manner it did because all this was in exercise of concurrent power of legislation under Entry 33 of List III" (at p. 646 of the report). On a parity of reasoning, the Retention Order is legislation in respect to Entry 33 of List III.
17. Thirdly, the argument that payment of just compensation is inherent in the concept of acquisition and requisitioning of property ignores the changes brought about by the Constitution Seventh Amendment Act by which Entry 33 of the Union List "acquisition or requisitioning of property for the purposes of the Union" and Entry 36 of the State List acquisition and requisitioning of property, except for the purposes of the Union, subject to the provisions of Entry 42 of List III," was deleted and the old Entry 42 "Principles on which compensation for property acquired or requisitioned for the purposes of the Union or of a State or for any other public purpose is to be determined and the form and the manner in which such compensation is to be given" was substituted by the present Entry 42 'Acquisition and requisitioning of property' The agrument in the Zamindari Abolition cases e.g. Kameshwar Singh's case (supra), that any legislation for acquisition of property must lay down the principles on which compensation is to be determined was found upon the provisions or the old Entry 42 which spoke about principles of compensation and the expression 'subject to the provisions of Entry 42 of List III' occurring in the old Entry 36 of List II which read with Articles 245 and 246 of the Constitution conferred upon the State legislatures power to legislate with respect to acquisition and requisitioning of property. It was contended that as the power of the State legislature to make laws with respect to acquisition and requisitioning of property was subject to the provisions of Entry 42 of List III, the power was conditional upon laying down principle of compensation. The effect of the aforesaid Amendment is that the power of acquisition and requisitioning of property falls in the Concurrent list and it makes no reference to the principles on which compensation for acquisition and requisitioning of property is to be determined. See the decision in State of Gujrat v. Shanti Lal Mangal Das , It makes no reference to public purpose or purpose of the Union or of a State. The argument that the legislature cannot enact a law of acquisition except for a public purpose and without providing for compensation, after the aforesaid amendment may therefore, no longer be maintained. In State of Bihar v. Rameshwar Pratap the Supreme Court specifically held "It is quite clear that after its amendment (by the Constitution (Seventh Amendment) Act the legislative list permits the State Legislature to enact a law of acquisition even without a public purpose" (at pages 1652-1653) of the report, and thus a law may be a law providing for "acquisition" even though the purpose behind the acquisition is not a public purpose". On a parity of reasoning, it must be held that at any rate after the aforesaid Amendment 'a law may be a law providing for acquisition even though it does not provide for compensation.
18. Prior to the deletion of Article 19(1)(f) and Article 31(2) of the Constitution by the Constitution (Forty-Fourth Amendment) Act, it has been explicitly and unambiguously held by the Supreme Court that the twin limitations viz. the existence of a public purpose and the payment of compensation for the acquisition, cannot be imported into the term 'acquisition' in Entry 36 of List II. The argument to the contrary was rejected by the Supreme Court speaking through Ramaswami, J. in B. Shankar Rao v. State of Mysors , in these words;
When these limitations are expressly provided for in Article 31(2) and it is further enacted that no law shall be made which takes away or abridgas these safeguards, and any such law, if made, shall be void there can be no room for implication, and the words 'Acquisition of property' in Entry 36 must be understood in their natural sense of the Act of acquiring property, without importing into the phrase an obligation to pay compensation or conditions as to the existence of a public purpose. In other words, it is not correct to treat the obligation to pay compensation as implicit in the legislative Entry 33 of List I or legislative Entry 36 of List II for it is separately and expressly provided for in Article 31(2)....The entries in the Lists of the Seventh Schedule are designed to define and delimit the respective areas of legislative competence of the Union and States legislatures. Such a context is hardly appropriate for the imposition of implied restrictions on the exercise of legislative powers, which are ordinarily matters for positive enactment in the body of the Constitution" (at p. 459 of the report).
19. The argument that the obligation to pay compensation is implicit in Entry 33 of List I or Entry 36 of List II was negatived principally on the ground that those principles could not be read into those entries by implication as those principles were separately and expressly provided for in Article 31(2). But it does not follow that now that Article 31(2) has been deleted, the argument must be accepted. Article 31(2) and Article 19(1)(f) were deleted from the Constitution because it was felt that the right to property should in a socialist polity not be a fundamental right and the legislature should have complete and unfettered right to regulate and acquire property without the risk of its legislative measures in that regard being subjected to judicial scrutiny and declared ultra vires the Constitution. The object of the deletion of Article 31(2) of the Constitution which was to remove the two-fold limitation on the legislative power to provide for acquisition or requisitioning of property, viz. the existence of public purpose and provision of compensation, would be rendered completely nugatory and the deletion would become an exercise in futility if the effect of the deletion is to introduce by necessary implication in the legislative Entry 42 of List III, the same two-fold limitations which were not present in the said Entry from before. The words used in Entry 42 and the context of Entry 42 not only do not compel such a construction but negative it. It was pointed out by Ramaswami, J. in B. Shankar Rao's case (supra) that the words 'acquisition of property' in the legislative Entry "In their natural sense" means "the Act of acquiring property, without importing into the phrase an obligation to pay compensation or a condition as to the existence of public purpose". The expression 'acquisition or requisitioning of property' in Entry 42 in its natural sense does not, therefore, import an obligation to pay compensation. Further the expression 'acquisition or requisitioning of property.' occurs in Entry 42 which is a head of legislation and on general principles must receive a wide and liberal meaning and, therefore, should include within its ambit acquisition and requisitioning of property without compensation also. To use the words of Ramaswami, J. in B. Shankar Rao's case, (supra) the context in which the expression 'acquisitioning and requisitioning of property' in Entry 42 occurs "is hardly appropriate for the imposition of implied restrictions on the exercise of legislative powers, which are ordinarily matters of positive enactment in the body of the Constitution". For these reasons, and also for the reason given by my learned brother, the challenge to the validity of the Retention Order on the basis of Article 300-A of the Constitution must fail.