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Showing contexts for: essential commodity act in The State Of Kerala And Ors. vs Annam And Ors. on 1 April, 1968Matching Fragments
...... It is a matter of some doubt, and of controversy, as to which of the two sub-sections viz., Sub-section (3) or Subsection (3B) of Section 3 of the Act has application. ......... Be that as it may, whichever be the sub-clause that applies, It is clear that the controlled price is not the sole determinant of the price to be paid to a person required to sell an essential commodity in compliance with an Order made with reference to Section 3 (2) (f) of the Act. It is only one of the factors to be taken into account. ......... Turning to the provisions of the Levy Order, the controlled price is the sole determinant of the price to be paid. To that extent the Levy Order seems to have travelled beyond the provisions of the parent Act, viz., the Essential Commodities Act, in respect of the provision as to payment of price for the rice or paddy acquired.
13. The learned Judge has held that "Clause 7 of the Levy Order, in so far as it imposes a ceiling on the price to be paid, fails to specify the principles on which compensation for the paddy taken b to be assessed, and thereby violates Article 31 (2) of the Constitution." Clause 7 requires the Government or its officer or nominee puichasing paddy to pay its price "at the prevailing market rate but not exceeding the maximum price specified by the Government for the lime being under" the concerned Maximum Prices Order Mr. K. V Survanaravana Iyer cited State of Weal Bengal v. Mrs. Bela Banerjee, AIR 1854 SC 170, State of Madras v. D. Namasivava, AIR 1965 SC 190, Vajravelu Mudaliar v. Special Deputy Collector for Land Acquisition, West Madras, AIR 1965 SC 1017. N. B. Jeejeebhov v. Assistant Collector, Thana, AIR lWi5 SC 1096, Union of India v. Metal Corporation of India. AIR 1967 SC 637 and Deputy Commissioner and Collector. Kamrup v. Durganath Sarma, AIR 1968 SC 394 to urge that the price paid to the cultivator for the paddy procured by the Government should be a "just equivalent" to the commodity taken from him. Nobody disputes that proposition here. But the material question is what Is the "just equivalent". It cannot be price that is "adequate" which is placed beyond judicial review by the Article 31 (2) of the Constitution, which commands ",..... no such law shall be called in question in anv Court on the ground that the compensation provided by that law is not adequate." Counsel urges that both the Essential Commodities Act and the impugned Levy Order refer to a market price different from the controlled price of the commodity and that it must be common knowledge that at a time of food shortage the market price will always be far above the controlled price It is well known that the market price for seasonal crops, like paddy, changes largely from time to time, particularly to fall considerably in the wake of a harvest and to rise thereafter till the next harvest takes place. Public interest in maintaining the once of food-grains at a fair level, without a flare up on account of scarcity which has come to stav as a fact for some time in our country, requires the market to be controlled by the State. Section 3 (2) (c) of the Essential Commodities Act - hereinafter 'the Act' -- contemplates an order "for controlling the price at which any essential commodity may be bought and sold." Such a control may be exercised by fix-Ing the actual price of the commodity at a particular time or by fixing a maximum price for the commodity which may stand good till modified, or by fix-Ing a minimum price. By the Maximum Prices Orders made on September 3, 1965, the State Government has fixed maximum prices at which rice or paddy might be sold by any person in the State. When such an Order has been issued any violation of it becomes a wrong punishable under Section 7 (i) (a) (ii) of the Act with a prison-term which may extend to five years and with fine. When such fixation of maximum price is in force the market price cannot rise above it: it may be anything equal to or less than the maximum price. Any sale at a price above it will not be lawful and therefore cannot afford a standard for "just equivalent" for the commodity. The word 'just' in 'just equivalent' seems to repel consideration of any illegal transaction as its standard. If dealings with racketeers or other anti-social elements in black market are to rule the price of paddy procured for equitable distribution, the object of the Act and the Levy Order -- 'for securing availability at fair prices' -- is certain to be defeated. They cannot afford a standard for governmental action or judicial considerations. The contention that the Government is empowered by the Maximum Prices Orders to sell the foodgrains to the consumers at prices above the maxima fixed under them is not correct as the said Orders have only allowed the Government to fix separate maximum prices for the rice and paddy procured and sold by the Government "after taking into consideration expenses on account of transport, storage and other Incidental charges." I do not find anything unfair or illegal therein. The provision in the Levy Order for payment of price to the cultivator "at the prevailing market rate subject to the maximum price specified by the Government for the time being under" the concerned Maximum Prices Order does not therefore spell any negation of a just equivalent or a violation of Article 31 (2) of the Constitution.
It is conceded at the bar that ever since 1966 cultivators have been paid at the maximum price fixed by the Maximum Prices Orders, besides other cash incentives by way of bonus to step up production and co-operation with the scheme for levy.
14. There is a controversy in the case whether the Levy Order is governed by Sub-section (3) or Sub-section (3B) of Section 3 of the Act. Mr. Justice Gopalan Nambiyar felt no necessity to solve it as his Lordship held: "Whichever be the sub-clause (either subsection (3) or sub-section (3B) that applies ...... the controlled price is not the sole determinant of the price to be paid" and to the extent the Levy Order has recognised so it has "travelled beyond the provisions of the parent Act viz., the Essential Commodities Act." I am afraid that the above observation cannot be correct, particularly when the learned Judge has accepted the Maximum Prices Orders as valid and constitutional. Mr, K. T. Harindranath characterised Section 3 (3) as a general provision in respect of all essential commodities and Section 3 (3B) as a particular provision in respect of foodgrains, edible oilseeds and edible oils only, and contended that subsection (3B) alone governs. The learned Advocate General submitted that Section 3 (3B) is not attracted to this case, and what applies is only Section 3 (3) of the Act He pointed out that an Order made under Section 3, as indicated in its Subsection (5), may be either one of the general nature, or one directed to a specified individual, and contended that Section 3 (3) applies to Orders of the former category like the instant Levy Order, while Section 3 (3B) applies to Orders of the latter kind.
Krishnamoorthy Iyer, J.
43. I agree with my learned brother Madha-van Nair, J.
44. The learned Single Judge has held that the definition of the term "cultivator" in the Kerala Rice and Paddy (Procurement by Levy) Order, 19G6, (hereinafter referred to as the Levy Order) is vague and does not lay down even the broad principles for a satisfactory administration of the provisions of the Levy Order and is productive of arbitrariness and is therefore violative of Article 14 of the Constitution and the last portion of Clause 7 of the Levy Order in so far as it places a ceiling on the market value of the price to be paid for the paddy acquired offends Article 31 (2) of the Constitution. The learned Judge took the view that since the definition of the term "cultivator" is so intimately connected with all the other provisions the Levy Order is liable to be struck down. The learned Judge also held that Clause 4 of the Ke-rala Paddy and Rice (Declaration and Requisitioning of Stocks) Order. 1966, (hereinafter referred to as the Requisitioning Order) to the extent it directs sale to the Government at the "controlled price" offends Article 31 (2) of the Constitution. But the challenge of the Ke-rala Paddy (Maximum Prices) Order, 1965, and the Kerala Rice (Maximum Prices) Order, 1965, was overruled by him. The Levy Order, the Requisitioning Order and the Maximum Prices Orders have been issued by the Kerala Government in exercise of the powers conferred by the Essential Commodities Act, 1955, (Central Act X of 1955) read with certain Orders issued by the Government of India. The Essential Commodities Act, 1955 (hereinafter referred to as the Act) is Intended to provide, in the interests of the General public, for the control of the production, supply and distribution of and trade and commerce, in Essential Commodities. Section 3 (1) thereof empowers the Central Government if it fa of 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, or for securing any essential commodity for the Defence of India or the efficient conduct of military operations to pass orders providing for regulating or prohibiting the production, supply and distribution of essential commodities and trade and commerce therein. Section 3 (2) of the Act specifies the several matters in respect of which orders under Section 3 (1) of the Act can be made. Section 5 of the Act enables the Central Government by notified order to delegate the power to make orders under Section 3 of the Act in favour of a State Government and other persons. It is in pursuance to such delegation that the Kerala Government has passed the Levy Order and the Requisitioning Order which came into force on 1-7-1966 and the Maximum Prices Orders which came into force on 3-9-1965.