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The Writ Petitions filed under Article 226 of the Constitution challenged the validity of a notification dated 14-6-1974 issued by the Government of Uttar Pradesh in exercise of the power conferred by Rule 114 of the Defence of India Rules, 1971, directing that no registered dealer of fertilizer shall charge or retain, enter into or enforce any contract for charging, in respect of any fertilizer sold to any person on or after 1.6.1974, from any stock held on 31.5.1974, a price exceeding the maximum price fixed by the Central Government for the sale of fertilizer under an earlier notification dated 11.10.1973 issued under Clause 3 of the Fertilizer (Control) Order, 1957 made in exercise of the power conferred by s. 3 of the Essential Commodities Act, 1955, as it prevailed on 31-5-1974. The Writ Petitions challenged also an order dated 18.6.1974 passed by the District Agricultural Officers directing registered dealers of fertilizers to refund the excess price charged on the sale of fertilizer effected on or after 1.6.1974 from out of the stock which was in existence on 31.5.1974. The Writ Petitions sought the quashing of the said notification dated 14.6.1974 and also a direction to the District Agricultural Officers and other District Authorities not to ask the dealers to refund the excess in respect of sales completed prior to the date of that notification. The High Court has, while upholding the validity of the notification dated 14.6.1974 and dismissing the prayer for quashing the same, directed the District Agricultural Officers and other District Authorities not to enforce the order for refund of the excess price realized on the sale of fertilizer up to 14.6.1974 from the stocks which were in existence on 31.5.1974. This part of the High Court's order has become final and has not been challenged by the State Government. This Court has directed by orders dated 2.9.1974 and 30.10.1974 that the excess price charged on the sale of fertilizer which was in the possession of the appellants before 1.6.1974 should be deposited with the District Magistrate concerned within a fortnight of the sales to remain in a separate account.

The fertilizer in question is admittedly a commodity controlled under the Fertilizer (Control) Order, 1957 issued by the Central Government in exercise of the power conferred by s.3 of the Essential Commodities Act, 19555. The maximum price for sale of fertilizers by registered dealers to consumers is fixed under Clause 3 of the Fertilizer (Control) Order, 1957 by notifications issued from time to time. The sale price of one of the varieties of fertilizers with which we are concerned in these appeals has been fixed at Rs. 1050 per ton by a notification dated 11.10.1973 which was in force on 31.5.1974. The price fixed in that notification for the sale of that variety of fertilizer to registered dealers was Rs. 1005 per ton leaving a margin of Rs. 45 per ton on sale to consumers at Rs. 1050 per ton. The Central Governments in supersession of the notification dated 11.10.1973 fixed the maximum sale price of that variety of fertilizer at Rs. 2000 per ton by a notification dated 1.6.1974, thus giving an increases of Rs. 950 per ton for that variety to the dealers. The dealers started selling at the new rates fixed in that notification for the several varieties of fertilizers. The Government of Uttar Pradesh being of the view that the Central Government's notification dated 1.6.1974 was not intended to apply to old stock procured by dealers at considerably lower prices from producers which was in existence on 31.5.1974 issued the impugned notification dated 14.6.1974 directing that the old stock should be sold at the old rate of Rs. 1050 per ton with effect from 1.6.1974. The Writ Petitions were filed by the dealers, some of them for quashing the State Government's notification dated 14.6.1974, some for quashing that notification as also for directing the District Agricultural Officers and other District Authorities not to enforce the order mentioned above and some for the latter direction alone.

The learned Judges of the High Court thus upheld the validity of the State Government's impugned notification dated 14.6.1974 and held that it is only prospective in operation and would apply only to sales of fertilizer made from 14.6.1974 out of the stock which was available with the dealers at the end of 31.5.1974.

The appellants are dealers in fertilizer as defined in Clause 2(c) of the Fertilizer (Control) Order, 1957. According to that clause "dealer" means any person carrying on the business of selling fertilizer, whether wholesale or retail. According to Clause 2(d) of that Order, fertilizer means any substance used or intended to be used as a fertilizer of the soil and specified in column 1 of Schedule I and includes a mixture of fertilizers and a special mixture of fertilizers. Trade and commerce in, and the production, supply and distribution of the products of any industry where the control of such industry by the Union is declared by Parliament by law to be expedient in public interest fall under entry 33 of the Concurrent List III in the Seventh Schedule of the Constitution. Trade and commerce within the State subject to the provisions of Entry 33 of List III fall under entry 26 of the State List II in the same Seventh Schedule. Fertilizer is an essential commodity under s.2(a)(xi) of the Essential Commodities Act, 1955. The Fertilizer (Control) Order, 1957, has been made in exercise of the power conferred by s.3 of the Essential Commodities Act in respect of fertilizer. Under Clause 3(1) of that Order the Central Government has power, with a view to regulating equitable distribution of fertilizers and making fertilizers available at fair prices, by a notification in the official gazette, to fix the maximum price or rates at which any fertilizer may be sold by a manufacturer or a dealer. The Central Government had issued the notification dated 11.10.1973 fixing the maximum sale price by producers to dealers as Rs. 1005 per ton and the maximum sale price by dealers to consumers as Rs. 1050 per ton in respect of the variety of fertilizer with which we are concerned in these appeals. There is nothing on record to show that when that notification of the Central Government was in force there was any notification of the State Government of Uttar Pradesh fixing the maximum price of fertilizer for sale by dealers. Subsequently, the Central Government issued the notification No. G.S.R. 254E dated 1.6.1974 fixing the maximum price at which a dealer could sell that variety of fertilizer as Rs. 2000 per ton in supersession of the earlier notification dated 11.10.1973. There is no dispute that the price fixed for sale of that variety of fertilizer by the producer to the dealer is Rs. 1960 per ton. Under s.3(1) of the Defence of India Act, 1971 the Central Government had power, by notification in the Official Gazette, to make such rules as appear to it necessary or expedient for securing the defence of India and civil defence, the public safety, the maintenance of public order or the efficient conduct of military operations, or for maintaining supplies and services essential to the life of the community. Section 1(3) of that Act said that the Act shall come into force at once and shall remain in force during the period of operation of the Proclamation of Emergency and for six months thereafter. There is no dispute that the Emergency which was in force when that Act was passed was lifted on 22.3.1977. Rule 114(2) of the Defence of India Rules, 1971 made in exercise of the power conferred by s.3(1) of the Defence of India Act, 1971 says that if the Central Government or the State Government is of opinion that it is necessary or expedient so to do for securing the defence of India and civil defence, the efficient conduct of military operations or the maintenance or increase of supplies and services essential to the life of the community or for securing the equitable distribution and availability of any article or thing at fair prices, it may, by order provide for regulation or prohibiting the production, manufacture. supply and distribution, use and consumption of articles or things and trade and commerce therein or for preventing any corrupt practice or abuse of authority in respect of any such matter.

The second ground of attack projected by Mr. Yogeshwar Prasad may be taken up first for consideration. This ground has been considered by the learned Judges of the High Court as the fifth ground of attack before them at pages 29 to 31 of the paper book in Civil Appeals 1568-1576 of 1974, and rejected by them. The submission of Mr. Yogeshwar Prasad is that some governmental agencies falling within the definition of "dealer" in the Fertilizer (Control) Order, 1957 were permitted by the State Government to sell the fertilizer carried over from the stock held at the close of 31.5.1974 at the new enhanced rate of Rs. 2000 per ton fixed in the Central Government's notification dated 1.6.1974 and that it is discriminatory against the private dealers who are required by the impugned notification to sell at the old rate of Rs. 1050 per ton fixed in the Central Government's old notification dated 11.10.1973. To show that such a direction was given by the State Government, Mr. Yogeshwar Prasad invited attention to the first sentence in the radiogram 23.7.1974 issued by the Chief Secretary to the Government of Uttar Pradesh. That sentence reads as follows : "All stocks of fertilizer available with ASO, AGRO Cooperatives and Cane Unions be distributed without any condition regarding purchase of fertilizers at new rates". It is not possible to make out what exactly was intended to be conveyed by that sentence in the radiogram. In the counter-affidavit of the Accounts Officer, Fertilizers and Manures Directorate of Agriculture, Government of Uttar Pradesh, filed in C.M.P. 6773 of 1974 on the file of this Court, it is stated that the State Government has not allowed any State owned agency to sell the stocks of fertilizer carried over from 31.5.1974 at the rates fixed in the Central Government's notification dated 1.6.1974, that the radiogram was not meant to permit Agricultural Supplies Organisation and the Agro Industrial corporation and other governmental agencies to sell the stocks carried over from 31.5.1974 at the revised rates and that it was issued to remove only the condition. There is no other material on the record to show that any direction was given by the State Government for the governmental agencies to sell the fertilizer carried over from 31.5.1974 at the enhanced rate fixed in the Central Government's notification dated 1.6.1974. Therefore, the very basis of the contention of Mr. Yogeshwar Prasad that there is any discrimination against private dealers like the appellants represented by him compared with governmental agencies in the matter of the sale price of fertilizer has not been established. Even if any such direction had been given, it would certainly be bad in law as being discriminatory. It would not, however, invalidate the impugned notification which per se applies to all dealers of fertilizers in the entire State of Uttar Pradesh, whether private or governmental. Consequently, the impugned notification of the State Government cannot be held to be bad in law on the ground of discrimination if it is otherwise valid. Mr. Manchanda relied upon the aforesaid counter-affidavit in support of his contention that there is no basis for the contention that there is any discrimination against private dealers. The second ground of attack projected by Mr. Yogeshwar Prasad fails and has been rightly rejected by the learned Judges of the High Court.