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Issues Involved:
1. Ultra vires of the 1948 Order under Section 3 of the Essential Supplies (Temporary Powers) Act, 1946. 2. Continuance of the 1948 Order under the Essential Commodities Act, 1955. 3. Arbitrary powers of the executive in fixing prices under Section 3 of the Essential Commodities Act, 1955. 4. Infringement of fundamental rights under Articles 19(1)(f), 19(1)(g), and 31 of the Constitution. 5. Reasonableness of price fixation under the impugned notifications. 6. Channelisation and distribution of yarn. 7. Creation of monopoly and violation of Articles 19(1)(f), 19(1)(g), and 301 of the Constitution. Issue-wise Detailed Analysis: 1. Ultra vires of the 1948 Order under Section 3 of the Essential Supplies (Temporary Powers) Act, 1946: The petitioners argued that the Cotton Textiles (Control) Order, 1948, particularly clauses 22 and 30, was ultra vires the powers conferred on the Central Government by Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, as cotton yarn was not covered by the item "Cotton and woollen textiles." The court held that cotton yarn is included in the term "cotton textiles" based on legislative and judicial precedents, dictionary meanings, and the consistent legislative and executive understanding. The court cited various statutes and orders, including the Cotton Cloth and Yarn Control Orders of 1943 and 1945, the Tariff Act, 1934, and the Trade Marks Act, 1940, which treated yarn as part of cotton textiles. 2. Continuance of the 1948 Order under the Essential Commodities Act, 1955: The petitioners contended that the provisions of the 1948 Order relating to cotton yarn could not be continued under the 1955 Act as cotton yarn was not covered by the item "Cotton and woollen textiles" and no notification had been issued declaring cotton yarn as an essential commodity. The court found that the 1948 Order was continued under Section 16(2) of the Essential Commodities Act, 1955, and cotton yarn was included in cotton textiles. The court noted that various legislative measures, including the Cotton Textiles (Control) Amendment Order, 1972, and the Essential Commodities Act, 1955, provided for the control of production, supply, and distribution of essential commodities, including cotton textiles. 3. Arbitrary powers of the executive in fixing prices under Section 3 of the Essential Commodities Act, 1955: The petitioners argued that Section 3 of the Essential Commodities Act, 1955, could not confer arbitrary powers on the executive to fix prices unrelated to the cost of production and reasonable profit. The court held that the controlled price fixed under the impugned notifications was not arbitrary and constituted a reasonable restriction on the fundamental rights of the petitioners. The court referred to the recommendations of the Tariff Commission, which emphasized that price control must be comprehensive, fair to both producers and consumers, and periodically revised to cover changes in production costs. 4. Infringement of fundamental rights under Articles 19(1)(f), 19(1)(g), and 31 of the Constitution: The petitioners contended that the impugned notifications violated their fundamental rights guaranteed by Articles 19(1)(f) and (g) and 31 of the Constitution. The court held that the controlled price fixed under the notifications was fair and reasonable, taking into account the cost of production, reasonable return, and the need to maintain equilibrium between supply and demand. The court cited various precedents, including Diwan Sugar & General Mills v. Union of India and Sri Krishna Rice Mills v. Joint Director (Food), which upheld the reasonableness of price control measures in the interest of the general public. 5. Reasonableness of price fixation under the impugned notifications: The petitioners argued that the price fixation under the impugned notifications was arbitrary and did not consider relevant factors such as cost of production and reasonable profit. The court held that the price fixation was based on relevant considerations, including the recommendations of the Tariff Commission, market conditions, and the need to ensure availability of yarn at fair prices. The court noted that the controlled price was more than fair to the producers and reflected normal market conditions. 6. Channelisation and distribution of yarn: The petitioners challenged the channelisation of yarn distribution through specified channels, arguing that it created a monopoly and violated their fundamental rights. The court held that the distribution control was intended to ensure availability of yarn at reasonable prices and eliminate profiteering, hoarding, and cornering. The court found that the channels of distribution were agencies of the State for distribution purposes and were guided by the provisions of clause 30 of the Cotton Textiles Order, 1948, and Section 3 of the Essential Commodities Act, 1955. 7. Creation of monopoly and violation of Articles 19(1)(f), 19(1)(g), and 301 of the Constitution: The petitioners contended that the impugned orders created a monopoly in favor of specified persons and violated their fundamental rights. The court held that the distribution channels were not monopolies but were intended to ensure equitable distribution and availability of yarn at fair prices. The court noted that the selection of traders was based on ensuring availability of yarn to actual consumers at fair prices and eliminating unscrupulous practices. The court cited various precedents, including Bhatnagars & Co. v. Union of India and Mannalal Jain v. State of Assam, which upheld the reasonableness of canalisation orders in the interest of the general public. Conclusion: The court dismissed the petitions, holding that the impugned notifications and orders were valid, reasonable, and in the interest of the general public. The court emphasized that the controlled price and distribution measures were necessary to ensure availability of yarn at fair prices and eliminate hoarding, profiteering, and artificial shortages. The court found that the measures did not violate the petitioners' fundamental rights and were consistent with the objectives of the Essential Commodities Act, 1955.
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