TMI Blog1968 (12) TMI 93X X X X Extracts X X X X X X X X Extracts X X X X ..... dealings, the appellant placed three orders for purchase of 100 candies of cocoanut oil for one month's vaida' and, in accordance with those three orders, the respondent purchased 100 candies of cocoanut oil on three different dates, 14th February, 1952 (a) ₹ 455 per candy, 16th February, 1952 @ ₹ 477/8/- per candy and 18th February, 1952 @ ₹ 432/8/- per candy. The period fixed for delivery under these contracts was one month, so that the due dates for performance of the contracts were 15th, 17th and 19th March, 1952 respectively. The appellant refused to take delivery of the goods on the due dates. It appears that the closing market rates on those due dates were ₹ 330, ₹ 335 and ₹ 352/8/- respectively 4 3 which were much lower than the prices at which these con- tracts had been entered into a month earlier. The respondent, therefore, instituted the suit claiming the difference in the two, sets of prices by way of damages together with the usual commission and brokerage. The suit was resisted on various grounds, but we are con- cerned with one of those grounds which has been canvassed before us in this appeal. This plea taken on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able Oils and Oilcakes (Forward Contracts Prohibition) Order, 1944 was passed by the territory of British India and, consequently, as a result of Proclamation 8 of 1115, it came into force in the State of Cochin. Subsequently, however, the Maharaja, under that Proclamation 8 of 1115, passed the Vegetable Oils and Oilcakes (Forward Contracts Prohibition) Order, 1119 (hereinafter referred to as the Prohibition Order of 1119 ) on the 14th April, 1944. This Order, thus, superseded the earlier Order which had been passed for British India and which had become applicable in Cochin State as a result of Proclamation 8 of 1115. The Prohibition Order of 1119, in clause 3, laid down that no person shall, after the specified date for any article to which this Order applies, enter into any forward contract in that article. The Order applied, inter alia, to cocoanut oil, which was the subject- matter of the three contracts, the breach of which was the cause of action in the suit. Thereafter, on the 27th September, 1946, the Maharaja promulgated the Cochin Essential Articles Control and Requisitioning Powers Proclamation 3 of 1122, and under clause 9 of this Proclamation, the orders already ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... astly, the Travancore-Cochin Public Safety Measures Act 5 of 1950 (hereinafter referred to as Act 5 of 1950 ) came into force on the 30th March, 1950. This Act, by s. 73(1), repealed a number of enactments, including the Cochin Temporary (Emergency Powers) Proclamation 5 of 1122, and the Essential Articles. Control and Requisitioning Powers Act 8 of 1122. However, the order passed under those Acts or continued by those Acts were, by s. 73(2) of Act 5 of 1950, further continued in force and were to be deemed to have been made and were to have effect as if they had been made under this Act 5 of 1950. The provision, under which they were to be deemed to be made and to have effect, was section 3 of this Act. It was in these circumstances that the validity of s. 3 of Act 5 of 1950 was challenged in the trial Court and in the High Court. The High Court has declared s. 3 to be void, while holding that s. 73 is valid. The High Court concluded as a result that the various orders and notifications, including the Prohibition Orders of 1119 and 1950. ceased to be in force, so that there was no prohibition at all invalidating forward contracts after the 30th March, 1950. It was on this view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... repealed; but rules, orders and notifications under that Act, or which continued in force under that Act, were to further continue in force under the proviso to S. 17(4) notwithstanding the repeal of Act 5 of 1950. Thus, in the year 1952, when the contracts in suit were entered into, the Essential Supplies (Temporary Powers) Act 24 of 1946 wasin force in Travancore-Cochin and only those orders made earlier could be held to be effective which had been continued by this Act and the previous Acts applicable in that State. The question of validity of the contracts, in these circumstances, will clearly depend on whether future contracts in cocoanut oil were prohibited by any law or orders or notifications which continued in force in 1952 after the Essential Supplies (Temporary Powers) Act 24 of 1946 had come into force in the State of Travancore-Cochin on 17th August, 1950. This opens the question whether any prohibitory order was validly in force on the 17th August, 1950. In turn, the answer to this question will depend on whether a valid prohibitory order was in force on 30th March, 1950 which could continue in force under S.73(2) of Act 5 of 1950. The only two earlier prohibitory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id, this Order will not have the effect of superseding the earlier Order of 1119. Learned counsel for the respondent, however, urged that the Prohibition Order of 1119 cannot, in any case, be held to have continued after 8th March, 1950, if the principle laid down by this Court in Firm A.T.B. Mehtab Majid Co. v. State of Madras and Another ([1963] Supp. 2S.C.R.435) is applied. In that case, rule 16 of the Madras General Sales Tax (Turnover Assessment) Rules, 1939 was impugned. A new r. 16 was substituted for the old r. 16 by publication on September 7, 1955, and this new rule was to be effective from 1st April, 1955. The Court held that the new r. 16(2) was invalid, because the provisions of that rule contravened the provisions of Art. 304(a) of the Constitution. Thereupon, it was urged before the Court that, if the impugned rule be held to be invalid, the old r. 16 gets revived, so that the tax assessed on the basis of that rule will be good. The Court rejected this submission by holding that : Once the old rule had been substituted by the new rule, it ceases to exist and it does not automatically get revived when the new rule is held to be invalid. On that analogy, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Provided that no Bill or amendment for the purposes of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. The first point that was urged by learned Counsel for the appellant was that s. 3 of Act 5 of 1950 did not require compliance with the proviso, because it was not a piece of legislation for purposes of clause (b) of Art. 304; but -we are unable to see any force in this submission. It is enough to refer to clause (f) of section 3(2) which is the provision under which a Prohibition Order relating to Forward Contracts could have been passed, and the Prohibition Order of 1119 or the Prohibition Order of 1950 can be held to be continued in force. Under s. 3 (2) (f), power is conferred on the State Government to make an order which may provide for regulating or prohibiting any class of commercial or financial transactions relating to any essential article which, in the opinion of the Government, are, or if unregulated are likely to be, detrimental to public interest. An Order prohibiting Forward Contracts would clearly. be an Order prohibiting a class of commercial transactions relating to an essential article whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 were enacted in the original form in which the Bill had already been introduced in December, 1949. In these circumstances, it was submitted that no occasion arose for complying with the requirements of the proviso. The Bill was validly introduced without the previous sanction of the President and no amendment was moved subsequently to that Bill requiring the President's sanction after the Constitution came into force, so that Act 5 of 1950 as passed by the Legislature on 29th March, 1950 and brought into force on 30th March, 1950 cannot be held to be void for non-compliance with the requirements of the proviso to Art.304. On behalf of the respondent, however, reliance was placed on the view expressed by the High Court in the judgment under appeal that the mere fact that the Bill was originally introduced on a date prior to the date of the Constitution will not save s. 3 from the operation of the proviso to clause (b) of Art. 304. The High Court relied on the fact that it was only subsequent to the coming into force of the Constitution that the Bill in its final form as redrafted by the Select Committee was introduced and moved in the State Legislature. We are unable to ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... required no Presidential sanction, get it amended by a Select Committee in such a way as to make it require the Presidential sanction in case it was originally introduced in the amended form and then pass it into law, and thus escape the necessity for the prior Presidential sanction provided by Art. 304 of the Constitution. It was held that there can be no doubt that such a result could never have been intended by the makers of the Constitution. In our opinion, the High Court did not correctly appreciate the position. The language of the proviso cannot be interpreted in the manner accepted by the High Court without doing violence to the rules of construction. If both the words introduced or moved are held to refer to the Bill, it must necessarily be held that both those words will also refer to the word amendment . On the face of it, there can be no question of introducing an amendment. Amendments are moved and then, if accepted by the House, incorporated in the Bill before it is passed. There is further an indication in the Constitution itself that wherever a reference is made to a Bill, the only step envisaged is introduction of the Bill. There is no reference to such a step ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent, he shall annex to the notice required by these rules such sanction or recommendation conveyed through a Minister and the notice shall not be valid until this requirement is complied with. Thus, the requirement of previous sanction of the President under the proviso to Art. 304 has to be satisfied by producing the sanction either before introducing the Bill or before moving the amendment, as the case may be. Rules relating to Select Committees on Bills are Nos. 298 to 305, amongst which Rule 300 is of importance and may be reproduced : 300. (1) If notice of a proposed amendment has not been given before the day on which the Bill is taken up by the Select Committee, any membermay object to the moving of the amendment and -such objection shall prevail unless the Chairman allows the amendment to be moved. (2) In other respects, the procedure in a Select Committee shall, as far as practicable, be the same as is followed in the House during the consideration stage of a Bill, with such adaptations, whether by way of modification, addition or omission, as the Speaker may consider necessary or convenient. This Rule makes it clear that, before a Bill can be modified or re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case, the original introduction of the Bill was valid, because, at that stage, the proviso to Art. 304 was not in force at all as the Constitution had not yet come into force; while, subsequently, when the Bill was pending in the State Legislature, no amendment was moved in respect of which sanction of the President was required under the proviso. Section 3 of Act 5 of 1950 was passed by the House as it was contained originally in the validly introduced Bill and cannot, therefore, be held to be void for noncompliance with the proviso to Art. 304. This section being valid, either the Prohibition Order of 1119 or the Prohibition Order of 1950 must be held to have been validly continued in force by this Act 5 of 1950 and to have continued to remain in force thereafter under the proviso to s. 17(4) of the Essential Supplies (Temporary Powers) Act 24 of 1946. Under either of those Orders, the transactions entered into between the appellant and the respondent were prohibited and, having been entered into against the provisions of law, no party can claim any rights in respect of the three contracts in suit. The claim for damages for breach of those contracts by the respon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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