TMI Blog1954 (1) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... Kanpur as well as the District Supply Officer, who figure respectively as respondents Nos. 2 and 3 in the petition, had been for a considerable time past issuing directives from time to time upon the petitioners as well as other coal depot holders of the town, imposing restrictions of various kinds upon the sale of coal, soft coke, etc. It is stated that prior to the 14th of February, 1953, the prices that were fixed by the District Officers left the coal dealers a margin of 20 per cent profit upon the sale of soft coke and 15 per cent profit on the sales of hard coke and steam coal, such profits being allowed on the landed costs of the goods up to the depot. The landed costs comprised several items and besides ex-colliery price, the middleman's commission and the railway freight, there were incidental expenses of various kinds including labour duty, loading and unloading charges, cartage and stacking expenses. After making a total of these cost elements, an allowance was given for shortage of weight at the rate of 5 rods and odd seers per ton in the case of soft coke and 3 rods and odd seers in the case of hard coke and steam coal, and it was on the basis of the net weight th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order and includes the District Supply Officer of the district. (d) Licensee means a person holding a licence under the provisions of this Order in Form 'A' or in Form 'B'. 3. (1) No person shall stock, sell, store for sale or utilise coal for burning bricks or shall otherwise dispose of coal in this State except under a licence in Form 'A' or 'B' granted under this Order or in accordance with the provisions of this Order. (2) Nothing contained in sub-clause (1)-- (a) Shall in so far as it relates to taking out a licence for stocking or storing coal for their own consumption, apply to the stocks held by persons or undertakings obtaining coal on permits of the District Magistrate or the State Coal Controller for their own consumption. (b) Shall apply to any person or class of persons' exempted from any provision of the above sub-clause by the State Coal Controller, to the extent of their exemption. 4. (1) Every application for licence under this Order shall be made in the form given in Schedule I appended to this Order. (2) A licence granted under this Order shall be in Form 'A' or Form 'B' appended to this O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... list, the persons included therein will be deemed for purposes of this Order to be licensee until three months next following the publication of the list in Form A or B as may be specified. 12. If any person contravenes any of the provisions of this Order, or the conditions of license granted thereunder, he shall be punishable under section 7 of the Essential Supplies (Temporary Powers) Act, 1946, with imprisonment for a term which may extend to three years or with fine or with both and without prejudice to any other punishment to which he may be liable ........ ' Schedule III referred to in the Order is as follows: SCHEDULE III. (Formula for declaration of prices of soft coke/hard coke/steam coal). 1. Ex-colliery Price Actuals. 2. L.D.C.C. and Bihar Sales tax Actuals. 3. Middleman's commission Actually Raid subject to the maximum laid down under clause 6 of the Government of India Colliery Order 4. Railway freight Actuals. 5. Incidental and handling chargers including Maximum of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners' license on the 13th of October, 1953. 15--95 S. C. I./59 The constitutional validity of the Uttar Pradesh Coal Control Order has been assailed before us substantially on the ground that its provisions vest an unfettered and unguided discretion in the licensing authority or the State Coal Controller in the matter of granting or revoking licenses, in fixing prices of coal and imposing conditions upon the traders; and these arbitrary powers cannot only be exercised by the officers themselves but may be delegated at their option to any person they like. It is argued that these provisions imposing as they do unreasonable restrictions upon the right of the petitioners to carry on their' trade and business conflict with their fundamental rights under article 19 (1)(g) of the Constitution and are hence void. With regard to the order dated the 16th of July, 1953, by which the prices of coke, coal, etc. were fixed, it is pointed out that it was not only made in exercise of the arbitrary power Conferred upon the licensing authority by the Coal Control Order, but the prices, as fixed, are palpably discriminatory as would appear from comparing them with the prices fixed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly to the discretion of particular persons to do anything they like without any check or control by any higher authority. A law or order, which confers arbitrary and uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable. As has been held, by this court in Chintamon v. The State of Madhya Pradesh(1), the phrase reasonable restriction,' connotes that the limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. Legislation, which arbitrarily or excessively invades the right, cannot be said to contain the quality of reasonableness, and unless it strikes a proper balance between the freedom guaranteed under (1) [1950] S. C.R. 759. article 19 (1) (g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in reasonableness. It is in the light of these principles that we would proceed to examine the provisions of this control Order, the validity of Which has been impugned before us on behalf of the petitioners. The provision contained in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le 'individual the power to grant, withhold or cancel licenses in any way he chooses and there is nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Mr. Umrigar contends that a sufficient safeguard has been provided against any abuse of power by reason of the fact that the licensing authority has got to record reasons for what he does. This safeguard, in our opinion, is hardly effective; for there is no higher authority prescribed in the Order who could examine the propriety of these reasons and revise or review the decision of the subordinate officer. The reasons, therefore, which are required to be recorded are only for the personal or subjective satisfaction of the licensing authority and not for furnishing any remedy to the aggrieved person. It was pointed out and with perfect propriety by Mr. Justice Matthews in the well-known American case of Yick Wo v. Hopkins(1), that the action or non-action of officers placed in such position may proceed from emmity or prejudice, from .... partisan zeal or animosity, from favouritism and Other improper influences and motive ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one by the declaration of prices made on the 16th of July, 1953. We have examined the formula given in Schedule Iii to the Control Order with some care and on the materials that have been actually placed before us, we are not in a position to say that the formula is unreasonable. 'The prices, as said already, are calculated on the basis of the landed costs of coke and coal up to the depot, 'to which a profit of 10 per cent is added. The landed costs comprise seven items in all which are enumerated' in Schedule III. With regard to items 1, 2, 3, 4 and 6 of the Schedule the actual costs are taken into, account and to that no objection can possibly be taken. The entire dispute is with regard to incidental charges specified in item 5 and the allowance or shortage which forms item 7. So far as incidental charges are concerned, the Schedule allows a maximum of ₹ 8-8-0 per ton to be determined by the licensing authority according to local conditions. The rates undoubtedly vary according to local conditions and some amount of discretion must have to be left in such cases to the local authorities. The discretion given to the licensing authority in fixing these rates is, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixation of profit would undoubtedly be in the interests of the public and cannot be held to be unreasonable. The counsel for the petitioners is not right in his contention that the Control Order has only fixed the maximum profit at 10 per cent and has left it to the discretion of the licensing authority to reduce it in any way he likes. Schedule III fixes the profit at 10 per cent upon the landed costs with the exception of item No. 5 and as this is not the maximum, it would have to be allowed in all cases and under clause 8 (1), the 'B' licensees are to sell their stocks of coal according to the prices fixed under Schedule III. Clause 8 (2) indeed is not very clearly worded, but we think that all that it provides is to impose a disability upon all holders of coal stocks to charge prices exceeding the landed costs and a profit upon the same not above 10 per cent as may be determined by the licensing authority. The determination spoken of here must be in accordance with what is laid down in Schedule III and that, as has been said above, does specify a fixed rate and not a maximum and does' not allow the licensing authority to make any reduction he: likes. On the whole ..... X X X X Extracts X X X X X X X X Extracts X X X X
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