TMI Blog1959 (12) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... tered office at Chawri Bazar, Delhi. Since 1948, it has been registered as a stockholder by the Iron and Steel Controller (hereinafter called the Controller) under clause 2(d) of the Order. It appears that under clause 11B of the Order notifications had been issued from time to time giving a schedule of base prices in respect of iron and steel. On December 10, 1949, the Controller issued a notification under clause 11B decreasing by ₹ 30 per ton the prices already fixed for all categories of steel. Several criminal cases were instituted (Nos. 385-410 of 1954) against the said company, its three directors, its general manager and two salesmen (hereinafter called respondents 1 to 7) on the allegation that they had sold their old stock of steel for prices higher than those prescribed by the said notification of December 10, 1949. When the respondents had thus to face several criminal proceedings they filed three writ petitions in the Punjab High Court against the Union of India, the State of Punjab and others (hereinafter called the appellants). By their Writ petition No. 36 of 1954 (23-3-54) they prayed for a direction, order or writ restraining the appellants from enforcing or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on September 29, 1939, the Defence of India Act was passed to provide for special measures to ensure the public safety and interest and the defence of British India and the trial of certain offences. The Act and the Rules framed thereunder were enacted to meet the emergency which had arisen as a result of the Second World War. Rule 81(2)(b) of the Rules authorised the Central Government inter alia, so far as appears to it necessary or expedient for securing the defence of British India or the efficient prosecution of war or for maintaining supplies and services essential to the life of the community, to provide by order for controlling the prices or rates at which articles or things of any description whatsoever may be sold or hired and for relaxing any maximum or minimum limits otherwise imposed on such prices or rates. This Act was followed by Ordinance No. XVIII of 1946, which was promulgated on September 25, 1946. Clauses 3 and 4 of this Ordinance are relevant for our purpose. Clause 3(1) provides inter alia that the Central Government, so far as appears to it necessary or expedient for maintaining or increasing supplies of any essential commodity, or for securing their their e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... July 26, 1941, by the Central Government in exercise of the powers conferred on it by r. 81(2) of the Defence of India Rules which correspond to the provisions of s. 3 of the Act. It may be pointed out that as a result of the combined operation of clause 5 of Ordinance XVIII of 1946 and s. 7 of the Act, the Order must now be deemed to have been issued under s. 3 of the Act. It is necessary to examine briefly the broad features of the scheme of this Order. The Controller specified in the Order is the person appointed as Iron and Steel Controller by the Central Government and includes any person described by clause 2(a) of the Order. The Order applies to all iron and steel of the categories specified in its Second Schedule. Clauses 4 and 5 regulate the acquisition and disposal of iron or steel, and clause 8 requires that the use of iron and steel must conform to the conditions governing the acquisition. This clause shows that, in exercise of the powers conferred on the Controller by the proviso to it, the Controller has to take into account the requirements of persons holding stocks, the requirements of persons needing such stocks, the transport facilities available and any other fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of the Controller in every Cash Memo, Bill or other document evidencing the sale or disposal out of the respective stocks to which the order of the Controller applies. (3) No producer or stockholder or other person shall sell or offer to sell, and no person shall acquire any iron or steel at a price exceeding the maximum prices fixed under sub-clauses or (2). 5. Clause 12 gives power to the Central Government to give directions to the Controller or other authorities in respect of the procedure to be followed by them in exercising their powers and generally for the purpose of giving effect to the provisions of the Order. It would thus be seen that in issuing this Order the Central Government have prescribed a self-sufficient scheme for regulating the production, supply and distribution of steel and iron at fair prices. The Controller is required to take an over-all view of the needs of national economy in respect of steel and iron and to issue appropriate directions in order to effectuate the policy of the Act. The appellants' contention is that if clause 11B is considered in the light of the scheme which the Order has in view it cannot be said that the said cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by fixing fair prices for them. Thus, when it is said that the delegation to the Central Government by s. 3 is valid, it means that the Central Government has been given sufficient and proper guidance for exercising its powers in effectuating the policy of the statute. 5. Similarly the validity of s. 4 postulates that the powers conferred on the sub-delegate do not suffer from the vice of excessive delegation. Sub-delegation authorised by s. 4 is also justified because, like the delegate under s. 3, the sub-delegate under s. 4 has been given ample guidance to exercise his powers when he is authorised by the Central Government in that behalf. If the Central Government chooses to exercise its powers under s. 3 itself it may pass appropriate orders to give effect to the policy of the Act in respect of matters covered by s. 3(1) and (2). When it adopts such a course the Central Government would have exercised its own authority under s. 3; and the exercise of its power cannot be challenged on the ground that it suffers from the vice of excessive delegation. Similarly where by a notified order passed by the Central Government under s. 3 the Controller is authorised to pass appropri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a statutory prohibition against the specified persons from selling or offering to sell iron and steel at a price exceeding the maximum price fixed under sub-clause (2). 7. It is obvious that by prescribing the maximum prices for the different categories of iron and steel clause 11B directly carries out the legislative object prescribed in s. 3 because the fixation of maximum prices would make stocks of iron and steel available for equitable distribution at fair prices. It is not difficult to appreciate how and why the Legislature must have thought that it would be inexpedient either to define or describe in detail all the relevant factors which have to be considered in fixing the fair price of an essential commodity from time to time. In prescribing a schedule of maximum prices the Controller has to take into account the position in respect of production of the commodities in question, the demand for the said commodities, the availability of the said commodities from foreign sources and the anticipated increase or decrease in the said supply or demand. Foreign prices for the said commodities may also be not irrelevant. Having regard to the fact that the decision about the maxi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibition enacted by s. 1 becomes effective under the act. Reference is also made to the American Emergency Price Control Act 1942, under which the administrator is directed, in fixing prices, to give due consideration so far as practicable to prices prevailing during a designated base period and to make adjustments for relevant factors of general applicability (Vide : Yakus v. United States ((1943) 321 U.S. 414). In our opinion, the analogy of the two statutes cannot effectively sustain the argument that in the absence of a corresponding provision in clause 11B it must necessarily be held to be unconstitutional. In deciding the nature and extent of the guidance which should be given to the delegate Legislature must inevitably take into account the special features of the object which it intends to achieve by a particular statute. As we have already indicated the object which was intended to be achieved and the means which were required to be adopted in the achievement of the said object have been clearly enumerated by the Legislature as a matter of legislative decision. Whether or not some other matters also should have been included in the legislative decision must be left to the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Arts. 19(1)(f) and (g) of the Constitution. It is with this argument that we are at present concerned; or, alternatively it can be urged that the actual fixation of prices by which a flat reduction of ₹ 30 per ton was directed is itself unreasonable and violative of Arts. 19(1)(f) and (g). Now in regard to the challenge to clause 11B on the ground that it violative Art. 19 it is difficult to see how this clause by itself can be said to violate Art. 19. In so far as the argument proceeds on the assumption that the authority conferred on the Controller by clause 11B is uncanalised or unbridled or unguided, we have already held that the clause does not suffer from any such infirmity. Therefore reading clause 11B by itself we do not see how it would be possible to hold that the said clause is violative of Art. 19. In fact, if ss. 3 and 4 are valid and clause 11B does nothing more than prescribe conditions for the exercise of the delegate's authority which are consistent with s. 3 it is only the actual price structure fixed by the Controller which in a given case can be successfully challenged as violative of Art. 19. Let us therefore consider whether it is open to the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of M/s. Dwarka Prasad Laxmi Narain ([1954] S.C.R. 803) the provision of clause 4(3) of the Uttar Prasad Coal Control Order, 1953, was held to be void as imposing an unreasonable restriction upon the freedom of trade and business guaranteed under Art. 19(1)(g) of the Constitution, and not coming within the protection afforded by clause (6) of the article. It is significant that in dealing with the validity of the impugned clause the court has expressly stated that the vires of ss. 3 and 4 of the Act were not challenged. The impugned clause, it was, however, held, had conferred on the licensing authority unrestricted power without framing any rules or issuing any directions to regulate or guide this discretion. Besides the power could be exercised not only by the State Coal Controller but by any person to whom he may choose to delegate the same and it was observed that the choice can be made in favour of any and every person. It is because of these features of the impugned clause that this Court held that the clause cannot be held to be reasonable. It is difficult to see how this decision can help the respondents in attacking clause 11B. We have already indicated that the powers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he impugned notification has not been challenged on any such ground in the present proceedings. 13. That takes us to the decision of this Court in the case of Harishankar Bagla on which the appellants strongly rely. In that case this Court has held that ss. 3 and 4 of the Act are not ultra vires. It appears that s. 6 of the Act was held to be ultra vires by the Nagpur High Court from whose decision the appeal arose. This court reversed that conclusion and held that s. 6 of the Act also was valid. The appellant had challenged not only ss. 3, 4 and 6 of the Act but also the impugned Control Order. This order was the Cotton Textile (Control of Movement) Order, 1948. Section 3 of the Control Order in particular was challenged as infringing the rights of a citizen guaranteed under Arts. 19(1)(f) and (g). Broadly stated this section of the Control Order prohibited transport except under and in accordance with a general permit or special transport permit as prescribed by it. The argument was that the power conferred by s. 3 constituted an unreasonable restriction on the fundamental rights of the citizen under Arts. 19(1)(f) and (g) and that in substance it suffered from the same vice a ..... 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