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The Wholesome GraIn and Seed Merchants Association, Nagpur and ors. Vs. the State of Maharashtra Through Secretary, Food Department, Bombay and anr. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtMumbai High Court
Decided On
Case NumberSpecial Civil Appln. No. 597 of 1963
Judge
Reported inAIR1968Bom75; (1967)69BOMLR93; ILR1967Bom269; 1967MhLJ372
ActsMaharashtra Foodgrains Dealers, Licensing Order, 1963; Maharashtra Foodgrains (Control on Margin of Profit) Order, 1963; Essential Commodities Act, 1955 - Sections 3; Defence of India Rules, 1962 - Rule 125, 125(2) and 125(3); Constitution of India - Articles 19, 226, 258 and 359(1)
AppellantThe Wholesome GraIn and Seed Merchants Association, Nagpur and ors.
RespondentThe State of Maharashtra Through Secretary, Food Department, Bombay and anr.
Appellant AdvocateP.P. Deo, Adv.
Respondent AdvocateS.M. Hajarnavis, Addl. Govt. Pleader
Excerpt:
maharashtra foodgrains dealers' licensing order, 1963. clause 6 - maharashtra foodgrains (control on margin of profit) order, 1963 -- constitution of india. articles 226, 358, 350, 19 -- essential commodities act (x of 1955), section 3 -- defence of india rules, 1962. rule 125 -- constitutionality of two orders -- whether orders immune from challenge under articles 358 do 359 respectively -- power to refuse licence under clause 6 of licensing order whether an unbridled or unchannelised power -- whether in proceedings under article 226 courts can embark on hypothetical inquiry as to constitutionality of legislation.;the maharashtra foodgrains dealers' licensing order, 1963, is constitutional as the restrictions placed on the right to carry on trade under the order are not unreasonable......abhyankar, j.(1) by this petition under article 226 of the constitution, the petitioners seek the following reliefs :(a) a writ of mandamns, prohibition or other appropriate writ be issued whereby the maharashtra foodgrains dealer's licensing order, 1963, be declared unconstitutional and void; (b) alternatively clause 6 of the said order and condition no. 7 of the licence in form b be declared void; (c) clause 5 of form c of schedule ii of the said order be declared void; (d) the maharashtra food grains (control of margin of profits) order, 1963, be declared void; (e) the respondent be prohibited from enforcing these provisions against the petitioners and (f) interim stay of enforcement of the said orders and provisions be granted till the decision of this petition. (2) first petitioner.....
Judgment:

Abhyankar, J.

(1) By this petition under Article 226 of the Constitution, the petitioners seek the following reliefs :

(a) A writ of mandamns, prohibition or other appropriate writ be issued whereby the Maharashtra Foodgrains Dealer's Licensing Order, 1963, be declared unconstitutional and void;

(b) alternatively Clause 6 of the said order and condition No. 7 of the licence in Form B be declared void;

(c) Clause 5 of Form C of Schedule II of the said order be declared void;

(d) the Maharashtra Food grains (Control of Margin of Profits) Order, 1963, be declared void;

(e) the respondent be prohibited from enforcing these provisions against the petitioners and

(f) interim stay of enforcement of the said orders and provisions be granted till the decision of this petition.

(2) First petitioner is an Association of Whole Grand and Seed Merchants, but it does not appear that the Association itself is carrying on any business in Foodgrains. Petitioners 2 and 3 are described as Wholesale Grain Merchants and petitioner No.4 is described merely as a proprietor of a Dal Flour Mill.

(3) The State of Maharashtra in exercise of powers conferred by Section 3 of the Essential Commodities Act, 1955 (Act 10 of 1955) read with the notification of the Government of India in the Ministry of Food and Agriculture (Department of Food) published under GSR 888, dated the 28th June 1961 and with the prior concurrence of the Central Government promulgated an order called the 'Maharashtra Foodgrains Dealers' Licensing Order 1963'. Though the order was promulgated on 9th February 1963, it is an admitted position that it came into force on 1st October 1963. The order has been subsequently amended from time to time and we have been furnished by the petitioners a copy of the order as in force on the date arguments are heard and this petition is disposed of.

(4) The Maharashtra State has also promulgated another order on 29th October 1963, styled as the Maharashtra Foodgrains (Control on Margin of Profit) Order, 1963. This order is promulgated in exercise of the powers conferred on the Government of Maharashtra by sub-rule (2) read with Clauses (e), (j), (l) and (n) of sub-rule (3) of Rule 125 of the Defence of India Rules, 1962, and other powers enabling it in that behalf.

(5) It is alleged in the petition in paragraphs 4 and 5 that the petitioners made representations to the State Government about the difficulties in complying with the provisions of the Maharashtra Foodgrains Dealers' Licensing Order and also another representation in November 1963 but the petitioners were informed by the State Government that the Maharashtra Foodgrains Dealers' Licensing Order must be complied with as it has been issued at the instance of the Government of India and cannot be postponed.

(6) We will refer to the various provisions of the two orders which are impugned in this petition and in respect of which a declaration is sought by the petitioners later on. But the over all grievance of the petitioners appears to be inability of complying with the provisions of the licensee under which they are required to trade. Reference is made to the difficulties of maintaining accounts in view of th nature of their business and compliance with the various provisions of submitting returns, exhibiting sale price and other provisions of the order and conditions of the licence. It is claimed that some of the provisions are not definite and cannot be reasonably complied with and the provisions cannot have the effect of regulating sale price of Foodgrains to consumers.

(7) As regards the power of controlling the margin of profit, the contention of the petitioners appears to be that it is not within the ambit of the powers of the authority exercising right to control prices to control the margin of profit. Therefore, the order like the Maharashtra Food grains (Control on Margin of Profit) Order is not valid exercise of the power under R. 125 (3) (e) of the Defence of India Rules which empowers the appropriate authority to make an order providing for controlling the prices or rates at which articles or things of any description whatsoever may be sold or hired or for relaxing any maximum or minimum limits otherwise imposed on such prices on rates. The Maharashtra Food grains (Control of Margin of Profit) Order therefore is stated to be in excess of delegation permissible under the Defence of India Rules and to that extent it is void.

(8) Before we deal with the various attacks on the different provisions of the two orders, the contention of the learned counsel regarding the principles on which the objection should be considered may be noticed. According to the learned counsel, the grounds on which bylaws may be treated ultra vires would also apply to the validity of rules made in exercise of power of subordinate legislation and two of the grounds on which bylaws may be struck down as ultra vires under English practice are that they are uncertain or unreasonable. In this connection, reference is made to Crises on Statute Law, Fifth Edition at pages 296 and 298.

(9) Our attention was invited to a decision of the Madras High Court reported in Balakrishnan v. State of Madras : AIR1952Mad565 , to indicate the limits within which powers may be conferred by the Legislature on a person or a body of persons. The Legislature can confer on a person or body of persons large powers for the purpose of administering the Act, but it must prescribe the principles on which these powers are to be exercised. If there are no rules for guiding and controlling the exercise of discretion by the person or body of persons, then the powers must be held to be arbitrary and unreasonable.

(10) Narendra Kumar v. Union of India, : [1960]2SCR375 , was also relied upon in this connection in support of the same proposition. The learned counsel also referred to a Single Bench decision of the Allahabad High Court reported in Municipal Board Ghaziabad v. Rizwan Beg, : AIR1964All544 . In paragraph 22 the learned Judge has observed as follows :-

'I would like to emphasise the necessity for certainty in framing rules or byelaws of every kind of public authorities. Such rules or byelaws are included in the definition of the term 'law' as used in Article 13 of the Constitution of India. Certainty is particularly essential in framing rules or byelaws creating offences. If a citizen cannot plead ignorance of law as an excuse for the commission of an offence, he is also entitled to demand reasonable certainty in the meaning of laws which create offences that he may know what his legal obligations and liabilities are with a fair amount of assurance'.

It is also urged that if a statutory rule is inconsistent with the statute under which it is made, on uncertain or unreasonable, such rule is liable to be struck down on either of these grounds. Discussion of this topic in Craies Fifty Edition, at pages 301 and 302 is relied upon in support of these propositions.

(11) These are some of the general principles on which the learned counsel relies in his attack on certain other provisions of the two orders and in particular certain conditions of the licence under which a trader is required to carry on his business in foodgrains.

(12) The Maharashtra Foodgrains Dealers' Licensing Order has been promulgated in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 18955. Section 3 of that Act is divided into six sub-sections. Sub-section (1) of that section provides that if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for security their equitable distribution and availability at fair prices, if may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Over and above this general power to make an order, power is given to make orders, without prejudice to the generality of the powers conferred by sub-section (1), in respect of several specified matters. Under Clause (c) of sub-section (2) of Section 3, the authority is empowered to make an order 'for controlling the price at which any essential commodity may be bought or sold'. What 'essential commodity' is, is defined in S. 2(a)(v) as including foodstuffs, including edible oil seeds and oils. Section 5 of the Act empowers the Central Government by a notified order, to direct that the power to make orders under Section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable by such officer or authority subordinate to the Central Government , or State Government , or such officer or authority subordinate to the State Government. The Central Government has exercised its powers under this section and delegated the power to make orders under Section 3 to the State Government and certain officers of the State Government .

(13) Such notification was issued by the Central Government on 28-6-1961 under which the powers to make orders to provide for matters specified in Clauses (a), (b), (d), (e), (f), (h), (i), (ii) and (j) of sub-section (2) of Section 3 in relation to foodstuffs is permitted to be exercised by the State Government , subject to the condition that before making any order regarding regulation by licences permits or otherwise the production or manufacture of any essential commodity, or in regard to regulation of transport specified in Clause (d) of sub-section (2) of Section 3, the State Government shall obtain prior concurrence of the Central Government . The Central Government has further ordered that some of the powers conferred on the State Government may also be exercised by the collectors of districts in the State of Maharashtra in respect of certain foodgrains.

(14) Before we consider objections to the various provisions of the Foodgrains Dealers' Licensing Order, it will be convenient to deal with the scheme of that order. clause 1, extends the order to the whole of the State of Maharashtra and fixes the date of its commencement. Clause 2 contain definitions among which definition of 'dealer' is given as follows ; 'Dealer' means a person engaged in the business of purchase, sale or storage for sale of any one or more of the foodgrains in quantity of twenty-five quintals or more at any one time. Under Clause 3, a dealer is required to obtain a licence to carry on business as a dealer and to carry on his business only in accordance with the terms and condition of the licence. Applications for licences are required to be made in Form A which is a prescribed form and the licence is to be issued in Form B. a licence granted is valid till 31st December of the year in which it is issued and may be renewed for a period of one year at a time. Certain fees are prescribed for issue of a licence and for its renewal and for issue of its duplicate. Licences are given areawise. A separate licence is required to be obtained for each place of business. Clause 5-A prescribes for deposit of security by a person applying for a licence and the amount of security differs according as the applicant is a wholesaler or a retailer. Under Clause 6, the licensing authority is empowered to refuse a licence but only after giving the dealer concerned an opportunity of stating his case and for reasons to be recorded in writing. Penalty for contravention of the conditions of the licence as provided in Clause 7 is cancellation of the licence or its suspension by an order in writing of the licensing authority. But such penalty can be imposed only after giving reasonable opportunity to the person concerned to state his case. The security amount which is required to be deposited under Clause 5-A is liable to be forfeited for a breach of conditions Nos. 3,4,9 and 10 of the licence. Under Clause 5 provision is made for appeals at the instance of persons aggrieved by an order of the licensing authority refusing to grant a licence or renew a licence or for cancellation or suspension of a licence, the appellate authority being the State Government ; and the appellate authority is required to give a reasonable opportunity to the appellant before deciding the appeal. power is also given to stay the effect of the order refusing to renew a licence or cancelling or suspending a licence. Under Clause 9 powers of search and seizure are given to the licensing authority.

(15) There are no different forms of application for licences whether an applicant is a retailer or a wholesaler. The same person may as well be wholesaler as well as a retailer at the same time.

(16) A licence as a dealer under the Licensing Order requires certain conditions to be observed by the holder of the licence. The quantity up to which a dealer is authorised to purchase, sell or store for sale a particular foodgrain is apparently mentioned in the licence. The place where the dealer is licensed to carry on business is also noted in the licence and if, it is prohibited from storing foodgrains at any place other than godowns mentioned in the licence. Under condition No. 3, a licensee is required to maintain a register of daily accounts for each of the foodgrains showing the opening stock, the quantities received on each day, showing the place from where received and the quantities delivered or otherwise removed, and the closing stock at the end of each day's transaction. Each day's transactions are to be completed on the same day. A wholesaler who is a licensee is required to submit to the licensing authority reruns in the prescribed from showing stocks, receipts and deliveries of each of the foodgrains every fortnight so as to reach him within three days of the close of the fortnight. Similar returns are to be made by a retailer. Under condition 7, a licensee is prohibited from entering into any transaction involving purchase, sale or storage for sale of foodgrains in a speculative manner prejudicial to the maintenance and easy availability of supplies of foodgrains in the market. A licence is prohibited from withholding sales or supply of foodgrains kept for sale and he cannot charge in respect of sales of foodgrains made by him a margin of profit in excess of that which is fixed by the Government under the Essential Commodities Act, 1955, or under the Defence of India Rules, 1962, or under any other law for the time being in force. As the margin of profit if fixed by the Government under the Defence of India Rules, it is not necessary to consider other restrictions in Clause (b) of condition No. 7(iii) of the conditions. Under condition No. 7-A, a wholesaler is required to sell foodgrains only to retailers who are registered with him and in accordance with such directions as the licensing authority may give. Form of register is prescribed for this purpose and it is Form D. A licensee who is a wholesaler is permitted to sell foodgrains direct to consumers at wholesale rates in quantities of a bag or more but shall not be less than a bag. These sales are to be separately entered in the register with names, addresses and other details of the consumer. A licensee, if it is Roller Flour Mill, is also permitted to sell its produce to licensed wholesalers. There are three notes which are added under condition No. 7-A. according to the first note, the licensing authority may permit a wholesaler who is a licensee to seed foodgrains or purchase from a licensed wholesale in other states, subject to the restrictions that may operate on Inter-State movements of foodgrains. Under the second note, the licensing authority may permit a licensed wholesaler to sell foodgrains to another wholesaler in the same market and under the third note, the licensing authority may permit a retailer registered with a licensed wholesale to purchase foodgrains from a licensed wholesaler with whom he has not been registered.

(17) Under condition 7-B is licensee is required to exhibit at the entrance or some other prominent place of his business premises, the price list of foodgrains held by him for sale. The list is required to be legibly written in the principle language of the locality. A license is also required under condition NO. 8, unless exempted by the State Government or the licensing authority, to issue to every customer a correct receipt or invoice giving his own name, address and the licence number of the customer, the date of transaction, the quantity sold, the price per quintal and the total amount charged, and keep a duplicate of this voucher to be made available for inspection. Other usual conditions are also there but need not be considered.

(18) In respect of the return required to be submitted by the licensee, Form C is prescribed for a wholesaler and Form C-1 is prescribed for a retailer. It will be necessary to consider the requirements of Form C only and in particular the item in the return where a wholesale is required to show average price paid under Clause 2 and average price realised or charged under Clause 3(c). then under Clause 5 of the return a wholesaler is required to give details of average margin in respect of stocks of each of the foodgrains sold during the quarter and during a particular date in respect of various foodgrains.

(19) It is thus clear that after the promulgation of this order or similar order which was in operation, the State Government has regulated to a substantial extent trading in foodgrains where sale, purchase or store for sale is twenty-five quintals or more. The traders who deal in shorter quantities are not apparently within the control of this order, nor are the consumer. It has also to be seen that there is no control on prices as such though under condition NO. 7(iii) of the licence a dealer is not permitted to change in respect of sale of foodgrains a margin of profit in excess of the margin fixed by the Foodgrains (Control on Margin of Profit) Order.

(20) We shall now consider the various objections and the resulting difficulties and inconveniences of which complains are made in the support of the contention that the provisions are either unreasonable or in excess of the authority permitting making of rules and are vague. The power to refuse a licence under Clause 6, it is urged, is an unguided and unchannelised power. There is no indication, according to the argument, as to who are eligible to be granted a licence and who are not eligible for being granted a licence. In the absence of any guidance in the order itself, the licensing authority is likely to abuse its power and, therefore, empowering the licensing authority to refuse a license has to be struck down.

(21) Now, it is obvious that the Foodgrains Dealers' Licensing Order has been made by the State Government under section 3 of the Essential Commodities Act. Section 3 of the Act, shows that the order is required to be made because it is considered necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices. The licensing of trade in foodgrains therefore has necessarily resulted in fulfilling these objects for which the Licensing Order is required to be promulgated. The object with which powers is entrusted for regulating a trade in certain minimum quantities is therefore a clear indication of the limits within which the power of refusal can be exercised. It is significant that Clause 6 provides for two safeguards against arbitrary exercise of power to refuse a licence. Hearing has to be given to the applicant and further decision to refuse a licence is to be supported by a written order giving reasons for refusal. Ordinarily, it would appear that any person bona fide carrying on a trade in foodgrains will be eligible to apply and obtain a licence under the order. a case has to be made out for refusing a licence, and refusal must be related to one or other of the objects for which regulation of trade is considered necessary so as to ensure maintenance and increasing of supplies of foodgrains, their equitable distribution and their availability at fair prices. Unless a refusal can be shown t be intimately connected as repugnant to any of these objects or ancillary thereto it will not be sustained. Further, every order of refusal, cancellation and suspension of a licence is made appealable. There is a further safeguard against arbitrary or capricious use of the power to refuse a licence. We do not therefore think that the attack on Clause 6 that the order has vested unbridled or unchannelised power in th licensing authority is justified. In this connection reference was made by the learned counsel to a decision of the Supreme Court in Dwarka Prasad v. State of U. P., : [1954]1SCR803 , and also to a decision of the Madras High Court in : AIR1952Mad565 . In the case that went to the Supreme Court the Controller was given absolute right to grant a licence. In that case, their Lordships observed at page 227 that the provisions contained in Clause 3(1) of the order requiring a licence to be taken for sale or disposal of coal was held to be quite unexceptional as a general provision. In fact, it is the primary object which the Control Order is intended to serve. The only provision which could be objected to reasonably was the power to exempt a person or a class of persons from the provisions of the Control Order which was vested in the Coal Controller. There was no indication in the order as to who were eligible to be exempted and in the absence of any such guidance, an unrestricted or unguided power of granting exemption was struck down. We do not see how the principle of this case can be called in aid by the petitioners here. On the other hand, the principle on which a similar power has been sustained in the following decisions fully supports that the power of refusal of a licence which is granted to the licensing authority is a valid exercise of the power of refusal of a licence which is granted to the licensing authority is a valid exercise of the power and is not either unreasonable or unguided. We may refer to the following decisions:

Harishankar Bagla v. State of Madhya Pradesh, : 1954CriLJ1322 ; State of Rajasthan v. Nath Mal, : [1954]1SCR982 .

In the second case the control order that was under challenge was Rajasthan Foodgrains Control Order. One of the contentions raised was that there was no indication in the circumstances in which the power to freeze stocks of foodgrains may be used. In refuting this contention, their Lordships observed that this provision should be read along with Section 3 of the Essential Commodities Act which lays down the policy for controlling the supply and distribution of essential commodity. The power to freeze stocks was thus held to be reasonably related to the object which the Act was intended to achieve namely to secure the equitable distribution and availability at fair prices of foodgrains and therefore was not an unreasonable or unguided power. In the present case, the policy being clearly laid down in Section 3 of the Essential Commodities Act, the power to make an order to bring into effect that policy must also be used in pursuance of the object of that policy an that is sufficient guidance for the exercise of the power.

(22) Their Lordships had also an occasion to consider a somewhat similar contention in N. B. Khare v. State of Delhi, : [1950]1SCR519 , where reasonableness of power given to a District Magistrate was under challenge. It was held that the vesting of authority in particular officers to take prompt action under emergent circumstances, entirely on their own responsibility or personal satisfaction is not necessarily unreasonable and one has to take into account the whole scheme of the legislation and the circumstances under which the restrictive orders could be made. there is hardly any scope to doubt that scarcity of foodgrains, the risk of soaring prices and nonavailability of sufficient stock of foodgrains to satisfy bare needs of the population are patent facts in this State. in this circumstances exercise of power under Section 3 of the Essential Commodities Act in respect of essential articles like foodgrains, vesting a power to refuse a licence for reasons to be stated cannot be considered as vesting of unbridled power.

(23) In this connection, reference may use fully be made to three more decisions of the Supreme Court:

(1) Bhatnagars and Collector Ltd. v. Union of India, : 1983ECR1607D(SC) .

(2) Sri Ram Ram Narain v. State of Bombay, : AIR1959SC459 ;

(3) : [1960]2SCR375 .

In Bhatnagar's case, : 1983ECR1607D(SC) , the challenge was to SECTION 3(1)(a) of the Imports and Exports (Control) Act (1947), Dealing with this their Lordships observed; 'Legislation which is conditional, properly so-called, must be distinguished from legislation which is delegated. Where the Legislature proves and lays down principle underlying the provisions of a particular statute and also affords guidance for the implementation or enforcement of the said principles, it is open to the Legislature to leave the actual implementation or enforcement to its chosen delegate. The time when the provision should be implemented, the period during which it should be implemented or the place where it should be applied can, in appropriate cases be validly left by the Legislature to its delegate. If the Court can find a reasonably clear statement of policy underlying the provisions of the Act either in the provisions of the Act or in the preamble, then any part of the Act cannot be attacked on the ground of delegated legislation by suggesting that questions of policy have been left to the delegate'.

In our opinion, th purpose of the order which is made under Section 3 of the Essential Commodities Act is clear. Vesting of power in the licensing authority to refuse a licence must necessarily be limited to one or the other of the objects for which a licence has been introduced; viz., for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices.

(24) A somewhat similar contention was raised with regard to the provision under Bombay Tenancy and Agricultural Lands Act empowering a district authority or a regional authority to determine the ceiling area as depository of invalid power. Repelling this suggestion their Lordships in : AIR1959SC459 , observed in paragraph 47;

'There were, however, bound to be differences between district and district and one part of the State and another and having, therefore, enunciated broad principles and policy which were embodies in Sections 5 and 6 of the Act the Legislature enacted Section 7 empowering the State Government to vary the ceiling area and the economic holding if it was satisfied that it was expedient so to do in the public interest'.

(25) Even more opposite to the controversy raised with respect to Clause 6 by the petitioners are the observations of their Lordships in Narendra Kumar's case, : [1960]2SCR375 , already referred to. One of the contentions was with regard to Clause 3 of the order which would result n elimination of certain class of dealers from trade and whether it would be a reasonable restriction in the interests of the general public. In any legislation to control rising prices which was the evil sought to be remedied, it was held, the middleman ceased to function because price was fixed with reference to certain landed cost at 3 1/2 per cent over such cost and it resulted in elimination of the middleman. Such a result would be considered to be in the public interest and would not be struck down merely because it affected adversely the owners or traders. If it can be shown that the provision will necessarily be in the public interest to ensure maintenance or increase in supply of essential commodities at fair prices, the power to bring about such a result by regulating trade by issue of a licence which must necessarily include the power to refuse a licence cannot be considered as unreasonable or excessive delegation of power.

(26) Next head of challenge was unreasonableness or vagueness of some of the conditions subject to which a licensed dealer has to carry on his trade. It appears that the scheme of the Licensing Order is that only one licence is issued to a dealer whether he is a wholesaler or a retailer. It was also stated at the Bar on behalf of the respondents that the same dealer can be a wholesaler as well as a retailer. There is no indication in the form of licence to show whether the holder of a licence is a dealer who is a wholesaler or a retailer or both. It is true that there is a difference in the amount of security which is required to be deposited under clause 5A of the Foodgrains Dealers Licensing Order according as a dealer is a wholesaler or a retailer; the security being Rs. 500 in the case of a wholesaler and only Rs. 100 in the case of a retailer. But this fact is not reflected in any record of the licence given to a dealer.

(27) Under condition No. 7(1) of the licence, a licensee is prohibited from entering into any transaction involving purchase, sale or storage of sale of Foodgrains in a speculative manner prejudicial to the maintenance and easy availability of supplies of Foodgrains in the market. It is complained that the use of the phrase 'in a speculative manner' in this condition is extremely vague and gives no indication as to which transactions are prohibited under this condition. In our opinion, it is impossible for any Court or authority to give a declaration whether this provision is valid or invalid unless it is tested with reference to certain facts when an occasion may come to apply the test to the facts or transactions of a particular dealer. A bare reading of the condition does not indicate that there is any vagueness in it. what kind of transactions of speculative manner which are prohibited apparently but only such transactions of speculate manner which are prejudicial to the maintenance and easy availability of supplies of Foodgrains in the market which are within the mischief of this condition. We do not see how such condition could be described as vague or unrelated to reference to the object with which the Licensing Order is made.

(28) Another objection is to the third provision in this connection, viz., that a dealer shall not charge margin of profit in excess of that fixed by the Government . The Government has fixed under the Maharashtra Foodgrains (Control on Margin of Profit) Order, 1963, the margin of profit and that margin of profit under clause 3 so far as a wholesaler is concerned is fixed at 1 per cent for transactions made by him as well as authorised agents and in other cases it is fixed at 1 1/2 per cent, if the transactions is in cash and 2 per cent, if by credit. So far as a retailer is concerned, the margin of profit, in the case of fixed sales is fixed at a margin of profit not in excess of 5 per cent. In other words, a retailer can charge profit up to a margin of 5 per cent in respect of his sales. The Order defines that a 'margin of profit' means. According to this definition, margin of profit means the difference between the prices paid by a dealer for purchase of any Foodgrains including the taxes, imposed by any local authority and imposed on sale or purchase, and also the cost of transport and handling and storage and charges incidental thereto incurred by or on his behalf and the price charged or realised by him for sale of the same foodgrains or the same recovered or recoverable by him from his authorised agent in respect of sale of the said foodgrains. So far as we can understand the argument, it was urged that many other facts enter in determining the price paid by a dealer for the purchase of foodgrains. The price at which a dealer can be said to have purchased a particular foodgrain consists not only the actual cost price of the foodgrain but also must include besides taxes cost of transport, storage charges and charges incidental thereto, changes such as insurance, interest paid on his capital, commission, if any, and many other expenses he is required to incur before the price of a particular foodgrain paid by a dealer can be determined. Here again, it is impossible for the Court to declare a provision like condition 7 (iii) as unreasonable inasmuch as there is no finding or there is no accusation or charge that a particular price charged is in excess of the margin of profit as defined in the Foodgrains (Control on Margin of Profit) Order. The grievance of the petitioners in this case, as in many others, is speculative. As we shall show later on, the petitioner will not be also to challenge the Maharashtra Foodgrains (Control and Margin of Profit) Order, because it puts unreasonable restrictions on either of the petitioners under Article 19 of the Constitution. The Order is made in exercise of powers under Rule 125 of the Defence of India Rules and an order made under those Rules is beyond challenge, except on the ground that the Order purporting to regulate the margin of profit cannot be made in the purported exercise of that power to control prices. We shall examine this attack based on this contention later on. So far as fixation of margin of profit by the Order is concerned, whether 1 per cent on 1 1/2 per cent or 5 per cent over and above certain expenses or what is called price paid by the dealer for the purchase of a particular foodgrain cannot be challenged as an unreasonable restriction on the right of the petitioners to carry on their trade. In this connection, in our opinion, the decision of the Supreme Court in Narendra Kumar's case, : [1960]2SCR375 , wherein an overall margin of profit of 3 1.2 per cent of the landed cost for fixed in controlling the price has been sustained even though it may result in a few cases in eliminating the middleman, is a complete answer.

(29) It is obvious that the margin of profit fixed by clause 3 of the Maharashtra Foodgrains (Control and Margin of Profit) Order, 1963, is not rigid but flexible. Under the proviso, the State Government has reserved to itself the right to fix different margins of profit in different areas or in respect of different foodgrains or of different varieties of foodgrains, or in respect of different consignments of foodgrains received for distribution and sale, having regard to the supply position in any area, or availability of different varieties of foodgrains or necessity for serving increased supply of any varieties of foodgrains. It cannot thus be said that fixation of margin of profit is rigid and unchangeable and does not and will not take into consideration the legitimate items of expenditure incurred by a dealer for the purchase of foodgrains, or, in other words, in determining the cost of foodgrains to the dealer and the price at which a dealer is expected to sell that commodity at the stated margin of profit, the requirement of the condition that a dealer shall not charge in respect of sales a margin of profit in excess of that fixed is vague or unreasonable.

(30) An objection is also taken to the provision of condition 7A requiring a wholesaler to sell foodgrains only to retailers who are registered with him and in accordance with such directions as the licensing authority may give. It is urged that it does not appear to be compulsory for a retailer to get himself registered with a wholesaler nor any procedure is provided or limit of time indicated within which a retailer should register himself with a wholesaler. It is true that there is no express provisions as to the time within which or the procedure by which a retailer should get himself registered with a wholesaler. But, in our opinion, registered to make any such provision as indication of intention of the authorities to leave the normal channel of trade and dealers of the retailers and a wholesaler to their own use. It is likely that a wholesaler who is employ to sell only to retailers will have no custom but what seems to be intended in that condition 7A is that a wholesaler shall compile a register of his customers who are retailers and as shall be restricted to such customers. It is true that there does not appear to by any restriction on a retailers getting himself registered with any wholesaler, but that is consistent with normal trade practice, that a retailer may purchase from one or more than on wholesaler according as he finds necessary variety at a reasonable price which he is willing to give. A further requirement of this condition that the sale shall be according to the directions of the Licensing authority cannot also be reasonably objected to inasmuch as it is the very purpose of this Licensing Order to regulate the follow of foodgrains to a particular area and particular agency according as exigencies of the situation may require. There cannot be a pre-determined direction to the licensing authority as to how, in what circumstances and to what extent to direction may be required to be given by the licensing authority which is supposed to be based on overall information as to the situation, the availability of foodgrains and the need of the locality, and all these things will have to be taken into consideration in issuing a direction as provided in condition No.7A. The object of a direction being maintenance of supplies of any essential commodity equitably among all sections of population at fair prices the direction will have to conform to this objective.

(31) With regard to the three notes subject to which condition 7A is to be complied, we fail to see what objection could be taken to the first note, which controls movements of inter-State trade in foodgrains. Second note which leaves discretion in the licensing authority to permit a licensed wholesale to sell foodgrains to another wholesaler for valid reasons can hardly be objected to either. Normally, according to the scheme of the Order, a wholesaler is expected to sell to a retailer or to a consumer subject to a certain minimum. He can also sell to a trader who may not be a dealer; but so far as the sales by one wholesaler to another Abdul Rahman concerned, they are required to be effected only under a permit. We fail to see what is unreasonable with respect to this condition. A licence being restarted to a particular area for dealing as a wholesaler or a retailer will normally be fixed and it is necessary that particular customers who are generally retailers Abdul Rahman required to be supplied so that ultimately their customers who are consumer will not be starved of necessary foodgrains and as a temporary measure of emergency a wholesaler may be permitted to sell foodgrains to another wholesaler after getting permission for valid reasons. The permission must necessarily be co-relative to the need and supply of foodgrains from the stock of one wholesaler to another wholesaler.

(32) To the same effect is the third note which permits a retailer registered with a licensed wholesaler to purchase foodgrains from a licensed wholesale with whom he has not been registered. The provision is obviously needed if a retailer finds that his supply from the wholesaler does not have the requisite kind of foodgrains in the requisite quantities. So long as there is no extraneous agency which ensures supply to the wholesaler or a retailer, contingency contemplated in note 3 may arise and in order to meet it power is reserved in the licensing authority to divert a retailer from one wholesaler to another for the limited purpose. We do not see how this condition imposes any unreasonable restriction or introduces any vagueness in the implementation of the scheme.

(33) Under condition 7B, a licensee is required to exhibit at the entrance or some other prominent place of his business premises the price list of foodgrains held by him for sale. According to the averment in the petition a foodgrain dealer is required to purchase his stocks from several sources and from different places. He has to employ agents either locally or who are mobile to purchase foodgrains on his behalf either from other traders or even from producers. The information as to the price at which foodgrains were purchased, cost incurred and incidental expenses required to be made is not available for a considerable length of time. Cost for a particular foodgrain may differ even though the foodgrains are of the same variety or quality according as the foodgrain comes from one source or the other. It may also differ according as it is purchased when stocks are available in plenty or there is scarcity. Thus it is not possible or practicable, according to the petitioners for a dealer to exhibit a price list when varying factor enter in determining price of foodgrains to a dealer. We are really unable to appreciate this contention at all. Whatever may be the cost to a dealer, whenever a sale is effected, price must necessarily be quoted by the dealer in respect of the foodgrains available in his shop. If it is possible and inevitable that a deal cannot be effected except by quoting price, we fail to see what difficulty could arise in exhibiting that price against a particular variety or quality of foodgrain that is offered for sale. The condition requires that a licensee shall exhibit a price list of the foodgrains held by him for sale. We do not see there is any compulsion on a dealer to declare what the price of foodgrains will be in respect of foodgrains purchased by him and kept in stock. A dealer, according to this condition of the license, is not compelled to offer for sale all foodgrains in stock or a particular variety. Whatever is offered for sale, a dealer is required to show the price at which it will be available. We do not think that any serious difficulty will at all arise in determining the price at which a particular variety or quality of foodgrain will be sold by a dealer if that foodgrain is offered for sale. The decision is that of the dealer and in arriving at that decision it is for the dealer to calculate all relevant expenses and factors which have entered in determining the price. We do not think that this provision is in any manner an unreasonable restriction or incapable of practical implementation.

(34) Next objection was in respect of the requirement of submitting a return under condition No. 4 of the licence. A licensee is required to submit a return to the licensing authority in Form C. In item 2 of the return, a wholesaler is required to indicate, the quantity purchased during the fortnight, source of supply and the average price paid. The objection was regarding showing of average price paid for the quantity purchased during the fortnight. It may be mentioned here that though the information was regarding fortnightly purchase, the information was not required to be sent every fortnight but was required to be sent within a month at the end of each quarter of the year. Thus even in respect of last fortnight of the quarter, a dealer gets time for a month to collect necessary information and forward it in his return. The difficulty that was expressed was regarding finding of average price paid. We have not been able to appreciate what the difficulty could be. A dealer is bound to know the price at which purchases have been made by him or find within reasonable time the expenses incurred therefor. What is required to be returned under Item 2(b) of the return is only average price paid. We fail to see what difficulty could be faced in finding out average of such price in respect of the quantity purchased during the fortnight. Sufficient time seems to have been allowed for a making a return in respect of average price paid and whatever information is required to be supplied should ordinarily be available within time during which a return is to be furnished.

(35) A similar objection was taken to Item 3 (c) of the prescribed return which is also required to be furnished quarterly within a month at the end of the quarter. Under Item 3 (c) a licensee is required to show average price realised in respect of quantity sold or delivered during the fortnight. Here again, in view of sufficient time being allowed to collect all information, the difficulty is even less. A dealer must know what is the price charged for sale. If the requirement of condition 8 of the licence is strictly and truly complied with, we do not see any difficulty in filing a return in respect of Item 3(c). Under condition 8 of the licence, a licensee is expected to issue to every customer a correct receipt or invoice. Thus, every transaction which is reflected through voucher must also indicate price charged or realised. And what is required to be returned in Item 3 (c) is only average price realised.

(36) Last objection to the return is Item 5 where details of average return in respect of stocks of each of the item during the quarters have to be furnished. From what appears in the form given indicating various items which can be taken into consideration in determine net profit, the items are illustrative and not exhaustive. Item (a) is to show rise and (b) transport cost but there is not indication as to what (c) and (d) are to show and the last item is regarding net profit. It is for a dealer to calculate what net profit is after taking into consideration the cost incurred by him. Here again, in the absence of any facts or any finding by any authority that a particular return is not in conformity with the provision of the rule, we are unable to find that there is any vagueness or unreasonableness in the requirement of Form C, under which a dealer is expected to make a return of net profit in respect of average margin of profit during the quarterly dealings

(37) The petitioners have also challenged the validity of the Maharashtra Foodgrains (Control on Margin of Profit) Order, 1963. Their contention is that in exercise of the power for controlling of price under Rule 125(3) (e) of the Defence of India Rules, the State Government is not empowered to control margin of profit. It is urged that the only power given to the State Government under Rule 125(3)(e) of the Defence of India Rules is to control price and not control margin of profit. According to the learned counsel for the petitioners, the Order controlling margin of profit does not in any manner control price and is beyond the scope of the authority given to control price. In our opinion, this contention is not well-founded. Under normal trade practice in free markets prices get fixed according to the law of supply and demand, capacity of the purchaser, availability of article, cost of the producer and margin at which a seller or middleman between the producer and the consumer is able to sell the goods. The whole mechanism of fixation of prices therefore must comprise of all the factors which go to determine the price and the margin of profit at which an article comes to be sold is certainly relevant factor in determining the price at which the article is sold. This Order is made in exercise of the power given by Section 3 of the Essential Commodities Act to make available an essential commodity at a fair price. Fairness of price for a particular foodgrain or article can therefore be determined by the authority exercising power under Section 3 of the Act. One of the criteria to determine fairness of price at which an article available tot he consumer or a wholesaler would make it available to the retailer. One way of making an article available at a fair price is to control the rate of margin of profit at which a wholesaler or retailer will be entitled to sell goods to the consumer or to the retailer. We have not been able to appreciate the contention that when authority is given to control price the power does not imply authority to control profit or margin of control on profit must be implicit in order to control price. As we have supplier, the Foodgrains Dealers Licensing Order of the Foodgrains (Control on Margin of Profit) Order 1963, does not regulate trade at all levels and it leaves free some fields of trade activities for the sake of wholesaler or retailer as well as for traders. Where complete control is established, procurement, preservation, purchase, sale and supply of foodgrains will be controlled at every stage including the price at which it may be sold or purchased. The Orders under challenge in this petition do not attempt to impose an overall control. They have apparently left free the wholesaler or the retailer to procure foodgrains at such price as he can get and over and above his price certain limit of margin of profit is fixed before a dealer sells the foodgrain either to a consumer or to a retailer or even to another wholesaler. This, it appears, was the scheme of the two Control Orders. We, therefore, do not see how in implementation of this scheme, the State Government could be said to be acting beyond its powers in fixing the rate of margin of profit within which the sale price of foodgrains is to be charged by a wholesaler or by a retailer. The state Government has chosen this mode of ensuring supply of foodgrains at a fair level of price and in order to achieve that object, it seems to have fixed a limit on the rate of the margin of profit at which the transaction may be done by a wholesaler or a retailer, as the case may be.

(38) There are other difficulties in the way of the petitioners in getting any relief in view of the fact that the President of India has issued a Proclamation of Emergency which is in operation under Article 258 of the Constitution. The President of India has also issued an order under Article 359(1) of the Constitution declaring that the right to move any Court for the enforcement of the fundamental rights under Articles 14,21 and 22, and all proceedings pending in any Court for the enforcement of the rights shall remain suspended for the period during which the Proclamation is in force. One of the grounds on which some of the provisions of the Foodgrains Dealers Licensing Order or the conditions of the licence were attacked was the unreasonableness of provisions. Now, unreasonableness of restriction on the right to carry on trade could only be challenged as an invasion on the right of the petitioners under Article 19 of the Constitution. If rights flowing from Article 19 of the Constitution are not enforceable during the operation of the Proclamation under Article 358 of the Constitution, then we fail to see how the petitioners could be heard to complain that any of the provisions of the Foodgrains Dealers Licensing Order or the Conditions of the licence should be struck down because they are unreasonable. In view of the Proclamation of Emergency under Article 358 of the Constitution, any challenge based on Article 1 is untenable. The question has been examined in detail by their Lordships of the Supreme Court in Makhan Singh v. State of Punjab, : 1964CriLJ217 . In paragraph 8 of the judgment their Lordships observed as follows:-

'It would be noticed that as soon as a Proclamation of Emergency has been issued under Article 352 and so long as it lasts, Art. 19 is suspended and the power of the legislatures as well as the executive is to that extent made wider. The suspension of Art. 19 during the pendency of the Proclamation of Emergency removes the fetters created on the legislative and executive powers by Art. 19 and if the legislatures make laws or the executive commits acts which are inconsistent with the rights guaranteed by Art. 19, their validity is not open to challenge either during the continuance of to challenge either during the continuance of the emergency or even thereafter. As soon as the Proclamation ceases to operate, the legislative enactments passed and the executive actions taken during the course of the said emergency shall be inoperative to the extent to which they conflict with the rights guaranteed under Art. 19 because as soon as the emergency is lifter, Art. 19 which was suspended during the emergency is automatically revived and begins to operate. Article 358, however, makes it clear that things done or omitted to be done during the emergency cannot be challenged even after the emergency is over.' Thus, even though the petitioners have not referred expressly to their rights under Art. 19 of the Constitution being violated, the complaint, in fact, amounts to this that the restriction placed on the right to carry the restrictions placed on the right to carry on trade under the Foodgrains Dealers Licensing Order are unreasonable provisions and therefore they should be struck down. Though we have rejected the contention on the allegation of unreasonableness of the provisions and interference with their right to carry on trade. The same view has been taken in two other High Courts, viz., Chanan Ram v. State of Punjab, and Swadeshi Cotton Mills Co ., Ltd. v. Sales Tax Officer, : AIR1965All86 .

(39) We have already indicated that the legislation controlling prices may well provide for a margin of profit at which an article may be sold if it is found necessary to regulate and control distribution and supply of any essential commodity and ensure its availability at fair price. Reference has already been made to Narendra Kumar's case, : [1960]2SCR375 . Under Section 3 of the Essential Commodities Act, the Government of India has issued an order called the 'Non-ferrous Metal Control Order, 1958', and one of the provisions in the order was that no person shall sell or purport to sell any non-ferrous metal at a price which exceeds the amount represented by an addition of 3 1/2 percent to its landed cost. This provision was attacked on the ground that arbitrarily fixing of a margin at which goods affected by the Order could be sold at 3 1/2 percent in addition to the landed cost virtually amounted to elimination of the middleman. In repelling this contention their Lordships have observed in paragraph 21:

'The first evil sought to be remedied by the law being thus the rise in price- which was bound to be reflected in the higher price of the consumer's goods in the production of which copper formed a major ingredient- an order controlling the price would of course be the first obvious step for fighting this evil. Experience has shown, however, that if nothing else is done it is practically impossible to make the control of price effective. The essential subsidiary step therefore was to introduce a system of permits so that the persons acquiring copper could be known. The system of permits would also be of great help in ensuring that the raw material would go to those industries where it was needed most and distributed in parts of the country as would procure the greatest benefit to the general public. Clause 3 of the Order fixes a price while clause 4 introduces a system of permits for the acquisition of the material. Some fixation of price being essential to keep prices within reasonable limits, must therefore be held to be reasonable restriction in the interests of the general public. Was it necessary, however, that the prices should be fixed in such a manner as to eliminate the dealer completely, as has been done in the instant case? The introduction of a system of permits was also clearly necessary in the interests of general public. Was it necessary, however, to specify the principles that would drive the dealer out of business? These questions require careful consideration. . . . . . . .'

'(22) That middleman's profits increase the price of goods which the consumer has to pay is axiomatic. It is entirely wrong to think that the middleman gets his profits for nothing and one has to remember that the middleman by forming the distribution channel between the producers and consumers relieves the producers of the burden of storing goods for length of time and the risk attendant thereto and relieves the consumers of the trouble and expense of going to the producer who may be, and often is, a long distance away. It is, however, in the very nature of things that the middleman has to charge not only as regards the interest on the capital invested by him, and a reasonable remuneration for management but also in respect of the risks undertaken by him what the economists call the 'entrepreneur's risk'. These charges often add to a considerable sum. It has, therefore, been the endeavour at least in modern times for those responsible for social control to keep middleman's activities to the minimum and to replace them largely by co-operative sale societies of the consumers. While it is clear that the middleman does perform important services, it is equally clear that the interests of the public would be best secured if these services could be obtained at a price lower than what the middleman ceases to function because of the fixation of price at landed cost plus 3 1/2 percent, the manufacturer have to establish contacts with importers. This will mean some trouble and inconvenience to them, but it is reasonable to think that the saving in the cost of obtaining the same would more than compensate. The lower cost of the raw material is also likely to be reflected - in a competitive market - in the lower price of the consumer's goods. Of which copper is a raw material, and thus redound to the benefit of the general public.'

(40) In our opinion, the principles which govern this decision are applied squarely in considering whether there has been any excess of exercise of power in securing availability of any essential commodity at a fair level of price by restricting the margin or profit chargeable by a wholesaler or a retailer at a rate in excess of that stated in the Foodgrains ( Control on Margin of Profit) Order. Apart from the fact that this Order having been promulgated under Rule 125 of the Defence of India Rules which in their turn have been issued under the Defence of India Act being immune from challenge of India Act being immune from challenge under Article 359 of the Constitution, we do not think that the rule-making authority has in any manner exceeded the power in fixing the rate of profit in exercise of its power to control price.

(41) Though we have considered the objections raised on behalf of the petitioners to the several provisions of the two Orders and the conditions subject to which a licensee has to operate his trade, we are considerably oppressed with the view that the petitioners are in fact asking us by this petition to give relief by a declaratory judgment. There are no facts, or justiciable issues under controversy as to the action or act of one party or the other which are brought for adjudication before any authority. It is well settled that extraordinary powers of the High Court under Art. 226 of the Constitution cannot be invoked by a citizen merely to secure a declaratory judgment. The learned counsel was given further time to enable him to address us on this aspect of the case inasmuch as in our opinion the petitioners were not entitled to any relief as no action had been taken against them under the impugned orders. Whether a particular provision of the order or condition of the licence was or was not invalid cannot be determined in the absence of actual enforcement of the power by the authority to the prejudice or injury of a citizen. When this aspect was under discussion at the Bar, it was contended on behalf of the petitioners that the Courts have assumed jurisdiction to give relief to citizens when approached under Art. 226 of the Constitution when there is threatened injury or invasion on their rights. In this connection reliance was placed on a decision of the Supreme Court in State of Bombay v. United Motors Ltd., : [1953]4SCR1069 . The case was taken in appeal at the instance of the State of Bombay from a decision of this Court in (1953) 55 Bom LR = (1953) 4 STC 10. In paragraph 8 of the judgment, the Supreme Court observed as follows:-

'The Advocate-General of Bombay, appearing on behalf of the appellants took strong exception to the manner in which the learned judges below disposed of the objection to the attainability of the petition. He complained and entertained the petition on the infringement of fundamental rights was alleged, and that the remedy under Art. 226 was, therefore, appropriate, the learned Judges issued a writ without finding that any fundamental right had in fact been infringed. Learned counsel for the State of West Bengal also represented that parties in that State frequently got petitions under Art. 226 admitted by alleging violation of some fundamental right, and the Court sometimes issued the writ asked for without insisting on the allegation being substantiated. We are of opinion that it is always desirable when relief under Art. 226 is sought on allegations of infringement of fundamental rights, that the Court should satisfy itself that such allegations are well founded before proceeding further with the matter. In the present case, however, the appellants can have no grievance, as the respondents allegation of infringement of their fundamental right under Art. 19(1)(g) was based on their contention that the Act was ultra vires the State Legislature, and that contention having been accepted by the Court below, there would clearly be an unauthorised restriction on the respondents right to carry on their trade, registration and licence being required only to facilitate collection of the tax imposed.'

In our opinion, if any principle is clearly enunciated from these observations, it is this that a citizen may be entitled to invoke extraordinary jurisdiction of this Court directly without submitting to the penal consequences or other injuries likely to be inflicted by the impugned legislation, but citizen's grievance must be founded on violation of fundamental rights. If the petitioner is not able to take a shield of the fundamental right in resisting operation of any statute or any order, we do not think that this decision of the Supreme Court warrants a conclusion that a right vests in the citizen to approach of the High Court merely because in the opinion of the petitioner the law promulgated or rules made are ultra vires of the rule-making power or unreasonable or vague.

(42) The question was raised in this Court in a slightly different form in Farm Nusserwanji v. State, : AIR1951Bom210 (FB). In that case the question was whether a writ of mandamus should issue to the Government prohibiting it from enforcing certain provisions of the Bombay Prohibition Act. The objection raised on behalf of the Advocate-General was to the effect that the petitioner was not entitled to any relief because he never made a specific demand of these rights against the Government to comply with any of his demands and therefore strictly there was no denial of his rights by Government at the date the petition was filed. In this context the learned Chief Justice speaking for the Court has observed as follows:-

'To maintain an application under Section 45, Specific Relief Act, a demand of justice and its denial is essential before an order can be made under that section. It is true that the orders that the petitioner is now seeking are not confined to Section 45 but fall under Art. 226 of the Constitution. But even so we have to consider whether it is open to a petitioner under Art. 226, without making a specific demand of his right and without giving an opportunity to the Government to comply with that right, to file a petition. It was pointed out in Jeshingbai v. Emperor, : AIR1950Bom363 that the Court should of its own motion put limitations upon th wide powers conferred upon it under Art. 226.'

(43) That the Court will not entertain a petition merely for a declaratory judgment to decide hypothetical questions or express opinion on such questions in exercise of its appellate jurisdiction would be the ratio of the decision in Central Bank of India v. Their Workmen, : [1960]1SCR200 . Quoting the decision of the Court of Appeal in Attorney General of Ontario v. Hamilton Street Rly. 1903 AC. 524 at P. 529, the following observations were reproduced:-

'It would be extremely unwise for any Judicial Tribunal to attempt beforehand to exhaust all possible cases and facts which might occur to qualify, cut down and override the operation of the particular words when the concrete case is not before it.'

(44) In the instant case, it is stated at the Bar that petitioners 2,3 and 4 have obtained licences under the impugned order and the respondents return shows that the information in the return is being supplied in pursuance of the requirements of the licence all over the State. It is not as if any of the petitioners have found it impossible to comply with the provisions of the order or the conditions of the licence. Though they have not failed to comply with any of the provisions or conditions and no action has been taken against any of the order is required to be adjudicated in this petition. The detailed averment in the petition discloses certain difficulties which the petitioners and others in trade may experience or perhaps do experience in complying with the provisions of the order, but the jurisdiction of this Court cannot be invoked to give its opinion as to what right the petitioner may be entitled to on proper interpretation of any of the orders and conditions of licence.

(45) This question was examined in some detail in one of the decisions of the Nagpur High Court reported in Sheoshankar v. State, ILR (1951) Nag 646 = (AIR 1951 Nag 58 FB), to which attention has been drawn by the learned cousel for the petitioners. One of the Judges constituting the Full Bench, Hidayatullah, J., as he then was, took the view that, strictly speaking, the application filed by Sheoshankar for declaring some of the provisions of the Prohibition Act ultra vires should be dismissed on the short ground that the petitioner had not shown any injury as a result of the application of the Act or invasion of any of his rights as a result of the action taken under the Act. The learned Judge observed at p. 667 of the Report as follows:-

'While I do not pretend to lay down principles for all cases, I am quite clear that a petition for the examination of the constitutionality of an Act does not lie even under the wide powers conferred by Art. 226. There is no need to go into the question whether original jurisdiction is conferred by Art. 226. Even in those countries where original jurisdiction is possessed judgments are not rendered unless the petitioner can show some injury or some imminent injury to himself as a cause of action. But in no country is the constitutionality of a statute examined on a mere petition to a superior Court. In other words, advisory opinions or declaratory judgments on the constitutionality of legislation cannot be given apart from some concrete injury or controversy.'

The learned judge has then referred in some detail to the practice in the High Court of Australia, High Courts of England and Canada as well as in United States. In the United States, there is in force the Declaratory Judgments Act. But even in spite of the statutory provision for giving a declaratory judgment, the Courts in United States have imposed on themselves some limitations in entertaining actions involving declaratory judgments about the constitutional validity of a State or national legislation. The learned Judge has accepted the limitation which have been imposed upon themselves and succinctly enumerated in the book on American Constitutional Law, at p. 675 of the Report. Self-imposed limitations are-

Acceptance of the exercise of the power by the Courts is in part attributable to the caution with which they have, wielded it. The following rules have been laid down to govern the exercise of power:-

'(1) Questions as to constitutionality will not be passed upon unless they are essential to the decision in the case.

(2) One who relies on the invalidity of a statute has the burden of proving its unconstitutionality. If the burden is not sustained the Court will presume that the statute is constitutional. This rule applies especially where the issue is the reasonableness of the enactment in the light of existing conditions.

(3) The unconstitutional character of the legislation must be clear regardless of the interpretation put upon it. Hence, where alternative constructions are possible, the law must be so construed as to preserve its validity.

(4) The power cannot be extended to permit the Court to pass upon the question of the expediency or wisdom of particular legislation.

(5) The motives of the legislature in passing particular statutes cannot be made the subject of judicial examination.

(6) The power may be exercised only in actual litigation since under Article III of the Constitution the judicial power extends only to 'cases' and 'controversies'. This means that there must be a real controversy between parties having opposing interests, and that one who contests the validity of a statute must show that substantial interests of his own will be adversely affected by its enforcement. The federal courts will not decide moot cases (i.e., they will not decide what the law would be on a hypothetical state of facts) nor will they render advisory opinions in cases when an abstract determination of the constitutionality of a statute is sought.'

(46) Basu in his Commentary on the Constitution of India has dealt with this question at pp. 171 to 183 after examination of the limits to be exercised as an attribute of judicial powers of the superior Courts in this country. It may be useful to note that the limitation imposed by superior Courts of the United States which finds expression in other decisions of that Court is also reported in Massachusetts v. Mellon, (1923) 262 U.S. 447 of the Report, Mr. Justice Sutherland delivering the opinion of the Court has observed as follows:-

'We have no power per se to review and annul Acts of Congress on the ground that they are unconstitutional. That question may be considered only when the justification for some direct injury suffered or threatened, presenting a justiciable issue, is made to rest upon such an act. Then the power exercised is that of ascertaining and declaring the law applicable to the controversy. It amounts to little more than the negative power to disregard an unconstitutional enactment, which otherwise would stand in the way of the enforcement of a legal right. The party who invokes the power must be able to show not only that the statute is invalid, but that he has sustained or is immediately in danger of sustaining some direct injury as the result of its enforcement, and not merely that he suffers in some indefinite way in common with people generally. If a case for preventive relief be presented, the Court enjoins, in effect, not the execution of the statute, but the acts of the official, the statue notwithstanding. Here the parties plaintiff have no such case. Looking through forms of words to the substance of their complaint, it is merely that officials of the executive department of government are executing and will execute an Act of Congress asserted to be unconstitutional and this we are asked to prevent. To do so would be not to decide a judicial controversy, but to assume a position of authority over the governmental acts of another and co-equal department-an authority which plainly we do not possess.'

(47) It is however contended that restricted view of the powers of the Court would leave no alternative to citizens but to face either prosecution for breach of the order or the conditions which may ultimately be proved to be invalid or to forgo the right to trade by cancellation, suspension, or refusal of a licence. In the Nagpur decision to which a reference is already made this dilemma has been examined and answered as follows at p. 674:-

'The awkward dilemma of subjects having to choose between complying with the law, to their unnecessary detriment if the law be unconstitutional, and violating it at their own peril if it should prove to be constitutional, has not induced the Supreme Court to examine at large the constitutionality of Acts of legislature.'

Rather than embarking on hypothetical enquiry as to whether a particular provision of law is or is not constitutional or within the legislative power, it is preferable that Courts should reserve judgments on the constitutionality or validity of a legislation, when the actual controversy is raised whether power under a particular law is invoked to the injury or detriment of the interests of citizens; until such contingency arose, Courts may refrain, especially in proceedings under Art. 226 of the Constitution, from adjudicating merely on hypothetical problems.

(48) We are therefore of opinion that in the instant case the petitioners' not having suffered any injury nor shown any imminent injury to their interests, they have no right to ask for declaratory opinion as they have done in the relief clause to which reference is already made.

(49) Though, we have adjudicated on the merits of the controversy, we are of opinion that invoking of jurisdiction of this Court without actual injury is not permissible. On both grounds, therefore, in our opinion, the petition fails and is dismissed with costs.

(50) Petition dismissed.


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