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Thakorelal Chaturbhuj Dalal and ors. Vs. the State of Bombay - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMumbai High Court
Decided On
Case NumberA.F.O.D. No. 337 of 1953
Judge
Reported inAIR1959Bom511; (1958)60BOMLR580; ILR1958Bom1025
ActsBombay Essential Commodities (Regulation of Disposal and Acquisition) Order, 1947; Essential Supplies (Temporary Powers) Act, 1946 - Sections 2, 3, 3(1), 3(2), 3(3) and 4; Constitution of India - Article 245; Essential Supplies (Temporary Powers)(Amendement) Act, 1950; Essential Supplies (Temporary Powers) Act, 1935; Easst Punjab Hoarding of Foodgrains Order, 1947
AppellantThakorelal Chaturbhuj Dalal and ors.
RespondentThe State of Bombay
Appellant AdvocateS.M. Shah and ;A.N. Surti, Advs.
Respondent AdvocateGovernment Pleader
Excerpt:
.....the demand, on 15-1-1952 special civil suit no. the words used in section 3 clearly authorise the central government to issue notified orders devising machinery for effectuating the purpose of regulating or prohibiting the production supply and distribution of the essential commodity. by virtue of the delegation under section 4 the provincial government became entitled to exercise legislative authority vested in the central government by section 3 (1); and we fail to see any rational ground for holding that the provincial government could not confer upon its officers powers for carrying out the provisions of the notified orders which it was competent to make by the combined operation of sections 3 and 4 and the notification issued by the central government. the order may well be a..........that contention it may be necessary to refer to certain legislative provisions.4. in 1946 the central government passed the essential supplies (temporary powers) act (xxix of 1946). that act was intended to provide for the continuance, during a limited period, of powers to control the production, supply and distribution of, and trade and commerce in, certain commodities. 'essential commodity' was defined in section 2(a) of the act as inclusive of various articles including foodstuffs. by section 3 authority was conferred upon the central government so far as it appeared to it to be necessary or expedient for maintaining or increasing supplies, of any essential commodity, or securing their equitable distribution and availability at fair prices, to provide by order for regulating or.....
Judgment:

Shah, J.

1. This is an appeal against the decree passed by the Civil Judge (Senior Division) at Broach in Special Civil Suit NO. 1 of 1952 dismissing the plaintiffs's suit for damages against the State of Bombay. The plaintiffs claimed damages on the plea that the Rationing Officer Broach, passed an order on 17-11-1948 freezing and requisitioning certain stock of wheat in the plaintiffs' custody and the District Magistrate passed an order dated 18-1-1949, that the stock of wheat be sold at the price (fixed by the order) which was below the market value of wheat, and that those orders were illegal and ultra vires. The learned trial Judge held that the orders were ultra vires the District Magistrate but in his view the plaintiffs had no cause of action because the stocks of wheat and in respect of which the plaintiffs claimed damages did not belong to them.

2. The facts which give rise to this appeal may be briefly stated. Plaintiffs Nos. 1 and 2 and one Hiralal Thakorlal Dalal were carrying on business in groceries at Broach in the name and style of Messrs Hiralal Thakorlal Dalal. Hiralal died having made a will whereby he appointed three persons, who where impleaded in this suit as plaintiffs Nos. 3, 4 and 5, as executors. On 8-11-1948 one Jayantilal Parsotamdas Dalal of Dholka sent a consignment of 150 bags of wheat to Messrs. Hiralal Thakorlal Dalal at Broach to be sold by the latter firm as commission agents and as pakka adatias. It is claimed by the plaintiffs that out of the 150 bags of wheat 114 belonged to Jayantilal Parsotamdas and the remaining 36 bags belonged to one Chottalal Chakubhai of Bavla. On 17-11-1948 when the stocks of wheat were in the custody of the firm of Hiralal Thakorlal Dalal and order was issued by the Rationing Officer, Broach purporting to act under the orders of the District Magistrate, directing that firm not to dispose of 98 bags of wheat without permit from a competent authority. On 3rd January 1949, the District Magistrate, Broach. purporting to exercise authority under the Bombay Essential Commodities (Regulation of Disposal and Acquisition) Order, 1947 directed the firm of Hiralal Thakorlal Dalal to sell and deliver to the godown manager, Broach, these 98 bags of wheat at the rate of Rs. 18 per Bengal maund. The District Magistrate also ordered that the price realised may be retained 'in deposit.' The firm of Hiralal Thakorlal Dalal failed to comply with the order and, therefore, the bags were seized and taken possession of by the Rationing Officer, Broach on 18-1-1949. It appears that the owner Jayantilal Parsotam of Dholka was prosecuted for exporting wheat from the Ahmedabad District to Broach in violation of a ban imposed by the Provincial Government prohibiting export of wheat from the Ahmedabad District. The trial Court convicted the accused Jayantilal Porsotam, but in the Court of Session his appeal was allowed and he was acquitted. It appears that in those proceedings, it was ordered that the wheat which had been attached should be handed over to Jayantilal Parsotam. On 8-10-1951 the plaintiffs, who are the surviving partners of the firm of Hiralal Thakorlal Dalal and the executors under the will of the partner Hiralal Thakorlal served a notice upon the State of Bombay claiming Rs. 8,824 as damages and Rs. 1,544 as interest thereon. The State of Bombay having failed to comply with the demand, on 15-1-1952 Special Civil Suit No. 1 of 1952 was filed for a decree for Rs. 10,368 as damages for conversion of the plaintiffs' goods and interest thereon. The learned trial Judge was of the view that the order passed by the District Magistrate ordering sale of the goods and the subsequent seizure of the goods was illegal and the plaintiffs were entitled to maintain an action for damages; but on the view that the plaintiffs had not suffered any loss by virtue of the wrongful action of the District Magistrate the plaintiffs' suit was dismissed.

3. In this appeal, the principal question which falls to be determined is whether the order of the District Magistrate was 'ultra vires and illegal' as contended by the plaintiffs. In order to appreciate that contention it may be necessary to refer to certain legislative provisions.

4. In 1946 the Central Government passed the Essential Supplies (Temporary Powers) Act (XXIX of 1946). That Act was intended to provide for the continuance, during a limited period, of powers to control the production, supply and distribution of, and trade and commerce in, certain commodities. 'Essential Commodity' was defined in Section 2(a) of the Act as inclusive of various articles including foodstuffs. By Section 3 authority was conferred upon the Central Government so far as it appeared to it to be necessary or expedient for maintaining or increasing supplies, of any essential commodity, or securing their equitable distribution and availability at fair prices, to provide by order for regulating or prohibiting the production supply and distribution thereof and trade and commerce therein. It may be observed that the powers conferred upon the Central Government were in the nature of delegated legislative powers and it has been held by the Supreme Court in a recent judgment that such delegation of legislative power is permissible. By Sub-section (2) of Section 3 of the Act it was provided : 'Without prejudice to the generality of the powers conferred by Sub-section (1), an order made thereunder may provide .... (f) for requiring any person holding stock of an essential commodity to sell the whole, or a specified part of the stock at such prices and to such persons or class of persons or in such circumstances as may be specified in the order;......(j) for any incidental and supplementary matters, including in particular the entering and search of premises, .....the seizure by a person authorised to make such search any article in respect of which such person has reason to believe that a contravention of the order has been, is being or is about to be committed,.....' By Sub-section (3) of Section 3 of the Act, as it originally stood, it was provided that 'an order made Sub-section (1) may confer powers and impose duties upon the Central Government or officers and authorities of the Central Government, notwithstanding that it relates to a matter in respect of which the Provincial Legislature also has power to make laws.' By Section 4 of the Act it was provided that 'the Central Government may by notified order 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 also may (a) such officer or authority subordinate to the Central Government, or (b) such Provincial Government as may be specified in the direction.' On 2-11-1946 the Central Government delegated its powers to the Provincial Governments by Notification No. PY. 603 (2)/I, dated 21-10-1946. That Notification stated that in exercise of the powers conferred by Section 4 of the Essential Supplies (Temporary Powers) Act, 1946, the Central Government is pleased to direct that the powers conferred on it by Sub-section (1) of Section 3 of the Act to provide for the matters specified in Sub-section 3 of the Act to provide for the matters specified in Sub-section (2) thereof shall, in relation to foodstuffs, be exercisable also by any Provincial Government subject to the condition, that before making any order relating to any matter specified in Clauses (a), (b), (c), (d), (f) of Sub-section (2), the Provincial Government shall obtain the concurrence of the Central Government. In exercise of the powers conferred upon the Provincial Government by Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 read with the above Notification, the Government of Bombay issued the Bombay Essential Commodities (Regulation of Disposal and Acquisition) Order 1947. By Clause 4 of this Order in so far it is material, it was provided:

'Any person or class of persons holding stocks of any essential commodity, whether on his own account or on behalf of any other person when so directed ..... by the District Magistrate ..... by notice given in the manner described in Clause 8, shall not use remove, sell or otherwise dispose of such stocks or cause them to be used, removed, sold or disposed of, without a permit issued by the officer concerned.'

Clause 5, in so far as it is material, provided:

'.....the District Magistrate may direct by a notice given in the manner described in Clause 8 that any person or class of persons holding stocks of any essential commodity shall sell the whole or a specified part of such stock to the officer who gives the notice or to any person whom he may name therein.'

Evidently, the order dated 17-11-1948, was passed in exercise of authority conferred by Clause 4 of the Bombay Essential Commodities (Regulation of Disposal and Acquisition) Order, 1947, and the subsequent order dated 18-1-1949 was passed under Clause 5(1) of that Order.

5. The validity of the two orders is impugned not on the ground that they could not be passed respectively under Clauses 4 and 5 of the Order, but on the plea that Clauses 4 and 5 of the Order are themselves ultra vires the Provincial Government. It is urged that by Section 3 of the Essential Supplies (Temporary Powers) Act 1946, the Central Government is invested with the power to issue orders providing for regulating or prohibiting the production, supply and distribution of and trade and commerce in any 'essential commodity', and even if the Central Government is entitled to delegate its powers under Section 4 to the Provincial Government, the Provincial Government is not authorised to issue general orders conferring powers upon its sub-ordinate officers to take steps for regulation, production supply and distribution of and trade and commerce in essential commodities. The argument in substance is that the power conferred under Section 3 is a legislative power and the Central Government having by Parliament been invested with legislative power, the Provincial Government may by a notification issued under Section 4 be invested with that power, but the Provincial Government is incompetent to re-delegate the powers delegated to it, by issuing general authority in that behalf to its subordinate officers. It was contended that the Provincial Government can only exercise its authority by issuing a specific order against and individual and in present case, as the orders were not issued by the Provincial Government against the firm of Hiralal Thakorlal Dalal but by the Rationing Officer and the District Magistrate those orders were unauthorised. In support of that contention our attention was invited to the terms of Sub-section (3) of Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 as they originally stood, and as they stood amended by Act 52 of 1950. We have set out the terms of Sub-section (3) of Section and it appears from Sub-section (3) of Section 3 of the Act, as it originally stood, that an order made under Sub-section (1) may confer power, and impose duties upon the Central Government, notwithstanding that it relates to a matter in respect of which the Provincial Legislature also has power to make laws. By Sub-section (3) the domain of the Provincial Legislature to legislate in matters which were within its competence under the Government of India Act, 1935, was invaded. By Act 52 of 1950, Sub-section (3) of Section 3 was amended and now reads as follows:

'An order made under Sub-section (1) may confer powers and impose duties upon the Central Government or the State Government or officers and authorities of the Central or State Government and may contain directions to any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties.'

It is evident that before Sub-section (3) of Section 3 was amended it was competent to the Central Government, exercising its powers, to legislate upon matters within the legislative domain of the Provincial Legislature, and Parliament by the amendment removed that anomaly. Since the amendment the Central Government by notified orders made under Sub-section (1) could only confer powers and impose duties upon the State Governments or officers and authorities of the State Government or to officers and authorities thereof. Evidently the vice of Sub-section (3) of Section 3, as it originally stood, has been removed by the amendment, the Central Government being entitled to issue directions to the State Government or to officers and authorities of the State Government but without trespassing upon the powers of the Provincial Legislature.

6. By Section 3 the Central Government is invested with the power of issuing notified orders and those notified orders may provide for regulation or prohibition in the matter of production, supply and distribution of any essential commodity. The words used in Section 3 clearly authorise the Central Government to issue notified orders devising machinery for effectuating the purpose of regulating or prohibiting the production supply and distribution of the essential commodity. These notified orders intended to be made by the Central Government are legislative orders and not executive orders; if authority be needed in support of that view it is to be found in the judgment of their Lordships of the Supreme Court in Harishankar Bagla v. State of M.P. : 1954CriLJ1322 . In that case the validity of Clause 3 of the Cotton Textile (Control of Movement) Order, 1948, was challenged by a person who had been convicted for transporting cloth without a permit as required by the Control Order. It was urged by a accused that Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, which enabled the Central Government to issue notified orders was ultra vires the Legislature on the ground of excessive delegation of the legislative power, and it was also urged that Section 4 of the Act which enumerated the classes of persons to whom the power could be delegated by the Central Government was ultra vires. Their Lordships held that the Legislature having declared the policy of the law and the legal principles which are to control any given cases and having provided a standard to guide the officials or the body in power to execute the law and having provided a standard to guide the officials or the body in power to execute the law and having provided that principle, namely, the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at given prices the provisions of Sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, could not be regarded as ultra vires. Their Lordships observed that 'the preamble and the body of the Sections in the Essential Supplies (Temporary Powers) Act, 1946, sufficiently formulate the legislative policy and the ambit and the character of the Act is such that the details of that policy can only be worked out be delegating that power to a subordinate authority within the framework of that policy.' On the view it was held that Section 3 of the Act was not invalid on the ground of excessive delegation and that the power the Central Government could be validly delegated to the Provincial Government by notification under Section 4 of the Act.

7. By delegation under Section 4 all the powers of the Central Government subject to any restrictions that the Central Government may impose in that behalf, may be conferred upon the Provincial Government. Under Notification No. Py. 603 (2)/I., dated 21-10-1946, the Provincial Government was competent to issue notified orders providing for regulating or prohibiting the production, supply and distribution of the essential commodities, and such orders could be general or directed against individuals or specified class of individuals. By virtue of the delegation under Section 4 the Provincial Government became entitled to exercise legislative authority vested in the Central Government by Section 3 (1); and we fail to see any rational ground for holding that the Provincial Government could not confer upon its officers powers for carrying out the provisions of the notified orders which it was competent to make by the combined operation of Sections 3 and 4 and the notification issued by the Central Government.

8. It is true that Sub-section (2) of Section 3 sets out in its various clauses the powers which may be exercised under the notified order, and a vanity of powers are described in Sub-section (2). But as has been observed by their Lordships of the Supreme Court in Santosh Kumar v. The State, : 1951CriLJ757 this form of legislation is not intended to restrict the wide powers conferred by the operative part which confers authority to issue orders.

9. In : 1951CriLJ757 it was held by the Supreme Court that Sub-section (2) of Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 conferred no further or other powers than what were conferred by Sub-section (1) and the enumeration of certain matters in Sub-section (2) was merely illustrative as such enumeration was 'without prejudice to the generality of the powers conferred by Sub-section (1)', and in coming to that conclusion their Lordships approved of the rule enunciated by Privy Council in Emperor v. Sibnath Banerjee . It cannot therefore be said that the authority to issue notified orders under Section 3(1) is authority of different quality or character from the authority under Section 2(2). An order which falls under the description of any of the clauses of Sub-section (2) of Section 3 is not on that account an order which is not issued under Sub-section (1) of Section 3.

10. There is in our judgment no warrant for the contention that under Sub-section (2) of Section 3 only specific orders directed against individuals can be passed. It is true that by Clause (f) of Sub-section (2) of Section 3 it is open to the Central Government in exercise of its authority under Sub-section (1) to issue an order requiring any person holding stocks of an essential commodity to sell the whole or a part of the stock at such prices and to such persons or class of persons or in such circumstances as may be specified in the order. That, however, does not justify the view that the order must be directed to nay specified individual. The order may well be a general order, i.e., applicable to a class of people or generally or the special order. In Santosh Kumar Jain's case : 1951CriLJ757 to which he have already referred the validity of certain orders issued by the order of the Governor of Bihar under the Sugar and Sugar Products Control Order, 1947, issued by the Government of Bihar was challenged on the ground that the Provincial Government was entitled to issue only general orders and not special orders. The Lordships of the Supreme Court held the Provincial Government in exercise of its delegated authority was entitled to issue orders general as well as specific. It was observed at page 307 (of SCR) : (at p. 202 of AIR) of the report:--

'It was contended that an order under Sub-section (1) should be in the nature of a rule or regulation of general application, like the Sugar and Sugar Products Control Order, 1947, issued by the Central Government on 4-8-1947, as the sub-section confers on the Central Government only the power to 'provide for regulating or prohibiting' the production supply, distribution, etc., of essential commodities, and does not authorise the making of an ad hoc or special order with respect to any particular person or thing. We see no reason to place such a restricted construction on the scope of the power conferred on the Central Government. The term 'notified order' which is defined as meaning 'an order notified in the official Gazette' is wide enough to cover special as well as general orders relating to the matters specified in Section 3. The power to provide for regulating or prohibiting production, distribution and supply conferred on an executive body may well include the power to regulate or prohibit by issuing directions to a particular producer or dealer or by requiring any specific act to be done or forborne in regard to production etc., and the provisions of Section 4 lend support to that view.'

After examining the scheme of the Act their Lordships negatived the contention that a specific order issued against an individual was nt within the competence of the Provincial Government. In the present case the reverse argument is sought to be urged before us. It is urged that only specific orders can be issued by the Provincial Government and general orders cannot be issued. In our judgment, the observations in Santosh Kumar Jain's case : 1951CriLJ757 clearly support the view that the Provincial Government in exercise of the delegated authority under Section 4 has power to issue orders, which are general as well as specific.

11. Our attention was invited to a judgment of the Punjab High Court reported in The State v. Amir Chand . That was a case in which the Rationing Controller of Ambala had issued an order under Clause 3 of the East Punjab Hoarding of Foodgrains Order, 1947, directing all owners of establishments, traders (including millers) and each house-holder (who held more than two maunds of rationed foodgrains at the commencement of rationing) in the rationed area of Ambala City and Ambala Cantonment, to submit a return in the enclosed form, showing stocks of rationed foodgrains held by them on 1-1-1949. This order was held by the Punjab High Court to be ultra vires the Rationing Controller. It was not disputed in the case that the authority of the Central Government under Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, was conferred upon the Provincial Government by a notification under Section 4 of the Act and in pursuance of that authority the Punjab Government issued the East Punjab Hoarding of Foodgrains Order, 1947. By that Order the District Magistrate was authorised at any time by general or special order, in writing, to direct any producer, firm, bank or other person to declare his stocks of foodgrains in such from as may be prescribed by the District Magistrate, and within such period as may be specified in the order and the District Magistrate exercised that power. The respondent in that case having contravened the order, was prosecuted under Section 7 of the Essential Supplies (Temporary Powers) Act. The trial Court convicted the respondent. In appeal to the Court of Session the order of conviction was set aside on the ground that the Rationing Controller had no power to pass the order in question. The matter was then taken in appeal to the High Court by the State. It was urged on behalf of the State that the order passed by the Rationing Controller was not a legislative order of the nature contemplated by Section 3 but was an executive order issued by him in exercise of the powers conferred by the Provincial Government by virtue of the East Punjab Hoarding of Foodgrains Order, 1947. The High Court declined to accept that contention and observed that the order was legislative in character and not executive. That is clear from the following observation in the judgment:

'The only point for decision in the present case is whether the Central Government had delegated to the Rationing Controller of Ambala the legislative powers which were exercisel by him on 31-12-1948.'

We have not been shown the text of the East Punjab Hoarding of Foodgrains Order. Prima facie the form in which the Order was passed suggest that it was an executive order, and no reasons have been set out in the judgment to show that the order was a legislative order. The only ground for holding that the Rationing Controller had no power to issue the order was that as the Provincial Government was exercising the delegated power it was incompetent to re-delegate the powers to the District Magistrate or to the Rationing Controller. If the power exercised by the Rationing Controller in issuing the order was legislative the impugned order was properly regarded as unauthorised: but if the power was executive in character it could be validly exercised by the officers of the Provincial Government. In the present case the order directed against an individual by the District Magistrate requiring him to sell wheat cannot be called a legislative order. The District Magistrate by requiring a person specified in the order to sell an essential commodity, to another, is only directing sale of that commodity by a specified individual to another and is not attempting to legislate. That being so, the principle of the case in cannot have any application to the facts of the present case.

12. Our attention was also invited to a judgment of the Orissa High Court reported in Fakir Mohmmad v. The King, : AIR1952Ori87 . In that case, it appears that a Sub-Divisional Magistrate purported to pass an order under Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, directing the appellant to supply a certain quantity of paddy at a specified price; and that Order was held to be ultra vires because the delegation of powers to that officer by the Central Government was not established. It appears that a general order was issued by the Central Government investing the Provincial Government with authority, under Section 3 and the Provincial Government had also issued an order relating to foodstuffs, but the general order was not on the record and the Order, which was passed by the Sub-Divisional Magistrate purported to be one not in exercise of any authority conferred upon him by the Provincial Government but pursuant to an order under Section 3(3) of the Essential Supplies (Temporary Powers) Act. In that case, if the Sub-Divisional Magistrate claimed to exercise authority in pursuance of an order under Section 3 of the Essential Supplies (Temporary Powers) Act by the Central Government, that authority had to be established, and in the absence of such authority indisputably the order passed by the Sub-Divisional Magistrate was unauthorised. This case is again not an authority for the proposition which is contended for, viz., that the Provincial Government exercising powers delegated to it under Section 4 of the Essential Supplies (Temporary Powers) Act must directly issue orders for carrying out the purpose of that Act.

13. We are unable, therefore, to agree with the view of the learned trial Judge that the impugned orders were unauthorised. We hold that the order directing sale of stocks wheat in the custody of the plaintiff was a valid order and within the competence of the District Magistrate. On that view of the case, it is unnecessary for us to consider whether the goods which were frozen and ultimately ordered to be sold by Orders dated 18-1-1949 did belong to the plaintiffs' firm or belonged to someone else. On that view of the case the appeal fails and is dismissed with costs.

14. It appears that an amount exceeding Rs. 8,000 is lying with the State of Bombay, being the price realized by sale of the stocks of wheat which are subject-matter of this litigation. The Magistrate, who tried Jayantilal Parsotam the original owner of the wheat, has directed that the stock of wheat which was the subject-matter of the criminal prosecution should be handed over to the accused. That order was confirmed in appeal to the Court of Session at Ahmedabad. A dispute therefore has arisen as to who is the owner of the goods. The Criminal Court appears to have taken the view that the wheat belongs to Jayantilal Parsotam, while the plaintiffs claim that they were the owners of the wheat. The question as to who is the owner of the goods must be decided in proper proceedings instituted against Jayantilal Parsotam or person interested therein. We cannot in this suit pronounce upon the question whether the plaintiffs from the State. The plaintiffs may, if so advised, file a suit after impleading proper parties, and obtain a declaration as to their right to receive that amount.

15. Appeal dismissed.


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