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Sri Venkateswara Rice Mill and ors. Vs. State of Andhra Pradesh and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAndhra Pradesh High Court
Decided On
Case NumberWrit Petn. Nos. 4110 and 4111 of 1974
Judge
Reported inAIR1975AP84
ActsEssential Commodities Act, 1955 - Sections 3(2); Andhra Pradesh Rice Procurement (Levy) and Restriction on Sale Order, 1967
AppellantSri Venkateswara Rice Mill and ors.
RespondentState of Andhra Pradesh and anr.
Appellant AdvocateP. Babulu Reddy and ;D. Sudershan Reddy, Advs.
Respondent AdvocateGovt. Pleader for Transport
DispositionPetition dismissed
Excerpt:
civil - validity of act - section 3 (2) (c) of essential commodities act, 1955 and clause 3 (1) of a.p. rice procurement (levy) and restriction on sale order, 1967 - petition filed challenging validity of clause 3 (1) of a.p. order - object of order to make rice available at reasonable price to consumer - dealer or miller asked to sell at notified price which was fixed after considering various factor and after being ensured dealer would not suffer any loss - held, order is valid. - .....charges, to sell levy rice to an agent or officer duly authorised by the govt. at the notified price. it is, therefore, necessary to refer to the relevant provisions of the procurement order and the essential commodities act.4. the government of andhra pradesh by virtue of the powers conferred upon it by clause (f) of sub-section (2) read with sub-sections (3), (3-b) and (5) of section 3 of the essential commodities act made the procurement order. the object of promulgating this order is to restrict sale and movement of rice within the state of andhra pradesh, the underlying idea being to maintain a price level and to make the essential commodity viz. rice available at a reasonable price to the consumer. clause 3 which has come in for challenge, is in these terms:'3. levy on rice: 1......
Judgment:

Obul Reddi, C.J.

1. In these two writ petitions the validity of clause 3 (1) of the Andhra Pradesh Rice Procurement (Levy) and Restriction on Sale Order, 1967 (hereinafter referred to as the 'Procurement Order') is involved. For the purpose of determining the question involved it would suffice if we refer to the facts stated in W. P. No. 4110 of 1974.

2. There are 37 petitioners. Among them petitioners 1 to 30 are millers and petitioners 31 to 37 are dealers. The millers carry on milling operations for hire and none of them carry on business in foodgrains. The millers i, e. petitioners 1 to 30 do not hold foodgrains dealers' licence. According to them, dealers having licence and producers bring paddy to their mills for milling purposes and therefore when they do not produce or manufacture rice' they cannot he called upon to sell particular percentage of rice milled at their respective mills under the rice levy system. Therefore, what they contend is this rice levy applies only to dealers and not to millers who have no licence to carry on trade in rice. It is their case that they only collect milling charges and nothing more.

3. Mr. Babulu Reddy the learned counsel appearing for the petitioners in both the petitions strenuously contended relying upon the decision of Chinnappa Reddy J. in W. -P. No. 1291 of 1968 and batch dated 22-3-1968 that it is contrary to the requirements of the Procurement Order to call upon millers, who were not dealers and who only mill paddy on receipt of hire charges, to sell levy rice to an agent or officer duly authorised by the Govt. at the notified price. It is, therefore, necessary to refer to the relevant provisions of the Procurement Order and the Essential Commodities Act.

4. The Government of Andhra Pradesh by virtue of the powers conferred upon it by clause (f) of sub-section (2) read with sub-sections (3), (3-B) and (5) of Section 3 of the Essential Commodities Act made the Procurement Order. The object of promulgating this Order is to restrict sale and movement of rice within the State of Andhra Pradesh, the underlying idea being to maintain a price level and to make the essential commodity viz. rice available at a reasonable price to the consumer. Clause 3 which has come in for challenge, is in these terms:

'3. Levy on rice: 1. Every miller carrying on rice milling operations shall sell to the agent or an officer duly authorised by the Government in this behalf of at the notified price and at such percentage of the total quantity of each variety of rice produced or manufactured by him in his rice mill every day as is specified for each district in the schedule.

(2) Every dealer shall sell to the agent or an officer duly authorised by the Government in this behalf at the notified price and such percentage of the total quantity of

(a) each variety of rice got milled by him every day out of his stocks of paddy, and

(b) each variety of rice purchased or otherwise acquired by him for the purpose of sale from persons other than millers or dealers as is specified for each district in the Schedule:

xx xx xx (3) Every dealer or every miller who comes into possession of any stock of paddy or rice not Being his own shall. .....

(a) furnish full particulars of the owner or other persons from whom he got possession of such stock to the Enforcement Officer and the Collector of the district or to such other person as may be authorised by them in this behalf.

(b) prove when so required, to the satisfaction of the Enforcement Officer, Collector or the person authorised by them in this behalf that he has no power of disposal by sale or otherwise over such stock of rice.

(c) continue to keep such stock in his custody and not part with its possession in any manner whatsoever until a direction is received by him from the Enforcement Officer or the Collector or the person authorised by them regarding the manner of disposal of such stock.'

Sub-clause (1) of clause 3 is applicable to a miller who carries on rice milling operations. A reading of the second part of that clause makes it clear that the first part of the clause applies only to such of the millers who produce or manufacture rice in their rice mill. It is the case of the millers in these petitions that they do not produce rice but they only mill paddy brought to them for conversion into rice.

5. In the counter affidavit filed by an Assistant Secretary to the Government it is admitted by him that clause 3 (1) is in general terms and that such of those millers who mill third party's paddy are exempt provided they comply with the requirements of clause 3 (3).

6. The petitioners have filed these writ petitions on receipt of notice from the District Revenue Officer calling upon them to sell rice at the notified price as specified in clause 3 (1). What Mr. Babulu Reddy contends is that the authorities have all the necessary material to know whether there was compliance with the requirements of clause 3 (3) and therefore the authorities should have verified from the records before issuing the impugned notices as to whether they could be called upon to sell levy rice in accordance with the requirements of clause 3 of the Procurement Order. It should be remembered that when any exemption is claimed from the operation of law it is for the party (hat claims exemption to establish that he is entitled to such exemption under the provisions of the law which he relies upon. Clause 8 (3) makes it obligatory on the part of every dealer or every miller, when he comes into possession of any stock of paddy or rice which is not his own, to furnish the particulars in the manner stated in clauses (a) (b) and (c). If a miller or dealer satisfies the requirements of clauses (a) (b) and (c) of Sub-clause (3), there is no question of his having to sell to the Government at the 'notified price' the quantity that is required to be sold by him under clause 3 (1). The petitioners, therefore, should have answered the notices issued to them relying upon clauses (a), (b) and (c) of Sub-clause (3). If the particulars already furnished by them are the particulars which they should have furnished in accordance with the requirements of Clauses (a) (b) and (c) and in spite of furnishing those particulars the District Revenue Officer had called upon them to sell rice in terms of sub-Clause (1) or (2) of Clause 3, as the case may be, then the petitioners could have moved this Court under Article 226 of the Constitution. In other words, we are of the opinion that these writ petitions are premature. The Assistant Secretary to the Government who has filed the counter affidavit, has conceded the position that a miller, who converts paddy which is not his own and which a third party brings to his mill for milling purposes, is exempt from the operation of Clause 3 (1). That being the case we see no real dispute at all in these cases. If as now contended by Mr. Babulu Reddy his clients have all the necessary particulars which require to be furnished by them under Sub-clauses (a) (b) and (c) of Sub-clause (3) they are at liberty to produce the same before the authorities and satisfy them, So far as the dealers are concerned there is no dispute, for every dealer under Sub-clause (2) of clause 3 has to sell rice in the manner provided therein at the notified price.

7. The learned counsel next invited our attention to Section 3(2)(c) and 3(2)(f) of the Essential Commodities Act to contend that the Procurement Order has been made by the Government in excess of the powers conferred upon it. Section 3 deals with power to control production, supply distribution regulation etc. of essential commodities. The validity of Section 3 of the Essential Commodities Act has been upheld by the Supreme Court in a number of cases. The object of enacting the Essential Commodities Act is to maintain or increase supplies of essential commodities and also to secure their equal distribution, that is to say, to make the essential commodities available to all people at fair prices. It is also the object of the Act to secure essential commodities for the defence of India and for the efficient conduct of military operations. In exercise of the powers conferred upon the Central Government by Section 5 it delegates its powers under the Act to the State Government or an officer or authority subordinate to the State Government as may be specified by it. It is by virtue of such delegation of powers that the State Government has issued the procurement Order. The Procurement order, as has already been noticed, is issued in exercise of the powers conferred under the various provisions of Section 3 of the Essential Commodities Act. We are now concerned with clauses (a) (c) and (f) of subsection (2) of Section 3 which are in these terms.

'Section 3(2) without prejudice to the generality of the powers conferred by subsection (1) an order made thereunder may provide.

(a) for regulating by licences, permits or otherwise the production or manufacture of any essential commodity;

xxx xx xx (c) for controlling the price at which any essential commodity may be bought or Sold;

(f) for requiring any person holding in stock any essential commodity to sell the whole or a specified part of the stock to the Central Government or State Govt. or to an officer or agent of such Govt. or to such other person or class of persons and in such circumstances as may be specified in the order.'

It is by virtue of the powers conferred under Clause (a) of Sub-section (2) of Sec. 3 that licences are issued to dealers andmillers in regard to production and manufacture of essential commodities. Clause 'c) empowers the Government to control the price of any essential commodity which may be bought or sold, that is to say, in our case either a miller or a dealer. Clause (f) further provides to sell the whole or any specified part of the stock either to the Government or to an officer authorised by such Government or to any other person in the manner specified in the order. The Procurement order imposes a levy on rice, A miller or a dealer is under no obligation to sell the entire stock that he mills or produces. He is only asked to sell such percentage of the total quantity as may be specified in the Schedule. A milter converts several varieties of paddy and having regard to each variety of paddy that a miller mills, a particular percentage of the total quantity he has to sell at a notified price. What Mr. Babulu Reddy contends is that while it is open to the Government to control the price line and fix a price for any essential commodity, it is not open to it to ask for sale of rice at a notified price which means a sale or a purchase price. In other words, according to him Section 3(2)(c) only provides for control of price and does not speak of fixing any sale price or purchase price. In support of his contention the learned counsel relied upon an unreported decision of the Mysore High Court W. P. Nos. 2126 to 2161 of 1974 and batch dated 2-7-1974 (Mys) Justice Chandrasekhar relied upon an earlier decision of the same Court reported in Jinaraja Hegde v. State of Mysore, (1970) 2 Mys LJ 224 at p. 227 = (AIR 1971 Mys 12, at p. 14). The contention of the Government Pleader in Jinaraja Hegde's case was that the prices specified in the Schedule to the Levy Order should themselves be regarded as the controlled prices referred to in Clause (i) of sub-section (3-B) of Section 3 of the Essential Commodities Act. That was repelled by the Division Bench. The learned Judges were of the view that the price Exed under Schedule II is not the controlled price. According to them, it was common knowledge that paddy was sold at much higher price in the open market both by the growers and the dealers than the price mentioned in the Schedule, It is in that view that the learned Judges held:

'We cannot therefore call this price as the controlled price, as contemplated by Clause (i) of sub-section (3-B) of Section 3 of the Act. The wording of the Levy Order leaves no doubt in our mind that the price that has been fixed in Schedule II is the 'purchase price', and not the controlled price.'

Chandrasekhar J., expressed his agreement with that view and that view is called in aid by the learned counsel Mr. Babulu Reddy here. We are unable to subscribe to the view expressed by the Mysore High Court in the two cases referred to above. The expression 'control' in Section 3(2)(c) lakes within its ambit restrictions, regulations, curbs, restraints. To control a thing is to have the right to exercise a directing or governing influence over it. (Black's Law Dictionary page 399). The object of procuring from millers or dealers by the Government is to make rice available at reasonable price to the consumers. A dealer or miller is called upon only to sell a portion of the total quantity of each variety of rice at a notified price. It i.i not the case of the petitioners that the Government while fixing the notified price has not taken into consideration the rate at which a dealer or miller purchased paddy, conversion charges, transport charges and other incidental expenses and also the marginal profit. So, a notified pries is fixed only after taking the relevant factors into consideration, that is to say, to see that no dealer or miller suffers loss by his having to sell a portion of the total quantity of the rice which he produces or manufactures. The fixation of the price has not been questioned before us. What Mr. Babulu Ready contends is that the notified price is not the controlled price and Sub-clause (c) of Section 3(2) only empowers the Government to control prices and not to notify prices. We are unable to see any force in this contention. The word 'control' as has already been observed by us, takes in regulation of the prices also by notifying a particular price. To the extent of Sub-clause (1) of Clause (3) the price at which levy rice should be sold is controlled. It is not open to a miller or dealer to sell at a rate above the notified price. In other words, the price at which a milter or dealer is to sell is controlled. The expression 'control' is of very wide amplitude. Clause (f) of Section 3(2), as already seen empowers the Government to require any person holding in stock any essential commodity to sell the whole or a specified part of the stock to the Central Government or the State Government. The procurement Order is issued in exercise of the powers conferred upon the Government tinder Sub-clause (f). We see absolutely no merit in the attack on the Procurement Order.

8. Mr. Babulu Reddy next sought to contend that the expression 'notified price' has been defined with reference to the price fixed in the Andhra Pradesh Rice (Procurement Ex. Mill Prices) Older, 1970 but that A. P. Rice (Procurement Ex. Mill Prices) Order 1970 has been subsequently superseded and therefore when levy rice is purchased by the Government in exercise of its powers under either Sub-clause (1) or Sub-clause (2) of clause (3) a dealer or miller should be paid at the market rate. The fact that the Andhra Pradesh Rice (Procurement Ex. Mill Prices) Order 1970 has been superseded by a subsequent order of the same kind notifying the price is not a ground for holding that the petitioners would be entitled to be paid when they sell levy rice at the market rate. However, it will be open to the petitioners to urge before the appropriate authorities for payment at the market rate, if no price has been fixed or notified.

9. For the reasons recorded, we find no merit in these two writ petitions and they are accordingly dismissed.


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