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Sitaram Jwala Prasad and ors. Vs. State of Uttar Pradesh and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberCivil Misc. Writ Nos. 7322 and 7788 of 1974
Judge
Reported inAIR1975All272
ActsEssential Commodities Act, 1955 - Sections 3 and 3B; ;Uttar Pradesh Coarse Foodgrains (Levy) Order, 1974
AppellantSitaram Jwala Prasad and ors.
RespondentState of Uttar Pradesh and ors.
Excerpt:
.....74/- per quintal as contained in schedule i of the impugned order is to be treated as the controlled price within the meaning of clause (i) of sub-section (3-b). 10. it was urged by the learned ajvo-cate-general that since only 50 per cent, of the coarse foodgrains were required to be sold to the state government, it was open to the dealers to sell the remaining 50 per cent of the foodgrains at any price which they liked to enable them to compensate themselves for any loss that they may suffer on account of the 50 per cent of the food-grains being sold to the government at the rate of rs......of the uttar pradesh coarse foodgrains (levy) order, 1974. the aforesaid order was issued by the state government of u. p. in exercise of the powers conferred by section 3 of the essential commodities act, 1955, read with the order of the government of india in the ministry of agriculture (department of food), published under g. s. r. 316 (e) dated june 20, 1972, with the prior concurrence of the central government. the paragraphs of the said order relevant for determination of the question raised are paragraphs 3 and 4 which read as hereunder :-- '3. (1) every licensed dealer shall sell to the state government at the scheduled price at a purchasing centre :-- (a) fifty per cent of course foodgrains in stock on the date of commencement of this order or coming into his custody or.....
Judgment:

N.D. Ojha, J.

1. These two writ petitions raise a common question of law and can conveniently be disposed of together. The question raised in these writ petitions is in regard to the validity of the Uttar Pradesh Coarse Foodgrains (Levy) Order, 1974. The aforesaid Order was issued by the State Government of U. P. in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955, read with the Order of the Government of India in the Ministry of Agriculture (Department of Food), published under G. S. R. 316 (E) dated June 20, 1972, with the prior concurrence of the Central Government. The paragraphs of the said Order relevant for determination of the question raised are paragraphs 3 and 4 which read as hereunder :--

'3. (1) Every licensed dealer shall sell to the State Government at the scheduled price at a purchasing centre :--

(a) Fifty per cent of course foodgrains in stock on the date of commencement of this order or coming into his custody or possession after the commencement of this Order.

(b) Fifty per cent of coarse foodgrains purchased by him or coming into his custody or possession for sale or disposal through him on commission basis or in any other manner every day beginning with the date of commencement of this order and until such time as the State Government may otherwise direct.

(2) No licensed dealer shall sell or otherwise dispose of or remove to any other place than his usual place of business or storage in a particular locality his stocks of coarse foodgrains unless he has sold the prescribed percentage to the State Government under Sub-clause (1) and obtained a release certificate in token thereof in respect of stocks left in balance with him.

(3) Any person on whose behalf the licensed dealer holds any stock of coarse food-grains, the whole or part of which such dealer is required to sell to the State Government under Sub-clause (1) shall, notwithstanding any contract or instrument to the contrary not be entitled to recover from the licensed dealer on account of the value of the stock so sold anything more than the price received by the licensed dealer under the said clause.

(4) The scheduled prices referred to in Clause 3 are for the fair average quality of coarse foodgrains conforming to the specifications prescribed in Schedule II and shall be subject, in relation to coarse foodgrains below that quality, to deductions specified therein.'

2. 'Coarse foodgrains' as defined in paragraph 2 (a) of the Order means one or more of the Coarse Foodgrains specified in Schedule I. 'Fair average quality' according to its definition as contained in paragraph 2 (d) means the quality containing an admixture or impurity not exceeding that specified in Schedule II. 'Licensed dealer' occurring in paragraph 3 has been defined in paragraph 2 (e) of the Order to mean a person holding a valid licence under the Uttar Pradesh Food-grains Dealers Licensing Order, 1964. Sub-paragraphs (h) and (i) of paragraph 2 define 'Schedule' and 'Scheduled price.' 'Schedule' means a schedule appended to this Order, whereas 'Scheduled price' for the fair average quality means the price specified in column 3 of Schedule I.

3 . In Schedule I the maximum price which has been fixed in regard to the food-grains in question is Rs. 74/- per quintal. The petitioners in writ petition No. 7322 of 1974 are licensed dealers in the grain and do the business of wholesale sale and purchase of grain, whereas the petitioners in writ petition No. 7788 of 1974 carry on business of selling coarse grains as kachcha and pucca arbatiyas. The ground on which the validity of the impugned order has been challenged is that the price of Rs. 74/- per quintal as fixed under the Order for the 50 per cent. of coarse food-grains which are required to be sold to the State Government is arbitrary and beyond the powers conferred by Section 3 of the Essential Commodities Act. In order to appreciate the submission made for the petitioners it will be useful to quote the relevant provisions contained in Section 3 of the Essential Commodities Act. They are as hereunder :--

'3. Powers to control production, supply, distribution etc., of essential commodities :--(1) 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 securing their equitable distribution and availability at fair prices, for securing any essential commodity for the Defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.

(2) Without prejudice to the generality of the powers conferred by Sub-section (1), an order made thereunder may provide:--

.....

(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 a State Government or to an officer or agent of such Government or to such other person or class of persons and in such circumstances as may be specified in the order:

.....

(3-A) (i) If the Central Government is of opinion that it is necessary so to do for controlling the rise in prices or preventing the hoarding of any food-stuff in any locality, it may, by notification in the Official Gazette, direct that notwithstanding anything contained in Sub-section (3) the price at which the food-stuff shall be sold in the locality in compliance with an order made with reference to Clause (f) of Sub-section (2) shall be regulated in accordance with the provisions of this sub-section.

(ii) Any notification issued under this sub-section shall remain in force for such period not exceeding three months as may be specified in the notification.

(iii) Where, after the issue of a notification under this sub-section any person sells foodstuff of the kind specified therein, and in the locality so specified in compliance with an order made with reference to Clause (f) of Sub-section (2) there shall be paid to the seller as price therefor-

(a) where the price can, consistently with the controlled price of the foodstuff, if any, fixed under this section, be agreed upon, the agreed price; (b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any; (c) where neither Clause (a) nor Clause (b) applies, the price calculated with reference to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the notification. (iv) For the purposes of Sub-clause (c) of Clause (iii) the average market rate prevailing in the locality shall be determined by an officer authorised by the Central Government in this behalf, with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighbouring locality; and the average market rate so determined shall be final and shall not be called in question in any court.

(3-B) Where any person is required by an order made with reference to Clause (f) of Sub-section (2) to sell any grade or variety of foodgrains, edible oilseeds or edible oils to the Central Government or a State Government or to an officer or agent of such Government and either no notification in respect of such foodgrains, edible oilseeds or edible oils has been issued under Sub-section (3-A) or any such notification having been issued has ceased to remain in force by efflux of time: then notwithstanding anything contained in Sub-section (3), there shall be paid as the price for the foodgrains, edible oilseeds or edible oils-

(i) The controlled price, if any, fixed under this section or by or under any other law for the time being in force for such grade or variety of foodgrains, edible oilseeds or edible oils; or (ii) whore no such price is fixed the price for such grade or variety of foodgrains, edible oilseeds or edible oils prevailing or likely to prevail during the post-harvest period in the area to which that order applies

Explanation:-- For the purposes of this sub-section, 'post-harvest period' in relation to any area means a period of four months beginning from the last day of the fortnight during which harvesting operations normally commence.'

4. That the foodgrains in respect of which the impugned order has been issued constitute 'essential commodity' within the meaning of Section 2(a) of the Essential Commodities Act admits of no doubt. Likewise, it cannot be doubted that the State Government has the power under Section 3(2) of the Act to issue an order requiring any person holding in stock any essential commodity to sell it to the State Government, and the impugned order in so far as it requires 50 per cent. of the coarse foodgrains to be sold to the State Government is covered by the power conferred by Section 3(2)(f) aforesaid. Sub-section (3-A) contains a provision in regard to foodstuffs generally, whereas Sub-section (3-B) deals specifically with food-grains, and it is an admitted case of the parties that the relevant sub-section which will apply in the instant case is Sub-section (3-B). In regard to the grade or variety of foodgrains which the State Government requires under Section 3(2)(f) of the Act -to be sold to it, the State Government is under an obligation to pay the price for the said foodgrains which is to be determined in accordance with Clauses (i) and (ii) of Sub-section (3-B).

5. It was urged by learned counsel for the petitioners that in view of the mandatory provisions contained in Sub-section (3-B) the State Government was bound to pay to the petitioners the price of the foodgrains which they have been required to sell to it in the manner contained in the aforesaid two Sub-clauses. According to learned counsel, the price which was payable to the petitioners was either the controlled price as contemplated by Clause (i) or the price prevailing or likely to prevail during the post-harvest period in the area where the petitioners are carrying on their business. It was urged that, in so far as the petitioners were aware, no controlled price had been fixed in respect of the food grains in question either under Section 3(2)(c) of the Act or under any other law for the lime being in force, and accordingly the petitioners were entitled to get the price of the foodgrains which they were required to sell to the State Government as contemplated by Clause (ii) aforesaid. In the affidavits filed on behalf of the petitioners it has been stated that the price if calculated according to Clause (ii) was much higher than Rs. 74/- per quintal as fixed in Schedule I of the Order.

6. For the respondents, on the other hand, it has been urged by the learned Advocate-General that the case was covered by Clause (i) of Sub-section (3-B) of Section 3 of the Act. According to him, Rs. 74/- per quintal as mentioned in Schedule I was the controlled price fixed by the Government in exercise of the powers conferred on it by Section 3(1) in general and Section 3(2)(c) in particular. It was submitted that when Section 3 conferred on the Government the power to fix the controlled price in regard to an essential commodity, that conferment included the power to fix the price in regard to a portion of that commodity and if the Government fixed in the instant case Rs. 74/- per quintal as the price in regard to the 50 per cent. of the foodgrains which were to be sold to it, it cannot be said that the fixation of the price was in any way in contravention of Sub-section (3-B) of Section 3 of the Act. It was pointed out that the fixation of the price of the foodgrains and the direction to sell 50 per cent. of the foodgrains to the Government could be contained in one and same order, and simply because no earlier order had been issued fixing the controlled price, it was of no consequence.

7. Having heard learned counsel for the parties we are of opinion that the submission made for the petitioners is well-founded. We are in agreement with the learned Advocate General that it is open to the Government to fix the controlled price and to require a certain percentage of food-grains to be sold to the State Government at that price in one and the same order. The question, however, is whether the requirement that 50 per cent. of foodgrains are to be sold to the State Government at the price mentioned in Schedule I viz. Rs. 74/- per quintal can be treated as controlled price of the grade or variety of foodgrains required to be delivered to any person in pursuance of an order made under Section 3(2)(c) of the Act, as contemplated by Clause (i) to Section 3(3-B). Clause fi) of Sub-section (3-B) speaks of controlled price, if any, for the grade or variety of foodgrains, edible oilseed, or edible oil and not in regard to a particular transaction of sale of such foodgrain, edible oilseed or edible oil. The controlled price contemplated by Clause (i), therefore, has to be with reference to either the grade of food-grain or its variety. If the Government issues a direction, as in the instant case, that 50 per cent. of the foodgrains are to be sold to it, it will have to pay to the seller a price as contemplated either by Clause (i) or Clause (ii) of Sub-section (3-B). It cannot say that whatever price it chooses to mention in the order as price payable in respect of the stock requisitioned by it would automatically become the controlled price of the grade or variety of the concerned foodgrain, as contemplated by Clause (i).

8. If the argument of the learned Advocate General that the price which the Government in its discretion chooses to pay in respect of the foodgrains which are required to be sold to it will automatically become the controlled price within the meaning of Clause (i) of Sub-section (3-B) is accepted, Clause (ii) thereof would become redundant. In no case would Clause (ii) be then applicable, for the moment the Government requires a particular percentage of foodgrains to be sold at a particular price, Clause (i) would automatically become applicable. In fact, if that was the intention of the Legislature in enacting Sub-section (3-B), it would have been simpler to use the phrase 'there shall be paid such price for the foodgrains, edible oilseeds or edible oils as may be fixed by the Government' in place of the phrase 'there shall be paid as the price for the foodgrains, edible oilseeds or edible oils' and then to have Clauses (i) and (ii) and the explanation to Sub-section (3-B). A similar phraseology could have been used even in Sub-section (3-A) in place of Sub-clauses (a), (b) and (c) of Clause (iii) of Sub-section (3-A). The distinction in the language of Sub-section (3-C) which deals with sugar and Sub-section (3-B) which deals with foodgrains also makes it clear that the criterion for calculating the price in case of one is altogether different from the other.

9. In this connection it would further be pertinent to note that the phrase 'there shall be paid as the price for the foodgrains, edible oilseeds or edible oils' towards the end of Sub-section (3-B) was substituted for the phrase 'there shall be paid to that person such price for the foodgrains, edible oilseeds or edible oils as may be specified in that ordei having regard to' the Essential Commodities (Amendment) Act, 1971 (Act No. 66 of 1971). By the same Act in Clause (ii) for the words 'the price' the words 'where no such price is fixed, the price' were substituted. An amendment was made in Clause (i) also. The last word in Clause (i) of Sub-section (3-B) as it stood earlier was 'and' in place of the word 'or'. The change in the phraseology of Sub-section (3-B) indicates that after its amendment by Act No. 66 of 1971 the criterion of the price payable was not the one 'as may be specified in that order having regard to.....' but in accordance with the provisions of Sub-section (3-B) itself. We are, therefore, not inclined to accept the submission made for the respondents that Rs. 74/- per quintal as contained in Schedule I of the impugned order is to be treated as the controlled price within the meaning of Clause (i) of Sub-section (3-B).

10. It was urged by the learned AJvo-cate-General that since only 50 per cent, of the coarse foodgrains were required to be sold to the State Government, it was open to the dealers to sell the remaining 50 per cent of the foodgrains at any price which they liked to enable them to compensate themselves for any loss that they may suffer on account of the 50 per cent of the food-grains being sold to the Government at the rate of Rs. 74/- per quintal. According to him, in this view of the matter, on the one hand, the dealers will not be put to any appreciable loss and, on the other, at least 50 per cent. of the foodgrains would be available to the consumers at a comparatively much lower price. This argument of the learned Advocate-General, based on economic equity, does not in our opinion help us in interpreting the meaning of the word 'controlled price' as used in Clause (i) of Section 3(3-B). Moreover, the Legislature has achieved the aforesaid object in the case of stock of sugar required to be delivered in pursuance of an order made under Section 3(2)(c) by enacting Section 3(3-C) and wording it differently. If what the learned Advocate General urges was the real intention of the Legislature it would have enacted Sub-section (3-B) on lines similar to Sub-section (3-C) but it has not done so.

11. Accordingly, we are of opinion that even though the State Government had full authority to require 50 per cent, of the food-grains to be sold to it as contemplated by the impugned order, it was not open to it to have fixed Rs. 74/- per quintal as the pries payable in respect of such foodgrains. If the State Government desires to purchase 50 per cent, of the foodgrains as contemplated by the Order, it must pay its price as contemplated by Sub-section (3-B).

12. In the result, both these writ peti-tions succeed in part and are allowed to this extent that such of the provisions in the impugned Order as fix the price of the food-grains to be sold to the State Government at the scheduled price, namely Rs. 74/- peri quintal, are held to be ultra vires the powers conferred on the State Government by Section 3 of the Essential Commodities Act, and the State Government is directed not to compel the petitioners to sell 50 per cent of the. foodgrains to it at the aforesaid price. If will, however, be open to the State Government to require the 50 per cent. of foodgrains to be sold to it if it pays price therefor in accordance with Sub-section (3-B) of Section 3 of the Essential Commodities Act. In the circumstances of the case, the parties will bear their own costs.


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