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Om Prakash Agarwal Vs. State of U.P. and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtAllahabad High Court
Decided On
Case NumberWrit Petn. No. 11720 of 1983
Judge
Reported inAIR1985All172
ActsEssential Commodities Act, 1955 - Sections 3 and 7; Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 - Sections 3(1); Cement Control Order, 1967; Uttar Pradesh Cement Control Order, 1973; Uttar Pradesh Essential Commodities (Display of Prices and Stock and Control of Supply and Distribution) Order, 1977
AppellantOm Prakash Agarwal
RespondentState of U.P. and ors.
Appellant AdvocateN.K. Chaturvedi, Adv.
Respondent AdvocateDeputy Govt. Adv.
DispositionPetition allowed
Excerpt:
.....order, 1973 and u.p. cement control order, 1972 - person detained is dealing in business of non-levy cement with various irregularities - no violation of u.p. cement control order - detention is illegal. - - (1). the central government or the state government or any officer of the central government, not below the rank of a joint secretary to that government specially empowered for the purposes of this section by that government, or any officer of a state government, not below the rank of a secretary to that government specially empowered for the purposes of this section by that government may, if satisfied, with respect to any person that with a view to preventing him from acting in any manner prejudicial to the maintenance of supplies commodities essential to the community it is..........to as the act).2. the detenu, a resident of 4/108, kutchery ghat, agra and a retail dealer in non-levy cement, is carrying on his business in premises no. 37/105, nagla padi, saran nagar,' agra, under a licence granted to him under the u. p. cement control order, 1973 for carrying on this business at 86/6, new agra. it was discovered in an inspection of the said two premises made by raiding party consisting of the additional district magistrate (civil supplies), district supply officer, senior marketing inspector and two public witnesses. during the inspection it was also found that the detenu was not only carrying on his business at a premises other than the place mentioned in his licence but was committing several irregularities. for example. 39 original cash memos purported to have.....
Judgment:

A.S. Srivastava, J.

1. By this petition, under Article 226 of the Constitution of India, Om Prakash Agarwal (hereinafter referred to as the detenu) questions the validity of his continued detention by an order dated 2-8-1984 of the District Magistrate, Agra, passed under Section 3(1) of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 (hereinafter referred to as the Act).

2. The detenu, a resident of 4/108, Kutchery Ghat, Agra and a retail dealer in non-levy cement, is carrying on his business in premises No. 37/105, Nagla Padi, Saran Nagar,' Agra, under a licence granted to him under the U. P. Cement Control Order, 1973 for carrying on this business at 86/6, New Agra. It was discovered in an inspection of the said two premises made by raiding party consisting of the Additional District Magistrate (Civil Supplies), District Supply Officer, Senior Marketing Inspector and two public witnesses. During the inspection it was also found that the detenu was not only carrying on his business at a premises other than the place mentioned in his licence but was committing several irregularities. For example. 39 original cash memos purported to have been issued to the purchasers and only one counter-foil were found in the shop. They were all loose. None of the 39 cash memos contained the names and addresses of the purchasers to whom they related. No stock register or sale register was available. Instead a rough copy was found in which stock of cement entered on that date was 890 bags. On physical verification the actual stock was 923 bags i.e. 33 bags in excess of the stock. No Rate and Stock board was found displayed. The detenu when asked to produce his licence, he slipped away from the shop without producing it. Thus he was found carrying on his business by contravening the provisions of U. P. Cement Control Order, 1973 and U. P. Essential Commodities (Display of Prices and Stock and Control of Supply and Distribution) Order, 1977. Consequently the Senior Inspector of District Supply Office lodged a report on the same date with the Police for initiating proceedings against the detenu under Section 3/7 of the Essential Commodities Act. On 26-7-1964 the detenu surrendered in Court and before he could secure his release on the bail, the impugned order was passed by the District Magistrate, Agra, on 2-8-1984. On 3-8-1984, this order was served on the detenu also in jail.

3. On 14-8-1984 a representation was made by the detenu to the State Govt. which was forwarded by the Superintendent, District Jail, to the district Magistrate where it was received on the same day at 8.45 P.M. 15-8-1984 being a public holiday due to the Independence Day, this representation along with the comments of the District Magistrate was sent to the State Govt. on 16-8-1984. A copy of the representation was also sent to the Advisory Board (Detention) Lucknow, where it was received on 17-8-1984. The representation of the detenu was ultimately rejected by the Governor of Uttar Pradesh on 27-8-1984 which was communicated to the detenu on 1-9-1984.

4. The grounds on which the impugned order was passed by the District Magistrate, as specified in the order, are; that on 4-7-1984 the detenu was found carrying on business at premises other than the one permitted by his licence; that the inspection of his shop made on 4-7-1984 by a raiding party further revealed that no stock or sale register was maintained by him; that no stock board and rate board were displayed at his shop; that no proper cash memos were issued to the purchasers in respect of sales; that the stock of cement at the shop on 4-7-1984 was found to be in excess i.e. even the rough stock book found at the shop was not correctly maintained. The detenu was, therefore, carrying his business in violation of the provisions of the U. P. Cement Control Order, 1973 and the U. P. Essential Commodities (Display of Prices and Stock and Control of Supply and Distribution) Order, 1977 not only punishable under Section 3/7 of the Essential Commodities Act but also acting in a manner prejudicial to the maintenance of supplies of cement, a commodity essential to the community.

5. The main ground on which the detenu has attacked his detention is that the provisions of U. P. Cement Control Order, 1973 and U. P. Essential Commodities (Display of Prices and Stock and Control of Supply and Distribution) Order, 1977 are not applicable to the sale of non-levy cement in the State. According to him, non-levy cement ceased to be the controlled commodity after 28-2-1982 i.e. after the date on which Cement Control Order 1967 of the Central Govt. was amended by the Central Govt. by issuing a Notification No.S.O.105 E dated 28-2-1982 (hereinafter referred to as 1982 Notification). By this Notification the Central Govt. introduced partial decontrol on cement with effect from 28-2-1982 under which 33.4 per cent of cement produced by a cement factory was decontrolled for free sale in the market as non-levy cement. Sale of non-levy cement was thus exempted from the Regulatory provisions of not only Central Cement Control Order, 1967 but also from U. P. Cement Control Order, 1973 and the U. P. Essential Commodities (Display of Prices and Stock, and Control of Supply and Distribution) Order 1977. The provisions of U. P. Cement Control Order, 3973 imposing conditions on sale and distribution of non-levy cement by the State Govt. which are now inconsistent with the provisions of Cement Control Order, 1967 as amended by the 1982 Notification are illegal and inoperative. Therefore, no licence is now required under the provisions of U. P. Cement Control Order, 1973 for sale of non-levy cement in the State after 1982 Notification. By this Notification the Central Govt. has lifted all restrictions on the sale and distribution of non-levy cement. Therefore, even the State Govt. is now left with no jurisdiction to impose such restriction on the sale of non-levy cement after 28-2-1982 under the provisions of U. P. Cement Control Order, 1973 merely because they have not amended their Cement Control Order, 1973 to make it consistent with the Central Cement Control Order as amended. In fact the provisions of U. P. Cement Control Order cannot over ride the Central Cement Control Order as amended by 1982 Notificaton. The detenu, therefore, did not act prejudicial to the maintenance of supply of a commodity essential to the community.

6. The detenu has also challenged the correctness of the facts alleged to have been found at his shop by the inspecting party on 4-7-1984. It is not necessary to detail them because these controversies of facts will be resolved in the trial initiated against the detenu under Section 3/7 Essential Commodities Act. They cannot be resolved for the decision of this petition under Article 226 of the Constitution. However, those relevant for the decision of this petiton shall be mentioned at appropriate places.

7. The impugned order of detention is placed under Section 3 of the Act, This section reads as under :

'3. Power to make orders detaining certain person: (1). The Central Government or the State Government or any officer of the Central Government, not below the rank of a Joint Secretary to that Government specially empowered for the purposes of this section by that Government, or any officer of a State Government, not below the rank of a Secretary to that Government specially empowered for the purposes of this section by that Government may, if satisfied, with respect to any person that with a view to preventing him from acting in any manner prejudicial to the maintenance of supplies commodities essential to the community it is necessary so to (So, make an order directing that such person be detained.

Explanation :--- For the purposes of this sub-section, the expression 'acting in any manner prejudicial to the maintenance of supplies of commodities essential to the community' means --

I (a) committing or instigating any person to commit any offence punishable under the Essential Commodities Act, 1955 (10 of 1955), or under any other law for the time being in force relating to the control of the production, supply or distribution of, or trade and commerce in any commodity essential to the community; or

(b) dealing in any commodity : --

(i) which is an essential commodity as defined in the Essential Commodities Act, 1955 (10 of 1955), or

(ii) with respect to which provisions have been made in any such other law as is referred to in Clause (a), with a view to making gain in any manner which may directly or indirectly defeat or tend to defeat the provisions of that Act or other law aforesaid.

(2) ...................'

8. The expression 'acting in any manner prejudicial to the maintenance of supplies of commodities essential to the community' in Section 3(1) above has been considered by a Division Bench of this Court in Munna Lal Agarwal v. District Magistrate, Aligarh 1984 EFR 188 : (1984 All U 753) and it has been held therein that :

'The expression 'acting in any manner prejudicial to the maintenance of supplies of commodities essential to the community' used in Section 3(1) of the Prevention of Black-Marketing and Maintenance of Supplies of Essential Commodities Act, 1980, covers within its ambit only such activities as have been specified in Clauses (a) or (b) of the Explanation appended to the said sub-section, and no other activity. Accordingly only such activities which result, in committing or instigating any person to commit any offence punishable under the Essential Commodities Act or under any other law for the time being in force relating to control of the production, or supply or distribution of, or trade and commerce in, any commodity essential to the community or dealing in any commodity which is an essential commodity as defined in Essential Commodities Act, 1955, or with respect to which provisions have been made in any such other law, with a view to making gain in any manner which may directly or indirectly defeat or tend to defeat the provisions of the Essential Commodities Act or other such law, alone can be considered to be activities to prevent which an order for detention under Section 3(1) of the Prevention of Black-Marketing and Maintenance of Supplies of Essential Commodities Act, 1980, can be passed.'

9. In other words, an order of detention under this Section can be passed only when he--

either commits an offence punishable under (a) Essential Commodities Act or (b) under any other law relating to the control of production, supply or distribution of any commodity essential to the community, or, deals in any commodity which is 'essential commodity' (as defined in the Essential Commodities Act) or deals in a commodity the production, supply or distribution of which is controlled by any other law with a view to make undue profit commonly known as profit made by sale in black market.

10. It, therefore, follows that an order of detention under this Section can be passed only against a person who has either (1) committed an offence punishable under the Essential Commodities Act or under any other law relating to the control of production, supply or distribution of any commodity essential to the community or (2) he must be dealing in an 'essential commodity' as defined in the Essential Commodities Act or in a commodity essential to the community the production, supply or distributin of which is controlled by any other law with a view to make undue profit. An order of detention which does not fulfil any of the above two conditions cannot be said to be covered by Section 3(1) of the Act and is accordingly vitiated.

11. We shall now examine whether the case of the detenu in this case falls in any one of the two categories, mentioned above. Admittedly, on the date on which the order of detention was passed, the detenu was dealing in cement which was 'non-levy' cement under the Cement Control Order, 1967. This distinction between 'levy cement' and 'non-levy' cement was introduced in the Cement Control Order, 1967 by Order No.S.O.l05(E) dated 28-2-1982 issued by the Ministry of Industry (Department of Industrial Development) of the Government of India. Prior to this there was no such distinction. It was by this Order that the Central Govt. amended the Cement Control Order, 1967. By these amendments 'cement' was classified into two categories viz. 'levy cement' and 'non-levy cement'. It is not that these two categories were cement of different qualities, because this amendment has not changed the definition of 'cement' as contained in Section 2(a) of the Cement Control Order, 1967. The categorisation was made with regard to installed capacity of the cement plant. 'Levy cement' was defined with regard to the installed capacity of the plant as may be defined by the Central Govt. (not being more than 66.6%) to which only the cement Control Order 1967 was applicable from the date of Notification i.e. from 28-2-1982, The remaining part has been categorised as 'non-levy' cement to which the Cement Control Order, 1967 ceased to apply from that date. In order words, non-levy cement is that cement which was released by the Central Govt. from its control exercised under the Cement Control Order, 1967 w.e.f. 28-2-1982.

12. The preamble of the Cement Control Order, 1967 indicates that one of the objects of this Order is to secure availability of cement at fair price. Clause 10(1) of the Cement Control Order, 1967 reads as under : --

'The maximum price at which cement may be sold by a dealer (whether wholesale or retail) shall be such as may be fixed by the State Government and no dealer (whether wholesale or retail) shall sell cement exceeding such maximum price.'

13. Under Clause (1-A) of the Cement Contra' Order, 1967, this order applied only to 'levy cement' and not to ''non-levy cement', Evidently, therefore, the sale of 'non-levy' cement became free of the price control imposed by Clause (10) of the Cement Control Order, 1967 with effect from 28-2-1982, That is, on the date of the order of detention, the sale of non-levy cement was not subject to the price control as provided in Clause (10)(1) of that order. Therefore, no maximum price can be fixed by the State Govt. for sale of non-levy cement either whole-sale or retail.

14. This was the position on the date of detention of the detenu under the Cement Control Order, 1967. But on that date another order viz. the U. P. Cement Control Order, 1973, made under Section 3 of the Essential Commodities Act, was in force. This Order was not amended by the Slate in 1982 following the amendment made by the Central Govt. in Cement Control Order, 1967. According to the learned Addl. Govt. Advocate, the control in the sale of cement imposed by the U. P. State Cement Control Order 1973 continued to apply to cement which has been declared 'non-levy' under the Cement Control Order, 1967 and has been released from all the restrictions imposed by that order.

15. It is submitted by the learned counsel for the detenu that after lifting of control on the sale of 'non-levy' cement by the Central Govt., the State of U. P. is left with no authority to interfere with the sale of the same and enforce the U. P. Cement Control Order, 1973. In support of this submission the learned counsel referred to a decision of the Patna High Court reported in Shyam Sunder Prasad Bhadani v. State of Bihar 1984 EF.R. 200 in which it has been held that : --

'the new provisions brought in by amendment and discussed above indicates that non levy cement has been completely released from the restriction and control applicable earlier to the total production of cement. Only the levy cement is now affected them. The power to earmark levy cement out of the total production lies with the Central Government. The Dstrict Magistrate or the Food Commissioner or the State of Bihar does not have any authority to interfere with same. The effect of seizing stock of non-levy cement and selling the same at the controlled price to disturb the proportion fixed in this regard by the Central Government. This is not permissible. As observed above the law as it stands now does not permit any control of price of non-levy cement.'

It may, however, be pointed out that the above observations do not have a direct application to this case. Unlike our State, Bihar Govt. has also amended the Bihar Cement Control Order, 1972 in the line similar to the Central Govt. Cement Control Order, 1967 by introduction of definitions of 'levy cement' and 'non-levy cement' in Clause (2) of their Order. This is amply clear from the following remarks contained in Shyam Sunder Bhadani's case ;

'...........The Bihar Cement Control Order, 1972 was also amended in similar line by introduction of the definitions of levy cement and non-levy cement in Clause 2. By a new Clause 8(a) the District Magistrate has been empowered to fix the price per bag of levy cement and the amended Clause 9 requires a person desirous of purchasing levy cement to obtain a permit. The original Clause 12 prohibiting the sale of cement at a higher price than fixed has been amended by substituting levy cement in place of cement.'

16. In our State, no such amendment has yet been made i.e. 'levy-cement' has not yet been substituted for 'cement' for the purposes of restrictions imposed by the U. P. Cement Control Order, 1973. Therefore, the question that needs examination is whether the restrictions contained in the Cement Control Order, 1973 will continue to affect sales of 'non-levy' cement despite its sale being decontrolled under the Cement Control Order, 1967. In other words whether a dealer of 'non-levy' cement in U. P. still needs a licence under the Cement Control Order, 1973 and whether a breach of any term or condition of the licence would mean contravention of that order.

17. The Cement Control Order, 1973 has been made by the State of U. P. in the exercise of powers under Section 3 of the Act delegated to it by the Order No.S.O. 1844 dated June 18, 1966 issued by the Govt. of India. Ministry of Commerce in the exercise of powers under Section 5 of the Essential Commodities Act (hereinafter referred to as the Delegation Order) for imposing a control on the production, supply and distribution of cement in the State. This delegation of power made by the Govt. of India is not an absolute one. It provides in Clause (a)(iii) of the Delegation Order :

'that no order shall be issued in pursuance of the powers hereby delegated if it is inconsistent with any order issued by the Central Government under the said Act.'

18. Therefore, any order of the State Govt. made in the exercise of delegated powers of the Central Govt. under Section 3 of the Essential Commodities Act cannot be inconsistent with the orders issued by the Central Govt under that Act. The reason for the above provision is not far to seek. Section 3 of the Essential Commodities Act confers power on the Central Govt to make an order for the control of all kinds of prices viz. ex-factory, wholesale or retail of any essential commodity and for the control of its production, supply and distribution whenever it (the Central Govt) is of the opinion that it is 'necessary or expedient' to do so. If in the exercise of this power the Central Govt. makes an order for the control of the production, supply and distribution with respect to a part of the installed capacity of commodity manufactured by a plant (in this case 'levy cement') and expressly releases the remaining part of the installed capacity of that plant (in this case non-levy cement'), the State Govt. in the exercise of its powers delegated under Section 5 of the Essential Commodities Act, will not be empowered to make an order inconsistent with the order issued by the Central Govt. in respect of the same commodity. It is this fact which has been emphasised) by Clause (a)(iii) of the Delegation Order. It is, therefore, evident that the State Govt. is not empowered to issue any Order in the exercise of its delegated powers which is inconsistent with any Order issued by the Central Govt. under the Essential Commodities Act and if such an order issued, it would be beyond its competence. But in this case the provisions of U. P. Cement Control Order, 1973 is not inconsistent with any order made by the Central Govt. under Section 5 of the Essential Commodities Act but is inconsistent with the provisions of the Cement Control Order 1967 as amended by the 1982 Notification which was made by the Central Govt. in the exercise of its powers under Section 18-G and Section 25 of the Industries (Development and Regulation) Act, 1951 (65 of 1951). Therefore, U. P. Cement Control Order, 1973 does not seem to be hit by Clause (a) (iii) of the Delegation Order, Still we cannot close our eyes to the fact that where only levy cement is subject to control under the Cement Control Order, 1967 with effect from 28-2-1982 and non-levy cement is free from any control, U. P. Cement Control Order, 1973 has placed non-levy cement under control. In other words, it has the effect of destroying the provisions of the Central Cement Control Order vis-a-vis non-levy cement and to that extent it is repugnant to the Cement Control Order, 1967 as amended by the 1982 Notification. Both the Cement Control Order, 1967 and the U. P. Cement Control Order, 1973 are orders issued in exercise of the powers conferred by a statute. Therefore, they for all practical purposes have the same effect as if enacted in that statute and inconsistency between them will attract the application of Article 254 of the Constitution of India. Such repugnancy is therefore hit by Article 254 of the Constitution of India and, even if not hit by this Article, it cannot be permitted to hold the field if the State of U. P. does not see the wisdom of making suitable amendments in the U. P. Cement Control Order, 1973 as the State of Bihar has done with respect to their Bihar Cement Control Order, 1972. In other words, the U. P. Cement Control Order, 1973 would remain inoperative to the extent it is sought to be applied with non-levy cement. That is. The law as it stands now after 28-2-1982 does not permit control of non-levy cement in a manner which is not consistent with the Cement Control Order, 1967 issued by the Central Govt. It cannot be disputed that this does not mean that a retail dealer in levy cement (which of course is also cement as defined in the U. P. Cement Control Order, 1973) should be given a free hand in indulging in activities enabling him to make undue gain. It is not within our competence to suggest here the ways and means for achieving this object. Annexure '12' of the petition shows that the State Govt. is already aware of the above situation and is thinking on these lines. This annexure is a copy of Confidential D.O. No. 7632/29-0-124/Cement dated 25-10-1982 of the Commissioner and Secretary, Khadya Ratha Rasad Anubhag-2 of the State Govt. After pointing out the situation created by the amendment of Cement Control Order, 1967 by 1982 Notification, it has by its para 7 issued a direction to all the District Magistrates that no prosecution be initiated against the dealers of non-levy cement in their districts till the position in this regard is got after consultation with the Govt. of India, clarified. The words *(.......) further indicate that all the previous orders issued in respect of sale of cement in the State were also amended along with the issue of this letter. In that event, it appears strange that the District Magistrate, Agra has fallen back on the U. P. Cement Control Order, 1973 without noticing para 7 of this Annexure which speaks of an amendment of the U. P. Cement Control Order, 1973 made prior to the issue of this letter. This part of the letter indicates that the enforcement of the provision regarding sale of cement in the State contained in the various Cement Control Order prior to this letter of 25-10-1982 were at least put off in respect of 'non-levy' cement.

19. If the order of detention is examined in the light of above discussions it would appear that it cannot be said that the detenu was dealing in 'non-levy' cement in contravention of the provisions of the U. P. Cement Control Order, 1973 even though he holds a licence for this business granted to him under this Order because the law as it now stands after the amendment of the Cement Control Order, 1967 with effect from 28-2-1982 does not permit control of 'non-levy' cement. The case of the detenu is, therefore, not covered by Section 3(1). Of the Prevention of Black Marketing and Maintenance of Supplies of Essential Commodities Act, 1980 and his continued detention under this section cannot he upheld.

20. The petition is accordingly allowed. The detenu shall be set free forthwith if not required in connection with any other case.


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