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S.K. Kalani and Co., Indore Vs. Iron and Steel Controller, Calcutta and ors. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtMadhya Pradesh High Court
Decided On
Case NumberMisc. Petn. No. 150 of 1967
Judge
Reported inAIR1969MP25; 1968MPLJ668
ActsIron and Steel (Control) Order, 1956; Constitution of India - Article 226
AppellantS.K. Kalani and Co., Indore
Respondentiron and Steel Controller, Calcutta and ors.
Appellant AdvocateG.M. Chaphekar, Adv.
Respondent AdvocateK.B. Dube, Govt. Adv.
DispositionPetition dismissed
Cases ReferredEshugbayi Eleko v. Officer Administering Government of Nigeria
Excerpt:
- - 1.,the iron and steel controller, calcutta, to withdraw the orders dated 14th october, 1966 and 5th december 1966 (annexures c and d) under which the producers are directed to suspend despatches of the iron and steel materials against all the indents to controlled as well as decontrolled categories planned prior to 1st march 1964 in respect of the petitioner-firm which is 'a registered stock-holder' under the iron and steel (control) order, 1956. the petitioner also prays that the respondents 2 and 3, namely, the planning officer, joint plant committee, calcutta, and the executive secretary, joint plant committee, calcutta, be prohibited from giving effect to the aforesaid orders issued by the respondent no. the petitioner-firm had obtained registration as 'stock-holder' under the..........the petitioner seeks a writ of mandamus directing the respondent no. 1., the iron and steel controller, calcutta, to withdraw the orders dated 14th october, 1966 and 5th december 1966 (annexures c and d) under which the producers are directed to suspend despatches of the iron and steel materials against all the indents to controlled as well as decontrolled categories planned prior to 1st march 1964 in respect of the petitioner-firm which is 'a registered stock-holder' under the iron and steel (control) order, 1956. the petitioner also prays that the respondents 2 and 3, namely, the planning officer, joint plant committee, calcutta, and the executive secretary, joint plant committee, calcutta, be prohibited from giving effect to the aforesaid orders issued by the respondent.....
Judgment:

Bhave, J.

1. By this petition under article 226 of the Constitution, the petitioner seeks a writ of mandamus directing the respondent No. 1., The Iron and Steel Controller, Calcutta, to withdraw the orders dated 14th October, 1966 and 5th December 1966 (Annexures C and D) under which the producers are directed to suspend despatches of the iron and steel materials against all the indents to controlled as well as decontrolled categories planned prior to 1st March 1964 in respect of the petitioner-firm which is 'a registered stock-holder' under the Iron and Steel (Control) Order, 1956. The petitioner also prays that the respondents 2 and 3, namely, the Planning Officer, Joint Plant Committee, Calcutta, and the Executive Secretary, Joint Plant Committee, Calcutta, be prohibited from giving effect to the aforesaid orders issued by the respondent No. 1 and be directed to plan the indents submitted by the Petitioner.

2. The petitioner-firm carries on business in iron and steel. When the Iron and Steel (Control of Production and Distribution) Order, 1941 was promulgated by the Central Government, the firm got itself registered as a 'registered stock-holder' under that Order with respect to its business carried on at Burwahs. The 1941-Order was superseded by another order, styled as 'The Iron and Steel (Control) Order, 1956' under which the registrations granted under the repealed Order were continued. The petitioner-firm had obtained registration as 'stock-holder' under the 1956-Order for its business carried on at Indore as well. The two registration certificates are Annexures A & B.

According to the procedure under the Iron and Steel (Control) Order, 1956, or its predecessor order, the Government of India used to allot State-wise quota of Iron and Steel and the States used to sub-divide that quota amongst the various stock-holders and used to issue thequota certificates to the stock-holders in accordance with the quota allotted to the share of each registered stock-holder. On receipt of the quota certificate, each stock-holder used to place indents for his requirement with the Iron and Steel Controller, Calcutta, who used to plan the indents and issue directions to the producers to book and to despatch the goods according to the indents as planned by him.

3. The Government of India, on the recommendation of the Committee of Economists, decided to withdraw statutory control over certain categories of iron and steel. Accordingly, it issued a Notification, dated 29th February 1964, published in the gazette of India Extraordinary, dated 1st March, 1964, by which notification all the categories of iron and steel other than those specified in Schedule 1 of the Notification were decontrolled. The effect of this Notification was that all the dealers in iron and steel, irrespective of the fact whether they were 'stock-holders' or not, could directly deal with the producers and obtain their requirements from them and deal with the iron and steel so obtained in any manner they liked without any restrict tion as to price etc.

The decontrol of the said categories was likely to create difficulties in the matter of proper distribution of iron and steel goods between the different States and the prices were also likely to rise, It was, therefore, recommended by the Committee that the plants (producers) themselves should be entrusted with the work of ensuring proper distribution of the iron and steel goods and to maintain proper level of prices. With this view, the Government of India constituted a Joint Plant Committee consisting of (i) the Iron and Steel Controller, Calcutta, as its Chairman ex officio; (ii) a representative of each plants, and (iii) a representative of the Railway Ministry. This Committee was entrusted with the work of obtaining from the producers, indentors and authorised dealers such information and data as it may require in connection with the planning of the production, scrutiny of the indents and at location to different plants.

In the case of decontrolled categories, the Joint Plant Committee was given the authority to fix the ex-works price. The producers were given freedom to recognise anyone as a trader in iron and steel of decontrolled categories after satisfying themselves of his credentials. On such recognition, the traders were to be treated as authorised dealers. Such authorised dealers could also be appointed by the Joint Plant Committee. Tha Committee was expected to plan the indents of the authorised dealers recognised by the producers or by the JoinPlant Committee itself. The formation of the Joint Plant Committee was notified by the Government of India on the same day the control over certain categories Was withdrawn.

4. The case of the petitioner-firm is that the Joint Plant Committee so constituted continued to plan the indents submitted by the petitioner-firm up to 1966. But its Indent No. FH/66-67/17 dated 7-12-1966 was returned by the second respondent under his Memorandum dated 13th December, 1966 (Annexure F) on the ground that, according to the policy of the Joint Plant Committee, no planning of controlled or decontrolled categories is done in favour of any party against whom the Iron and Steel Controller, Calcutta, may have imposed embargo on suspension of despatches of any of category of perfect or defective material irrespective of the materials involved and the reasons for such embargo or suspension.

It was stated in that memo that as the Iron and Steel Controller. Calcutta, had Imposed suspension on despatches to the petitioner, the Committee was unable to plan the indent. The direction of the Iron and Steel Controller, Calcutta, referred to in the above memo, is to the following effect:

'You are hereby advised to suspend despatches of Iron and Steel materials against all pending indents for controlled categories as well as decontrolled categories planned prior to 1-3-1964 in respect of Registered stock-holdership of M/s S.R. Kalani and Co., 1, Ganesh Ganj, (Pilia Khal), Indore City at Bur-waha (Dist. Nimar) under Registration No. MB-38 for a period of three years.' (Annexure C)

This direction was with respect to the petitioner's business of Burwaha. A similar direction was issued under the Memorandum dated 5th December 1966 (Annexure D) with respect to the petitioner's business at Indore.

5. The petitioner, under its Letter dated 10th December 1966 (Annexure E) requested the Iron and Steel Controller. Calcutta, to indicate reasons for the action taken by him; but no reply was received by the petitioner. Similarly, the petitioner sent a representation dated 19th December 1966 (Annexure G) to the third respondent pointing out therein that the suspension on despatches was applicable to only those indents which were planned upto 1-3-1964; the Controller's directive had no prospective effect; and that there was no justification for the Committee to refuse to plan the indents of the decontrolled categories submitted by the petitioner subsequent to that date. The petitioner was, however, informed that the decision already taken, was finaland till such time as the suspension order Was not withdrawn by the Iron and Steel Controller, Calcutta, nothing could be done with respect to the petitioner.

6. The petitioner's contention is that the directions issued by the respondent No. 1 under Annexures C and D were Issued without giving the petitioner any opportunity of being heard and without bringing to the notice of the petitioner as to on account of which default on its part the directions were issued. It was urged that this resulted in violation of the principles of natural justice and the directions issued by the Iron and Steel Controller, Calcutta, are liable to be quashed. It was further submitted that the Joint Plant Committee was constituted by the Central Government and thus it was a statutory body and was also bound by the same principles. The refusal of the Controller to afford any opportunity to the petitioner to explain its position and the refusal of the respondents 2 and 3 to plan its indents without disclosing any valid reasons has resulted in arbitrarily excluding the petitioner from the Iron and Steel business. It was urged that the petitioner has no remedy against the arbitrary action of the respondents apart from the remedy under Article 226 of the Constitution.

7. Shri Chaphekar, learned counsel for the petitioner, urged that the executive can only act in pursuance of the powers given to it by law. No member of the executive can interfere with the liberty or property of the subject except on the condition that he can support the legality of his action before a court of justice. In support, he relied on the decision of the Privy Council in Eshugbayi Eleko v. Officer Administering Government of Nigeria, AIR 193] PC 248. He, therefore, urged that the respondents must justify before this court as to under which provision of law the action was taken against the petitioner.

8. In the return filed on behalf of the respondent No. 1, it is stated that Annexures C and D do not contain any order of the respondent No. 1. Under those memos all the producers have been merely advised to suspend despatches of iron and steel materials to the petitioner for a period of three years. It is conceded that the advice given was not in exercise of any powers conferred on the respondent No. 1 under the Iron and Steel (Control) Order; the advice was given by the respondent No. 1 merely in his administrative capacity, and it is open to the producers to accept or reject the advice. It was, however, urged that certain malpractices of the petitioner came to light and the Central Government was satisfied that the petitioner's conduct warranted an action against him.

The advice was, therefore, issued under the 'Standardised Black-listing Code'. As the reasons that impelled the Central Government were kept secret and confidential on grounds of public policy, they could not be disclosed to the petitioner. It was, therefore, urged that no writ could be issued as against the respondent No. 1.

9. On behalf of the respondents 2 and 3, it has been urged that after certain categories of iron and steel were decontrolled, the producers as well as the dealers have been left free to deal with those items in any manner they liked; the Joint Plant Committee is a self-created organisation of the producers; and that it is not a statutory body. The decision of the Joint Plant Committee not to deal with persons who have been found guilty of malpractices or about whom there is a suspicion to the same effect is in the national interest; the Joint Plant Committee cannot be forced to deal with an undesirable person; and that it not being a statutory committee, no writ can be issued against it.

10. From the language of Annexures C and D it is clear that they do not contain any order issued by the Iron and Steel Controller, Calcutta; it is merely an advice tendered to the producers. The respondent No. 1 has conceded as much. The Joint Plant Committee is, therefore, not bound to accept the advice and can deal with the petitioner if it so desires. As Annexures C and D do not contain any binding orders of the Controller, the same cannot be quashed; nor can the Controller be directed to withdraw the same. After the notification decontrolling certain categories was issued, the petitioner ceased to be a 'stock-holder' vis-a-vis these categories; it becomes just a dealer in those items. The producers may deal with it or may insist that it should come through the Joint Plant Committee. The Joint Plant Committee may also disregard the advice of the Controller and may deal with the petitioner. The fact that the Controller is also an ex-officio Chairman of the Joint Plant Committee does not make any difference so far as the legal position is concerned. We are of the view that the Joint Plant Committee is not a 'statutory committee' appointed under any enactment or regulation. The Committee was formed by the Central Government in its administrative capacity and is, as a matter of fact, a self-imposed organisation of the producers to ensure proper distribution of their products at proper price. The mere fact that the Controller is the ex officio Chairman of the Committee does not clothe it with any executive authority. We are, therefore, of the view that no writ can be issued against the Joint Plant Committee or its officers also.

11. For the aforesaid reasons, we do not wish to enter into the controversy as to whether the petitioner was guilty of malpractices or whether there was any justification for the respondent no. 1 to issue the advice or for the Committee to accept the same. The proper remedy of the petitioner is to approach the authorities and satisfy them about its proper and clean dealings. The petitioner is not entitled to any relief from this court under Article 226 of the Constitution.

12. The petition, therefore, fails and is dismissed. In the circumstances of the case, we make no order as to costs. The amount of the security deposit shall be refunded to the petitioner.


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