M.R. Sharma, J.
1. On 5th April, 1973, the Governor of Haryana in the exercise of the powers conferred upon him by Section 3 of the Essential Commodities Act, 1955, read with the powers conferred upon him under Government of India, Ministry of Agriculture (Department of Food) Notification dated 20th June, 1972, and all other powers enabling him in this behalf, and with the prior concurrence of the Central Government, made the Haryana Wheat Dealers Licensing and Price Control Order. 1973. This Order shall be hereinafter referred to as Order No. 1. Under this Order, a dealer was defined to mean a person engaged in the business of purchase, sale or storage for sale of wheat in quantity of more than five quintals at any one time and included a chakki owner, but did not include a person who stored wheat produced by him by personal cultivation and a person who did not engage in the business of purchase or sale of wheat. Under Clause 4 of this Order, no dealer was allowed to store more than 100 quintals of wheat at any time. Under Clause 5, no dealer was authorised to sell wheat to another dealer, but it was made permissible for the State Government to authorise any public agency to procure wheat on its behalf from time to time. Such an agency was exempted from the operation of the clause relating to the possession of maximum wheat. The other provisions of the Order, other than Clauses 13 and 14, relate tothe licensing fees and security etc., and are not material for the decision of this case. Clause 13 provides that no dealer shall sell wheat at a rate higher than that fixed by the State Government from time to time by a notification in the official Gazette. Clause 14 provides that a person aggrieved by all order of the licensing authority could file an appeal before the Director within 30 days of the date of the receipt of the order appealed against.
2. On 20th June. 1973, the Governor of Haryana promulgated another Order known as the Haryana Wheat (Restriction on Stock by Producers) Order, 1973. In this Order. 'Producer' has been defined to mean a person who:
(i) in his normal course of avocation grows, manufactures, rears or produces, as the case may be wheat personally, through tenants or otherwise but does not include a person who works as a dealer or a broker or who is a partner of a firm of dealers or brokers; and
(ii) who is not engaged in the business of purchase and sale of wheat. Clause 3 of the Order provides that the Government may by notification in the Official Gazette, fix the maximum quantity of wheat which may be possessed by a producer at any time. Clause 4 provides that where no maximum has been fixed under Clause 3, no producer shall have in his possession at any time a quantity of wheat exceeding 30 quintals for the use of his house-hold consisting of ten members and 40 quintals in ease where the members of the house-hold exceed ten and forty kilograms per acre of his entire agricultural holding for use as seed, and that no producer shall have in his possession or custody, whether by way of bailment or otherwise, any quantity of wheat on behalf of or on account of any other person. Clause 5 provides that any producer who on the date of the commencement of this order has, in his possession, any quantity of wheat in excess of the maximum permitted under Clause 4, shall, within 5 days from the date of the enforcement of this Order, deliver to the Government, at procurement price, the excessive wheat possessed by him. This Order will be hereinafter referred to as Order No. 2. In short, the effect of this Order is that limitations were imposed on the capacity of even the producers to retain in their possession wheat beyond the permissible quantity.
3. In exercise of the powers conferred by Clause 13 of Order No. 1, the Governor of Haryana, fixed the following sale price of wheat and wheat flour, per quintal:
1. Wheat superior varieties (Desi Farm, K-68, Sharbati) Rs. 89.50
2. Wheat flour of above varieties Rs. 95.50
4. Prior to the issuance of the aforementioned Orders by the State of Haryana, the Central Government, in exercise of the powers conferred upon it by Section 3 of the Essential Commodities Act (No. X of 1955), promulgated an Order known as the Inter-Zonal Wheat and Wheat Products (Movement Control) Order, 1973, on 31st March, 1973. This Order shall hereinafter be referred to as the Central Order. The relevant provisions of this Order are reproduced below:
'2. Definitions -- In this Order, unless the context otherwise requires:--
(a) xx xx xx xxto
(g) XX XX XX XX
(h) 'Zonal border area' means the area with a five mile belt inside a zone all along its border whether adjoining: --
(i) another zone, or
(ii) the territories of Nepal, Bhutan and Sikkim-'
'4. Restriction on the movement of wheat or wheat products to or within the Zonal border area:-- No person shall, move, attempt to move or abet the movement of wheat or any wheat product:--
(a) to any place in the zonal border area from any place outside that area; or
(b) from any place in the zonal border area to any other place in that area, except under and in accordance with a permit issued by the State Government having jurisdiction in this behalf or by an officer authorised in that behalf by that Government,'
The effect of the aforementioned provisions is that different provisions have been made for areas within a five miles belt inside the Slate all along its border and no person is allowed to move wheat in this area except in accordance with the permit issued by the State Government or by an officer authorised by it.
5. This petition has been filed on behalf of petitioners Nos. 1 to 10, who are the chakki owners in the District of Ambala at Kalka. All of them hold licences under Order No. 1. The petitioners Nos. 11 and 12 are said to be traders in wheat products, but they do not possess licences under Order No. 1. The petitioners have challenged the two Orders issued by the State of Haryana inter alia on the following grounds: --
(1) The price of wheat has been fixed at an arbitrary figure. The market value of wheat is much higher and the traders; especially the chakki owners, are left with no profit. This arbitrary fixation of price has violated their fundamental right guaranteed to them under Article 19(1) (f) and (g) of the Constitution.
(2) No uniform price of wheat can be fixed for areas which normally produce wheat and those areas in which the wheat is produced in almost negligible quantity.
(3) The State Government cannot make fixation of the prices unless it also ensures adequate supply of wheat to the traders like chakki owners.
6. The Central Order, Annexure 'B' to the petition, has been challenged on the ground that in the zonal border areas like that of Kalka, actual production of wheat is almost negligible and so, the wheat is not available in the market at the prices fixed by the State Government. Under Order No. 2, issued by the State of Haryana, even the bona fide producer of wheat cannot stock it for longer period. The result is that whereas similar traders and chakki owners in bulk producing areas can purchase wheat and carry on their business even under the prices fixed by the Government, such traders and chakki owners at Kalka are being discriminated against inasmuch as they are not allowed by law to make unrestricted import of wheat into Kalka from those parts of Haryana where the wheat is available in abundance. The provision regarding import of wheat into zonal border areas under a licence is also arbitrary because in the Order itself no guidance has been given either to the Government or to the licensing authority regarding the circumstances and the conditions under which such licences for import of wheat are to be granted.
7. The return has been filed onbehalf of respondent No. 1 only by Shri N.K. Bidani. Joint Director. Food and Supplies, Haryana, Chandigarh. It has been stated that apart from the retail prices of quality wheat and Quality wheat atta, the State Government had also fixed the prices of indigenous red Dara and Mexican varieties of wheat at Rs. 83.50 and its flour at Rs. 89.50 per quintal. In order to give fair price to the producer, the Government procures wheat at support prices at the rate of Rs. 76.00 per quintal for fair average quality of the wheat and at the rate of Rs. 82.00 per quintal for superior quality wheat. The Government distributes the procured stocks at pair prices to vulnerable sections of the society. It is submitted that the fixation of retail prices had been done in the public interest to ensure availability of wheat/wheat atta at fair prices to the general consumer. It is further averred that the Government had only fixed the retail prices leaving the traders and dealers to purchase wheat from the mandis within the stock-storage limits allowed, at lower rates. These rates provide a fair margin to the dealers/traders. The chakki owners have also been given a fair margin at the rate of Rs. 6/- per quintal on account of grinding and other charges. With regard to the necessity ofobtaining permits in the zonal border areas, it has been stated that the petitioners were not debarred from applying for permits for movement of wheat from any place in the zone to the zonal border areas. It has also been stated that the petitioners did not apply for any such permit. The issuarice of these permits depends upon the need of these commodities at the places where the stocks are to be moved and the safeguards were required in public interest to prevent smuggling out of the zone.
8. The attack levelled against these Orders on behalf of the petitioners may now be considered. The gravamen of the allegations made by the learned counsel for the petitioners is that the price fixed was arbitrary and no wheat was available at these prices. Apart from the fact that these allegations are hotly contested in the written statement it may be observed that the petitioners have based their attack on the basis of fair quality of wheat only. In the return, it has been mentioned that the Government itself purchased ordinary wheat at the rate of Rs. 76.00 per quintal and the chakki owners and other traders are allowed to sell it at the rate of Rs. 83.50 per quintal. This shows that a considerable margin has been left for such traders and if they grind wheat into atta, an additional margin of about Rs. 6/- is allowed to them. The learned counsel for the petitioners, however, submits that even these prices are not fair. In support of his submission he has placed reliance upon Narendra Kumar v. Union of India, AIR 1960 SC 430. In this case, Section 3 of the Essential Commodities Act. 1955, has been interpreted and it has been observed that these provisions confer power to provide for regulation or prohibition of production, supply and distribution of any essential commodity. It gives such power to make any regulation or prohibition in so far as such regulation and prohibition do not violate any fundamental rights guaranteed by the Constitution. The very object of the Essential Commodities Act is to check the inflationary trends in prices and to ensure equitable distribution of essential commodities. This Act deals with essential commodities of two types. The first type consists of coal, textile, iron and steel etc., and the second type consists of food-stuffs and cattle fodder etc. In the very nature of things, different provisions have to be made for making arrangements for equitable supply of these essential commodities. If a certain commodity was readily available in the market then there was no point in either fixing its maximum price or providing for its regulated distribution. While fixing the prices of essential commodities like foodstuffs, the Government has to take intoconsideration various elements such as the total production in the country, the effect of food-stuffs upon the wages to be paid to the workers and the Government employees and the like. It cannot be disputed that the price payable to the producer has been fixed by the State Government after consultation with the Central Government. It is also a matter of common knowledge that the State Governments which are in a position to supply wheat and food-stuffs to the rest of the country have been clamouring for higher and higher prices. In this view of the matter, in the absence of anything to the contrary, it cannot be assumed that the price payable to the producer is wholly unreasonable.
9. In Premier Automobiles v. The Union of India, AIR 1972 SC 1690, the Court was concerned with the question of fixing a proper price of the Cars. The mode of fixation of prices had already been agreed upon between the parties concerned and as a consequence of that agreement, a Commission of Enquiry was appointed which determined the principles on which the prices of the Cars were to be fixed. In those peculiar circumstances, the Court came to the conclusion that the price of a Car had not been properly fixed. In Panipat Co-operative Sugar Mills v. Union of India. AIR 1973 SC 537, the Court was concerned with the fixation of fair price of sugar. This matter had also been entrusted to a Commission which was of the view that the business should get a return of 12 per cent. on the capital employed. The Court also took into consideration the fact that 40 per cent of the sugar produced could be sold by the business in the free market. On these considerations, the price of sugar fixed by Government was held to be fair.
10. I may also observe that in the two cases discussed above, the grievance had been made by the actual producers. In this petition, none of the petitioners is an actual producer of wheat and so it is not open to them to assert that the price on which the producer was called upon to sell wheat was not a fair price. I am chiefly concerned with their intrinsic grievance which is and can only be to the effect that some sort of margin should be left to them as members of this trade. Since the Government has fixed the sale price of wheat at Rs. 76.00 per quintal and the retail price of wheat at Rs. 83.50 per quintal and that of atta at the rate of Rs. 89.50 per quintal, it cannot be said that the petitioners have not been left with a reasonable margin. In Shree Meenakshi Mills Ltd. v. Union of India Civil Writ No. 734 of 1973, decided on 26-11-1973 = (reported in AIR 1974 SC 366), the Supreme Court considered the law laid down in Premier Automobiles v. Union of India, AIR 1972 SC 1690 and the Panipat Co-operative Sugar Mills v. Union of India, AIR 1973 SC 537, and observed as under:
'The producer should not be driven out of his producing business. He may have to bear loss in the same way as he does when he suffers losses on account of economic forces operating in the business. If an essential commodity is in short supply or there is hoarding, cornering or there is unusual demand, there is abnormal increase in price. If price increases, it becomes injurious to the consumer. There is no justification that the producer should be given the benefit of price increase attributable to hoarding or cornering or artificial short supply. In such a case, if an 'escalation' in price is contemplated at intervals, the object of controlled price may be stultified. The controlled price will enable both the consumer and the producer to tide over difficulties. Therefore, any restriction in excess of what would be necessary in the interest of general public or to remedy the evil has to be very carefully considered so that the producer does not perish and the consumer is not crippled.'
If the grievance of the petitioners is considered in the light of the aforementioned observations it becomes obvious that the petitioners are advocating the cause of the actual producers so that they may indirectly be able to reap the actual benefit from the situation resulting from unrestricted hoarding of wheat and its sale at uncontrolled prices.
11. Since the State Government is purchasing wheat at a fixed rate for the purpose of augmenting the needs of the deficit areas in the State, the fixation of uniform rates for wheat producing areas and non-producing areas cannot be made the basis of any valid attack. Further, if essential commodity is in short supply, what steps the authorities competent to promulgate the. Orders take for meeting the situation are not open to attack unless and until any tangible rights of the citizens are infringed; nor can a trader insist that before fixing the minimum or maximum prices the Government must make arrangements of supplying a certain quantity of wheat to him. For the reasons mentioned above. I find no ground to hold that the two Orders issued by the Government of Haryana are violative of any of the fundamental rights guaranteed to the petitioners.
12. The provisions of the Central Order have already been noticed above and it has been observed that the effect of these provisions is that a trader has to obtain a permit for importing wheat to the zonal border area which lies within a five miles belt inside the zone. The attack against this provision is that thetraders carrying on similar business in wheat producing areas are not being subjected to this inconvenience of seeking permits. It is settled law that a Legislature can make a proper classification of the subjects of legislation. Such a classification can also be made on the basis of geographical considerations. It is a matter of common knowledge that attempts at smuggling of wheat and other food-grains are made from the border areas of surplus States. In order to forestall this evil, the Legislature deemed it necessary to introduce these provisions in the Central Order. These provisions cannot be attacked on the ground that the rights of the traders under Article 14 of the Constitution are infringed. The traders having their areas of operation in zonal border areas form a class by themselves and all such traders have been subjected to the same disability. The imposition of this disability can be justified on the basis of the peculiarities of the situation.
13. These provisions are also not open to attack on the ground that the rights of the petitioners under Article 19(1)(g) have been violated. On their showing, the petitioners Nos. 1 to 10 are chakki owners. No restriction has been imposed upon the milling trade. The only restriction is that they cannot import wheat into these areas without a permit. It is no doubt true that the order does not give any indication of the grounds under which the permit could be issued or denied, but it is implicit in the nature of things that the authority competent to grant the permit would be swayed by considerations of actual need of a particular area. These considerations apart, the petitioners have nowhere alleged that they actually applied for any permit and the same was refused. In Harishankar Bagla v. State of Madhya Pradesh, A. I. R. 1954 SC 465, the Court observed as under:
'Mr. Umrigar further argued that the Textile Commissioner had been given unregulated and arbitrary discretion to refuse or to grant a permit, and that on grounds similar to those on which in Dwarka Prasad v. State of Uttar Pradesh, AIR 1954 SC 224 this Court declared void Section 4 (3) of the U. P. Coal Control Order. Section 3 of the Control Order in question should also be declared void. This argument again is not tenable. In the first place, the appellants never applied for a permit and made no efforts to obtain one. If the permit had been applied for and refused arbitrarily they might then have had a right to attack the law on the ground that it vested arbitrary and unregulated power in the Textile Commissioner. The appellants were not hurt in any way by any act of the Textile Commissioner as they never applied for a permit. They were transporting essential goods by rail without a permit and the only way they can get any relief is by attacking the section which obliges them to take a permit before they can transport by rail essential commodities.
It may also be pointed out that reference to the decision of this Court in 'Dwarka Prasad's case' is not very apposite and has no bearing on the present case. Section 4 (3) of the U. P. Coal Control Order was declared void on the ground that it committed to the unrestrained will of a single individual to grant, withold or cancel licences in any way he chose and there was nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Section 4 (3) of the U. P. Coal Control Order was in these terms:
'The Licensing Authority may grant, refuse to grant, renew or refuse to renue a licence and may suspend, cancel, revoke or modify any licence or any terms thereof granted by him under the Order for reasons to be recorded. Provided that every power which is under this Order exercisable by the Licensing Authority shall also be exercisable by the State Coal Controller or any person authorised by him in this behalf.' In the present Control Order there is no such provision as existed in the U. P. Coal Control Order. Provisions of that Control Order bear no analogy to the provisions of the present Control Order. The policy underlying the Order is to regulate the transport of cotton textile in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion cannot be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief. Presumably, as appears from the different forms published in the Manual, there are directions and rules laid down by the Central Government for the grant or refusal of permits.'
The learned counsel for the petitioners, however, submitted that the respondents have not brought to the notice of the Court any instructions or rules which may guide the discretion of the authority concerned to issue permits. According to him, on the basis of the observations made by the Supreme Court towards the end of the passage quoted above, the Control Order or at least the discretion vested in the authority competent to grantthe permits should be set aside. I find no merit in this submission either. As already noticed, the consideration which is supposed to weigh with the authority competent to grant the permit is the actual need of a particular area. Besides, the State Government has asserted in the written statement that the wheat purchased by it is utilised for meeting the legitimate needs of the scarcity hit areas. In State of U. P. v. Ram Charan, AIR 1962 All 359, while considering a similar objection against the U. P. Wheat (Restriction on Movement) Order, 1949, the Court observed as under:
'There is no force in the contention that no norms for regulating the grant of permit have been laid down in the Order. The order has been promulgated under the powers given by the Essential Commodities Act (Act No. 10 of 1955) the object of which, as mentioned in the preamble, was to provide, in the interest of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain commodities. The preamble lays down the policy and in a way prescribes the norms in accordance with which a permit is to be granted. We, therefore, hold that Clause 3 of the Order is not hit by Article 19(1)(g) of the Constitution.'
I am in respectful agreement with the view expressed above.
14. For the reasons mentionedabove this petition fails and is dismissed.There shall, however, be no order as tocosts.