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Tata Iron and Steel Company Ltd. Vs. the State of Kerala and anr. - Court Judgment

LegalCrystal Citation
SubjectCivil
CourtKerala High Court
Decided On
Case NumberOriginal Petn. No. 2138 of 1968
Judge
Reported inAIR1972Ker97
ActsEssential Commodities Act, 1955 - Sections 3 and 5; Kerala Iron and Steel (Declaration of Stocks and Maintenance of Accounts) Order, 1968; Iron and Steel Control Order, 1956
AppellantTata Iron and Steel Company Ltd.
RespondentThe State of Kerala and anr.
Appellant Advocate T.K. Kochuthommen and; K.K. Poulose, Advs.
Respondent AdvocateGovt. Pleader
DispositionPetition allowed
Cases Referred and Chacko Mathew v. State
Excerpt:
.....kerala iron and steel (declaration of stocks and maintenance of accounts) order, 1968 and iron and steel control order, 1956 - under section 3 central government delegated some powers to state government for exempting steel of any category of first schedule from any provisions of order - under delegated power state government introduced several restrictions in matter of distribution and sale of iron and steel - also director passed circular to concerned people to follow state order - writ petition for quashing state order and circular being declared illegal - in view of apex court decision in case of description real test is whether remains of statute so inextricably bound up with invalid part that what remains cannot independently survive - held, both impugned state order and circular..........agents engaged in any such business;(b) 'retail dealer' means a dealer who is not a wholesale dealer :(c) 'wholesale dealer' means a dealer who sells iron and steel to other dealers or to bulk consumers. 3. dealer not to withhold stocks from sale.-- no dealer shall withhold from sale or refuse to sell iron and steel ordinarily kept for sale.4. price list to be displayed at places of business.-- every dealer shall exhibit at the entrance or some other prominent place of his business premises, the price list and stock position of iron and steel separately held by him for sale. such price list and stock position shall be legibly written in the principal language of the locality concerned. it shall indicate separately the prices of different variety of iron as well as steel.5......
Judgment:
ORDER

1. Short title, extent and commencement.--(1) This Order may be calledthe Kerala Iron and Steel (Declarationof Stocks and Maintenance of Accounts)Order, 1968.

(2) it extends to the whole of the State of Kerala.

(3) it shall come Into force at once.

2. Definitions.-- in this Order, unless the context otherwise requires,--

(a) 'dealer' means a person carry-ing on the business of purchase or sale of iron and steel, whether wholesale or retail and whether or not in conjunction with any other business and includes manufacturers and commission agents engaged in any such business;

(b) 'retail dealer' means a dealer who is not a wholesale dealer :

(c) 'wholesale dealer' means a dealer who sells iron and steel to other dealers or to bulk consumers.

3. Dealer not to withhold stocks from sale.-- No dealer shall withhold from sale or refuse to sell iron and steel ordinarily kept for sale.

4. Price list to be displayed at places of business.-- Every dealer shall exhibit at the entrance or some other prominent place of his business premises, the price list and stock position of iron and steel separately held by him for sale. Such price list and stock position shall be legibly written in the principal language of the locality concerned. It shall indicate separately the prices of different variety of iron as well as steel.

5. Dealer to maintain accounts.--(1) Every dealer shall maintain a register of daily accounts of his stock of iron and steel showing correctly.--

(a) the opening stock on each day;

(b) the quantities received on each day showing the place from where and the source from which received;

(c) the quantities delivered or otherwise removed on each day showing the places of destination; and

(d) the closing stock on each day.

(2) Every dealer shall complete his accounts for each day on the day to which they relate unless prevented by reasonable cause, the burden of proving which shall be upon him.

(3) Every dealer shall submit to the District Collector or any other officer authorised by him in this behalf, a true return of the stocks, receipts and deliveries of iron and steel separately every fortnight (1st to 15th the 16th to the end of the month), so as to reach the District Collector or the officer authorised within 7 days after the close of the fortnight.

6. Dealer to issue receipt or invoice.--Every dealer shall issue to every customer a correct cost memo showing his own name and address, the name and address of the customer, the date of transaction, the quantity sold, the price per unit of sale and the total amount charged and shall keep a duplicate of the same to be available for Inspection on demand by the Director, of Industries and Commerce, the District Collector or any other officer authorised by the Director of Industries and Commerce or the District Collector in this behalf,

7. Dealer to give facilities for Inspection.-- Every dealer shall give all facilities at all reasonable times to any executive officer not below the rank of Technical Supervisors in the Industries Department, any officer of the Revenue Department not below the rank of Tahsildar or any officer of the Police Department not below the rank of Sub Inspector for inspection of his stocks and accounts at any shop, godown or other places used by him for the storage, sale or purchase of iron and steel.

8. Powers of entry, search and seizure.-- (1) Any Officer specified in Clause 7, may, where he has reason to believe that any contravention of the provisions of this order has been, is being or is about to be committed, or generally for the purpose of satisfying himself that the provisions of this order are being complied with, with such assistance, if any, as he thinks fit.--

(a) require the owner, occupier or any other person in charge of any place, premises, vehicle or vessel connected with or in use for the purpose of his trade, to produce any book, accounts or other documents showing all or any of his transaction;

(b) enter, inspect or break open with such assistance as he considers necessary and search any place or premises, vehicle or vessel, connected with, or in use for the purpose of his trade;

(c) take or cause to be taken, extracts from or copies of. any documents showing all or any of the transactions; and

(d) search, seize or remove stocks of iron and steel and the animals, vehicles, vessels or other conveyances connected with, or used in carrying, them and take or authorise the taking of all measures necessary for securing production of iron and steel and the animals, vehicles, vessels or other conveyances so seized, in a court, and for their safe custody pending such production.

(2) The provisions of the Criminal Procedure Code, 1898 (CentralAct 5 of 1898) relating to search and seizure shall, so far as may be, apply to search and seizure under this clause.'

8. Counsel for the petitioner sub-mitted that the Joint Plant Committee constituted under Clause 17-A of the Iron and Steel Control Order has laid down the policy for distribution of Iron and Steel, and that distribution can be made only in accordance with the priorities provided therein. Exts. P-5 and P-7 contain the directions in that respect. Accordingly, the petitioner cannot sell iron and steel to anybody who asks for it. He has to withhold his stock from sale from those who offer to buy it, and distribute the same according to the order laid down in Exts. P-5 and P-7. Clause 14 (3) of the Iron and Steel Control Order provides that no producer, stock-holder or other person holding stocks of iron and steel shall, without sufficient cause, refuse to sell any iron or steel which he is authorised to sell. As these persons are bound to distribute their stock in accordance with the aforesaid priorities, he would have sufficient cause to refuse to sell it to persons other than those who are entitled to buy it according to the order of priority. Clause 3 of Ext P-3 provides that no dealer shall withhold from sale or refuse to sell iron and steel ordinarily kept for sale. The prohibition in the said clause is absolute; and it is incapable of obedience in the light of Clauses 17-A and 17-B of the Iron and Steel Control Order and the directions issued by the authorities concerned. The learned Government Pleader contended that Clause 3 of Ext. P-3 can be complied with in the case of the stock, if any available, for sale in the open market after satisfying all the priorities, and that the said clause would be valid in respect of such balance stock. It is difficult to accept this contention. This clause, as it stands, would apply to the whole stock kept for sale. It was neither intended to apply, nor would it apply in the face of regulations made by the Central Government authorities in the matter of distribution. There is also Clause 10 of the Iron and Steel Control Order, which provides that the Controller may require any stock-holder to sell the whole or part of his stock to such person or class of persons on such terms and conditions as may be specified in the Order. If the Controller issues any such Order, the stock-holder is bound to withhold his stock from a person who offers to buy it and reserve the same to be sold as required by the Controller. In such an event Clause 3 in Ext. P-3 cannot be complied with.

9. The petitioner's counsel also attacked Clause 5 of Ext. P-3 on the ground of conflict. Clause 12 of the Iron and Steel Control Order reads :--

'12. Power to require keeping of accounts and to obtain information.--(1) Every producer and every stockholder shall keep such books, accounts and records relating to the business carried on by him as the Controller may require.

(2) Every producer or stockholder and every person employed in connection with the business of a producer or stockholder shall on being requested so to do, either by notice served on him or special or general direction issued by the Controller--

(a) produce to such person such stocks of iron or steel and such account and other documents and within such period as may be specified in the notice or direction;

(b) furnish to the Controller such estimates, returns and other information relating to the business and within such period as may be specified in the notice or direction.'

Shri Kochu Thommen submitted that Clause 5 of Ext. P-3 and Clause 12 of the Iron and Steel Control Order deal with the same matter, that the provisions contained in Clause 5 of Ext. P-3 are more stringent, and it provides a different authority for submission of returns. This may not be a case of conflict as such, since both provisions are capable of obedience. But the law is well established that if power is vested in two authorities, one subordinate to the other, to act in respect of a certain matter, the subordinate authority has no scope to act, if the superior authority has already acted. It would be all the more so, if the subordinate authority makes different and more stringent provisions. It was contended on behalf of the respondents that Clause 12 of the Iron and Steel Control Order only empowers the Controller to act in respect of the matters mentioned therein, and that so long as the Controller has not acted in exercise of that power no question of any inconsistency with the provisions contained in Clause 5 of Ext. P-3 arises. Such a contention was advanced before the Supreme Court in AIR 1964 SC 1284 at page 1285. In that case the constitutional validity of certain provisions in the Orissa Mining Areas Development Fund Act, 1952, which empowered the State Government to levy a cess or a fee on all extracted minerals for the development of the mining areas was questioned on the ground that the said provisions were repugnant to Section 18(1) of the Mines and Minerals (Regulation and Development) Act, 1957. This section only empowered the Central Government to take all steps as may be necessary for the conservation and development of minerals in India; but the Central Government had not taken any such steps or made rules in that respect. So it was contended that, until the Central Government acts under Section 18(1), there was no repugnancy, which should exist in fact, and not depend merely as a possibility. The contention was reiected by the Supreme Court. After laying down the tests which should be applied for ascertaining whether there is conflict between the two legislative provisions -- we have already quoted the relevant passage -- the Court stated:--

'In the present case, having regard to the terms of Section 18(1). It appears clear to us that the intention of Parliament was to cover the entire field, and thus to leave no scope for the argument that until rules were framed, there was no inconsistency and no supersession of the State Act.'

The same principle applies here. The authority competent to exercise the power under Section 3 of the Act is the Central Government; and that authority has exercised the power in respect of the matters mentioned in Clause 12 of the Iron and Steel Control Order by empowering the Controller to do such things as he deems necessary. Then the State Government, who is another delegate of the Central Government, has no scope to come into that field and do anything. The powers delegated to the State Government are not additional powers, but concurrent powers which can be exercised only subject to the exercise of the said powers by the Central Government. Clause 5 of Ext. P-3 cannot, therefore, be sustained in the face of Clause 12 of the Iron and Steel Control Order.

10. The position is more or less the same with regard to Clause 6 of Ext. P-3. Clause 14 (2) of the Iron and Steel Control Order provides that the Controller may by notification in the official Gazette direct that every producer or stockholder when selling any iron or steel shall give to the purchaser a memorandum containing the particulars specified in such notification. This is the same matter dealt with in Clause 6 of Ext. P-3. The reasons stated for holding that Clause 5 of Ext. P-3 is inconsistent with Clause 12 of the Iron and Steel Control Order would apply also to Clause 6 of Ext. P-3; and it cannot, therefore, be sustained. It was not seriously disputed that Clauses 7 and 8 of Ext. P-3 cannot stand in the face of Clause 28 of the Iron and Steel Control Order. Then the only remaining; clause in Ext. P-3 is Clause 4, which provides for exhibition of price list and stock list. This is only one of the provisions in the scheme envisaged by Ext. P-3; and if Clauses 3 and 5 to 8 cannot stand, Clause 4 which is an integral part of the scheme cannot stand independently. The true principle is thus stated by the Supreme Court in Harakchand v. Union of India, AIR 1970 SC 1453 :

'In a case of this description the real test is whether what remains of the Statute is so inextricably bound up with the invalid part that what remains cannot independently survive, or as it is some times put whether on a fair review of the whole matter it can be assumed that the legislature would have enacted at all that which survives without enacting the Part that is ultra vires.'

There is a clear statement of the law fa Cooley on Constitutional Limitations, 8th Edition page 360. The relevant passage has been quoted with approval in the above decision.

11. For the reasons stated above, we hold that the State Government Order. Ext. P-3 cannot apply to the petitioner who is governed by the Iron and Steel Control Order 1956. Ext. P-4 is a notice issued by the second respondent pursuant to Ext. P-3; and it cannot, therefore, be sustained. Ext. P-4 is accordingly quashed.

12. In the light of the above conclusion, it is not necessary to consider points (ii) and (iii), which relate only to the validity of Clauses 4 and 6 and part of Clause 3 of Ext. P-3. The attack against these clauses was based on two decisions of a learned Single Judge of this Court in Udavasi v. State of Kerala, 1969 Ker LT 69 and Chacko Mathew v. State, 1969 Ker LT 222. The correctness of these decisions was seriously questioned before us. It is not, however, necessary to express any opinion on that question for the disposal of this case.

13. In the result this writ petition is allowed to the extent herein stated. The parlies will bear their costs.


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