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A.K. Abdulla, Kasaragod Vs. State of Kerala and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtKerala High Court
Decided On
Case NumberO.P. No. 5743 of 1970
Judge
Reported inAIR1973Ker242
ActsKerala Cycle Tyres and Tubes (Declaration of Stocks and Maintenance of Accounts) Order, 1966; Essential Commodities Act, 1955 - Sections 3; Constitution of India - Article 245
AppellantA.K. Abdulla, Kasaragod
RespondentState of Kerala and anr.
Appellant Advocate T.C.M. Das, Adv.
Respondent AdvocateGovt. Pleader
DispositionPetition partly allowed
Cases ReferredChacko Mathew v. State
Excerpt:
.....245 of constitution of india - appellant challenged validity of clauses 4 and 5 on ground that state government not competent to make declarations by way of impugned clauses -state government not enabled to pass impugned order under clause 4 to display price list at business places as alleged section 3 (2) (j) does not enlarge to extent for any incidental or supplementary matter - clause 5 of order within power of state government falling under section 3(2) (h) - held, clause 4 invalid and state government has no power to insist display of prices - clause 5 is valid as it is within competence of state legislature. - - (j) for any incidental and supplementary matters, including in particular the entering and search of premises, vehicles, vessels and aircraft, the seizure by a..........of stocks and maintenance of accounts) order 1966 as invalid as it is beyond the competence of the state government.(ii) declare clause 5 of the kerala cycle tyres and tubes (declaration of stocks and maintenance of accounts) order, 1966 to be invalid as the power sought to be exercised is beyond what has been conferred on the state government.''2. the kerala cycle tyres and tubes (declaration of stocks and maintenance of accounts) order, 1966 (hereinafter referred to as the order) was passed by the state government on 16th august, 1966 in exercise of the powers conferred by sub-section (1) read with clauses (e), (h), (i) and (j) of subsection (2) of section 3 of the essential commodities act, 1955 (hereinafter referred to as the act) and the order of the government of india in the.....
Judgment:

Govindan Nair, J.

1. The first two prayers in this petition are to :

'(i) declare Clause 4 of the Kerala Cycle Tyres and Tubes (Declaration of Stocks and Maintenance of Accounts) Order 1966 as invalid as it is beyond the competence of the State Government.

(ii) declare Clause 5 of the Kerala Cycle Tyres and Tubes (Declaration of Stocks and Maintenance of Accounts) Order, 1966 to be invalid as the power sought to be exercised is beyond what has been conferred on the State Government.''

2. The Kerala Cycle Tyres and Tubes (Declaration of Stocks and Maintenance of Accounts) Order, 1966 (hereinafter referred to as the Order) was passed by the State Government on 16th August, 1966 in exercise of the powers conferred by Sub-section (1) read with Clauses (e), (h), (i) and (j) of Subsection (2) of Section 3 of the Essential Commodities Act, 1955 (hereinafter referred to as the Act) and the Order of the Government of India in the Ministry of Commerce dated 18th June, 1966. Clauses 4 and 5 of the Order are in these terms:--

'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 of cycle tyres and tubes held by him for sale. Such price list shall be legibly written in the principal language of the locality concerned. It shall indicate separately the prices of different varieties of cycle lyres and tubes.

5. Dealer to maintain accounts --(1) Every dealer shall maintain a register of daily accounts of his stock of cycle tyres and tubes 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 cycle tyres and tubes every fortnight (1st to 15th and 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.' Sub-sections (1) and (2) of Section 3 of the Act which are the only provisions in Section 3 that are relevant are in these terms:--

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, (or 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--

(a) for regulating by licences, permits or otherwise the production or manufacture of any essential commodity;

(b) for bringing under cultivation any waste or arable land, whether appurtenant to a building or not, for the growing thereon of food-crops generally or of specified food-crops, and for otherwise maintaining or increasing the cultivation of food-crops generally, or of specified food crops;

(c) for controlling the price at which any essential commodity may be bought or sold;

(d) for regulating by licenses, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of. any essential commodity;

(e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale;

(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;

(g) for regulating or prohibiting any class of commercial or financial transactions relating to foodstuffs or cotton textiles which, in the opinion of the authority making the order, are, or, if unregulated, are likely to be, detrimental to the public interest;

(h) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters;

(i) for requiring persons engaged in the production, supply or distribution, of, or trade and commerce in, any essential commodity to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto, as may be specified in the order;

(ii) for the grant or issue of licences, permits or other documents, the charging of fees therefor, the deposit of such sum, if any, as may be specified in the order as security for the due performance of conditions of any such licence, permit or other document, the forfeiture of the sum so deposited or any part thereof for contravention of any such conditions, and the adjudication of such forfeiture by such authority as may be specified in the order;

(j) for any incidental and supplementary matters, including in particular the entering and search of premises, vehicles, vessels and aircraft, the seizure by a person authorised to make such search of any articles in respect of which such person has reason to believe that a contravention of the order has been, is being, or is about to be committed, the grant or issue of licences, permits or other documents, and the charging of fees therefor [and of any books of accounts and documents which in his opinion would be useful for, or relevant to, any proceedings under this Act and the return of such books of accounts and documents to the person from whom they were seized after copies thereof or extracts therefrom as certified by that person in the manner specified in the order have been taken].

.....

We may read Section 5 as well :

'5. Delegation of powers.-- The Central Government may, by notified order, direct that the power to make orders under Section 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction be exercisable also by--

(a) such officer or authority subordinate to the Central Government; or

(b) such State Government or such officer or authority subordinate to a State Government, as may be specified in the direction.'

Pursuant to Section 5, the Central Government by notified order conferred power on the State Government to pass orders under Section 3(1) of the Act. The relevant part of that order is in these terms:--

'In exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (10 of 1955), the Central Government hereby directs. (a) that the powers conferred on it by Sub-section (1) of Section 3 of the said Act to make orders to provide for the matters specified in Clauses (d), (e), (f), (g), (h), (i) (ii) and (j) of Sub-section (2) thereof shall, in relation to all commodities other than foodstuffs and fertilisers, etc. etc.'

3. The State Government can only pass orders by virtue of the power conferred on it by the Central Government by notified order as contemplated by Section 5 of the Act. The Central Government has conferred power in regard to matters specified in Clauses (d) to (j) of Sub-section (2) of Section 3 of the Act. The powers of the State Government are therefore confined to the matters in the above clauses. What we have to examine is whether Clauses 4 and 5 of the Order can be brought under any of these clauses.

4. Clause 4 of the Order relates to the price list to be displayed at places of business. It is contended by counsel on behalf of the petitioner that this has relation to the matters specified in Clause (c) of Subsection (2) of Section 3 of the Act 'for controlling the price at which any essential commodity may be bought or sold', and the power to make orders in relation to this matter not having been notified under Section 5 to be exercised by the State Government the State Government was incompetent to make provision for exhibition of prices as they have done in Clause 4 of the Order. The exhibition of price insisted upon by Clause 4 of the Order is a matter coming within. Clause (c) of Subsection (2) of Section 3 of the Act has been held by this Court in Udayasi, Metro Cycle Importing Co. v. State of Kerala, (1969 Ker LT 69). Raghavan. J, who delivered the judgment stated thus :

'The purpose of publishing a price list at the premises of the shop can only be to control the prices at which the tyres and tubes may be bought or sold. No other clause of Section 3(2) of the Act can be said to confer this power. Now turning to the Order of the Central Government delegating powers to the State Government, what is found is that the power under Clause (c) of Sub-section (2) of Section 3 is not one of the powers delegated under the Order. As I have already stated, the powers delegated were only those under Clauses (d), (e), (f), (g), (h) etc. Section 4 is thus beyond the competence of the delegated powers of the State Government and hence invalid.'

The learned Judge reiterated the same view in another decision in Chacko Mathew v. State, (1969 Ker LT 222) and these decisions have been followed in Criminal R. P. No. 340 of 1969 (Ker.).

5. Isaac, J. before whom this came up for hearing has doubted the correctness of the decisions in (1969 Ker LT 69), and in (1969 Ker LT 222) as well as the decision in Criminal R. P. No. 340 of 1969 (Ker) and has passed an order of reference which has brought this case before us. The learned Judge has stated in the order of reference that the power to include in an order, a provision for displaying the price list at places of business, falls under Clause (e) of Subsection (2) of Section 3. That clause is in these terms:--

'(e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale;'

We find it difficult to hold that a provision that price list should be displayed at places of business will fall under Clause (e) of Subsection (2) of Section 3. Nor is it a matter which is incidental or supplementary to the matter provided under Clause (e) of Sub-section (2) of Section 3 of the Act. On the other hand, we think that a provision for display of prices can at least be incidental or supplementary to the matter under Clause (c) of Sub-section (2) of Section 3, namely 'for controlling the price at which any essential commodity may be bought or sold'. It cannot be gainsaid that the display of prices will at least have an indirect effect of controlling the prices in that it will be difficult, if not impossible, for the dealer to sell at prices higher than that displayed. A display of prices will therefore have a controlling effect on the prices and with respect we agree with the view taken by Raghavan, J. as he then was in the decision in (1969 Ker LT 69).

6. Counsel on behalf of the State urged an additional contention before us with reference to Clause (j) of Sub-section (2) ot Section 3. He urged that all orders under Section 3, whether passed by the Central Government or by the State Government, pursuant to the delegation under Section 5 of the Act are really orders under Section 3(1) and that therefore the State Government having been given power under Clause (j) of Sub-section (2) of Section 2 to make orders 'for any incidental and supplementary matters' for regulating or prohibiting the production, supply and distribution of any article or trade or commerce therein can pursuant to Clause (j) of Sub-section (2) of Section 3 provide for a display of prices. While we agree that all orders under Section 3 are orders for the purpose of regulating or prohibiting the production, supply and distribution of articles and the enumerated matters under Sub-section (2) of Section 3 are only illustrative of the matters that can be provided for under an order under Section 3(1), we are unable to accept tha contention that by virtue of Clause (j) enabling the State Government to pass orders for any incidental and supplementary matters can confer on the State Government power in relation to matters other than those for which powers have been conferred on them specifically by the order of the Central Government under Section 5 of the Act.

Incidental and supplementary matters in Clause (j) when read with the other parts of the Order of the Central Government under Section 5 of the Order dated 18th June, 1966 can only refer to incidental or supplementary matters to the matters specifically delegated to the State Government. The order under Section 5 merely states that the matters regarding which powers have been conferred on the State Government are the matters specified in Clauses (d) to (j). '(j)' therein must be related to the matters incidental and supplementary to the specified matters enumerated in Clauses (d) to (h). Actually Clause (j) docs not enlarge on the powers nor does Clause (j) confer power in regard to a new and additional matter. The matters are only those specified in the order of the Central Government dated 18th June, 1966, namely, those that are specified in Clauses (d) to (h) of Sub-section (2) of Section 3. Even if Clause (j) was not there, we think that the State Government would have power to pass orders in relation to matters incidental and supplementary to enumerated matters. Clause (j) does not confer any additional power and we think it is only by way of abundant caution that the clause has been put in.

7. Clause 5 of the Order is within the power of the State Government. We think it will fall under Clause (h) (i) of Subsection (2) of Section 3. No relief can therefore be granted to the petitioner by way of a declaration that Clause 5 of the Order is beyond the competence of the State Government.

8. However in the light of what we have stated above, we are of the view that the State Government has no power to insist that prices should be displayed. We therefore declare that Clause 4 of the Order is invalid.

9. The petitioner is not entitled to any other relief in this petition. We dispose of this petition on the above terms. We direct the parties to bear their respective exists.


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