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The Commercial and Ahmedabad Mills Co. Ltd. and anr. Vs. Union of India (Uoi) and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtGujarat High Court
Decided On
Case NumberSpecial Civil Application No. 2305 of 1979
Judge
Reported inAIR1993Guj20
ActsEssential Commodities Act, 1955 - Sections 3, 3(1), 3(2), 3(3), 3(3C), 4 and 5; Cotton Textiles (Control) Order, 1948; Constitution of India - Articles 14, 19, 19(1), 31, 31(A), 31(B), 31(C), 195, 226 and 245; Essential Supplies (Temporary Powers) Act, 1946; Essential Commodities Ordinance, 1955; Iron and Steel (Control of Production and Distribution) Order, 1941; Companies Act - Sections 237; Company Law Board (Procedure) Rules, 1964; Gold (Control) Act, 1968 - Sections 5 and 5(2); Sugar (Control) Order, 1966; Rajasthan Trade Articles (Licensing and Control) Order, 1980; Assam Municipal Act, 1957 - Sections 298
AppellantThe Commercial and Ahmedabad Mills Co. Ltd. and anr.
RespondentUnion of India (Uoi) and ors.
Appellant Advocate M.H. Joshi, Adv. for; K.S. Nanavati, Adv.
Respondent Advocate B.B. Naik, Addl. Standing Counsel
DispositionPetition dismissed
Cases ReferredShri Bakul Oil Industries v. State of Gujarat
Excerpt:
constitution - reasonable restriction - clauses 20 and 21 a of cotton textiles (control) order, 1948 and article 19 (1) (g) of constitution of india - textile commissioner in exercise of powers conferred by clauses 20 and 21 a directed petitioner no. 1-company to pack certain meters of controlled cloth during quarter ending on 30.09.1978 - order of 1948 promulgated to ensure equitable distribution and availability of controlled cloth at fair prices in open market - textile commissioner guided by proviso to clause 20 (1) in giving directions to pack minimum quantity of cloth - rules or principles for guidance are firstly equitable distribution and secondly availability at fair prices of controlled cloth - requirement to pack controlled cloth under clause 21 a reasonable restrictions on.....panchal, j.1. in this petition, filed under article 226 of the constitution of india, the petitioners have challenged the constitutional validity of section 3 of the essential commodities act, 1955 and clause 21a of the cotton textile (control) order, 1948 as well as the legality and validity of the orders dated 7-1-1978, 7-4-1978, 27-4-1978, 11-8-1978, 27-12-1978, 29/30th december, 1978 passed by the textile commissioner and the order dated 8th july, 1979 passed by the central government under the provisions of the cotton textile (control) order, 1948, which have been produced at annexures e (i), d, e(ii), g. h, i. j and k respectively to the petition, the petitioners have given up the challenge to clauses 20 and 22 of the cotton textile (control) order, 1948 after the petitioners were.....
Judgment:

Panchal, J.

1. In this petition, filed under Article 226 of the Constitution of India, the petitioners have challenged the Constitutional validity of Section 3 of the Essential Commodities Act, 1955 and Clause 21A of the Cotton Textile (Control) Order, 1948 as well as the legality and validity of the orders dated 7-1-1978, 7-4-1978, 27-4-1978, 11-8-1978, 27-12-1978, 29/30th December, 1978 passed by the Textile Commissioner and the order dated 8th July, 1979 passed by the Central Government under the provisions of the Cotton Textile (Control) Order, 1948, which have been produced at Annexures E (i), D, E(ii), G. H, I. J and K respectively to the petition, the petitioners have given up the challenge to Clauses 20 and 22 of the Cotton Textile (Control) Order, 1948 after the petitioners were permitted to carry out the amendment in the petition.

2. It is necessary to refer to certain factual background to appreciate the contentions raised by Mr. Joshi before us in this petition. The petitioner No. 1 is a Company incorporated and registered under the provisions of the Indian Companies Act and is engaged in the business of manufacturing textiles. The 2nd petitioner is both -- a shareholder and the Managing Director of the first petitioner Company. Under the provisions of the Essential Supplies (Temporary Powers) Act, 1946, which came into force on and from November 19, 1946, the Cotton Textile (Control) Order, 1948 (hereinafter referred to as the 'Order of 1948') was issued. It came into force on and from August, 1948. On coming into force of the Essential Commodities Ordinance, 1955 with effect from 26th January, 1955, the Essential Supplies (Temporary Powers) Act, 1946, came to an end. The Essential Commodities Ordinance, 1955 was repealed by the Essential Commodities Act, 1955 (hereinafter referred to as the 'Act'), which came into force on and from 1st April, 1955. The Order of 1948 issued under the provisions of the Essential Supplies (Temporary Powers) Act, 1946 has been continued to be in force under the Essential Commodities Act, 1955. The Control Order has been amended from time to time thereafter.

3. Section 3 of the Act provides that if the Central Government is of the opinion that it is necessary or expedient for maintaining or increasing supplies of any essential commo-dity or for securing their equitable distribution and availability at fair prices, it may, by order, provide for regulating or prohibiting the production, regular supply and distribution thereof and trade and commerce therein. Section 3(2)(c) and (f) empowers the Central Government to control the prices at which any essential commodity may be bought or sold and also to require any person engaged in the production of any essential commodity to sell the whole or a specified part of the quantity of the essential commodities to Central Government or State Government or an Agent appointed by the State Government. Sub-section (3) of Section 3 requires the person to sell the essential commodities at the price specified therein.

4. Clause 21A of the Order of 1948 empowers the Textile Commissioner having regard to the matters specified in the proviso to Sub-clause (1) of Clause 20 by order in writing, to direct any producer with a spinning plant of a group of such producers to pack such minimum quantity of such cloth and during such period as may be .specified in the direction. Clauses 20 and 21A of the Order of 1948 read as under:--

'20. (1) The Textile Commissioner may, from time to time, issue directions in writing to any manufacturer, of class of manufacturers, or manufactuers generally regarding

(a) the classes or specifications of cloth or yarn which each manufacturer, or class of manufacturers, or manufacturers generally shall manufacture, or

(b) the maximum or minimum quantitiesthereof which such manufacturer, or class ofmanufacturers or manufacturers generallyshall manufacture, during such period as maybe specified in the order :

Provided that in issuing the direction under this Sub-clause, the Textile Commissioner shall have regard to-

(i) the demand for cloth or yarn; (ii) the needs of general public;

(iii) the special requirements of the industry for such cloth or yarn;

(iv) the capacity of the manufacturer, or class of manufacturers, or manufacturers generally, to manufacture different descrip-tions or specifications of cloth or yarn; and

(v) the necessity to make available to the general public cloth of mass consumption.

(2) While issuing any direction under Sub-clause (1) the Textile Commissioner may also provide that such direction shall be with reference to the quantity of cloth or yarn packed by the manufacturer, or class of manufacturers or manufacturers generally during the period referred to in that Sub-clause.

(3) Every manufacturer, or class of manufacturers or manufacturers generally, to whom a direction has been issued shall comply with the direction.

(4) Where, on an application made by any manufacturer or class of manufacturers of otherwise the Textile Commissioner is satis-fied that any direction issued by him under this clause will cause undue hardship or difficulty to any such manufacturer or class of manufacturers he may, by order and for reasons to be recorded in writing, direct that the directions shall not apply, or shall apply subject to such modifications as may be specified in the order, to such manufacturer or class of manufacturers.'

'21-A.(1) Where the Textile Commissioner has specified under para (a) of Sub-clause (1) of Clause 22 the maximum prices at which any class or specification of cloth may be sold, or where he has specified under para (aa) of the Sub-clause the principles on which and the manner in which such maximum prices may be determined, he may, having regard to the matters specified in the proviso to Sub-clause (1) of Clause 20 by order in writing, may direct any producer with a spinning plant or a group of such producers to pack such minimum quantity of such cloth and during such period as may be specified in the direction.

(2) Where a producer with a spinning plant or a group of such producers fails to pack the minimum quantities of cloth within the period as specified in a direction issued under Sub-clause (1), the Textile Commissioner may, without prejudice to any other action he may take for failure to comply with the direction by the producer or group of producers but having regard to the matters specified in the proviso to Sub-clause (1) of Clause 20, by order in writing direct such producer or group of producers to pack the quantities of cloth by which the producer or group of producers has fallen short, within, such extended period as may be specified. The Textile Commissioner may further direct that the price applicable to such quantities of cloth shall be the price in force during the period specified in the direction under Sub-clause (I) or during the extended period whichever is lower:

Provided that the power conferred on the Textile Commissioer, under this Sub-clause shall be exercised only in respect of the quantity of cloth falling short of the minimum quantity, which the producer shall have pack-ed before the 2nd May, 1968.

(3) Where, on an application made by any producer having spinning plant or group of such producers or otherwise, the Textile Commissioner is satisfied that any direction issued by him under this clause causes undue hardship or difficulty to any such producer or group of such producers he may, by order and for reasons to be recorded in writing, direct that the direction shall not apply, or shall apply, subject to such modifications as may be specified in the order, to such producer or group of such producers.

(4) Any producer or group of producers to whom a direction has been issued either under Sub-clause (1) or Sub-clause (2) shall comply with such direction.

5. Under the provisions of the Order of 1948, the Government of India has introduced, a Scheme of controlled cloth obligation under which every Textile Mill is compelled to manufacture and/or pack, certain quantity of controlled cloth on the basis of total number of looms worked in the Mills. Financial year of the petitioner No. 1 Company ends on 31st December every year. According to petitioners during the year 1976, the reserves of petitioner No. 1 Company were reduced to more: tthan 50% and, therefore, on an application made by the petitioner-Company, by an order dated 9th June, 1977, the petitioner-Company was granted exemption to the extent of 50% of its normal obligation pertaining to controlled cloth for the period from 1-1-1977 to 31st December, 1977. A copy of the order dated 9th June, 1977 has not been produced by the petitioners on the record of this petition. It appears that in exercise of the powers confer-red on the Textile Commissioner by clauses 20 and 21-A of the Order of 1948, the Textile Commissioner by an order dated 7th January, 1978 directed the petitioner No. 1 Mill. Company to pack 10,15,224 sq. mts. of con-trolled cloth during the quarter ending on 31st March, 1978. The said order has been produced by the petitioners at Annexure E(i) to the petition. Therefore, the petitioners addressed a representation dated 30th March, 1978 to the Director, Control Branch, Office of the Textile Commissioner, Bombay, pointing out deteriorated financial position of the Company and prayed to grant exemption from the obligation to pack controlled cloth with effect from 1st January, 1978. A copy of the said representation is produced by the petitioners at Annexure-C to the petition. On 7th April, 1978, in exercise of powers confer-red by Clauses 20 and 21-A of the Order, of 1948, the Textile Commissioner directed the petitioner No. 1 Company to pack 5,50,158 sq. mts. of controlled cloth during the quarter ending on 30th June, 1978. The said order has been produced by the petitioners at Annexure D to the petition. It appears that the representation dated 30th March, 1978 was considered sympathetically by the Textile Commissioner and the Textile Commissioner by another order dated 27th April, 1978 passed in exercise of powers conferred on him by Clauses 20 and 21-A of the Order of 1948, directed the petitioner No. 1 company to pack controlled cloth of 5,92,240 sq. mts, for the quarter ending on 31st March, 1978 instead of 10,15,224 sq. mts. of controlled cloth, directed to be packed by earlier order dated 7th January, 1978. Thereafter, it appears that the petitioners addressed an application dated 2-5-78 to the Director Government of India, Ministry of Commerce, Office of the Textile Commissioner, Bombay, pointing out the financial condition of petitioner No. 1 Company and the hardship faced by it and prayed for exemption from production of controlled cloth for the year 1978. A copy of this application has been produced by the petitiones at Annexure-F to the petition. At this stage, it would be necessary to note that direction to manufacture controlled cloth can be given under Clause 20 of the Order of 1948 and no direction to manufacture having been given, it must be construed that by the application dated 2nd May, 1978, the petitioners claimed exemption from packing of controlled cloth for the year 1978. In fact it has been so construed by the Authorities concerned also.

6. On 11th August, 1978, in exercise of the powers conferred by Clauses 20 and 21-A of the Order of 1948 the Textile Commissioner directed the petitioner No. 1 Company to pack 7,59,120 sq. mts. of controlled cloth during the quarter ending on 30th September, 1978. A copy of the said order has been produced by the petitioners at Annexure-G to the petition.

7. The application dated 2nd May, 1978 submitted by the petitioners seeking total exemption from packing of controlled cloth for the year 1978 was considered by the Textile Commissioner and was not acceded to by him as is apparent from the Order dated 27th December, 1978. Moreover, the obligation for the quarters January/March, 1978, April/June, 1978 and July/September, 1978 were suitably refixed. A copy of the said order has been produced by the petitioners at Annexure-H to the petition. By this order at Annexure-H it was informed to the petitioner No. 1 Company that if the petitioner No. 1 Company felt aggrieved, petitioner No. 1-Company was entitled to file an appeal to the Government under Clause 36 of the Order of 1948.

8. It appears that as the application dated 2nd May, 1978 was not fully accepted, by an order dated 29/30th December, 1978 passed in exercise of powers conferred by Clauses 20 and 21A of the Order of 1948, the Textile Commissioner directed the petitioner No. 1 Company to pack 10,15,225 sq.mts. of controlled cloth during the quarter ending on 31st March, 1978. This order has been produced by the petitioners at Annexure-I(i) to the petition. Thus, from this Order it appears that the original direction contained in the Order dated 7-1-1978 was restored. Thereafter, by another order dated 29/30th December, 1978 passed in exercise of powers conferred by Clauses 20 and 21A of the Order of 1948, the Textile Commissioner directed the petitioner No. 1-Company to pack 9,43,128 sq. mts. of controlled cloth during the quarter ending on 30th June, 1978. A copy of the said order has been produced by the petitioner at Annexure I (ii) of the petition. As the prayer for total exemption from the obligation of packing of controlled cloth for the year 1978 made in the application dated 2nd May, 1978 was not acceded to, the petitioners preferred an Appeal before the government under Clause 36 of the Order of 1948. A copy of the Appeal Memo has been produced by the petitioners at Annexure J to the petition. The Central Government rejected the appeal by an order dated 8th June, 1979 and the said order has been produced by the petitioners at Annex-ure-K to the petition.

9. In view of the above facts, the petitioners have challenged constitutional validity of Section 3 of the Essential Commodities Act and Clause 21A of the Order of 1948, in this petition, on various grounds.

10. Mr. M. H. Joshi, learned counsel appearing on behalf of the petitioners submitted that the provisions of Section 3 of the Essential Commodities Act, 1955 are ultra vires Articles 14, 19 and 31 of the Constitution of India and, therefore, provisions of Cotton (Control) Order 1948 also being bad in law, the impugned orders and directions given by the Textiles Commissioner should be set aside. So far as this submission is concerned, it is to be noted that the Essential Commodities Act, 1955, has received the protective umbrella of Article 31(B) of the Constitution of India read with 9th Schedule as it has been included therein as Item No. 126. Article 31(B) of the Constitution of India provides that without prejudice to the generality of the provisions contained in Article 31(A), none of the Acts and Regulations specified in the 9th Schedule, nor any of the provisions thereof shall be deemed to be void or ever to have become void on the ground that such Act, Regulation or provision is inconsistent with, or takes away or abridges any of the rights conferred by Part III of the Constitution of India. In the case of H.S.S.K. Niyami v. Union of India, AIR 1990 SC 2128, the Hon'ble Supreme Court of India had an occasion to consider the constitutional validity of Section 3(3-C) of the Essential Commodities Act and after referring to the fact that the Act has received a protective umbrella of Article 31(C) (sic-31(B)) of the Constitution of India read with 9th Schedule and placing reliance on the Constitution Bench, judgment of the Hon'ble Supreme Court of India in M/s. Shitaram Sugar Company v. Union of India, AIR 1990 SC 1277, the Hon'ble Supreme Court of India has negatived the said challenge. Therefore, in our view, the point is no longer res integra and the provisions of Section 3 are constitutionally valid and unassailable.

11. Learned counsel next submitted that Clause 21-A of the Order of 1948 is ultra vires Section 3 of the Essential Commodities Act, 1955 because the delegation of powers to the Textile C6mmissioner under the Control Order 1948 is illegal and invalid, inasmuch as such delegation is not contemplated under Section 3 of the Act. Mr. Joshi submitted that sub-delegation can only be under Section 5 of the Act, 1955 which has been given a go-by and no policy, guidelines, restriction and compass for the exercise of powers so sub-delegated having been laid down, such sub-delegation suffers from the vice of excessive delegation and, therefore, Clause 21A of the Order of 1948 should be struck down. In support of his above referred contention, learned Counsel has placed reliance on the case of Barium Chemicals Limited v. Company Law Board, AIR 1967 SC 295.

12. In order to deal with the above referred contention of Shri Joshi, it will be advantageous to quote the provisions of Sections 3(1), 4 and 5 of the Act, which are as under:--

'3(1). If the Central Government is of opinion that it is necesssary 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.'

'4. Imposition of duties on State Governments, etc.-

An order made under Section 3 may confer powers and impose duties, upon the Central Government or the State Government or officers and authorities of the Central Government or State Government, and may contain directions to any State Government or to officers and authorities thereof as to the exercise of any such powers or the discharge of any such duties.'

'5. Delegation of powers:-- The Central Government may, by notified order, direct that the power to make orders or issue notifications 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 Goverment or such officer or authority subordinate to a State Government, as may be specified in the direction.'

This Order of 1948 has not been issued by any of the authorised officers in exercise of powers that might have been conferred under Section 5 of the Act, but has been issued by the Central Government itself in exercise of powers conferred on it by Section 3 of the Act and, therefore, in our view, reliance placed on the provisions of Section 5 is misplaced. The argument that power to give direction to any producer with a spinning plant to pack such minimum quantity of such cloth and during such period as may be specified in the direction is available only to the Central Government or that such power should have been reserved by the Central Government to itself and could not have been delegated to Textile Commissioner has no force at all in view of the provisions of Section 4 of the Act. Section 4 of the Act, in clear term provides that an order made under Section 3 may confer power and impose duties upon the Central Government or the State Government or Officers and authorities of the Central Government or State Government and may contain directions to any State Government or to officers and authorities thereof as to exercise of any such powers or the discharge of any such duties. The Cotton Textile (Control) Order, 1948 has been pro-mulgated by Government and has conferred powers and imposed duties upon the Textile Commissioner and has also given directions to him as to exercise of such powers and discharge of duties thereunder. The validity of Section 4 is not questioned before and even if questioned, it will have to be negatived in view of the fact that the Essential Commodities Act, 1955 has been placed in Ninth Schedule to the Constitution of India. Section 4 postulates delegation of powers in favour of Central Government and State Government Officers and authorities and in the facts of the present case, delegation to Textile Commissioner is in terms of Section 4 of the Act. In view of this, we are of the opinion that the challenge to Clause 21-A of the Order of 1948, on the ground that delegation of powers to Textile Commissioner is not in terms of Section 5 of the Act or it suffers from the vice of excessive delegation is not available at all and said challenge must fail in view of the provisions of Section 4 of the Act.

In the case of Union of India v. M/s. Bhanamal Gulzarimal Ltd. reported in AIR 1960 SC 475 : (1960 Cri LJ 664). M/s. Bhanamal Gulzarimal Ltd. was a Private Limited Company. Since 1948 it had been registered as a stockholder by the Iron and Steel Controller under Clause 2(d) of the Iron and Steel (Control of Production and Distribution) Order, 1941. Under Clause 11-B of the Order, notifications had been issued from time to time giving a schedule of base prices in respect of iron and steel. On December 10, 1949, the Controller issued a notification under Clause 11B decreasing by Rs. 30 per ton the prices already fixed for all categories of steel. Several criminal cases were instituted against the said Company, its three directors, its General Manager and two salesmen on the allegation that they had sold their old stock of steel for prices higher than those prescribed by the said notification. Then the respondents had to face criminal proceedings, they filed writ petitions in the Punjab High Court challenging constitutional validity of Clause 11B as violative of Article 19(1)(f) and (g) as well as Article 31 of the Constitution 6f India. The High Court upheld the respondents' plea. While allowing the Appeal filed by the Union of India, the Hon'ble Supreme Court of India has held as under at pages 479 and 480 of AIR 1960:--

'Before we address ourselves to the question about the vires of Clause 11B it is necessary to make it clear that the validity of Sections 3 and 4 of the Act has not been disputed before us, and indeed it cannot be disputed, in view of the decision of this Court in Harishankar Bagha v. State of Madhya Pradesh, 1955 1 SCR 380 : AIR 1954 SC 465 : (1954 Cri LJ 1322). The challenge to the vires of Clause 11B has, therefore, to be examined on the basis that Sections 3 and 4 of the Act are valid. It is relevant to set out the implications of this position. When it is assumed that Sections 3 and 4 are valid it necessarily means that they do not suffer from the vice of excessive delegation Then the Legislature delegated its authority to the Central Government to prpvide by order for regulating or prohibiting the production, supply and distribution of steel and iron, it had not surrendered its essential legislative, function in favour of the Central Government. The preamble to the Act and the material words used in Section 3(1) itself embody the decision of the Legislature in the matter of legislative policy, and their effect is to lay down a binding rule of conduct in the light of which the Central Government had to exercise its powers conferred on it by Section 3. The Legislature has declared its decision that the commodities in question are essential for the maintenance and progress of national economy and it has also expressed its determina-tion that in the interest of national economy it is expedient that the supply of the said commodities should be maintained or increased as circumstances may require and the commodities should be made available or equitable distribution at fair prices. The concept of fair prices which has been deliberately introduced by the Legislature in Section 3 gives sufficient guidance to the Central Government in prescribing the price structure for the commodities from time to time. With the rise and fall of national demand for the said commodities or fluctuations in the supplies thereof, the chart of prices may, in the absence of well-planned regulation, prove erratic and prejudicial to national economy, and without rational and well-planned regulation equitable distfibu-tion may be difficult to achieve, and so the Legislature has empowered the Central Government to achieve the object of equitable distribution of the commodities in question by fixing fair prices for them. Thus, when it is said that the delegation to the Central Gov-ernment by Section 3 is valid, it means that the Central Government has been given sufficient and proper guidance for exercising its powers in; effectuating the policy of the statute.

Similarly the validity of Section 4 postulates that the powers conferred on the sub-delegate do not suffer from the vice of excessive delegation. Sub-delegation authorised by Section 4 is also justified because, like the delegate under Section 3, the sub-delegate under Section 4 has been given ample guidance to exercise his powers when he is authorised by the Central Government in that behalf. If the Central Government chooses to exercise its powers under Section 3 itself it may pass appropriate orders t,o give effect to the policy of the Act in respect of matters covered by Section 3(1) and (2). When it adopts such a course, the Central Government would have exercised its own authority under Section 3 and the exercise of its power cannot be challenged on the ground that it suffers from the vice of excessive delegation. Similarly, where by a notified order passed by the Central Government under Section 3 the Controller is authorised to pass appropriate orders, the notified order cannot be Challenged on the ground that it suffers from the vice of excessive delegation. In our opinion, this position is implicit in the assumption that Sections 3 and 4 are valid.

Having regard to the fact that the decision about the maximum prices in respect of iron and steel would depend on a rational evaluation from time to time of all these varied factors the Legislature may well have thought that this problem should be left to be tackled by the delegate with enough freedom, the policy of the Legislature having been clearly indicated by Section 3 in that behalf. The object is equitable distribution of the commodity, and for achieving the object, the deleate has to see that the said commodity is available in sufficient quantities to meet the demand from time to time at fair prices. In our opinion, therefore, if Clause 11B is considered as a part of the composite scheme evidenced by the whole of the Order and its validity is examined in the light of the provisions of Sections 3 and 4 of the Act, it would be difficult to sustain the plea that it confers on the delegate un-canalised orunbridled power. We are inclined to hold that the power conferred on the Central Government by Section 3 and on the authority specified by Section 4 is canalised by the clear enunciation of the legislative policy in Section 3 and that Clause 11B seeks further to canalise the exercise of the said power, and so it is not a case where the validity of the clause can be successfully challenged on the ground of excessive delegation. We have referred to this aspect of the matter at some length because it appears to have influenced the final conclusion in the judgment under appeal. As we will presently indicate the argument before us has, however, centred on the question as to whether the clause has violated Article 19 of the Constitution.'

In view of the above referred decision of theHon'ble Supreme Court of India, we are of the view that the delegation of powers under Clause 21A of the Order of 1948 is valid and itdoes not suffer from vice of excessive delega- tion.

Even otherwise, reading Section 3 of the Act with the preamble, it would be obvious that the object of the Act is to provide control over production, supply and distribution and trade and commerce in essential commodities in the interest of the general public so that the supplies of such commodities may be maintained or increased, their quitable distribution secured and they may be available to the general public at fair prices. Section 3(1) provides that if the Central Government is of the opinion that it is necessary or expedient so to do for main-taming or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. In exercise of such analogous powers contained in Essential Supplies (Temporary Powers) Act, 1946, the Cotton Textile (Control) Act, 1948 was issued. It would thus, be clear that the Act confers powers on the Central Government to regulate the production, supply and distribution of essential commodities. It is well settled by catena of decisions of the Hon'ble Supreme Court of India that essential powers of Legislation cannot be delegated. In other words, the Legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a Rule of Conduct. The Legislature must declare the policy of law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the Legislative policy and of formally enacting that policy into the binding rule of conduct.

13. In the present case, the Legislature has laid down such a principle and that principle is maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to the Central Government in exercising its power under Section 3 of the Act. As stated earlier, the preamble and the body of the Sections of the Act sufficiently formulate the legislative policy, and the ambit and character of the Act is such that the details of that policy can only be worked out by delegating them to a subordinate authority within the framework of that policy. Thus, legislature has retained in its own hands the essential legislative function, which consists of the determination of the legislative policy and its formulation has a binding rule of conduct. Once the essential legislative function is performed by the legislature and the Policy has been laid down, it is open to the Legislature to delegate to the Executive Authority ancillary and the subordinate powers necessary for carrying out the policy and the purposes of the Act as may be necessary to make the Legislation effective, useful and complete. The delegation of powers in favour of the Textile Commissioner is inconsistent with the parent Act and has not travelled beyond the legislative policy and the standard laid down by the Legislature.

14. A bare reading of the provisions of Clause 21A of the Order of 1948 reveals that the Textile Commissioner has powers to direct any producer to pack such minimum quantity of such cloth and during such period as may be specified in the direction having regard to the matters specified in the proviso to Sub-clause (1) of Clause 20 of the Control Order. By Control Order of 1948, the Legislature has not delegated its function of laying d6wn legislative policy in respect of the measure in question to the Textile Commissioner. The Legislature has declared the policy of law and legal principles which are to control any given cases and the Order of 1948 has provided a standard to guide the Textile Commissioner in his power to execute law. In view of the provisions of the. Proviso to Sub-clause (1) of Clause 20, the Textile Commissioner has to take into consideration the following factors before giving directions to any manufacturer to pack a particular quantity of controlled cloth:--

(i) the demand for cloth or yarn;

(ii) the needs of general public;

(iii) the special requirements of the industryfor such cloth or yarn;

(iv) the capacity of the manufacturer, or class of manufacturers, or manufacturers generally, to manufacture different descriptions or specifications of cloth or yarn; and

(v) the necessity to make available to the general public cloth of mass consumption.

On a fair, generous and liberal construction of the provisions of Clause 21-A of the Control Order of 1948, it cannot be said that the Legislation has exceeded the limits of permissible delegation.

In the case of Barium Chemicals Ltd. (supra), the Secretary of the Company Law Board had issued an order on behalf of the Company Law Board under Section 237(b) of the Companies Act appointing four persons as Inspectors for investigating the affairs of Barium Chemicals Ltd. The order was made by the Chairman of the Board on behalf of the Board by virtue of the powers conferred on him by Rules. The Company preferred a writ petition under Article 226 of the Constitution of India for issuance of writ of mandamus quashing the order of the Board. The High Court rejected the petition and, therefore, Barium Chemicals Ltd., approached the Hon'ble Supreme Court of India by way of Special Leave. While dealing with the submission namely, that the Central Government could delegate its functions under Section 237 to the Board, but it had no power to authorise the Chairman to sub-delegate this function to himself and consequently, the Company Law Board (Procedure) Rules, 19,64 made by the Central Government and the Chairman's order of distribution of business delegating the function of the Board to the Chairman are ultra vires the Companies Act, the Hon'ble Supreme Court of India has held as under:--

'As a general rule, whatever a person has power to do himself, he may do by means of an agent. This broad rule is limited by the operation of the principle that a delegated authority cannot be redelegated, delegatus non potest delegare. The naming of a delegate to do an act involving a discretion indicates that the delegate was selected because of his peculiar skill and the confidence reposed in him, and there is a presumption that he is required to do the act himself and cannot re-delegate his authority. As a general rule, 'if the statute directs that certain acts shall be done in a specified manner or by certain persons, their performance in any other manner than that specified or by any other person than one of those named is impliedly prohibited.' See Crawford on Statutory Construction, 1940 Ed. Article 195, p. 335. Normally, a discretion entrusted by Parliament to an administrative organ must be exercised by that organ itself. If a statute entrusts an administrative function involving the exercise of a discretion to a Board consisting of two or more persons it is to be presumed that each member of the Board should exercise, his individual judgment on the matter and all the members of the Board should act together and arrive at a joint decision. Prima facie, the Board must act as a whole and cannot delegate its function to one of its members.'

In this case, it has not been averred by the petitioners that discretion vested in the Textile Commissioner by the provisions of the Cotton (Control) Order, 1948 and more particularly, by Clause 21A of the Order, has not been exercised by the Textile Commissioner and has been exercised by his sub-delegate. In promulgating the Cotton (Control) Order, 1948, the Central Government has acted within its powers, which has been delegated to it under Section 3 of the Essential Commodities Act, 1955. In view of this position, we are of the view that the decision relied on by the learned Counsel for the petitioners, has no application to the facts bf the persent case.

In support of the contention that Clause 21A of the Order of 1948 suffers from vices of excessive delegation, learned Counsel for the petitioners placed reliance on the decision rendered in the case of Harkchand Ratan-chand Banthia v. Union of India, AIR 1970 SC 1453. In the said case, Hon'ble the Supreme Court of India had occasion to examine constitutional validity of different provisions of Gold (Control) Act, 1968 and it has been held that Section 5(2)(b) suffers from excessive delegation of legislative powers.

Section 5 of the said Act reads as under:--

'(1) The Administrator, may if he thinks fit make an order not inconsistent with the provisions of this Act, for carrying out the previsions of this Act.

(2) The Administrator may, so far as itappears to him to be, necessary or expedientfor carrying out the provisions of this Act byorder:--

(a) regulate after consultation with the Reserve Bank of India, the price at which any gold may be bought or sold and,

(b) regulate by licences, permit or otherwise, the manufacture, distribution, transport, acquisition, possession, transfer, disposal, use or consumption of gold.'

On true interpretation, the Hon'ble Supreme Court of India has held in the above referred case that it is manifested Upon a review of this provision that power conferred upon the Administrator under Section 5(2)(b) is legislative in character and extremely wide and, therefore, power of regulation granted to the Administrator under Section 5(2)(b) of the Act was held to be constitutionally invalid, as it suffered from excessive delegation of legislative power. In the facts of the present case, there is no delegation of legislative power in favour of the Textile Commissioner and the Textile Commissioner has to give appropriate direction regarding packing having regard to the policy laid down by Section 3 of the Act read with Clauses 20 and 21A of the Order of 1948 and, therefore, we are of the humble view that the above referred decision has no application to the facts of the present case. In view of our above discussion, we do not find any substance in the contention raised by Mr. Joshi, to the effect that the delegation to the Textile Commissioner under the Control Order of 1948, is illegal and invalid, as such delegation is not contemplated under Section 3 of the Act or that no policy, guidelines, restrictions and compass in the exercise of powers so sub-delegated having been laid down, such delegation suffers from the vice of excessive delegation.

15. It was next contended by Mr. Joshi that the power to regulate the production, supply and distribution under Section 3 of the Essential Commodities Act does not carry with it the powers to issue directions as to how the goods produced should be packed and, therefore, Clause 21A of the aforesaid Control Order, which empowers the Textile Commissioner to issue such directions; is beyond the scope of Section 3 of the Act and, therefore, is ultra vires the provisions of the said Act. In support of this contention, the learned Counsel placed reliance on the decision of the Hon'ble Supreme Court rendered in the case of P. P. Enterprise v. Union of India, AIR 1982 SC 1016. As far as this submission is concerned, we are of the view that the predominent object of the Act as reflected in the preamble, is to provide in the interest of general public for the control of the production, supply and distribution of, trade and commerce in certain essential commodities. It is a piece of social legislation enacted for the control over distribution of, trade and commerce in, essential commodities. The various Control Order issued by the Central Government under Sub-section (3) bf Section 3 or by the State Government under Section 3 read with Section 5 have introduced a system of check and balance to achieve the object of the Legislation i.e. to ensure equitable distribution and availability of essential commodities at fair prices. Special public interest in ah industry e.g. that it is engaged in the production of commodity Vitally essential to the community may justify the regulation of production, supply and distribution and its trade and commerce, provided such regulation is not arbitrary and has rational nexus to. the object sought to be achieved. The power to regulate or prohibit the supply and distribution of trade and commerce in essential commodity may be exercised in innumerable ways. One of the ways in which such power of regulation or control over the production, supply and distribution of, and trade and commerce in an essential commodity like controlled cloth may be exercised is by directing a producer which has spinning plant ,or a group of such producers to pack such minimum quantity of such cloth and during such period as may be specified in the direction. We find no lawful justification for giving a restricted meaning to the word 'regulating' appearing in Sub-section (1) of Section 3 cannot be understood in restricted sense of the Act as to mean that no order can be promulgated by the Central Government providing for a direction to producer with a spinning plant or group of producers to pack such minimum quantity of such cloth and during such period as may be specified in the direction. The dominant object of Section 3 is maintenance and increase in supplies, equitable distribution and availability, at fair price, of the essential commodity, and, with that object in view, the Government has to take measures for regulating the production or manufacture of any essential commodity and for controlling the price at which such commodity may be bought or sold. Fixation of fair price only will not necessarily render the essential commodity available to the consumers. In order to make the essential commodity available to the consumers at a fair price, not only the fair price has to be fixed, but, if there is no adequate supply of the essential commodity, supply thereof has to be increased. With a view to achieving this objective, Clause 21A of the Control Order of 1948 has been enacted. In the case of P. P. Enterprise, the Hon'ble Supreme Court of India had an occasion to examine constitutional validity of Sugar (Control) Order, 1966. By the said Order, an embargo on the dealer on keeping sugar in excess of the quantity specified was put. While negativat-ing challenge to the said Order, it has been held by the Hon'ble Supreme Court of India that embargo seeks to regulate the limit of storage of sugar and does not prohibit its storage and on an overall consideration of various aspects of the matter, restriction put by the said Order can, by no means, be said to be unreasonable. We fail to appreciate as to how this decision of the Hon'ble Supreme Court of India is of any help to the petitioners. In the above referred decision, it has not been held by the Hon'ble Supreme Court that while providing for regulating or prohibiting the production, supply and distribution of essential commodities, the Central Government cannot promulgate an order providing for a direction to be given to the producer to pack a particular quantity of controlled cloth. In view of this, we are of the view that the above referred decision does not help the petitioners' cause. In the result, we do not find any substance in the submission made on behalf of the petitioners to the effect that the power to regulate the production, supply and distribution of essential commodities under Section 3 of the Act does not carry with it the power to issue direction as to how the goods produced shall be packed and is beyond the scope of Section 3 of the Act.

16. Mr. Joshi, learned Counsel for. the petitioners further submitted that if Section 3 of the Act is construed as to empower the Central Government to make Orders to call upon any person to pack controlled cloth according to specifications to be prescribed and the quantity to be prescribed by the Textile Commissioner, such a provision would be clearly ultra vires Article 19(1)(g) of the Constitution of India. It was submitted that the controlled cloth is a separate and distinct commodity having a specialised mark and the direction to carry on a partiicular business in a particular commodity against the Will and desire of the manufacturer is violative of Article 19(1)(g) of the Constitution of India. Elaborating the said argument, learned Counsel submitted that a fundamental right to trade guaranteed under Article 19(1)(g) of the Constitution carries with it a right not to carry trade in certain commodity and goods and no person can be compelled on the pain of penalty and imprisonment to undertake packing of certain goods if such a person does not desire, wish and cannot afford to produce or manufacture those goods and this fundamental right, namely, not to undertake packing of certain goods or not to deal in certain type of goods cannot be restricted or interfered with and as the said right is sought to be restricted and interfered with, Clause 21A of the Order of 1948 violates the provisions of Article 19(1)(g) of the Constitution of India and consequently it should be declared to be ultra vires. Mr. Joshi also submitted that no manufacturer can be compelled to manufacture and pack the goods against his wish irrespective of his capacity to do so, unless he is assured of a reasonable return and fair price of such goods and as no such considerations are apparent in Clause21A of the Order of 1948, the said Clause tantamounts to unreasonable restriction on the fundamental rights to trade and,therefore, violative of Article 19(1)(g) of theConstitution of India.

17. As far as challenge to the constitutional validity of Clause 21A on the ground that it violates provisions of Article 19(1)(g) of the Constitution of India is concerned, it has to be noted that a person has a right to carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of the State to make a law imposing reasonable restriction under Clause 6 of Article 19. The expression 'reasonable restric-tions' signifies that the limitation imposed on a person in enjoyment of that right, should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. No out and dry test can be applied to each individual statute impugned, nor a abstract standard or general patern of reasonableness can be laid down as applicable in all cases. In each case one has to strike a proper balance between the freedom guarant-ed by Article 19(1)(g) and the social control permitted by Clause (6) of Article 19. The legislative measures have left the question of resolving the economic problem of increasing supplies, equitable distribution and availability of essential commodities at fair prices to the judgment of the statutory authorities. The mere direction to suggestion that no person can be compelled on the pain of penalty and imprisonment to undertake the packing of controlled cloth if such a person does not desire wish or cannot afford to produce or manufacture or pack those goods is violative of fundamental right to carry on business, trade and to hold and dispose of property, cannot be accepted. The interest of producers or manufacturers of an essential commodity is no doubt a factor to be taken into consideration, but surely it is of much lesser importance and must yield to the interest of general public who are consumers. It is the duty of the Government to strike a balance between the need of the demand for the essential commodity concerned and the interest of the industry, but in no circumstances the interest of the industry should be given preference and predominent considera-tion surrendering public interest. If in serving the interest of public, the industry has to suffer a loss for temporary period such loss cannot be considered a relevant factor in setting at naught the Governmental action in issuing Order like Control Order of 1946: If the case of M/S. Laxmi Khandsari v. State of Uttar pradesh, AIR. 1981 SC 873, the Hon'ble Supreme Court of India made the following pertinent observations about reasonable restriction on the right conferred by Article 19(1)(g) of the Constitution :

'As to what are reasonable restrictionswould naturally depend on the nature andcircumstances of the case, the character of the statute, the object which it seeks to serve, the existing circumstances, the extent of evil sought to be remedied as also the nature of restraint or restrictions placed on the right of the citizens. It is difficult to lay down any hard and fast rule of universal application, but in imposing such restrictions the State must adopt an objective standard amounting to a social control by restricting the rights of the citizens where the necessities of the situation demand. Further, the restrictions must be in public interest and are imposed by striking a just balance between the deprivation of right and the danger or evil sought to be avoided. If the restrictions imposed appear to be consistent with the directive principles of State policy, they would have to be upheld as the same would be in public interest and manifestly reasonable. Further, the restrictions, may be partial, complete, permanent or tem-porary, but they must bear a close nexus with the object in the interest of which they are imposed. Another important test is that restrictions should not be excessive or arbitrary, The Court must examine the direct and immediate impact of the restrictions on the rights of the citizens and determine if the restrictions are in larger public interest while deciding the question that they contain the quality of reasonableness. In such cases, a doctrinaire approach should not be made, but care should be taken to see that the real purpose which is sought to be achieved by restricting the rights of the citizens is subserved. At the same time, the possibility of an alternative scheme which might have been, but has not been enforced, would not expose the restrictions to challenge on the ground that they are not reasonable.'

The Cotton Control Order, 1948 has been promulgated to ensure equitable distribution and ayailabjlity of controlled cloth at fair prices in the open market. Judged in the light of the abpve referred decision of the Hon'ble Supreme Court of India and on an overall consideration of the various aspects of the matter, restrictions put by Clause 21A of the Order of 1948 can by no means be said to be unreasonable. This is a reasonable restriction in the interest of the general public and is contemplated in Article 19(6) of the Constitu-tion of India. The Textiles Commissioner is guided by the provisions as contained in Proviso to Sub-clause (1) of Clause 20 of the Order of 1948 in giving directions to pack minimum quantity of cloth. Apart from this, the Rules or principles for guidance are first equitable distribution and Secondary availability at fair prices of controlled cloth. The requirement to pack controlled cloth under Clause 21A of the Order of 1948 cannot, in any sense of the term, be said to be unreasonable restrictions on the citizens' right mentioned in Clause (g) of Article 19(1) of the Constitution of India.

18. The submission of Shri Joshi that Clause 21A is unreasonable restriction on the right conferred on the petitioners by Article 19(1)(g) of the Constitution of India, as no procedure has been prescribed for lifting the controlled cloth, has no substance. A Similar challenge to the validity of the provisions of Sugar (Control) Order, 1966 has been negatived by the Hon'ble Supreme Court of India in the case of P. P. Enterprise v. Union of India, AIR 1982 SC 1016. In the case of Suraj-Mal Kailashchand v. Union of India, AIR 1982 SC 130, challenge to Clause 18 of Rajasthan Trade Articles (Licensing and Control) Order, 1980 as violative of Articles 14 & 19(1)(g) of the Constitution of India was negatived by the Hon'ble Supreme Court of India in the following terms (at page 131) :--

'To obviate hoarding and blackmarket-ing in essential commodities, the State Gov-ernment has promulgated the Rajasthan Trade Articles (Licensing & Control) Order, 1980. The Order introduces a system of checks and balances to achieve the object of the legislation, i.e. to ensure equitable distri-bution and availability of. essential commodities at fair prices. Clause 18 of the Order enables the Government to fix the stock-limits of essential commodities. The Notification dated 23-5-1981 fixing the stock limit of wheat cannot be assailed on ground that it provides no guidelines as to the manner of disposal of stock of wheat in excess of the limit of 200 quintals with a dealer at any one time.'

19. In view of our above discussion, we are of the view that there is no substance in the challenge to the provisions of Clause 21A of the Order of 1948 on the ground that it violates Article 19(1)(g) of the Constitution of India.

20. We now take-up the contention, namely, that the provisions of Clause 21A of the Order of 1948 violate Article 14 of the Constitution of India. Mr. Joshi, learned Counsel for the petitioners, submitted that the Textile Commissioner is empowered to issue directions to all the Spinning Units by the powers conferred on him under the aforesaid Clause irrespective of the capacity of the Mills to produce or to pack the controlled cloth and, therefore, unequals have been treated equally and, therefore, the said Clause being arbitrary, violates the provisions contained in Art, 14 of the Constitution of India and, therefore, should be struck down.

In this connection, it has to be appreciated that the power to direct packing of such minimum quantity of controlled cloth has been conferred on a higher Officer, namely, Textile Commissioner and abuse of power by such Officers cannot be easily assumed. The Office of the Textile Commissioner was established in 1943 with the objective of arranging supply of cloth to the defence force as well as to the civilian population. After the end of second World War, the need of defence force reduced in importance to those of the civilians. The post war scarcity condition had developed. The Textile Commissioner was made responsible for administering the prices, distribution and control of a few varieties of cloth meant for civilian consumption. The Textile Commissioner has been vested with suitable powers under the various Control Orders issued from time to time under the provisions of the Essential Commodities Act, 1955 to enable him to discharge his regulatory and developmental functions. The regulatory function by and large constitute the implementation of various types of Control Orders under the Essential Commodities Act so as to ensure protection to the decentralised Sector as also to ensure that proper quality of textiles are manufactured and marketed at reasonable prices. Thus, while performing the regulatory functions, it cannot be assumed that the powers conferred on Textile Commissioner would be arbitrarily used. Apart from this, the direction to pack such minimum quantity of controlled cloth under Clause 21A of the Order of 1948 can be given by the Textile Commissioner subject to the provisions contained in the proviso to Sub-clause (1) of Clause 21 of the Order of 1948. It follows that in issuing direction under Clause 21A of the Order of 1948, the Textile Commissioner shall have to take into consideration the following factors:--

(i) the demand for cloth or yarn.

(ii) the needs of general public.

(iii) the special requirements of the industry for such cloth or yarn.

(iv) the capacity of the manufacturer, or class of manufacturers, or manufacturers generally, to manufacture different descriptions or specifications of cloth or yarn and

(v) the necessity to make available to the general public cloth of mass consumption.

Therefore, it cannot be said that irrespective of the capacity of the Mills to produce or to pack the controlled cloth, directions can be given by the Textile Commissioner to pack a particular quantity of cloth under Clause 21A of the Order of 1948. Apart from the above referred factors, which are bound to enter into consideration of the Textile Commissioner before any direction is given under Clause 21A of the Order of 1948. Sub-clause (3) of Clause 21A of the said Order provides that if the Textile Commissioner is satisfied that any direction issued by him causes under hardship or difficulty to any such producer or a group of producers, he may, by an order and for the reasons to be recorded in writing, direct, that direction shall not apply or shall apply subject to such modification as may be specified in the Order to such producer or a group of such producers. Moreover, Clause 36 of the Order of 1948 provides that any person aggrieved by an order of the Textile Commissioner made under this Order may prefer an appeal to the Central Government within thirty days of the date of communication of such order and the decision of the Central Government thereon shall be final. Thus, an appeal lies against the order of the Textile Commissioner to the, Central Government, Any arbitrary action on, the part of Textile Commissioner can always be interfered with by the High Court in appropriate cases. Thus, we are of the view that it cannot be said that unbridled, un-guided and arbitrary powers have been conferred on the Textile Commissioner under the provisions of Clause 21A of the Order of 1948. Therefore, we do not find any substance in the contention that Clause 21A of the Order of 1948, is arbitrary and, therefore, violative of the provisions contained in Article 14 of the Constitution of India.

21. Lastly it was submitted by the learned counsel for the petitioners that the different orders dated 7-1-1978, 7-4-1978, 27-4-1978, 11-8-1978, 27-12-1988 two orders dated 29/ 30th December, 1978 and the order passed by the Central Government in Appeal On 8-6-1979, which have been produced by the petitioners at Annexures E-(i), D, E(ii), G, H, I, J & K respectively to the petition are bad in law, inasmuch as those orders were passed by the Textile Commissioner without affording any oral hearing to the petitioner and in violation of principles of natural justice. It was contended on behalf of the petitioners that the orders refusing to grant exemption are vitiated by the fact that no opportunity of hearing was given to the petitioner either at the stage of rejecting the exemption application or even at the earlier stage while giving the direction to pack a particular quantity of cloth. It was submitted that the Order of granting or rejecting/ refusing exemption, is a quasi judicial order because such an order results in civil consequences and creates a liability of pecuniary nature and, therefore, the impugned orders could not have been passed without affording an opportunity of oral hearing to the petitioners. Mr. Joshi argued that granting of exemption is a statutory function and the eligibility of exemption pas to be decided on consideration of objective standard of relevant factors and this function being a quasi-judicial function, opportunity of oral hearing ought to have been given to the petitioners and the same having been denied, not only the orders passed by the Textile Commissioner are bad, but consd-quently confirmation in appeal by the Government of India is also bad. In support of this submission, learned Counsel placed reliance on the decision rendered by the Hon'ble Supreme Court of India in the case of Km. Neelima Misra v. Dr. Harinder Kaur Paintal, AIR 1990 SC 1402 : (1990 Lab 1C 1229) and in the case of the Scheduled Caste and Weaker Section Welfare Association (Regd.) v. State of Karnataka, AIR 1991 SC 1117 : 1991 AIR SCW 1010.

As against this, Mr. Naik, learned Counsel appearing on behalf of the respondents, submitted that it is true that an adjudicating Authority must observe the principles of -natural justice and must give a reasonable opportunity of being heard to the person against whom the motion is sought to be taken, but it is well settled law that in absence of statutory provision, administrative authority is not bound to give the person concerned an oral hearing. It was further pointed out by the learned Counsel for the respondents that in fact, no oral hearing was demanded by the petitioners while seeking exemption from the obligation cast under Clause 21-A of the Order of 1948. In the premises, the learned Counsel submitted that the impugned orders passed by the Textile Commissioner as well as by the Central Government rejecting the Appeal cannot be said to be contrary to the principles of natural justice and should not be set aside on this ground. In support of his above submission, the learned Counsel placed reliance on the decision rendered by the Hon'ble Supreme Court of India in the case of State of Assam v. Gauhati Municipal Board, Gauhati, AIR 1967 SC 1398 and in the case of Union of India v. Jyoti Prakash Kitter, AIR 1971 SC 1093.

So far as the above referred contention raised on behalf of the petitioners is concerned, it is well settled that an adjudicating authority must observe the principles of natural justice and must give a reasonable opportunity of being heard to the person concerned against whom action is sought to be taken. However, it is well settled that in absence of any statutory provisions, even if the Textile Commissioner exercises quasi judicial power, he is not bound to give the person concerned an oral hearing. Oral hearing is not regarded as sine qua non of natural justice and the person is not entitled to an oral hearing unless such a right is conferred by the Statutes. Sub-clause (3) of Clause 21A of the Order of 1948 does not provide that before deciding an application for exemption under the said clause, the Textile Commissioner must afford oral hearing to the person concerned. The cases relied upon by the learned Counsel for the petitioners do not lay down that even in absence of statutory provisions, oral hearing should be accorded before passing any orders against a person. In the facts of the present case, undue hardship and difficulty was pointed out by the petitioners in the application seeking exemption from the direction issued by the Textile Commissioner by stating all relevant facts. Along with the application dated 2nd May, 1978, the petitioners had produced a statement showing the details of reserves and accumulated loss. A comparative statement showing the consumption of raw-material, was also annexed along with the application dated 2nd May, 1978 seeking exemption. The fact that rate of dearness allowance had gone-up and that during the year 1977, the petitioner No. 1 --Company had to pay bonus to the extent of Rs. 10,64,630/-, was also pointed out. Thus, by giving facts and figures supported by the statement, the petitioners had tried to demonstrate before the Textile Commissioner that there was undue hardship and difficulty in complying with the direction issued by the Textile Commissioner under Sub-clause (1) of Clause 21A of the Order of 1948 and, therefore, necessary exemption should be granted to the petitioners. The Textile Commissioner, after considering the relevant facts, came to the conclusion that the petitioner No. 1 Company had made profit during the year ending on 31st December, 1977 and the balance-sheet showed a reserve of Rs. 53,52,747/- and an increase in the reserves as compared to the previous year and on account of this position, came to the conclusion that the petitioner No. 1 Company did not qualify for grant of exemption and rejected the exemption application.

Thus, we are of the view that sufficient opportunity to represent its case was given to the petitioner No. 1 Company and no principles of natural justice were violated by the Textile Commissioner while rejecting the application for exemption. In fact, there were no contending parties before the Textile Commissioner, one of whom was given opportunity of oral hearing and another was not. It is true that in the case of Km. Neelima Misra (supra) it has been observed by the Hon'ble Supreme Court of India that as far as the Administrative Officers are concerned, the duty is not so much to act judicially as to act fairly and for this concept of fairness, adjudi-cative settings are not necessary nor it is necessary to have lis inter partes and there need not be any struggle between two opposing parties giving rise to a 'lis'. In the said case, it has also been held that there need not be resolution of lis inter partes and the duty to act judicially or to act fairly may arise in widely different circumstances. However, in the above referred case, it has not been laid down that even in absence of statutory provision, oral hearing should be granted to the person concerned and, therefore, the said decision would have no application to the facts of the present case. Similarly, in the case of the Scheduled Caste and Weaker Section Welfare Association (Rgd.) (supra) it has been held by the Hon'ble Supreme Court of India that it is one of the fundamental rules of our constitutional set-up that every citizen is protected against exercise of arbitrary authority by the State or its Officers and if there is power to decide and determine to the prejudice of a person, duty to act judicially is implicit in the exercise of such power and the rule of natural justice operates in areas not covered by any law validly made. However, in the said case, it has been further clarified by the Hon'ble Supreme Court of India that what particular rule of natural justice should apply to a given case must depend to an extent on the facts and circumstances of that case, the frame-work of the law under which the enquiry is held and the body of persons appointed for that purpose. We are, of the view that opportunity of being heard was given to the petitioners when application filed by the petitioners seeking total exemption was considered by the Textile Commissioner and in this view of the matter, we are of the view that the observations made by the Hon'ble Supreme Court of India in the above referred case, do not help the petitioners. Complex, legal and technical questions wer,e not involved in deciding the exemption application. Therefore, we are of the view that oral hearing was not necessary at all in the facts and circumstances of the case and it cannot be said that any principle of natural justice was violated by the Textile Commissioner while passing the impugned orders. It is an admitted position that no oral hearing was asked for by the petitioners before the exemption applica-tion was decided by the Textile Commissioner. In the case of State of Assam and others (supra), the facts were that after the Municipal election, new members of the Board began to function from July 7, 1962. The term of the members was four years and was to expire on July 6, 1966. On June 9, 1964, the State of Assam issued notice to the Board under Section 298 of the Assam Municipal Act, 1957 stating that it was of the opinion that the Board was incompetent to perform or persistently make default in the performance the duties imposed on it by or under the Act and, therefore, the Board should be superseded and asked the Board to show cause why this should not be done. The Board gave explanation on August 10, 1964. That explanation was considered by the State Government and on December 9, 1964, the State Government issued a Notification supersed ing the Board. The Board filed a Writ Petition in the High Court challenging the order of supersession, which was allowed, inter alia, on the ground that there was violation of principles of natural justice. Being aggrieved, the State of Assam preferred Appeal before the Hon'ble Supreme Court of India. While allowing the Appeal and dealing with the point of natural justice, it has been held by the Hon'ble Supreme Court as under (at page 1399: of AIR 1967) :

'It is not necessary in the present appeal to decide whether the proceedings resulting in an order under Section 298 of the Act are quasi judicial proceedings or merely administrative proceedings. Assuming that the High Court is right that the proceedings are quasi judicial proceedings; the question is whether there was any violation of the principles of natural justice in this case. What the section provides is that a notice should be given to the Board by the State Government and its explanation taken before an order under Section 298 is passed. It is not disputed that the appellant had given notice to the Board and had indicated the charges on the basis of which it had formed its tentative conclusion and also had asked for an explanation from the Board. The explanation was received in August, 1964 and considered by the appellant and thereafter the appellant by its order dated December 9, 1964 decided to supersede the Board. Now, it is clear from these facts that the appellant acted in full compliance with the procedure provided in Section 298. Ordinarily, therefore, there is no reason why it should be held, when the procedure provided in Section 298 was complied with, that the principles of natural justice were violated. But, the High Court was of the view that the appellant should have given an oral hearing to the Board which should also have been given an opportunity to produce materials before the appellant in support of the explanation. According to the High Court, the right of hearing includes the right to produce evidence in support of an explanation and this opportunity was not given to the Board. Here again it is unnecessary to decide whether Section 298 which merely says that the State Government should give opportunity to the Board for submitting an explanation in regard to the matter envisages production of evidence -- oral or documentary -- at some later stage by the Board in support of its explanation. The High Court has conceded that a personal hearing of the nature indicated above is not always a concomitant of the principles of natural justice. But, it was of the view that in the present case, principles of naturaljustice required that the Board should have been given a personal hearing and an opportunity to produce materials in support of the explanation. We should have thought that when the Board is given a notice as required b,y Section 298 it would naturally submit its explanation supported by facts and figures and all relevant material in support thereof. However, we are definitely of opinion that the provisions of Section 298 being fully complied with, it cannot be said that there was violation of principles of natural justice in this case when the Board never demanded what is called a personal hearing and never intimated to the Government that it would like to produce materials in support of its explanation at some later stage. Therefore, where a provision like Section 298 is fully complied with as in this case and the Board does not ask for an opportunity for personal hearing or for production of materials in support of its explanation, principles of natural justice do not require that the State Government should ask the Board to appear for a personal hearing and to produce materials in support of the explanation. In the absence of any demand by the Board of the nature indicated above, we cannot agree with the High Court that merely because the State Government did not call upon the Board to appear for a personal hearing and to produce material in support of its explanation it violated the principles of natural justice. This ground in support of the order of the High Court, therefore, fails.'

22. In the case of Union of India v. Jyoti Prakash Mitter (supra), the respondent was a candidate for the matriculation certificate examination of the Bihar University held in April, 1918. In the Bihar Government Gazette declaring him successful, the age of the respondent was shown to be 16 years 3 months in April, 1918. The respondent offered himself as a candidate for admission to the Indian Civil Service at an Examination held in 1923 by the United Kingdom Civil Service Commission. On that occasion, he declared that his date of birth was December 27, 1901. The respondent joined the High Court Bar at Calcutta in May, 1931. On February 11, 1949, the respondent was appointed as Additional Judge and on December 26, 1949, he was recommended for appointment as a permanent Judge. He then declared that he was 45 years of age. A question arose as to the age of the respondent and in view of the direction given by the Hon'ble Supreme Court of India, the President of India, after considering the evidence and after consulting the Chief Justice of India, by an order dated September 29, 1965 determined the date of birth of the respondent as December 27, 1901. The legality of the procedure followed by the President in making the order was challenged by an respondent before the Hon'ble Supreme Court of India and one of the contentions raised was that as the personal hearing was not given, the order passed by the President was bad in law. While reporting the above referred contention, it has been held by the Hon'ble Supreme Court of India as under (at page 1103 of AIR 1971):--

'Article 217(3) does not guarantee a right of personal hearing. In a proceeding of a judicial nature, the basic rules of natural justice must be followed. The respondent was on that account entitled to make a representation. But, it is not necessarily an incident of the rule of natural justice that personal hearing must be given to a party likely to be affected by the order. Except in proceedings in Courts, a mere denial of opportunity of making an oral representation will not, without more, vitiate the proceeding. A party likely to be affected by a decision is entitled to know the evidence against him and to have an opportunity of making a representation. He, however, cannot claim that an order made without affording him an opportunity of a personal hearing is invalid. The President is performing a judicial function when he determines a dispute as to the age of a Judge, but he is not constituted by the Constitution a Court. Whether in a given case the President should give a personal hearing is for him to decide. The question is left to the discretion of the President to decide whether an oral hearing should be given to the Judge concerned. The record amply supports the view that the President did not deem it necessary to give an oral hearing. There were no complicated questions to be decided by the President.

..... ..... .......... ..... .......... ..... ..... If upon this evidence the President was of the view that the disputed question may be decided without giving an opportunity of personal hearing this Court cannot set aside the order on the ground that the order was made without following the rules of natural justice.'

23. It was suggested by Mr. Joshi that reading of balance-sheet requires a special skill and, therefore, personal hearing ought to have been given to the petitioners. We are not impressed by this argument at all. A copy of the balance-sheet for the relevant year has not been produced before this Court, nor it has been demonstrated as to how any error was committed by the Textile Commissioner in reading the balance-sheet. On true and correct reading of the balance-sheet, the Textile Commissioner came to the conclusion that the petitioner No. 1-Company had made profit during the year ending on 31st December, 1977 and that balance-sheet showed reserves of Rs. 53,54,747/- and an increase in the reserves as compared to the previous year. An incumbent manning the post of Textile Commissioner is a highly qualified I.A.S. Officer and it cannot be presumed that he did not possess the skill of reading the balance-sheet. In the circumstances, we do not find any substance in this contention raised by Mr. Joshi.

24. In view of the above decision of the Hon'ble Supreme Court of India, we are of the view that the impugned orders passed by the Textile Commissioner and the order passed by the Central Government in Appeal, cannot be said to be contrary to the principles of natural justice and are not liable to be set aside on that ground. It was argued byby Mr. Joshi that exemption once grantedcould not have been withdrawn without affording any opportunity of being heard to the petitioners and, therefore, the order rejecting the application dated 2nd May, 1978seeking total exemption from the direction given under Sub-clause (1) of Clause 21A of the Control Order should be set aside. So far as this submission is concerned, it has to be noted that earlier exemptions were provisional in character and if that had not been so, the petitioners would not have filed the application dated 2nd May, 1978 seeking total exemption from the obligation arising from the direction given under Sub-clause (1) of Clause 21A of the Order of 1948. Even if it is assumed for the sake of arguments that the exemption already granted was sought to be withdrawn by the order dated 27th December, 1978 by rejecting the application dated 2nd May, 1978 claiming total exemption arising under the direction given by the Textile Commissioner under Sub-clause (1) of Clause 21A of the Order of 1948. We are of the view that it was not necessary for the Textile Commissioner to hear the petitioners, before passing the order dated 27th December, 1978, as it is in the nature of withdrawing concession.

In the case of M/s. Andhra steel Corpora- tion Ltd., etc. etc. v. The Andhra Pradesh State Electricty Board and anothers, AIR 1991 SC 1456 : (1991 AIR SCW 1358) relying on the decision rendered in the case of Shri Bakul Oil Industries v. State of Gujarat, (1987) I SCC 31 : (AIR 1987 SC 142), the Hon'ble Supreme Court of India has held that the subsequent withdrawal of the concession granted by the Government does not attract the provisions of principles of natural justice and the order withdrawing concession, can-.not be said to be illegal on the ground that the same was passed in violation of the principles of natural justice. In view of this, we do not find any merits in the submission that the order dated 27th December, 1978, is bad, as it violates the principles of natural justice.

25. Except the above referred contentions, no other contentions were argued, though raised in the petition.

26. In view of the above discussion and conclusion, we do not find any merits in the petition. The petiton fails. Rule is discharged. Interim relief granted earlier, is hereby vacat-ted. However, having regard to the facts and circumstances of the case, there shall be no order as to costs.


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