M. Natesan, J.
1. These appeals by the State and its concerned officers have been preferred against an order passed by our learned brother Kailasam J., (in. Ramananda v. Taluk Supply Officer I.L.R. (1968) Mad. 679) declaring under Article 226 of the Constitution, the provisions of the Madras Paddy and Rice (Declaration and Requisitioning of Stocks) Order, 1966 (hereinafter referred to as the Order) invalid, and granting consequential reliefs. The order in question was issued by the state as delegate of the Central Government on 28th of June, 1966, under Section 3 of the Essential Commodities Act (Central Act X of 1955), an Act to provide, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in certain commodities. The several respondents, as persons aggrieved by action taken against them under the said order, challenged the legality of the action of the authorities, questioning the vires of the Order. The Order inter alia provides for specified State officers or any officer of the Government who may be authorised in that behalf to require any person holding any stock of paddy or rice to sell the whole or a specified part of the stocks at the controlled price to the Government or to an officer or agent of the Government or to such other person or class of persons and in such circumstances as have been specified in the order, and for inspection and seizure of stocks of paddy or rice with a view to securing compliance with the provisions of the order or to satisfy himself that the provisions have been complied with. The validity of the order was challenged on the ground that it was violative of the rights of the grower of paddy under Article 14 and 19 (1) (f) of the Constitution, besides being in excess of the powers conferred under Section 3, of the Essential Commodities Act, 1955. It was contended that the essential pre-requisite for a valid order of the kind, the formation of opinion by the Government that it was necessary or expedient for maintaining or increasing the supply of paddy or for securing its equitable distribution and availability at fair prices to have the order in question, was absent in the case, and that, therefore, the order had no legal basis. For the State in the main, two submissions were made. First, it was contended that as the proclamation of emergency under Article 352 of the Constitution was in operation, Article 358 of the Constitution prevented citizens from complaining of any violation of the fundamental rights guaranteed under Article 19. Secondly, it was submitted that the Order was one that would fall under Article 31 (2) of the Constitution and, therefore, the contention was not open of violation of rights guaranteed under Article 19 (1) (f). There was denial by the State of the charge of excessive delegation and arbitrary uncontrolled discretion capable of abuse and indiscriminate action. At the hearing of the writ petition, several of the moot points that arose for consideration were subject of concessions by the learned Advocate-General for the State, and we find quite properly in the state of the authorities. However, having regard to the constitutional importance of questions involved the learned Judge examined the contentions on merits and held that the impugned order which does not lay down any specific direction regarding the manner in which paddy should be requisitioned, empowering officer with unguided and arbitrary powers end enabling them to discriminate between persons was violative of Article 14 of the Constitution. He found further that the power for seizure and search provided under Clause 5 of the Order was violative of the rights of a producer under Article 19 of the Constitution and in excess of the powers conferred by Section 3 of the Essential Commodities Act, 1955. The claim on behalf of the State that the impugned Order was one falling under Article 31 (2) of the Constitution and for that reason and as the proclamation of emergency was in operation, Article 19 (1) (f) was not available to the citizens, was overruled. The learned Judge also upheld the claims of the petitioners before him in Writ Petition No. 2358 of 1966 and Writ Petition No. 2671 of 1966, that they were exempted from the operation of the Order by virtue of a prior notification and that the exemption was continued under the impugned Order also. The learned Advocate-General conceded the claim of the religious institutions for exemption. However, appeals have been filed by the State in these cases also, as the constitutional validity of the Order has also been questioned by the religious institutions and a common judgment was pronounced. Except for questioning the finding as to the invalidity of the Order, the learned Advocate-General stated before us that the appeals against the religious institutions are not pressed.
2. Before us, the findings on facts by the learned Judge, Kailasam, J., have not been the subject of serious traverse and except to briefly indicate the circumstances in which the parties came up for relief to this Court, it is not necessary to refer to them. In Writ Petition No. 2671 of 1966 it is alleged that on 15th October, 1966 a notice was served by the Revenue Divisional Officer calling upon the petitioner to measure out 1634 bags of paddy within three days. While the petitioner's representation to the District Revenue Officer for permitting him to retain the quantity of paddy required for the personal use of the mutt was pending, it is stated that the Tahsildar and the Taluk Supply Officer sealed the granary of the mutt and refused access to the petitioner. It is averred that though the District Revenue Officer permitted the petitioner to retain 1338 bags of paddy for the purpose of the mutt and sell the surplus to the Government agents, the Tahsildar and the Taluk Supply Officer, Nanguneri, measured out the entire stock of paddy without permitting the deduction for personal use allowed by the District Revenue Officer. The further averment made in the affidavit is that no one on behalf of the mutt was allowed to be present when the paddy was being measured out. Though the Taluk Supply Officer and the Tahsildar have been made parties to the writ petition only the Collector has filed a counter affidavit giving a general denial of the allegations. The officers concerned have not specifically denied the serious charges made against them while enforcing the Order.
3. In Writ Petition No. 2358 of 1966 the charge against the procurement officials Was that from the thrashing floor itself even before the share of the lessees was measured out, the entire harvested paddy was removed. Here again, there was no counter affidavit by the concerned officers. The Collector, in his affidavit, would set up consent by the petitioner for taking the entire paddy available. The learned Judge, on the materials that have been placed before him, is not for accepting the consent pleaded. There was material for the learned Judge to find that the petitioner was willing only to measure out the excess paddy he had.
4. Serious charges of seizure without any requisition order, arrest of the petitioners and refusal to release the petitioners on bail are made in Writ Petition Nos. 814 and 815 of 1967. In the counter-affidavit, it is admitted that no requisition order was made and it was not stated that the officers were of Opinion that the petitioners were taking steps to evade the provisions of the Order. The learned Judge finds that in the circumstances made out by the records, there was no justification for the entry, search and seizure and arrest of the petitioners.
5. One thing emerges from the above statement of facts, that questions of considerable public importance in the enforcement of the emergency food grains procurement provisions arise for consideration. The learned Advocate-General would maintain before us the validity of the order on three grounds. First he rests on Articles 358 and 359 of the Constitution. The second ground is that as a law relating to acquisition and requisition, the impugned order falls under Article 31 (2) and, therefore, is immune from attacks based on Article 19 (1) (f). The third ground is that Article 14 is not violated by the grant of discretion to specified officers of the Government having regard to the nature of their duties. It is said that they are responsible officers and their functions under the order require discretionary power of sufficient latitude to !meet the variety of situations that may be found in the enforcement of the order. The Advocate-General would explain away the absence of any reference in the preamble to the order that the State Government was satisfied as to the necessity or expediency of the order, by drawing our attention to various orders issued under the Act, the preambles to which do not contain anything to indicate whether the Government was satisfied about the necessity or expediency of the orders. It was faintly urged that the necessity or expediency was self-evident from the very exercise of the powers in the prevalent circumstances. It was pointed out that the learned Judge has himself noticed that it is a notorious fact that paddy was the problem of the State and that it was in acute shortage at the time when the impugned order was passed.
6. It is well established that the presumption is of the constitutionality of a law. And we start with this that the stark reality that has been confronting our country for the past several years is that there are not enough foodstuffs to go round, and parts of the country are frequently found in the throes of famine. Since the Second World War there have been a succession of Acts, Rules and Orders for the control of the production, supply and distribution of and trade and commerce in essential commodities under which form have been included foodstuffs and food crops. Such regulations necessarily involve restrictions on the citizen's rights to acquire, hold or dispose of property and free practice of his occupation, trade, business or profession. The Essential Commodities Act. 1955 with which we are immediately concerned, received the assent of the President on the 1st April, 1955 replacing the Essential Supplies (Temporary Powers) Act (XXIV of 1946) to similar purpose. The life of Act XXIV of 1946 had been extended from time to time till the Essential Commodities Act, 1955 (X of 1955) (hereinafter referred to as the Act) was placed on the statute book as a permanent control measure. The Act, it must be seen, is only an enabling Act. It enables the Government whenever there is need or it is expedient to exercise powers under the Act. But the Act by itself is not an emergency provision. It only arms the Government with powers to meet certain emergencies, difficulties in the economic, trade and commerce fronts, difficulties in the production and distribution of essential commodities, including foodgrains. It is a Central Act passed by Parliament in the interests of the general public, for the control of the production, supply and distribution of and trade and commerce in specified commodities. The dominant purpose of the Act and its intendment, as may be seen from Section 3 of the Act, is to secure equitable distribution and availability at fair price of specified commodities. Section 2 (a) defines ' essential commodity' and we find it covering foodstuffs, including edible oilseeds and oils, and food crops including crops of sugarcane. Section 3 of the Act enumerates the power of the Government under the Act and, when the power to control production, supply and distribution, etc., could be availed of. Sub-section (2) of Section 3 refers to the varied and manifold measures that may be adopted for effecting the object. Section 4 refers to the powers that may be conferred and duties that may be imposed by an order under Section 3 upon the Central Government or the State Government or officers and authorities of the Central Government or State Government. Section 5 provides for delegation of powers by the Central Government by means of a notified order to the State Government or such officers or authority subordinate to the State Government or Central Government. Section 7 provides penalties for contravention of orders under Section 3, and certain contraventions carry punishment with imprisonment extending to three years. A reference to the Act shows that the making of orders under the section is the exclusive privilege of the Central Government. A State Government directly has no such power or privilege. But the Central Government can delegate the State Government with powers under the Act. The delegation contemplated by Section 5 can be effected only by notified orders specifying the matters in relation to which and conditions subject to which the power is exercisable. The delegated powers under the Act can be restricted and need not cover the entire ambit of powers possessed by the Central Government under the Act. Apart from delegation, the Central Government, under Section 4 may confer on the State Government, certain powers under orders passed by the Central Government under Section 3. The orders passed by the Central Government under the provisions of the Act would be subordinate legislation as a delegate of the Parliament and the Central Government is empowered by Parliament to further delegate its functions and powers under the Act to the State Government or such officer or authority subordinate to the State Government. There is a provision, Sub-section (6) in the Act that every order made under Section 3 by the Central Government or by any officer or authority of the Central Government shall be laid before both the Houses of Parliament as soon as it is made. This provision provides safeguards against the abuse of powers; it is a check on the delegated powers; The Central Government by G.S.R. No. 906, dated 9th June, 1966, in exercise of the powers conferred for delegation under Section 5 of the Act delegated to the State Government certain powers under Section 3 in relation to foodstuffs. The material part of it runs thus:
G.S.R. 906--In exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (X 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 (a), (b), (c), (d),(e) (f) (h) (i) (ii) and (j) of Sub-section (2) thereof shall, in relation to foodstuffs, be exercisable also by a State Government subject to the condition ::
(1) that such powers shall be exercised by a State Government subject to such directions, if any, as may be issued by the Central Government in this behalf and....
7. It is in pursuance of this delegated power that the impugned order was made by the local State Government on the 28th of June 1966, arming its officers with extensive powers for the procurement of paddy and rice. At that time, there was in force the Madras Paddy and Rice (Declaration and Requisitioning of Stocks) Order, 1964, issued in exercise of the powers conferred by Sub-rule (2) of Rule 135 of the Defence of India Rules, 1962. The provisions therein were practically identical and the impugned order was passed in supsercession of the order under the Defence of India Rules. The order comes in as one made under powers conferred to meet an emergency. The respondents before us who invoked the special jurisdiction of this Court have complained of arbitrariness and excesses by the officials who have been charged with the execution of the provisions of the order. The learned Judge, Kailasam, J., found no material to reject the complaints made by the petitioners before him. Before us, there have been no arguments on facts or on the merits of the complaints. The learned Advocate-General would confine, as already stated, his arguments to the legal validity of the impugned Order. Of course, it was submitted that in fact there have been no such excesses as complained of and that the officers at the highest levels, at any rate been scrupulously fair in enforcing the provisions of the order. But clearly there should have been at least some overzealousness somewhere as the substantial charges regarding the seizure of stocks in one case even without the requisite order and arrests have not been denied. The powers are wide and affect the rights of the citizens. It is said that there is emergency necessitating the drastic curtailment of rights in relation to food-grains. But the very fact that the administration feels that there is emergency makes the responsibility of the Court greater and more solemn. Emergency cannot be allowed to serve as a cloak for constitutional breaches and violations; to permit violation of the rights of citizens unwarranted by the Constitution on the ground of emergency is to permit abuse and misuse of the emergency situation. Courts have the sacred duty to keep the balance between the requirements of the larger interests of the nation and the fundamental rights guaranteed to the citizens. In Liversidge v. Sir John Anderson L.R. (1942) A.C. 206, Lord Macmillan cautions Courts not to adopt even in war times canons of construction different from those followed in peace times. War was considered no justification for any relaxation of the vigilance of Courts in seeing that law is observed. Adopting the words of Lord Atkin in that case, I would say that laws in this country should speak the same language in emergency as in normal times and that Courts even in periods of emergency have to be 'alert to see that any coercive action is justified in law'. Restraints on the guaranteed freedom of the subject can only be under law and not by any executive ukase. This is no damper for under the Constitution ample powers reasonably required are found providing for any situation.
8. We shall first take up the argument for the State that the subject cannot rely upon the fundamental freedoms under Articles 14 and 19, as the President's proclamation of emergency declared on 26th of October, 1962 under Article 352, Clause (1) is in operation. Articles 358 and 359 are relied upon by the State. On the proclamation of emergency under Article 358, the provisions of Article 19 are automatically suspended. Under Article 359 where a proclamation of emergency is in operation, the President may by order declare that the right to move any Court for the enforcement of such of the rights conferred by Part III as may be mentioned in the order and all proceedings pending in any Court for the enforcement of the rights so mentioned shall remain suspended for the period during which the proclamation is in force or for such shorter period as may be specified in the order. In exercise of the powers under Article 359, Clause (1), the President has suspended the enforcement of the rights conferred under Articles 14, 21 and 22 of the Constitution during the operation of the proclamation of emergency if the person has been deprived of any such rights under the Defence of India Act, 1962. The suspension of rights under Part III is limited in its scope. As pointed out in Ananda v. Chief Secretary, Government of Madras : 1966CriLJ586 .
This order can be invoked only in cases where persons have been deprived of their right under Articles 14, 21 and 22 under the Defence of India Ordinance or any rule or order made thereunder. In other words, if the said fundamental rights of citizens are taken away otherwise than under the Defence of India Ordinance or Rules or Orders made thereunder, the Presidential Order will not come into operation.
So we are only left with the suspension of Article 19 under Article 358 of the Constitution. Persons affected otherwise than by the Defence of India Act, can certainly invoke Article 14 if their rights thereunder are invaded. The impugned order here is not by virtue of powers conferred under the Defence of India Act, but under the powers conferred under the Essential Commodities Act. The earlier order with reference to the same matter and in similar terms issued on the 14th of August, 1964 which the impugned order has superseded, was one under Rule 125 of the Defence of India Rules, 1962, and that was immune from attacks under Article 14 also.
9. The Advocate-General submits that as the impugned order was issued during the operation of the proclamation of emergency, if is at any rate immune from attack on grounds based on Article 19. The view of our learned brother, Kailasam, J., to the contrary relying on the decision in Tuticorin T. & C. Corporation (P.) Ltd. v. State of Madras (1966) 1 M.L.J. 313, is questioned. The learned Judge following the said decision holds that though the order is a post-emergency order passed in 1966, it should be taken as in pursuance of pre-emergency legislation, that is, the Essential Commodities Act, 1955, and so it should be held that Article 358 of the Constitution will not deprive a person of his rights under Article 19 of the Constitution. On this reasoning the learned Judge would hold that the impugned order is liable to be questioned as an infringement of rights under Article 19. While we arc also of the view that the order could be challenged under Article 19, our reasoning is on slightly different grounds. Merely on the ground that the order is in pursuance of a pre-emergency legislation it cannot escape the blanket cover from attack under Article 19 provided under Article 358. Admittedly it is a post-emergency law and during the operation of the proclamation of emergency Article 358 removes the inhibition of Article 19 from a State making any law or taking any executive action. That the power to make law or take any executive action has been derived from a pre-emergency Act, is not made an exception to the application of the Article. In Tuticorin T. & C. Corporation (P.) Ltd. v. State of Madras (1966) 1 M.L.J. 313, what was questioned was the constitutionality of a law made anterior to the proclamation of emergency. The Legislature had passed the Act and the President's assent to the law had been given before the proclamation of emergency. The Act had been published before the proclamation of emergency. The Act provided that it shall come into force on such date as the Government may by a notification appoint and the notification bringing the Act into force in certain districts of this State was dated 8th of September, 1964, that is after the proclamation of emergency. The learned Judge held that the law was made when the Legislature passed it, the President accorded his assent and the Act was placed on the statute book. As that was a date anterior to the proclamation of emergency, the aggrieved parties were not denied the right to impugn the law on the ground that it offended Article 19 of the Constitution. What was impugned was not just the post-emergency notification. Here what is impugned is the very post-emergency order. The provisions of the order in question are stated to offend Article 19 of the Constitution. Clearly, therefore, the ruling relied upon cannot apply for assailing the order under Article 19.
10. But the order is made under Section 3 of the Essential Commodities Act and subject to the limitations under which orders and notifications could be issued under the Act. Article 358 could save the order only from objections founded on Article 19, but not from other infractions of law or lack of the requisite power in the law making authorities. As an order made by the delegate under powers conferred under Section 3 of the Essential Commodities Act, 1955, the validity of the order could be examined to see whether it is within the ambit of that pre-emergency legislation. Section 3 of the Act which provides for making orders must be presumed to provide for orders which are constitutionally sound. When Parliament's powers arc circumscribed by constitutional limitations its delegate empowered to act under the power granted by Parliament cannot travel beyond and pass unconstitutional orders.
11. As a pre-emergency Act whose constitutional validity is assumed, orders passed by virtue of the powers granted under the Act must pass the gauntlet of Part III of the Constitution. If the impugned order is violative of Article 19, it fails for want of the necessary delegated power under the parent legislation or as exceeding the limits of the parent legislation. There has been no amendment of the Act after the proclamation of emergency re-vitalising it as a post-proclamation legislation, sheltered from attacks based on Article '19, If Section 3 of the Act could on its language sustain an order violative of Article 19, then Section 3 itself is void and so the delegate could pass no order thereunder. As pointed out in State of M.P. v. Bharat Singh (1968) 1 S.C.J. 173 : (1968) M.L.J. 24 : A.I.R. 1967 S.C. 1170 which suspends the provisions of Article 19 during an emergency declared by the President under Article 353 is in terms prospective; after the proclamation of emergency nothing in Article 19 restricts the power of the State to make laws or to take any executive action which the State but for the provisions contained in Part III was competent to make or take. Article 358, however, does not operate to validate a legislative provision which was invalid because of the constitutional inhibition before the proclamation of emergency. In that case acting under Section 3 of the Madhya Pradesh Public Security Act, XXV of 1959 a pre-proclamation of emergency Act, an order was passed on 24th April, 1963, severely curtailing the movements and actions of a person. When objections based on the continuance of the state of emergency were raised to the challenge by the petitioner under Article 226 of the validity of the order under Article 19 (1) (d) and (e), the Supreme Court observed:.the Act was brought into force before the declaration of the emergency by the President. If the power conferred by Section 3 (1) (b) authorised the imposition of unreasonable restrictions, the clause must be deemed to be void, for Article 13 (2) of the Constitution prohibits the State from making any law which takes away or abridges the rights conferred by Part III, and laws made in contravention of Article 13 (2) are to the extent of the contravention void. Section 3 (1) (b) was, therefore, void when enacted and was not revived when the proclamation of emergency was made by the President.
If an order made under powers conferred by the Act is void at its inception for lack of power, there is no need for its being subsequently impugned under Article 19. Only if it is an otherwise valid order, it could not be challenged under Article 19 during the period of emergency. In this connection by way of analogy reference may be made to the observations of the Supreme Court in Ghulam Sarwar v. Union of India : 1967CriLJ1204 , where it is pointed out that the validity of an order made by the President under Article 359 could be questioned if it violated the provisions of Article 14:
The President has to make an order declaring that the right to move a Court in respect of a fundamental right or rights in Part III is suspended. He can only make an order which is a valid one. An order making an unjustified discrimination in suspending the right to move a Court under Article 14 itself, will be void at its inception. It is a still-born order. It cannot be said that this involves an argument in a circle. This argument ignores the distinction between the order and the effect of that order. If the order does not violate Article 14, it can validly take away the right to move the Court to enforce Article 14.
In Narendra Kumar v. Union of India : 2SCR375 , the validity of certain orders made by the Central Government under Section 3 of the Essential Commodities Act came up for consideration. The validity of the Essential Commodities Act was not challenged. It was inter alia contended for the Union that as the petitioners before the Supreme Court (the petition was under Article 32 of the Constitution) had not challenged the validity of the Essential Commodities Act and had admitted the power of the Central Government to make an order in exercise of the powers conferred under Section 3 of the Act it was not open to the Court to consider whether the order made by the Government violated any of the fundamental rights under the Constitution. The petitioners had contended that their rights under Articles 19 (1) (f) and 19 (1) (g) were invaded and were not saved under Articles 19 (5) and 19 (6). Overruling the contention of the State, Das Gupta, J., speaking for the Court observed:
When, as in this case, no challenge is made that Section 3 of the Act is ultra vires the Constitution, it is on the assumption that the powers granted thereby do not violate the Constitution and do not empower the Central Government to do anything which the Constitution prohibits. It is fair and proper to presume that in passing this Act the Parliament could not possibly have intended the words used by it, viz., ' may by order provide for regulating or prohibiting the production, supply and distribution thereof, and trade and commerce in', to include a power to make such provisions even though they may be in contravention of the Constitution. The fact that the words ' in accordance with the provisions of the Articles of the Constitution' are not used in the section is of no consequence. Such words have to be read by necessary implication in every provision and every law made by the Parliament on any day after the Constitution came into force. It is clear therefore that when Section 3 confers powers to provide for regulation or prohibition of the production, supply and distribution of any essential commodity it gives such power to make any regulation or prohibition in so far as such regulation and prohibition do not violate any fundamental rights granted by the Constitution of India.
It is therefore necessary for us to consider, even though mala fides on the part of the Government are not alleged, whether the law made by the Central Government by way of subordinate legislation, is a law, which though abridging or taking away the rights conferred by Article 19 (1) (f) and (g), is within the saving provisions of Articles 19 (5) and 19 (6).
12. Viewed from this angle we cannot shut out of consideration Article 19 when examining the validity of the order, see Chanam Ram v. State of Punjab . The difference between subordinate legislation and law of a sovereign Legislature is that the subordinate law making body is bound by the terms of its delegated or derived authority. A subordinate legislation must not be in excess of the statutory power authorising it, nor repugnant to the statute or to the general principles of law.
13. The learned Judge Kailasam, J., has found that the order is violative of both Articles 14 and 19 of the Constitution. Before we examine the provisions of the order in relation to these Articles on the merits, there is the other question raised that Article 14 is not available as the order is law falling under Article 31 (2). The only requirement for the validity of the law, the Advocate-General submits, is that the conditions laid down under Article 31 (2) must be satisfied. The learned Judge Kailasam, J., sums up the position in Ramananda v. Taluk Supply Officer I.L.R. (1968) Mad. 679 with regard to the applicability of Article 19 (1) (f) thus at page 718.
If the law is one restricting the right of a citizen to acquire, hold and dispose of the property, the restriction should be reasonable and should be in the interests of the general public. If the law is one falling under Article 31 (1) the deprivation of property should be by authority of law. But the person is entitled to protection under Article 19 (1) (f) of the Constitution. When the law relates to acquisition and requisitioning of property for a public purpose by transferring the ownership or possession of the property to the State or to a corporation owned or controlled by the State, Article 31 (2) is applicable and the person is not entitled to the protection under Article 19 (1) (f) of the Constitution. But he is entitled to reasonable compensation which shall be just equivalent of the value of the property that is acquired or requisitioned. It will thus be seen if the impugned order falls under Article 31 (1) or 31 (2) the person would be entitled to reasonable compensation. But if it falls under Article 31 (2) the person would not be entitled to the benefits of Article 19 (1) (f) and he cannot claim that the law amounts to an unreasonable restriction on his right to acquire, hold and dispose of property. If the order is held to fall under Article 31 (2), the acquisition of the whole of the stock of paddy cannot be questioned as amounting to unreasonable restriction.
Then the learned Judge proceeds to consider whether the impugned order is law relating to acquisition or requisition of property under Article 31 (2) of the Constitution and holds that it is not a law under Article 31 (2). Therefore, it is held that the protection of Article 19 (1) (f) of the Constitution Would be available to the respondents herein. We do not think it necessary to examine at length for these appeals, the relative scope of Article 31 (1) and Article 31 (2) with reference to Article 19 (1) (f). The decisions of the Supreme Court held that where the deprivation of property does not amount to acquisition or requisition as postulated in Article 31 (2-A) the law has to satisfy the test of reasonable restrictions contained in Article 19 (5). When the law amounts to acquisition or requisition then Article 19 has no application, but it must satisfy the requirements of Article 31 (2). Article 31 (2) contains within itself the extent of challenge available to a person whose property is compulsorily acquired or requisitioned. On this part of the case the learned Advocate-General submits that as the case before us for the respondents could be disposed of under Article 14 itself, we may defer determining the question of applicability of Article 31 (2) and the further question whether the order is assailable under Article 19 (1) (f) of the Constitution for another occasion if it should arise. It is not contended that if the matter falls under Article 31 (2), the protection under Article 14 is not available. The availability of Article 19 (1) (f) to the aggrieved respondents in these appeals has been examined by the learned Judge as dependent on the question whether the impugned order could be considered as a law relating to acquisition and requisition falling under Article 31 (2) of the Constitution.
14. The case for the respondents under Article 19 (1) (f) may be summarised thus; As the Preamble to Act X of 1955 shows, the Act is intended to provide, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain commodities. Section 3 which empowers passing orders under the Act provides for making orders where the Government is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing equitable distribution End availability at fair prices, to regulate or prohibit the production, supply and distribution thereof and trade and commerce therein. The various ways in which the equitable distribution and availability at fair prices of the controlled commodities may be effected are indicated in Sub-section (2) of Section 3. Sections 3 (2) (d) and 3 (2) (f) are the relevant provisions in the context of the present cases. Sub-section (d) provides for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity. The acquisition therein clearly contemplates in the context acquisition by private parties also. Sub-clause (f) prior to its amendment in 1957 ran thus:. .for requiring any person holding in stock any essential commodity to sell the whole or a specified part of the stock to such person or class of persons and in such circumstances as may be specified in the order.
Ex facie Sub-clause (f) before its amendment provided for directions for sale of commodities to private individuals and not acquisition by the Government though the expression 'person' may be strained and interpreted to include also a Government. In Ramrichpal v. The State : AIR1958Cal257 , it was held by the Calcutta High Court that the Government had no power under the law as it stood without an amendment to empower it to order a stock-holder under Section 3 (2) (f) to sell to the Government or its officers acting as agents of Government. Under the Act as it originally stood there Was no specific provision for transfer of rights in property in favour of the State, Nor can it be said that there was provision in the Act for requisition of stock within the connotation of the expression as found in Entry 42 of List III 'acquisition and requisitioning of property.' 'Requisitioning' contemplated there is clearly not the requisition referred to in the marginal heading to Clause 4 of the impugned order. It does not appear to be used there as a term of art. No doubt acquisition by the State or an order for sale even in favour of private persons may where the law warrants it be preceded by a requisitioning order. The argument for the respondents is that for the order to be a law under Article 31 (2) it must be one directly falling under Entry 42 of the Concurrent List. Article 31 (2-A) provides that where a law does not provide for the transfer of the ownership or right to possession of any property to the State or to a corporation owned or controlled by the State it shall not be deemed to provide for the compulsory acquisition or requisitioning of property, notwithstanding that it deprives my person of his property. The object of the Essential Commodities Act having regard, to its Preamble and the provisions in Section 3 particularly would properly make it legislation falling under Entries 33 and 34 in the Concurrent List. In 1957 by Act XXVIII of 1957 doubts cast by the decision in Ramrichpal v. The State : AIR1958Cal257 , was removed and Section 3 (2) (f) amended to read:.for requiring any perron holding in stock any essential commodity to sell the whole or specified part of the stock to the Central Government or State Government or to an officer or agent of such Government or to such other person or class of persons End in such circumstances as may be specified in the order.
This provision is an enabling provision indicating one of the several ways in which the object of the statute could be attained. The State could itself require end store foodgrains for subsequent distribution. But the object of the acquisition is to serve the purposes of the legislation under Entry 33, and the acquisition is in the process of the exercise of powers under Entry 33. If the legislation is considered, as falling under Entry 42 and, therefore, coming under Article 31 (2), even if the entire stock of paddy of a farmer is acquired for the State, he could not question it as an unreasonable exercise of power. When the legislative power could be exercised under two entries and a reading of the entire Act shows that it could properly be brought under one entry, though in certain circumstances the Act could be placed under the other entry and both the entires are in the same list, while ordinarily it may be immaterial under which entry the legislation is considered it will become material if the. result of ascribing the Act to a particular entry is prejudicial to the subject. When it cannot be inferred from the Act that no such prejudice was intended, the proper thing would be to place the legislation under the entry in which there can be no such prejudice. It is a well established principle in the construction of entries that large and liberal construction must be put on the legislative power and the power under any entry carries with it all ancillary and subsidiary powers. Once the pith and substance of the legislation falls squarely under Entry 33 of the Concurrent List because of the incidental encroachment on the legislative power under Entry 42, the legislation need not be related to the power under Entry 42. A law can fall under more than one entry, a part under one legislative power and another part under another. But when it becomes necessary to determine the character of the legislation then the pith end substance doctrine is applied. When there is trespass on another field of legislation, that test is whether in truth and substance the legislation falls on the trepassed field. For a law to fall under Article 31 (2), it must satisfy the requirements of Article 31 (2) and 31 (2-A). In character it must be a legislation contemplated under Article 31 (2-A). The law in question is in respect of production, supply and distribution of, and trade and commerce, in certain commodities and the impugned order relates to foodstuffs. Ex facie it falls under Entry 33.
15. This argument has found acceptance before the learned Judge Kailasam, J.
16. As against this the case for the respondents, for the State the argument is straight and simple. The Act and the order clearly contemplate acquisition of the commodities by the State also for distribution. The impugned order refers to requisition. The State can acquire and store essential commodities for subsequent distribution. That can properly be under a law falling under Entry 42. Whenever there is acquisition by the State it is a matter falling under Article 31 (2).
17. No authority with reference to the Act and order in question, considering the matter and holding the law as one falling under Entry 42, has been referred to. The few cases to which our attention has been drawn refer to Entry 33 as the source of legislative power. No doubt in Atulya Kumar v. Director of Procurement and Supply : AIR1953Cal548 , the provisions of the West Bengal Foodgrains (Intensive Procurement) Order, 1952, promulgated by the Government of West Bengal under the Essential Supplies (Temporary Powers) Act was considered as falling under Article 31 (2). Under the order there in question every producer could be directed to deliver to the Director of Procurement and Supply or any person appointed by him the available surplus of foodgrains. The Act in that case was assailed on the ground that it offended against the fundamental rights guaranteed under Articles 19 (1) (f), 19 (1) (g) and 31 (2). There was no question as under what entry the legislation fell. It was prior to the fourth constitutional amendment. The aggrieved parties relied on Article 31 (2) also on the requirement as to fairness of compensation. It was held that Article 19 was not available and the legislative enactment empowering the Government to acquire property of citizens compulsorily for public purpose attracted Article 31. It was observed that what had to be considered in such cases was the question of compensation and it was irrelevant whether the law imposed reasonable restrictions on the fundamental rights conferred by Article 19 (1) (f) and 19 (1) (g). It was said:
But this would be true only in, a case where the legislative enactment is one for acquisition simpliciter. Where it is a composite piece of legislation like the present Act which we are considering, we have to distinguish that part of it which deals with acquisition from the rest.
The problem in our view is not the consideration of the legislative power under the entries. The lists deal with distribution of legislative power between the States and Centre and there is no conflict of legislative powers here. Bath the entries are under the Concurrent List. The question under what legislative head a particular law falls will be material if the competency of the Legislature in making the law is put in issue. We are here concerned with particular acts or dealings of the Government under Article 31 (2). Of course any act of compulsory acquisition by the State can only be under authority of law and that is a requirement of Article 31 (2). If a particular act of the Government taken by itself is factually an act of acquisition or requisition by the State or a corporation owned or controlled by the State, that is, there is physical or constructive transference of possession of the commodity to the State or to a corporation owned or controlled by the State then the law under which the action is taken will fall for consideration under Article 31 (2) and its constitutionality has to be considered accordingly. The law which authorises the acquisition must be that of a competent body. It may be maintained under any legislative list not necessarily directly under Entry 42. There may be a valid or permissible encroachment on the field of Entry 42. As noticed in the Calcutta decision above cited, the order in question may be considered as a composite piece of legislation. In some cases the procurement may be an act of acquisition by the State. In other cases it may not be so. A modern State may quite properly while making laws under Entry 33 proceed to acquire and store foodgrains as buffer stock for subsequent issue to regulate prices and make it available to all sections of its people at fair prices. Whether it may acquire for trading for profit under Article 31 (2) we need not consider here. Where it is not a colourable act it appears to us that the State could insist that in considering the validity of any acquisition falling under Article 31 (2) the limitations of Article 19 have no place. In the State of Rajasthan v. Nath Mal and Mitha Mal (1954) S C.J. 404 : (1954) S.C.R. 982, the Supreme Court considered the Rajasthan Foodgrains Control Order, 1949 and held that the first portion of Clause 25 of the order relating to the freezing of stocks of foodgrains did not violate Article 19 (1) (f), because such freezing of stocks of foodgrains was reasonably related to the object which the Act was intended to achieve, namely, to secure the equitable distribution and availability at fair prices and to regulate transport, distribution, disposal and acquisition of an, essential commodity such as foodgrains. However, the Supreme Court held that the last portion of Clause 25 which enabled the acquiring authority to acquire the stock at such prices as it thought fit, was void both under Article 19 (1) (g) and Article 31 (2). It was held that it placed unreasonable restrictions on carrying on trade or business in that it enabled Government to acquire stocks from traders below the market rate, and thus destroy their business. Because the clause vested the power in the authority to acquire the stocks at any price without fixing the amount of compensation or the principles of compensation, it was held to violate Article 31 (2). Any way in view of the request of the Advocate-General referred to above and as we have not had full arguments on this aspect we refrain from expressing our final conclusion on the question. But this case of the State has a vital bearing on Article 14. as Article 19 can be elbowed out by the State only in cases falling under Article 31 (2), and there can be an area where Article 19 may be called in that is cases where there is no acquisition by the State as defined under Article 31 (2-A).
18. We shall now take up the offending provisions of the impugned order. The validity of Clauses 4 and 5 of the order are questioned, firstly on the ground that they are in excess of the delegated power and secondly on the ground that they are violative of fundamental rights. The learned Judge had struck down both the said clauses as invalid. As there is no serious attempt to sustain the validity of Clause 5 we may immediately dispose of the same. Clause 5 provides for inspection and seizure of stocks of paddy or rice. The Act empowers under Section 3 (2) (j) for making orders for any incidental and supplemental 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 parson has reason to believe that a contravention of the order has been, is being or is about to be committed. But Clause 5 of the impugned order enabled the officer to enter and search and seize with a view to securing compliance with the provisions of the order or to satisfying himself that the provisions have been complied with. The protection to the citizen from search which is a process exceedingly arbitrary in character by insisting as a pre-requisite that the officer should have reason to believe that a contravention of the order has been is being or is about to be committed, is not found in Clause 5. Mere seizure could be had under the clause of paddy or rice in respect of which an officer suspects that any provision of the order is contravened or about to be contravened, There can be no doubt about the highly arbitrary character of the powers conferred for search and seizure. Clearly the occasion docs not warrant such drastic powers, leave alone the question that the powers conferred are in excess of the delegated authority to issue orders. The State Government's powers under the Act being; limited to laws in conformity with the fundamental rights, Clause 5 as violative of Articles 19 (1) (f) and 19(1) (g) has to go and has, therefore, been struck down. Quite properly the learned Advocate-General does not question the correctness of the order striking down Clause 5. In fact Clause 5 has been re-cast on the 9th of July, 1967 itself. We shall, therefore, leave out Clause 5 and proceed with the consideration of Clause 4 of the order.
19. The marginal heading for Clause 4 is Power to requisition of paddy and rice. The clause is the centre piece of the order and runs thus:
The Commissioner or the Secretary to the Government or any District Collector or any District Supply Officer or Revenue Divisional Officer or any Officer authorised in this behalf by the Government may, by an order in writing; require any person holding any stock of paddy or rice or both within his jurisdiction to sell the whole or a specified part of the stocks at the controlled price to the Government or to an officer or agent of the Government or to such other person or class of persons and in such circumstances as may be specified in the order and on such order being made, such person shall sell such stocks in accordance with such requisition.
The learned Advocate-General conceded before Kailasam, J., that the provision in the clause for an order directing a party to sell stock of paddy or rice or both at the controlled price is not in accordance with the provisions of the Act and, therefore, it is not valid. The concession is fair and justified. Section 3 (3) of the Act regulates the prices to be paid when an order is made on a person to sell any essential commodity under this provision. Sub-section (3) of Section 3 runs thus:
Where any person sells any essential commodity in compliance with an order-made with reference to Clause (f) of Sub-section (2), there shall be paid to him the price therefor as hereinafter provided ::
(a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon, the agreed price;
(b) where no such agreement can be reached the price calculated with reference to the controlled price, if any;
(c) where neither Clause (a) nor Clause (b) applies, the price calculated at. the market rate prevailing in the locality at the date of sale.
There have been two amendments to Section 3--(3-A) and (3-B). We are concerned with, (3-B) inserted by Act XXV of 1966 which runs thus:
(3-B) Where any person is required by an order made with reference to Clause (f) of Sub-section (2) to sell any grade or variety of foodgrains, edible oil seeds or edible oils to the Central Government or a State Government or to an officer or agent of such Government and either no notification in respect of such foodgrains, edible oil seeds or edible oils has been issued under Sub-section (3-A) or any such notification having been issued has ceased to remain in force by efflux of time, then, notwithstanding anything contained in Sub-section (3), there shall be paid to that person such price for the foodgrains, edible oil seeds or edible oils as may be specified in that order having regard to:
(i) the controlled price, if any, fixed under this section or by or under any other law for the time being in force for such grade or variety of foodgrains, edible oil seeds or edible oils; and
(ii) the price for such grade or variety of foodgrains, edible oil seeds, or edible oils prevailing or likely to prevail during the post-harvest period in the area to which that order applies.
Explanation.--For the purpose of this sub-section ' post-harvest period ' in relation to any area means a period of four months beginning from the last day of the fortnight during which harvesting operations normally commence.
Sub-section (3-A) provides that if the Central Government is of opinion that it is necessary so to do for controlling the rise in prices, or preventing the hoarding, of any foodstuff in any locality, it may by notification in the official gazette, direct that notwithstanding anything contained in Sub-section (3) the price at which the foodstuff shall be sold in the locality in compliance with an order made with reference to Clause (f) of Sub-section (2) shall be regulated in accordance with the provisions of this sub-section. Detailed provisions are found thereunder for the price payable to the seller. Any notification issued under Sub-section (3-A) shall remain in force for a period of three months. The power of the Central Government under subsection (3-A), it is stated, has not been delegated to the State Government. We have, therefore, to leave out of account Sub-section (3-A) and consider the matter under Sub-section (3-B). It is obvious that the price provided as payable to the seller in Clause (4) of the order is not in accordance with the provisions of the Act found in Sub-section (3-B). Under the order the seller is given the controlled price only. Under Sub-section (3-B) the controlled price is only one of the factors that goes in the determination of the price payable to the seller. The price has to be fixed having regard to the controlled price, if any, and the price for the grade or variety of foodgrains prevailing or likely to prevail during the post-harvest period in the area to which the order applies. The area having regard to the context of the user can refer only to a given locality. Both the controlled price and the market price in the locality are taken into consideration, obviously to give the producer fair and reasonable price for the foodgrains he is deprived of. After the insertion of Sub-section (3-B) in the Act any order fixing the price must be in accordance with Sub-section (3-B). The following principle set out in Maxwell on Interpretation of Statutes, eleventh edition at page 290 will apply:
If rules are made under a statute, sections of which are later repealed and reenacted in a narrower form, the rules must be cut down so as not to conflict with the narrower statute.
When Clause 5 of Central Government notification under the Sugar (Control) Order, 1955 issued under Section 3 of the Essential Commodities Act, 1955 was challenged inter alia on the ground that the price for sale of sugar was fixed arbitrarily and the impugned notification was beyond the ambit of the authority conferred under Section 3 of the Act, in D.S. & G. Mills v. The Union of India : AIR1959SC626 , the Supreme Court pointed out that the price is to be fixed after taking into account all reasonable factors which go into the consideration of price fixation--(i) price or minimum price fixed for sugarcane, (ii) manufacturing cost, (iii) taxes, (iv) reasonable margin of profit for producers and or trade and (v) any incidental charges. The price paid must be fair and reasonable and it should not be arbitrary. Here it is not even in accordance with the provisions of the parent Act giving directions in the matter of fixation of price payable to the seller.
20. It is relevant to notice here that under the order the sale can be to the State or to a corporation owned or controlled by the State or to a third party, a private individual. Viewing as an act of acquisition or requisition falling under Article 31 (2) when the sale is in favour of the State, then the requirements of Article 31 (2) in regard to compensation payable for the acquisition have to be satisfied. The parent Act certainly specifics principles for determining compensation. The impugned order deviates from the principles set out therein and, therefore, is outside the ambit of the Act. If the matter falls under Article 31 (2) and compensation is determined in accordance with the terms of the Article, the law providing for the acquisition cannot be questioned on the ground that the compensation provided is not adequate. But to preclude judicial scrutiny, the law providing compensation has to provide for payment of a just equivalent for the commodity acquired or lay down principles which will lead to the result. As has been pointed out by the Supreme Court repeatedly in several cases recently the latest being Union of India v. Metal Corporation of India : 1SCR255 , to avert judicial scrutiny of the compensation, the principles laid down must be relevant to the fixation of compensation and not arbitrary. Then only the adequacy of the resultant product cannot be questioned in a Court of law. The validity of the principles laid down for ascertaining compensation will fall within the judicial scrutiny. After referring to the earlier cases on the question of compensation, the Supreme Court summarised the position under Article 31 (2) thus at page 642:
Compensation under Article 31 (2) of the Constitution means a 'just equivalent ' of what the owner has been deprived; and (2) the value of land at an anterior date is presumed to be no compensation within the meaning of the said Article. After the Constitution (Fourth Amendment) Act, 1955, the Court had to construe in two decisions the amended provision of Article 31 (2) vis-a-vis the expression ' compensation' found therein. The first decision is that in Vajravelu v. Special Deputy Collector : 1SCR614 . There this Court observed at page 1023 : ' A scrutiny of the amended Article discloses that it accepted the meaning of the expressions ' compensation ' and ' principles ' as defined by this Court in Mrs. Bella Banerjee's case : 1SCR558 . And it held that, if the compensation is illusory or if the principles prescribed are irrelevant to the value of the property at or about the time of its acquisition it can be said that the Legislature committed a fraud on power and therefore, the law is bad.
The decision emphasises that the principle must be such as to enable the ascertainment of its price at or about the time of its acquisition. Judged under Article 31 (2) also the provision in Clause 4 regarding the price fails in its validity. The order gives no choice to the procurement officers, but to pay only the controlled price, whether it has any relation to the fair price or not. The provision as to the price is not conducive to the determination of the compensation payable under Article 31 (2) viewed as an act of acquisition, and Clause 4 will fail before the requirements of Article 31 (2). We have no data about the controlled price, the formula on which it is based whether in a given area it will satisfy the requirements of Article 31 (2) as laid down by the Supreme Court. If the sale directed by the officers is to a private party, it would fall on the ground of arbitratiness and unreasonableness as regards the price. Expropriatory provisions must satisfy the test of reasonableness and fairness having regard to all relevant factors. The object of the Essential Commodities Act, 1955, is to control production, supply and distribution of, and trade and commerce in, certain commodities It aims at equitable distribution and availability at fair prices any essential commodity. The control of price at all stages, from the procurement stage to the stage of sale to the actual consumer, must have a relevant nexus and stand scrutiny as reasonable within the intendment : of the Act. The fixation of price provided under Clause 4 of the order is a vital limb of the clause and it may be that the economy and the scheme of procurement and distribution to a considerable extent centre round the price payable at the several stages. The controlled price referred to in Clause 4 may have absolutely no relation whatsoever to the economic or fair price of a commodity at the time of procurement. It may be low or may be higher. Market price in a given locality is a thing which depends on several factors. The market may be in the hands of racketers or hoarders or there may be a sudden influx of the commodity. Trade competition and various other factors may influence the price at any given period. The Act in a way contemplates these possibilities when it provides for price being determined having regard to the controlled price and the prevailing price, or price likely to prevail during the post-harvest period of the area. The determination of the price, of course, has ultimately to be with the administration. Economic factors cannot be overlooked and it must be determined with fairness to all concerned. The factors considered as reasonable by the Supreme Court in D.S. and G. & Mills v. The Union of India : AIR1959SC626 cited already mutatis mutandis supply a working basis. To be reasonable a farmer cannot be compelled to part with the produce raised by him at a loss, that is, at less than what costs him to produce. Equally a Welfare State cannot permit profiteering in food grains which form the stable food of its millions when there is not enough to go round. It is in duty bound to see the available food is equitably distributed at a reasonable price. The price provided under the order, besides being not in terms of the Act, has not been shown to be fair according to the above standards. On this ground the clause fails to stand the test of a valid law.
21. The next limb of Clause 4 of the impugned order, the subject of severe attack, is the provision therein enabling specified officers of the Government requiring any person holding any stock of paddy or rice or both to sell the whole or specified part of the stock. This is attacked as violative of both Articles 14 and 19(1)(f). If the sale is to the Government or to a corporation owned or controlled by the Government, then of course the question may arise whether this part of the order does not fall under Article 31 (2) and, therefore, immune from attack based on Article 19 (1) (f). But if the order is for sale to a private person, clearly the aggrieved party can rely on Article 19 (1) (f). The submission for the respondents has been that paddy is by a large majority grown for home consumption, and it is the incidental surplus that is marketable. Many an agriculturist may have no available surplus for sale, production being just sufficient for the needs of his family, he may be left with just enough for seed purposes and for meeting the expenses of cultivation when the same is payable in kind. To demand upon such a grower to part with his own paddy and then to wait upon the Government or buy in the open market for his personal requirements, probably paying a higher price, it is said, is extremely unreasonable, harsh and impracticable. It destroys all incentives for cultivation and encourages room for dishonesty, secretion of stocks, etc. The purpose of the order as well as the parent Act, it is said, is to provide for equitable distribution. It is better achieved by permitting the farmer to retain for his essential requirements having regard to the overall availability of paddy for general distribution. In the decisions which have been brought to our notice under analogous orders only the available surplus calculated on some specified formula is procured from the grower. The learned Judge Kailasam, J., observes:
The grower though he may not be entitled to any special claim as a producer of paddy, he will at least be entitled as a member of the public to the quantity of paddy which is necessary for his personal requirements. It would not be in the public interest to deprive him of such a minimum requirement.
The learned Judge refers to Sections 60 and 61 of the Civil Procedure Code in this regard. Under Section 61 the State Government may, by general or special order published in the official gazette, declare that such portion of agricultural produce, or of any class of agricultural produce, as may appear to the State Government to be necessary for the purpose of providing until the next harvest for the due cultivation of the land and for the support of the judgment-debtor and his family, shall, in the case of all agriculturists, or of any class of agriculturists be exempt from liability to attachment or sale in execution of a decree. This certainly gives a norm for reasonable procurement. For a restraint to be maintained as not violative of Article 19 (1) (f) and 19 (1) (g), it must be reasonable and in the interests of the general public. The peasantry in this land constitute the bulk of the public and that has to be borne in mind.
22. The question, whether Clause (f) of Section 3 (2) of the Essential Supplies (Temporary Powers) Act, 1946, authorising the compulsory sale of the whole of the stock of an essential commodity without providing for immunity from sale of that portion of the essential commodity which was necessary for the normal requirements of the owner, contravened Article 19 (1) (f), came up for consideration before a division Bench of the Orissa High Court consisting of Jagannadha Das, C.J., and Narasimham, J., in Bhajaram v. State of Orissa : AIR1953Ori277 . The determination of the question became academic, as the paddy that had been procured disappeared long ago and a fair price for the paddy procured was offered by the Government. However, the obiter dicta of the learned Judges may be referred to usefully. Adverting to the argument on behalf of the citizen that if the law itself did not provide for immunity from compulsory sale of that portion which was necessary for the family requirements of the owner such a law would be unreasonable and invalid notwithstanding the fact -that in administering the law the competent authority might pass a reasonable order, Narasimham, J., remarked that there was some force in the contention because the impugned clauses authorise the compulsory sale of the whole of the stock of paddy of a person if the authority concerned considered that such an order was necessary for securing the equitable distribution and availability at fair prices of that essential commodity, and that if in exercise of that power if a competent authority directed the sale of the whole of the stock of paddy in a particular area and sent it elsewhere thereby reducing the inhabitants of that area to starvation, the order, however unreasonable it might be, would be a valid order under the impugned clause. The learned Judge Jagannatha Das, C.J., remarked with reference to the argument of the invalidity of Clause (f) of Sub-section (2) of Section 3 of the Act as being inconsistent with the fundamental rights guaranteed under Article 19 (1) (f), that it appeared to be prima facie correct. The learned Advocate-General having regard to the force of the contentions on behalf of the agriculturists, had to an extent at least to concede before Kailasam, J., that the power to requisition the entire stock could not be justified as a reasonable restriction under Article 19 (1). Before us the learned Advocate-General would get round Article 19 (1)(f) only by contending that acquisition or requisition would fall under Article 31 (2) of the Constitution. It is said that procurement is generally by the Government or its agents. If Article 31 (2) is out of the way, there can be no doubt that the power is unreasonable. There has been no attempt to sustain the validity of the procurement of the entire paddy otherwise than under Article 31 (2).
23. We shall now take up for consideration whether Clause 4 is violative of Article 14. The argument is that untrammelled and arbitrary power is vested with certain officers of the Government without any guidance as to in what cases they may require a person to part with the entire stock of paddy or rice or both and in what cases they may leave him with a part. It is left to the uncontrolled discretion of the officer as to the proportion of the commodity that will be left even when he decides leaving a part. The power to call upon the sale of the entire stock of paddy or rice or both may be exercised by a heirarchy of officers from the Commissioner of Civil Supplies down to the Revenue Divisional Officer and also by any officer authorised in this behalf by the Government. No doubt the parent Act itself provides for procuring the entires tock of a specified essential commodity. Section 3 (2) (f) of the Act enables the passing of an order 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 an officer or agent of such 'Government or to such other person or class of persons and in such circumtances as may be specified in the order. The delegation provision, Section 5, provides for delegation of authority to make orders under Section 3, 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. The order delegating power to the State Government, dated 8th June, 1966, in relation to foodstuffs provides only that the powers under Section 3 (1) to make order with reference to the specified classes in Sub-section (2) of Section 3 be cxercisable by the State Government. The notified order delegating powers itself does not specify any officer or authority subordinate to the State Government who may make orders under Section 3. Section 5 specifically states that a notified order may provide for the power being exercisable also by such State Government or such officer or authority subordinate to a State Government as may be specified in the direction. Now by Clause 4 of the order we find a further delegation providing for specified officers to make orders as provided for under Section 3 (2) (f). The only condition that the Central Government imposes when delegating powers with reference to particular clause is that the power shall be exercised by the State Government subject to such directions if any as may be issued by the Central Government in that behalf. Sub-section (6) provides that every order made under this section by the Central Government or by any officer or authority of the Central Government shall be laid before both the Houses of Parliament as soon as it is made. It will be seen that under Section 5 powers to make orders under Section 3 may be delegated to any officer or authority subordinate to the Central Government. The orders are also to be laid before both the Houses of Parliament. So far as the orders made by the State Government's officers under Clause 4 of the impugned order are concerned, there is no such safeguard, as far we are able to see, providing against unreasonable and arbitrary orders. Clause 4 repeats the provisions of Section 3 (2) (f) and delegates its delegated power. There has been no argument before us whether such delegation is invalid. We shall proceed on the basis that there is no invalid delegation; but it does affect the question whether the discretion is vested arbitrarily without provision for check or control. The scope of Article 14 has been repeatedly laid down by the Supreme Court and it is needless to dilate upon the scope of the Article much. Recently in State of Andhra Pradesh v. Raja Reddi : 3SCR28 . it is said:
While the article prohibits discrimination it permits classification. A statute may expressly make a discrimination between persons or things or may confer power on an authority who would be in a position to do so. Official arbitrariness is more subversive of the doctrine of equality than statutory discrimination. In respect of a statutory discrimination one knows where he stands, but the want of official arbitrariness can be waved in all directions indiscriminately.
The Act itself, of course, enables the passing of an order requiring the whole of stock or specified part thereof to be sold. But the Act is an enabling statute in general terms conferring powers on specified authorities to do certain things for realising the objects of the enactment. Power to promulgate the necessary orders is given thereunder. The commodities which can be controlled by the Act are of varied character covering various aspects in the economic and industrial fields of the country. We have control of coal including coke and other derivations, cotton and woollen textiles, iron and steel, paper including newsprint, etc., petroleum and petroleum products, foodstuffs including oil seeds and oil, and so on. The Central Government may by notified order declare any other commodity as, an essential commodity for the purpose of the Act provided it is a commodity with respect to which the Parliament has power to make laws by virtue of Entry 33 in List III in the Seventh Schedule to the Constitution. Naturally, therefore, orders as to procurement can vary. Certain commodities may be produced wholly for industrial uses and not for personal consumption. Commodities may be hoarded or stocked purely for a purpose of sale. Variety of situations may arise and to achieve the object of the Act orders have to be issued having regard to the commodities in question. Viewed from this angle, the provision in the general Act which only grants powers to do the needful in a given situation do not appear to be invalid. Orders passed under the Act will have to stand the test of law under the Constitution. Ancillary and procedural provisions and guiding principles in the matter of enforcement of the Act which are absolutely necessary for reasonable exercise of the powers, may find their place in the orders promulgated under the Act. In a given case, the law will be the order promulgated under the Act even as the impugned order under consideration. As an enabling statute, the Act does not stand by itself. The Act is supplemented by the orders passed thereunder and if the orders passed thereunder are violative of the constitutional limits, it is sufficient if they are struck down. The Act can stand. As pointed out in the beginning, the Essential Commodities Act contemplates only valid and lawful orders being made thereunder, orders that would stand before Part III of the Constitution.
24. The impugned order leaves to the officers in their discretion as to the extent the procurement in a given case should go. No doubt there can be delegation and in modern Welfare States there cannot but be considerable delegation of authority to promulgate orders and give directions. But it is well established that before such delegation is lawful, the legislative authority must declare the policy of the law and fix the legal principles which are to control in a given case. A definite or primary standard must be provided to guide those empowered to execute the law. A proper approach to the question whether there is excessive delegation of discretionary power to executive officers of the Government may be seen in the following observations in Yakus v. United States 88 L Ed. 834, 849:
Nor does the doctrine of separation of powers deny to the Congress power to direct that an administrative officer properly designated for that purpose have ample latitude within which he is to ascertain the conditions which Congress has made pre-requisite to the operation of its legislative command. Acting within its constitutional power to fix prices it is for Congress to say whether the data on the basis of which prices are to be fixed are to be confined within a narrow or a broad range. In either case the only concern of Courts is to ascertain whether the will of Congress has been obeyed. This depends not upon the breadth of the definition of the facts or conditions which the administrative officer is to find but upon the determination whether the definition sufficiently marks the field within which the Administrator is to act so that it may be known whether he has kept within it in compliance with the legislative will....
Only if we could say that there is an absence of standard for the guidance of the Administrator's action, so that it would be impossible in a proper proceeding, to ascertain whether the will of Congress has been obeyed, would be justified in over-riding its choice of means for effecting its declared purpose of preventing inflation.
Can it be said in these cases that the order disclosed sufficient standards for the officer to decide whether he has to procure the entire stock or a specified part?' Will it be possible for an aggrieved party to complain that the procurement in his particular case is excessive? What standards can he rely on? Can he point his finger at any rule or law and say that there has been excessive or hostile discrimination in the procurement? When there is no standard to guide discretion, the officer can say that it was justified by the law which gave him discretion. Excessive discretion unregulated by any policy or standard can provide a cloak for the malevolent, the misinformed or the corrupt. There is nothing to judge whether the law is followed. There is wide room to exercise privilege, show favouritism, wreak vengeance or spite and still be within the letter of the law. It will be difficult for the affected to establish the irrelevancies which have led to his being singled out. It is here that considerations under Article 19 and Article 14 overlap. Some administrators may find this approach rather annoying. Democratic methods are irksome to the over-zealous administrator and equally to the few who can command, and more irksome to the privileged who may hope to gain by unbridled and unjusticiable power vested in a few. Uncontrolled discretion besides being unreasonable is destructive of the principles of equality before law and equal protection of the laws. Whether the power is being in fact exercised arbitrarily or in an even-handed manner is wholly immaterial in considering the validity of the clause. It cannot be said that the discretionary power vested in the officers under Clause 4 is not capable of being regulated by further rules. Nor can it be said that sufficient guidance could be found in the Act or in the other provisions of the order for deciding in what cases the entire stock should be procured and in what cases a part should be left out. In Dwarka Prasad v. State of Uttar Pradesh : 1SCR803 , wherein the Uttar Pradesh Coal Control Order, 1953 was impugned, Mukherjea, J., observed:
The more formidable objection has been taken on behalf of the petitioners against Clause 4 (3) of the Control Order which relates to the granting and refusing of licences....
No Rules have been framed and no directions given on these matters to regulate or guide the discretion of the licencing Officer. Practically the Order commits to the unrestrained will of single individual the power to grant, withhold or cancel licences in any way he chooses and there is nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same.
In Ram Krishna Dalmia v. Justice Tendolkar : 1SCR279 , where the law relating to Article 14 is summed up, the principles applicable in a case like the one under consideration are found in the following observations of S.R. Das, C.J.,
A statute may not make any classification of the persons or things, for the purpose of applying its provisions but may leave it to the discretion of the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise of such a statute the Court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute had laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification. After such scrutiny the Court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situate and that, therefore, the discrimination is inherent in the statute itself. In such a case the Court will strike down both the law as well as the executive action taken under such law. ...
In our view, Clause 4 in question in the impugned order does not stand the above 'test. No principle or policy can be seen for selecting the cases where the procurement should be of the entirety of the stock of paddy or rice held. For this area, no guidance could be derived from the Preamble to the Essential Commodities Act or the condition precedent laid down in Section 3 for passing of an order thereunder, the existence of necessity or expediency for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices. One can conceive of a Government Order which may be harsh and wholly unreasonable, by directing without room for discrimination, that every bushel of produce harvested anywhere and every ounce of rice stocked by any person should first be procured by the Government and then evenly distributed or the 'Government may say that the farmer who produces may retain sufficient stock for his consumption till the next harvest. These are matters of expediency and one cannot say for the impugned order even reading the same with the Act--what the intention of the Government was when it formed its opinion to issue the order in regard to the extent of procurement that should be had in a given case. Clearly such a state of affairs of unguided discretion is destructive of the guarantee under Article 14. It was stated by the learned Advocate-General that the administration of the order is vested in high and responsible officers of the Government and that high standard of the enforcement officers is relevant for upholding) the grant of discretionary power. In this connection a reference was made to the decision in Pannalal Binjraj v. Union of India : 1SCR233 , where the Supreme Court observed at page 408:
It may also be remembered that this power is vested not in minor officials but in top ranking authorities like the Commissioner of Income-tax and the Central Board of Revenue who act on the information supplied to them by the Income-tax Officer concerned. This power is discretionary and not necessarily discriminatory and abuse of power cannot be easily assumed where the discretion is vested in such high officials
But the power involved in that case was the power to transfer the case of a particular assessee from the income-tax officer of the area in which he resided or carried on business to any other income-tax officer if the exigency of the tax collection warranted the case. It was pointed out that there was no fundamental right in an assessee to be assessed in a particular area or locality, and that it was not an absolute right but subject to the exigency of tax collection The difference if any, of transfer was not a material difference but minor deviation from the general standard and would, therefore, not amount to the denial of equal rights. Bhagwati, J., who delivered the judgment of the Court proceeds to point out at page 410:
There is a broad distinction between discretion which has to be exercised with regard to a fundamental right guaranteed by the Constitution and tome other right which is given by the statute. If the statute deals with a right which is not fundamental in character the statute can take away but a fundamental right the statue cannot take away. Where, for example, a discretion is* given in the matter of issuing licences for carrying on trade, profession or business or where restrictions are imposed on freedom of speech, etc., by the imposition of censorship, the discretion must be controlled by clear rules so as to come within the category of reasonable restrictions. Discretion of that nature must be differentiated from discretion in respect of matters not involving fundamental rights such as transfer of cases. An inconvenience resulting from a change of place or venue occurs when any case is transferred from one place to another but it is not open to a party to say that a fundamental right has been infringed by such transfer. In other words, the discretion vested has to be looked at from two points of view, viz., (1) Does it admit of the possibility of any real and substantial discrimination, and (2) does It impinge on a fundamental right guaranteed by the Constitution? Article 14 can be invoked only when both these conditions are satisfied.
In Clause 4 it is manifest that both the features that could invalidate it under Article 14 arc present. The learned Advocate-General drew our attention also to the recent decision of the Supreme Court in Board of Revenue v. R. S. Jhaver : 1SCR148 , arising out of search and seizure by the officers of the commercial tax department under the Madras General Sales Tax Act. The following observations (at page 66) of the Supreme Court were relied upon:
It is true that search under this sub-section can be made by any officer empowered by Government in this behalf, but we have no reason to think that Government will not empower officers of proper status to make searches. In this very case, we find that the Government empowered an Assistant Commercial Tax Officer, a Revenue Inspector and a Sub-Inspector of Police to make searches. ...The fact that the Act gives power to Government to empower any officer is therefore no reason to strike it down for, as we have said, the Government will see that officers of proper status are empowered.
We are not striking down the clause in question merely on the ground that any officer may be authorised by the Government to pass orders under Clause (4), and the low position of an officer may facilitate hostile discrimination. The ground of invalidity we find here is something more substantial--the lack of any policy or guidance whatsoever as to the class or category of persons who may be wholly exempted from procurement, the class of persons who can be called upon to part with their entire stock of paddy or rice and the cases where the procurement may be partial. Is it to be decided ad hoc or ad hominum and on what principles? , The operative order emanating from the powers conferred by the skeletal legislation, the Essential Commodities Act, 1955, does not indicate with certainty the policy to be pursued, in this sphere to guide the officials on the spot. The clause could fall even as a case of excessive delegation or abdication of the functions by the delegate of the Central Government. The vice is the absence of criterion for classification. We may in this connection quote the observations of the Supreme Court an K. T. Moopil Nair v. State of Kerala : 3SCR77 :
It is one of those cases where the lack of classification creates inequality. It is, therefore, clearly hit by the prohibition to deny equality before the law contained in Article 14 of the Constitution. Further more, Section 7 of the Act, quoted above particularly the latter part, which vests the Government with the power wholly or partially to exempt any land from the provisions of Act is clearly discriminatory in its effect and therefore, infringes Article 14 of the Constitution. The Act does not lay down any principle or policy for the guidance of the exercise of discretion by the Government in respect of the selection contemplated by Section 7.
The rule of law which Forms a fundamental principle of our Constitution means, as pointed out by Dicey in his Introduction to the Study of the Law of the Constitution tenth edition, at page 202, quoted with approval by the Supreme Court in State of M.P. v. Bharat Singh : 2SCR454 :.in the first place, the absolute supremacy or predominance of regular law as opposed to the influence of arbitrary power, and excludes the existence of arbitrariness, of prerogative, or even of wide discretionary authority on the part of the Government.
The learned Advocate-General in the course of argument before us submitted that there are certain executive instructions for leaving out to the farmer paddy for his personal requirements. Apart from the fact that we have no idea as to what these instructions are no reference even is made to them in the counter-affidavit on behalf of the State. Further executive instructions probably confidential would be a dangerous encroachment on the rights of the subject. They have no force of law and an aggrieved party cannot rely upon their breach. In matters affecting the rights of parties, such instructions are no protection and can have no place in a country governed by the rule of law.
25. Even if it be contended that some policy or guidance as to the extent of procurement could be found in the Act itself, there is another vitiating feature in clause 4 violative of Article 14, and this based on the acceptance of the argument of the Advocate-General that where the procurement is by the State it would be a case of acquisition and requisition falling under Article 31 (2). The Advocate-General submitted that since the procurement by the Government would be acquisition by the State, the aggrieved citizen cannot invoke Article 19 (1) (f). If he could, he has the right to contend that the provision enabling procurement by the Government of a person's entire stock of paddy or rice is unreasonable. Now, the clause gives a discretion to the officer enforcing its provisions to direct any person by an order to sell his stock of paddy or rice wholly or a specified part to the Government or to an officer or agent of the Government or to such other person or class of persons as may be specified in the order, that is, the officer could either direct the sale of paddy to the State or to a private individual. On his exercise of discretion the procurement would fall either under Article 31 (2) and exclude recourse by an aggrieved party to Article 19 (1) (f) or it may fall under Article 31 (1) and entitle the aggrieved party to insist on the procurement not being unreasonable, but in accordance with his rights under Article 19. No rule or regulation has been brought to our notice that would guide the discretion of the officer in this matter. As it stands, a wide and uncanalised power is given for selecting the areas where, or the persons from whom, the procurement would be by the State itself. Is the case of Government procurement to be determined by fields, villages, taluks or districts? Who decides upon it? What is the yard-stick for the classification between areas of Government procurement and procurement by authorised private agencies? In the areas where procurement takes place as acquisition under Article 31 (2). there could be no complaint that the entire stock of paddy or rice without leaving anything even for the immediate needs of the producer has been commandeered. The result is that Clause 4 permits two procedures; a harsher and more onerous one curtailing the rights of the subject to a considerable degree and the other reasonable in its restrictions. The choice of the procedure as it stands today being left to the concerned officer, clearly the clause has to be struck down as violative of Article 14. Of course if the principles governing the extent of the level is indicated in the order itself and the price payable is fair, no question of hostile discrimination could arise whether the acquisition falls under Article 31 (1) or Article 31 (2). But as Clause 4 now stands it has to be struck down.
26. To a question from the Court Mr. V.P. Raman, learned Counsel appearing for the respondents, fairly conceded that striking down of Clauses 4 and 5 by itself need not result in invalidation of the entire. Order. Clause 3 of the Order provides for declaration of stocks of paddy and rice. It could stand by itself. Section 3 (2) (h) of the Act enables the passing of orders for collecting any information or statistics with a view to regulating or prohibiting any of the matters mentioned in the section. But on another ground, the absence of the formation of opinion by the Government of the necessity or expediency of the order in question, the entire Order has to fail as wanting in sanction.
27. As we have been repeatedly pointing out, the State Government is acting in this sphere as the delegate of the Central Government. The Central Government has delegated to the State Government certain of its powers to make orders under Section 3 of the Act. But for an order to be made under Section 3, as a condition precedent, the Government has to form an 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 price. The impugned order does not state the Government's satisfaction of the necessity or expediency for the order. In the affidavit in Writ Petition No. 815 of 1967 a specific point is taken of the absence of any indication in the order that the State Government was satisfied of the necessity or expediency for the order. It is averred that the very justification and basis of the order under Section 3 is founded upon a necessary precedent satisfaction of the concerned Government. In the counter-affidavit filed by the State with reference to this specific requirement, all that is stated is:
So long as the Essential Commodities Act specifically mention the standards or the polices for the exercise of the power of requisition, it is not necessary, that any order issued by virtue of such powers should also make mention of the expediency of passing such an order.
Obviously, the point taken for the respondents has been missed by the Stale and has not been met squarely. In Hamdard Dawakhana. Union of India : 2SCR192 , the validity of Fruit Products Order, 1955 promulgated by the Central Government under Section 3 of the Essential Commodities Act, 1955, came up for consideration. Referring to the powers under Section 3 (1), the Supreme Court observed at page 1171:
This power, of course, can be exercised only if the condition precedent prescribed by Section 3 (1) is satisfied, and that is that the Central Government should be of opinion that it is necessary or expedient to regulate the production of any essential commodity for one of the purposes mentioned by it.
Meeting the argument that the Fruit Products Order was valid because it did not purport to say that before it was passed, the Central Government had formed an opinion that it was necessary or expedient to issue the order, the Supreme Court .remarked at page 1172.
Mr. Pathak contends and rightly, that the condition prescribed by the 'first part of Section 3 (1) of the Act is a condition precedent and it is only when and after the said condition is satisfied that the power to issue a regulatory order can be exercised by the Central Government. This contention again cannot be .allowed to be raised for the first time in appeal, because if it had been raised before the High Court, the respondents would have had a chance to meet it. It is true, as Mr. Pathak contends, that in the absence of any specific averment made by the Fruit Order that the Central Government had formed the necessary opinion, no presumption can be drawn that such opinion had been formed at the relevant time; but it would have been open to the respondents to prove that such an opinion had been formed at the relevant time; and it cannot be suggested that the failure to mention that fact expressly in the Fruit Order itself would preclude the respondents from proving the said fact independently. That is why we find Mr. Pathak cannot be permitted to urge this contention at this stage.
In the present case, the point was taken at the earliest point of time and the State-Government had every opportunity to meet the case and establish that it had formed an opinion as required under Section 3 at the relevant point of time. In the circumstances, the learned Judge Kailasam, J., finds that the condition precedent for the passing of the impugned order has not been complied with. Before us, the learned Advocate-General, submitted that it is not necessary that the formation. of opinion should be recited in the order itself, and that the validity of the order-does not depend on the order itself revealing either by reference to it in the preamble or in the body of the order of the formation of the requisite opinion by the Government. A list of various orders issued under the Essential Commodities Act, 1955, wherein. there is no reference in the orders to the existence of the opinion of the Government was submitted to make out the practice. But this cannot carry the matter any further. In the list among the orders shown is the Fruit Products Order, 1955, with reference to which the Supreme Court made the observations quoted above.. The Supreme Court in that case declined to interfere on the ground that the point had not been raised in the High Court and the Government was not given an opportunity to prove that the requisite opinion had been formed at the relevant time. The order in the present case has not been struck down merely on the ground of the absence of a recital as to the formation of the requisite opinion in the order itself, but upon the absence of any material for inferring that the opinion has been formed by the State Government before making the order. In Swadeshi Cotton Mills v. S.I. Tribunal : (1961)IILLJ419SC , where the Court had to consider a similar provision in. Section 3 of the Uttar Pradesh. Industrial Disputes Act, the requirement there being formation of an opinion by the State Government that it was necessary or expedient to do so, the Supreme Court observed at page 1386:
The power to pass an order under Section 3 arises as soon as the necessary opinion required thereunder is formed. This opinion is naturally formed before the order is made. If therefore such an opinion was formed and an order was passed thereafter, the subsequent order would be a valid exercise of the power conferred by the section. The fact that in the notification which is made is made thereafter to publish the order, the formation of the opinion is not recited will not take away the power to make the order which had already arisen and led to the making of the order. The validity of the order therefore does not depend upon, the recital of the formation of the opinion in the order but upon the actual formation of the opinion and the making of the order in consequence.
The argument of the Advocate-General based on the presumption as to the regularity of official acts and reliance upon the promulgation of the impugned order by the Governor of Madras is answered in the following observations of the Supreme Court at page 1387 in the above case:
We cannot accept the extreme argument of Shri Aggarwala that the mere fact that the order has been passed is sufficient to raise the presumption that conditions precedent have been satisfied, even though there is no recital in the : order to that effect. Such a presumption in our opinion can only be raised when there is recital in the order to that effect. In the absence of such recital if the order is challenged on the ground that in fact there was no satisfaction, the authority passing the order will have to satisfy the Court by other means that the conditions precedent were satisfied before the order was passed...The difference between a case where a general order contains a recital on the face of it and one where it does not contain such a recital is that in the latter case the burden is thrown on the authority making the order to satisfy the Court by other means that the conditions precedent were fulfilled, but in the former case the Court will presume the regularity of the order including the fulfilment of the conditions precedent; and then if will be for the party challenging the legality of the order to show that the recital was not correct and that the conditions precedent were not in fact complied with by the authority.
For the State, reference was made to Krishnayya v. State of Andhra Pradesh : AIR1959AP292 . But this decision cannot advance the case of the State.
28. The objection taken for the respondent is not a mere technical one. Drastic : powers could be taken by the State and its enforcement entrusted to a whole hierarchy of officials. The Government has to exercise its mind and consider whether the situation, demanded the assumption of such powers, and the expediency of the course. These are matters to be determined at the highest level of the Government to its subjective satisfaction. Matters of policy and expediency are executive functions, and if the opinion had not been formed at the relevant time, the fact later on the State stands by the order is neither here nor there. The State Government is here acting as delegate of the Central Government and of the Parliament which permitted the delegation, the pre-condition for its exercise of the delegated power being the formation of opinion as to the necessity or expediency for the order. In. the absence of such an opinion, the Government has no power to issue the order.
29. Having regard to the importance of the matter and the fact that the order is. for regulating and providing for equitable distribution of paddy and rice, despite-objection by Counsel for the respondents, we invited the learned Advocate-General to satisfy us even though it was the appellants state that the Government had formed an opinion before the issue of the order in question. To facilitate the production of the relevant material, we also adjourned the hearing. But the Advocate-General could not satisfy us that the Government was at the relevant point of time satisfied about the necessity or expediency of the order. The Advocate-General placed before us certain files relating to the passing of the order in question and frankly stated that it does not appear that the matter went up to the stage of consultation at the ministerial level before passing of the impugned order. We regret to notice that a matter of such considerable importance affecting the rights and liberties of the people does not appear to have been considered by any Minister. As we have stated earlier, there was current then, the Madras Paddy and Rice (Declaration and Requisitioning of Stock) Order, 1964 issued under Rule 125 of the Defence of India Rules. As a routine matter in supersession of that order, the present order under the Essential Commodities Act has been issued. From the notings on the files produced, it appears to have been thought sufficient if orders under the Defence of India Rules were re-issued under the Essential Commodities. Act, utilising, the occasion for incorporating whatever changes were considered necessary.
30. The executive power of the State vests in the Governor; it is exercised by him directly or by officers subordinate to him in accordance with the Constitution. A Council of Ministers headed by the Chief Minister advise the Governor in exercise of his functions except where he may under the Constitution act in his discretion. The Government has made rules providing for Ministers to be placed in charge of particular departments and enabling the Minister in charge of a department to dispose of cases before him and also authorising him by means of standing orders. to give such directions as he thinks fit for the disposal of the cases in the department... We are informed that there is a Minister in charge of Food. The Madras Government Business Rules and Secretarial Instructions issued under Article 166, Clauses. (2) and (3) were placed before us for our perusal and we understand therefrom that while the Council of Ministers is collectively responsible for all executive orders issued in the name of the Governor in accordance with the rules, whether such orders are authorised, or by an individual Minister on a matter appertaining to his portfolio or as the result of discussion at a meeting of Council of Ministers. or otherwise, the Minister in charge of a department without prejudice to that position is primarily responsible for disposal of the business appertaining to his department. It is seen from the rules that cases of routine nature, or cases which the circulating officer does not consider to be of sufficient importance need not be circulated to any Minister. It will be open to a Minister in charge of a department to direct that any case in his department shall be submitted to him for orders and the Secretary in the department shall submit the case to him accordingly. Subject to the above provisions, the Secretary in each department shall ordinarily dispose of cases which do not involve the adoption of any new policy or principle or are not of such importance or special interest as to require the orders of the Minister in charge. Proposals involving any important change of policy or practice have to go before the Council of Ministers. It is not contended before us by the learned Advocate-General that the secretarial approval which alone has been established for the issue of the order is sufficient. The very essence of democracy is the sense of ministerial responsibility and in a vital matter affecting public interests when the related Act requires the formation of the requisite opinion, a matter of subjective . satisfaction of the Government involving questions of expediency and policy, the Government is not shown to have formed any opinion. The order has been issued, replacing as a matter of routine an earlier order issued under the Defence of India Rules. The requirements for the issue of the earlier order are entirely different. Different factors may have to be considered for passing an order under the Essential Commodities Act, though there may be overlapping of the considerations. It follows that the order is invalid and cannot sustain any action taken thereunder. When a law is found to be constitutionally invalid, it is for all legal purposes as if it had never been. Action taken in the enforcement of the order cannot claim protection as done in exercise of any valid law.
31. In the result, the writ appeals fail and are dismissed with costs.
M. Anantanarayanan, C.J.
32. The Madras Paddy and Rice (Declaration and Requisitioning of Stocks) Order, 1966, was promulgated as a form of delegated or subordinate legislation, under Section 3 read with Section 5 of the Essential Commodities Act, 1955, prior to which this field of legislation was held by the Madras Paddy and Rice (Declaration and Requisitioning of Stocks) Order, 1964, issued under Rule 125 of the Defence of India Rules. In Writ Petition Nos. 2358, 2671 of 1966, 814, 815 and 997 of 1967, Kailasam, J., in an elaborate judgment, struck down this order, and directed the return of the seized grain (paddy) to the concerned parties. The appeals before us are of the same scope, and involve, substantially, the same arguments. Though certain matters, such as the invalidity, on the relevant grounds of attack, of an important part of the impugned order, namely, Clause 5, providing for the inspection and seizure of stocks, were almost ex concessis before the learned Judge, Kailasam, J., has, nevertheless, devoted considerable space to the discussion of all the relevant aspects. Indeed, with regard to Clause 5, it would even appear, as submitted by the learned Advocate-General for the State, that the original clause, which was part of the impugned order, was Recast and reformulated pendente lite. Apart from the judgment of Kailasam, J., my learned brother has also prepared a judgment of exhaustive traverse on all the aspects involved, particularly on the aspect whether this piece of subordinate legislation falls under Entries 33 and 34 of List III (Concurrent List--Seventh Schedule or Entry 42 thereof, and on the aspect whether the central part of the order, namely, Clause 4 thereof, is ultra vires, as violative of Article 14 of the Constitution, even if the order be immune from attack under Article 19 (1) (f) read with Article 19 (5) of the Constitution.
33. I find myself in entire agreement with the conclusion expressed by my learned brother, and it would, thus appears to be hardly necessary, and even inexpedient, that I should devote another judgment to this field of discussion. But I am impelled to do so, for the important reason that, upon one or two of the vital aspects of the case, I am adopting a somewhat different prospective of approach. In the interests of brevity, I have condensed a great deal of the relevant scope of the argument, and I do not propose to encumber this judgment with any extensive citations of the sections of law which concern us, or passages from precedents cited at the Bar. I shall content myself with being as terse as possible, assuming the field covered by my learned brother, and hence, this might be taken as complementary to the fuller judgment.
34. It appears to me to be imperative, at the outset itself, to Frame the points that arise for our determination, as issues, for the simple reason that this mode of approach brings into sharp focus, the real constitutional implications which are involved. In one sense, the disposal of the writ appeals is a comparatively easy task. Clause 5 of the impugned order is patently unsustainable, as the said order stood, in the light of the guarantees under both Articles 14 and 19 of the Constitution; this was hardly disputed, though the learned Advocate-General has throughout maintained that the order itself cannot be impugned under Article 19, on his two main arguments on this aspect. Actually, the clause Was revised and formulated afresh, while the writ petitions were still pending. As I shall presently show, Clause 4 of the order cannot be saved from the attack based on Article 14 of the Constitution whatever might be said about its immunity from being assailed under Article 19. This is a central and vital part of the order and if clauses 4 and 5 are thus not to be salvaged, very little of the order would remain; the truncated remnant, may not justify retention in the form in which the order stands.
35. The issues may be set forth as follows:
1. Is this order immune from attack, because it was promulgated during the emergency declared under Article 358 of the Constitution, and in the light of the suspension of the right to move Courts in respect of fundamental rights conferred by Part III, provided for by Article 359. Or, as the learned Counsel for the writ petitioners contend, is the order liable to be struck down even under Article 19, as it is a species of delegated legislation under Sections 3 and 5 of the Essential Commodities Act X of 1955, which itself was a pre-emergency legislative measure?
2. Is the order immune from attack under Article 19 of the Constitution, because essentially, and in substance, it must be held to have been promulgated under Entry 42 of the Concurrent List, namely, the acquisition and requisition of property, and not under Entries 33 and 34 of the said List? In other words, can this immunity be inferred, by bringing the order within the scope of Article 31 (2) and (2-A), and not under Article 31 (1) of the Constitution of India?
3. Per contra could it be contended that, even if certain features relating to a piece of legislation under Entry 42 are evident in the order, it must be construed as substantially under Entries 33 and 34, because of the principle of interpretation by pith and substance? . .
4. If Article 19 (1) (f) read with Article 19 (5) does apply, is the order, or material portions thereof such as Clauses 4 and 5, liable to be struck down as opposed to this Fundamental Right?
5. Is the order liable to be assailed under Article 14? If so, are Clauses 4 and 5, liable to be struck down, as infringing Article 14?
6. Is the order liable to be struck down, even if it is brought within Articles 31 (2) and (2-A), because of the absence of any governing principles for determining the just compensation, particularly in the light of Sections 3 and 3-A of the parent Act, namely, the Essential Commodities Act, 1955?
7. Is the order liable to be struck down, for the absence of any indication whatever that it was promulgated, after the Government were satisfied that it was necessary or expedient to promulgate this order for maintaining or increasing supplies of any essential commodity or for securing their euqitable distribution and availability at fair prices? Can we hold that we are satisfied, on the record, that Government, did arrive at this conclusion, whether it be stated in the order itself or is otherwise made evident before the promulgation?
36. These are the relevant issues, and I propose to deal with them quite briefly. As far as Article 19 is concerned, my learned brother and I have both come to the conclusion that the matter might be left open, in the broad sense. On certain aspects we may be indeed in a position to express a definite view, but if Articles 31 (2) and 31 (2-A) do apply, the learned Advocate-General might be justified in contending that the authorities of the Supreme Court support his position that, subject to the imperative need for the inclusion of some stated principle of just compensation within the terms of the order, the order cannot be assailed under Article 19. In other words, the argument can be compressed, in the form of the terse proposition that Article 31 (2) is not delimited by Article 31 (1), and that it commences where Article 19 ends. But, even if the central part of the order, namely, Clause 4 is liable to be struck down under Article 14 alone, Clause 5 having already been virtually struck down and re-formulated pendente lite, and if we further hold that there is no evidence before us, on which we can be satisfied, that the Government did promulgate this order, after arriving at the conclusion specified under Section 3 of the Essential Commodities Act, which is an essential pre-requisite, then it would clearly follow that the writ appeals must fail.
37. The situation with regard to Articles 358 and 359 is simple, and clearly beyond doubt. The following authorities clarify the actual position : Makhan Singh v. State of Punjab : 1964CriLJ217 , Ananda v. Chief Secretary, Government of Madras : 1966CriLJ586 , Durgadas v. Union of India : 1966CriLJ812 , Jaichand Lal v. State of West Bengal : 1967CriLJ520 Tuticorin T. & C. Corporation (P.), Ltd. v. State of Madras (1966) M.L.J. 313, a decision of a learned single Judge of this Court, and Narendra Kumar v. Union of India : 2SCR375 . The effect of this case-law is, certainly, that as a piece of post-emergency legislation, or subordinate legislation, this order is protected from attack upon any ground stemming from Article 19, under Article 358. But it is not protected from attack on grounds under Article 14, and that is very clear from what their Lordships of the Supreme Court stated in Ananda Nambiar's Case : 1966CriLJ586 the simple reason is that the fundamental rights of citiens under this Article are being affected by this order, otherwise than under the Defence of India Ordinance or Rules or Orders made thereunder.
Even with regard to Article 19, though this is a post-emergency legislation, it may not be immune from attack upon the different ground that it is a piece of delegated or subordinate legislation, and that the concerned authority in the parent Act, is itself subject to rights guaranteed under Article 19. As my learned brother has pointed out, the true argument here is somewhat different from that adopted by the learned single Judge of this Court in Tuticorin T. & C. Corporation (P.) Ltd. v. State of Madras (1966) M.L.J. 313. In that case the concerned Act had been enacted prior to the promulgation of the emergency and the President accorded his assent, thereby the Act being placed in the statue book on that anterior date. In the present case, ground is different; it is the broad principle of constitutional law, that a piece of subordinate legislation cannot exceed the ambit or scope of the parent power. That power embodied in Section 3 of the Essential Commodities Act, is admittedly subject to the rights guaranteed under Article 19, and, as observed in Narendera Kumar v. Union of India : 2SCR375 , such words,, that the power is subject to the guarantee of the relevant Fundamental Rights, have to be assumed,, on a doctrine of necessary implication. On this ground, the learned Advocate-General cannot contend that the order is immune from the attack based on Article 19(1)(f).
38. But the learned Advocate-General does contend and with considerable force and substance, that the order is immune from the attack based on Article 19, because it is also partly at least, an order traceable to the powers of eminent domain under Entry 42 of the Concurrent List. My learned brother has dealt so extensively with this matter, that I do not propose to cover the same ground by any reiteration. If we look to the doctrine of pith and substance as an essential principle of interpretation, there would appear to be much to be said for the view that the order really falls within the ambit of Entries 33 and 34 of the List . But, assuming that the order falls also within the ambit of Entry 42, since legislative technique does not exclude the draft of a legislative measue which is composite in the sense that it is traceable to more than one entry in the list, as the source of power, can we accept the proposition that Article 19 must, consequently, be excluded, because Article 19 really ends where Articles 31(2) and 31 (2-A) begin? On this aspect, though we are not expressing any final view, I desire to make a few pertinent observations before passing to the other issues.
39. A valuable conspectus of the entire case-law on this aspect can be found in Constitutional Law of India (A Critical Study) by H. M. Servai (1967 Edn.) at page 531 et seq. We have really to commence with Gopalan's case : 1950CriLJ1383 , where the dictum is to be found that if a citizens property had been compulsorily acquired under Article 32 any right based on Article 19 (1) (f) was no longer justiciable, as the property itself had disappeared. Thus, in The State of Bombay v. Bhanji Munji and Anr. : 1SCR777 , their Lordships observed that both in Subodh Gopal's Case : 1SCR587 , and Dwarkadas Shrinivasa's case : 1SCR674 the Judges agreed that Article 19 (1) (f) and Article 31 (2) dealt with different aspects so that if the existence of property posulated by Article 19 (1) (f) could no longer be postulated, because the property had been acquired, then it followed that Article 19 (1) (f) could not be invoked, where Article 31 (2) held the field. In Smt. Kamala Bala v. State of West Bengal : AIR1962Cal269 , Bose J., pointed out that, after the Constitution (Fourth Amendment) Act, 1955, Article 31 (1) of the Constitution cannot be construed as excluding the operation of Article 19 (1) (f). But a legislation dealing with the acquisition or requisition, as contemplated by Article 31 (2) read with (2-A) has the effect of excluding the operation of Article 19 (1) (f), on the logic that I have earlier set forth.. But, the question which can still be raised here for elucidation, conceivably might be, what has to happen if a writ of prohibition is prayed for, prior to the exercise of the act of eminent domain, so that the property is still in existence on the ground that the act of eminent domain violates the guaranteed right that every citizen can hold property under Article 19 (1) (f), subject to reasonable restrictions? Conceivably, as Mr. V.P. Raman has argued, even in a case where the single cent of land owned by a person, or his entire stock of paddy, is sought to be acquired by the State, it could be held that this is a reasonable restriction under Article 10 (1) (f) read with Article 19 (5), if the interests of the public necessarily require such acquisition or requisition. Such a perspective of approach has the advantage that it avoids the difficulty in holding that Courts cannot interfere, where Article 10 is invoked, because that Article ends where Articles 31 (2) and (2-A) commences the property is no longer in existence by virtue of eminent domain. The difficulty here is that the property would actually exist, if a writ of prohibition be prayed for impugning the contention that public interest requires a total deprivation of a right to hold some property. Hence it is to be noted that this is different from the argument that where Article 31 (2) and 31 (2-A) applied, Article 19 (1) (f) is no longer available, because the property must exist, and it has ceased to exist by virtue of the exercise of the power of eminent domain. The matter has to be left there for in any event, it is clear that the guarantees under Article 19 will not be available when the property has been acquired. Article 31 (1) cannot come into operation, nor Article 19, when the public interests do require the acquisition or requisition of the property of a person, whether it be his minimum holding of the land or the cultivated produce of that land.
40. But, as my learned brother has referred to incidentally in his judgment Article 31 (2-A) is a protection, only where the law provides for transfership of the right to property to the State or to a corporation owned or controlled by the State. Here we have to note that Section 3 (2) (f) of the Essential Commodities Act itself gives' a power to require a person to sell the stock, not merely to the State Government or its officers or agent but also to such other person or class of persons....as may be specified ...In clause 4 of the impugned order, these words are repeated and, if the sale is arbitrarily to be in favour of other private individuals, it is very difficult to see how immunity under Article 31 (2-A) could be claimed by the State.
These aspects of the matter have to be left there, as we are not determining these appeals upon the attack under Article 19.
41. But it appears to me to be very clear indeed that the attack based on Article 14 has necessarily to succeed and it is here that I propose to adopt a slightly different perspective of approach. Perhaps, the best way in which I could do that, would be to place the argument of the learned Advocate-General at its highest level, and then to see whether Clause 4 of the impugned order could survive even on such a presentation of its justification. The argument might run on some such lines, as follows.
42. The authorities on Article 14 are, indeed, well-known and it will not be now profitable to cover the ground that has been so frequently covered in the past. The ratio are to be found in Ram Krishna Dalmia's case : 1SCR279 , Joyoti Pershad v. Union Territory of Delhi : 2SCR125 , Moti Ram v. N.E. Fronteir Railway : (1964)IILLJ467SC and D.S. & G. Mills v. The Union of India : AIR1959SC626 , etc. But obviously, there is a distinction between a law which may be violative of Article 14, because it embodies an untrammelled power, which may be exercised without any guideline or principle indicated for such exercise, and the individual act of some authority, deriving its sanction from a piece of legislation, which act is impugned as arbitrary or excessive. This distinction, according to the learned Advocate-General, is of great importance, with regard to the concept of hostile discrimination. It was emphasised by Chagla C.J., in Dhanraj Mills Ltd. v. B.K. Kocher : AIR1951Bom132 , that, where a subject comes to Court and challenges a specific act of an individual officer as being in contravention of Article 14, he is really seeking protection, not under that Article, but against a dishonest, arbitrary or capricious act. This proposition is claimed to have been approbated in Nath Mal v. The Commissioner, Civil Supplies I.L.R. (1951) Raj. 654 and Dineshcharan v. State of M.B. A.I.R. 1953 M.B. 165. According to the learned Advocate-General, Clause 4 of the order vests a discretion in the procuring officers to procure the stock in whole or in part, in the context of the discernible object, namely, the freezing of food-grains, in order to secure equitable distribution and availability at a fair price; vide the observations of the Supreme Court in The State of Rajasthan v. Nath Mal and Mitha Mal : 1SCR982 .
43. So long as there is such a nexus between the objective and the power embodied in the legislation Article 14 will not apply merely because of any individual acts of caprice or arbitrariness by the concerned officials.
44. It is here that the learned Advocate-General depended on the level of the delegation and the dicta of the Supreme Court in Pannalal Binjraj v. Union of India : 1SCR233 . The power involved in that decision, no doubt, was merely a power to transfer the case of an assessee from the jurisdiction of one income-tax officer to that of another, but their Lordships recognised that there was. a safeguard against caprice or excess in the level of the concerned officialdom. The observations in Board of Revenue v. M.S. Jhaver : 1SCR148 , have also been relied on, particularly the dictum that
We have no reason to think that Government will not empower officers of proper status to make searches.
In substance, the argument is this. The power to seize stocks, in whole or in part, can be reasonably related to the objective of freezing of stocks for the sake of equitable distribution and control of prices; the economic situation is so acute and distressing, that the State has necessarily to take over and to exercise this power. Once that is conceded, and the power is derived from Section 3 of the Essential Commodities Act itself, it follows that Article 14 cannot be invoked. Though the entire stock of one cultivator might be seized, and no stock at all might be seized from another cultivator, as Mr. V.P. Raman has pointed out, these inequalities are explicable in terms of the enunciated criteria. They result from an exercise of power by a hierarchy of responsible officers and their bona fides must be assumed. In these terms,, therefore, there can be no general argument of hostile discrimination. If there are individual cases of arbitrariness or caprice, as Chagla, C.J., pointed out, that does not mean that the section must be struck, down under Article 14, but that relief must be given in the individual cases, in a different form, but not under Article 226 of the Constitution. This, as I understand it, is the highest level of the justification, in the arguments of the learned Advocate-General.
45. In my view, this argument has necessarily to fail, and does not withstand critical scrutiny. Clause 4 of the impugned order is devoid of any content whatever, with regard to any guideline or principle for requistion of the stock; it may range, as Mr. V.P. Raman urges, from nil to the entirety. Such a power may be exercised by any designated officer of the Government, and a sale of grain can be compelled in favour of even a private person authorised by the Government. In our view, a statute which is so dificient in the enunciation of any principle behind the discriminatory power is per se violative of Article 14. It is also violative of Article 14, on another very important consideration. To the extent to which Entry 33 in the Concurrent List has been operative, with regard to parts or clauses of this order, Article 19 could be invoked by the aggrieved individual; to the extent to which Entry 42 alone has been operative, the affected citizen is bereft of recourse to Article 19. This, again, involves an inherent element of hostile discrimination.
46. As far as the controlled price is concerned the order suffers from a fatal lacuna or defect, in that it totally overlooks Section 3-B of the Essential Commodities Act. This has been virtually accepted by the learned Advocate-General, whose argument was very faint, in attempting to repel this attack. The whole intendment of Section 3-B, as I understand it, is that the controlled price should either be by agreement, as in Section 3-A (iii) of the Essential Commodities Act, or that it should have regard both to a price which Government may fix, and to the price which is
likely to prevail during the post-harvest period in the area to which that order applies.
Admittedly, this criterion has been totally abandoned or relinquished, in the price settled by Government. The failure to incorporate some machinery or process, having regard to the criteria in Section 3-B of the Essential Commodities Act, is a fatal defect of this order, which renders the fixation of the controlled price, as it is at present under the relevant notification separately produced, totally unsustainable.
47. With regard to the last part of the arguments, I propose to be very brief. The authorities referred to, which include Hamdard Dawakhana v. Union of India : 2SCR192 , Swadeshi Cotton Mills v. S.I. Tribunal : (1961)IILLJ419SC , Krishnayya v. State of Andhra Pradesh : AIR1959AP292 , are very clear. It is not necessary that such words as in the opinion of, or of any similar expression, should appear in the Preamble or any introductory part of the order. The essence of the matter is that the Government must exercise their mind, and consider whether the situation requires the assumption of such powers. The materials made available to us, place us in very grave doubt, whether the matter was brought to the level of consideration by Government at all, and any decision was taken by the concerned Minister. It appears as if there arose a purely departmental question, whether the Madras Paddy and. Rice (Declaration and Requisition of Stocks) Order, 1964 issued under Rule 125 of the Defence of India Rules, should not be substituted by an order under the Essential Commodities Act, as a routine measure, in view of the supersession of the earlier order. No doubt, that was perfectly a proper topic for consideration by the Secretariat, and the files show that the necessary proceedings were being taken by the Chief Secretary and the concerned Secretary, etc. But all this is quite irrelevant, with regard to one essential matter that now concerns us. Whatever these preliminary steps might have been, at some stage or other, the Government, namely, the Minister or some person who 'under the rules of business, could speak for the Minister, should have taken a decision that it was necessary in the interests of the people and the State, to promulgate this order as a delegated legislation. Actually, I find an extract from the notefile relating to the 1966 order, signed by the Law Secretary on 27th May, 1966, which perfectly expresses the requirement. This note states that
such control is very necessary in order to ensure the feeding of the people of the State; the order have to be issued under the Essential Commodities Act.
48. If only this note had been approved by the Minister concerned, as a basis for further action, We would be satisfied that Government did apply their mind, and arrive at the requisite decision. The question is not whether the subjective satisfaction of the Government is expressly emodied in the Preamble to the order, or a part of the order, or otherwise. The question is, whether such satisfaction ever existed, and that is certainly a justiciable matter. As far as we are able to gather, we are unable to assume that such satisfaction did exist. For all that we can glean from the material, this order might have been promulgated as a routine measure, without any application of the mind by the Government to a decision that this step was necessary in the interests of the State and the people. I would, therefore, agree in the order passed by my learned brother, that the writ appeals be dismissed. with costs.