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Jayantilal O'shah Vs. Chief Presidency Magistrate and Ors. (23.04.1968 - CALHC) - Court Judgment

LegalCrystal Citation
CourtKolkata High Court
Decided On
Reported in1970CriLJ282
AppellantJayantilal O'shah
RespondentChief Presidency Magistrate and Ors.
Cases ReferredParliament. In Hamdard Dawakhana v. Union of India
- ornaments and polishing gold and silver ornaments. in 1963 he took out a licence under the gold control rules from the superintendent, gold control, calcutta who was the licencing authority under the said rules. this was an annual licence and the petitioner did not take out any licence in 1964 onwards, although according to the respondent, he still carries on business in the manufacture of ornaments of gold at premises no. 13, armenian street. before i proceed further, it will be necessary to state something more about the said rules. the defence of india act, 1962 (hereinafter referred to as the 'said act') came to be promulgated in 1962 and the preamble of the said act recites that the president having declared by proclamation under clause (1) of article 352 of the constitution.....

D.N. Sinha, C. J.

1. This is an application under Article 228 of the Constitution praying for the transfer of a criminal proceeding pending in the court of 8th Presidency Magistrate, Calcutta, to this Court. The facts are briefly as follows: The petitioner in this application is Jayantilal O'Shah, a resident of 13. Armenian Street in the city of Calcutta. According to the petitioner, he was carrying on business as an order supplier by remaking gold ornaments and polishing gold and silver ornaments. In 1963 he took out a licence under the Gold Control Rules from the Superintendent, Gold Control, Calcutta who was the licencing authority under the said rules. This was an annual licence and the petitioner did not take out any licence in 1964 onwards, although according to the respondent, he still carries on business in the manufacture of ornaments of gold at premises No. 13, Armenian Street. Before I proceed further, it will be necessary to state something more about the said Rules. The Defence of India Act, 1962 (hereinafter referred to as the 'said Act') came to be promulgated in 1962 and the preamble of the said Act recites that the President having declared by Proclamation under Clause (1) of Article 352 of the Constitution that a grave emergency exists whereby the security of India was threatened by external aggression, the said Act was enacted as it was necessary to provide for special measures to ensure the public safety and interest, the defence of India and civil defence and for the trial of certain offences and for matters connected therewith. Chapter if of the said Act (Sections 3 to 6) deals with emergency powers. Section 3(1) gives power to the Central Government, by notification in the Official Gazette, to make such rules as appear to it necessary or expedient for securing the defence of India and civil defence, the public safety, the maintenance of public order or the efficient conduct of military operations, or for maintaining supplies and services essential to the life of the community. Sub-section (2) sets out certain specific headings which have been held to be illustrative of the general powers granted under Sub-section (1) of Section 3. The relevant heading for our purpose is Clause (33) of Sub-section (2) which runs as follows:

Controlling the possession, use or disposal of, or dealing in, coin, bullion, bank notes, currency notes, securities or foreign exchange;

The Gold Control Rules, 1963 forms a part of the Defence of India Rules, 1962 and it is not disputed that the origin of the power to promulgate it is derived from Section 3(2)(33) of the said Act. Under Rule 126-B of the Gold Control Rules, 1963 (hereinafter referred to as the 'said Rules') on and from the date of the publication of the Defence of India (Amendment) Rules, 1963 in the Official Gazette, no dealer is permitted to make or manufacture any article of gold unless authorised to do so and no dealer may make new ornaments out of any gold of which the purity exceeds 14 carats. Briefly speaking, dealers in and manufacturers of gold ornaments would have to possess a licence under the said Rules and are not permitted to deal with gold whose purity exceeds 14 carats. If a person does so, then he commits an offence. I now come to the facts of the present case. I have already mentioned that in 1964 the petitioner did not possess a licence under the said Rules. On the 23rd of October, 1964 there was a search of the business premises belonging to the petitioner at 13 Armenian Street, and primary gold of above 14 carats purity, weighing 69 tollas 4 annas and 7 1/2 pies was seized at the said business premises. On the 29th of December, 1964 the Superintendent of Central Excise, Gold Control, served a show-cause notice on the petitioner. It is stated in the said notice that, gold amounting to 69 tollas 4 annas 7 1/2 pies were seized from 13, Armenian Street, Calcutta and the said quantity of gold was found to be above 14 carats purity and it was in the illicit possession of the petitioner who had the intention to sell and manufacture gold ornaments by melting the same, thereby violating the provisions of Rules 126-H (2) (d), 126-1 (10) and 126-1 (a) (i) (sic) of Defence of India (Amendment! Rules, 1963. The petitioner was required to show cause as to why the goods seized should not be confiscated and why penalty should not be imposed on him under Rules 126-M and 126-1 (16) of the Defence of India (Amendment) Rules, 1963. On the 15th of January, 1965 the petitioner showed cause. On the 3rd of May 1965 the Deputy Collector, Central Excise Calcutta and Orissa, ordered the confiscation of 64 tollas 4 annas 3 pies of the seized gold under Rule 126-M (2) (aa) of the Defence of India (Amendment) Rules, 1963 for contravention of Rule 126-H (2) (d) thereof. The petitioner preferred an appeal against the said order of the Deputy Collector, Central Excise, Calcutta and Orissa. On November 29, 1965 the appeal was rejected as time barred. The petitioner thereupon applied in revision to the Secretary to the Government of West Bengal, Ministry of Finance (Department of Revenue and Insurance). On the 13th July. 1966 the Revision was rejected. On the 3rd of January, 1967 the Deputy Collector. Central Excise, Calcutta and Orissa filed a complaint against the petitioner for contravention of the provisions of Rules 126-P (2) (iv), 126-P (1) (i) and 126-1 (10 of the Gold Control Rules. On the 21st of June, 1967 the 8th Presidency Magistrate, Calcutta framed charges against the petitioner, particulars whereof are set out in paragraph 14 of the petition. The said criminal Proceeding is pending before the 8th Presidency Magistrate and it is this proceeding that has been challenged in this application. On the 26th July, 1967 the petitioner made an application under Section 432 of the Code of Criminal Procedure before the said Presidency Magistrate, requesting him to state a case for the decision of the High Court. The section lays down that, if in the opinion of the trying Magistrate, any provision of law appears to be unconstitutional and void, but which has not been so declared by any High Court to be so, the trying Magistrate can refer the matter to the High Court. By his order dated 8th August, 1967 the learned Magistrate came to the conclusion that he was not of the opinion that the Rules, for the contravention of which the criminal proceeding had been instituted, were invalid and so he refused to refer the matter to the High Court. Thereupon the petitioner made an application to this Court under Article 228 of the Constitution and a Rule was issued on the 30th August, 1967 calling upon the respondent to show cause why the proceeding should not be transferred to this Court under the provision of that Article. Article 228 provides that if the High Court is satisfied that a case pending in a court subordinate to it involves a substantial question of law as to the interpretation of the Constitution, the determination of which is necessary for the disposal of the case, it shall withdraw the case and may either dispose of the case itself or determine the said question of law and then return the matter to the court from where it has been withdrawn, for further proceeding. It is clear that we must be satisfied that this case involves a substantial question of law as to the interpretation of the Constitution. In the petition the grounds for making this application are set out in paragraph 20. The grounds as formulated are so clumsily framed that they are not understandable. We, therefore, requested Mr. Dutt, who appears for the petitioner, to formulate the real point that he wishes to put forward for our consideration in this case. Upon consideration he formulated the following grounds:

The Gold Control Rules purported to be framed in exercise of Section 3(2)(33) of the Defence of India Act. 1962 being silent on the limits of delegation relating to legislative power and no limits being laid down by the Constitution relating to exercise of such power. The Gold Control Rules is a piece of delegated legislation and hence bad.

I might mention here that although Mr. Dutt promised to confine himself to this point he travelled far beyond it and advanced arguments which either have nothing to do with the interpretation of the Constitution or are points which have been fully and finally decided by the Supreme Court so that no further interpretation is necessary.

2. I shall first of all deal with the ground as formulated by Mr, Dutt. The delegation of powers has not been specifically provided for in the Constitution, but it is a power, the existence of which is widely accepted. The Supreme Court has in a number of decisions laid down the principles that are to be followed and these are by now so well-established that it is too late in the day to advance the argument that the Constitution or the Defence of India Act or the Gold Control Rules are unconstitutional and void because they themselves do not contain any specific provision as to delegation of powers. As was explained by Fazl Ali, J. in, Delhi Laws Act Case AIR 1951 SC 332, delegated legislation has become a presentday necessity--it is both inevitable and indispensible. The legislature has now to make so many laws that it has no time to devote to all the legislative details, and sometime the subject on which it has to legislate is of such a technical nature that all it can do is to state the broad principles and leave the details to be worked out by those who are more familiar with the subject. It is not always possible to bring out a self-contained and complete Act straightway, since it is not possible to foresee all the contingencies and envisage all the legal requirements for which provision is to be made. The legislature must normally discharge its primary function itself and not through others. It cannot abdicate its legislative function and therefore, while entrusting power to an outside agency, it must see that such an agency acts as a subordinate agency and does not become a parallel legislature. The policy and principle must be laid down, but provided this is done and control is retained, the delegation is a valid one. These principles were reiterated in Rajnarain Singh v. Chairman, Patna Administration Committee : [1955]1SCR290 . The principles, therefore, to be applied having been very clearly laid down by the Supreme Court, it merely remains for us to apply them to the facts of each case. that the Defence of India Act and the Rules contemplate delegation of power cannot be disputed. The question is whether this application of the power is well within the constitutional limits. In our opinion there is no doubt on the point that the constitutional limits have not been exceeded. Similar question arose in the case of Harishankar Bagla v. State of Madhya Pradesh : 1954CriLJ1322 with regard to the Cotton Textile (Control of Movement) Order, 1948 promulgated under the Essential Supplies (Temporary Powers) Act, 1946. Mahajan, C. J. said as follows: 'The next contention of Mr. Umrigar that Section 3 of the Essential Supply (Temporary Powers) Act 1946 amounts to delegation of legislative power outside the permissible limits is again without any merit. It was settled by the majority judgment in the 'Constitution of India and Delhi Laws Act 1912 etc. AIR 1951 SC 332 that essential powers of legislation cannot be delegated. In other words, the Legislature cannot delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The Legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists of the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct.

In the present case the Legislature has laid down such a principle and that principle is the maintainance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to the Central Government in exercising its powers under Section 3. Delegation of the kind mentioned in Section 3 was upheld before the Constitution in a number of decisions of the Privy Council vide Russell v. Reg (1882) 7 A. C. 829, Hodge v. Reg (1884) 9 A. C. 117 and Shannon v. Lower Mainland Dairy Products Board 1938 AC 708 and since the coming into force of the Constitution delegation of this character has been upheld in a number of decisions of this Court on principles enunciated by the majority in AIR 1951 SC 332. As already pointed out the preamble and the body of the Sections sufficiently formulate the legislative policy and the ambit of the policy and the character of the Act is such that the details of that policy can only be worked out by delegating them to a subordinate authority within the frame work of that policy. ...' The provisions of the said Act and the Rules are similar. The said Act in its preamble lays down clearly the objects for which it was intended. Section 3 of the said Act lays down the policy to be followed by the delegate, namely Parliament. In Hamdard Dawakhana v. Union of India : 1960CriLJ671 it was pointed out at P. 567 that when the delegate is given the power of making the rules and regulations in order to fill in the details to carry out and subserve the purpose of the legislation, the manner in which the requirements of the statute are to be made and the rights therein created to be enjoyed, it is an exercise of delegated legislative powers. In our opinion, neither the Act nor the Rules in the present case can be said to exceed the rule of delegation of powers. Mr. Dutt made out an elaborate argument based on the 14th Report of the Law Commission to the effect that the said Act and the Rules do not subserve their purpose. It is impossible for us, in interpreting either the constitution or the said Act or Rules, to take into consideration the report of the Law Commission. The comments of the Law Commission on the question of legal reform are matters for consideration by Government and the legislature and not for us. Mr. Dutt also referred to the Rules and procedures of the Lok Sabha under the provision of which the Lok Sabha appoints a committee to see that the powers of delegation are not exceeded that is a matter of internal management with which we have nothing to do. Perhaps the only point argued which might have some substance in it is that, under Section 3(2)(33) the word used is 'bullion' but that the provisions in the said Rules do not relate to bullion only, but to other kinds of gold, including manufactured ornaments. Assuming that this is so, it can only mean that the provisions of the said Rules are ultra vires the said Act. that has nothing to do with the interpretation of the Constitution and therefore, cannot come within the provisions of Article 228 of the Constitution. Lastly, Mr. Dutt argued that the provisions of Article 352 for the proclamation of emergency and Article 353 relating to the effects thereof, are vague and do not lay down any limits as to the powers of the president or the Parliament and there was no guideline to be found therein. To say that, what is a 'grave emergency' should have been defined in the Constitution, is an argument of desperation. In my opinion it is sufficiently explained in Article 352 itself. The emergency should be such that thereby the security of India or any part of the territory thereof is threatened by war or external aggression or ineernal disturbance. More then this, could not possibly have been enunciated in the Constitution. I must mention that during argument Mr. Dutt went into fields which have nothing to do with the interpretation of the Constitution; for example he argued that his client was a pledge of ornaments and had not acquired the same nor was he a dealer. These are questions of fact, and have nothing to do with Article 228 of the Constitution.

3. The result is that we are not satisfied that any ground has been established to our satisfaction to bring the matter within Article 228 of the Constitution and consequently this application is dismissed and the Rule discharged. All interim orders are vacated.

4. The operation of this order will remain in abeyance for three weeks from this date, as prayed for.

A.K. Mukherjea, J.

5. I agree.

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