T D KUMAR AND BROS PRIVATE LTD Vs. IRON AND STEEL CONTROLLER
LAWS(CAL)-1960-8-6
HIGH COURT OF CALCUTTA
Decided on August 26,1960

T.D.KUMAR AND BROS. PRIVATE LTD. Appellant
VERSUS
IRON AND STEEL CONTROLLER Respondents

JUDGEMENT

D.N.Sinha, J. - (1.) The facts in this case are shortly as follows: The petitioner company carries on business in iron and steel materials. It is a well known business house in Calcutta, and has been carrying on business since 1940, having been incorporated as a company in 1923. Ever since the inception of statutory control of the distribution of Iron and Steel in 1941, the petitioner company has been registered as a stock-holder under the Iron and Steel Control Orders. The petitioner company had also been appointed as a 'Controlled Stockholder', but in this application we are not concerned with that aspect of the matter. In this case we are concerned with events which occurred in 1957. At that time, the Iron and Steel (Control) Order, 1956, promulgated in exercise of powers conferred by the Central Government by Section 3 of the Essential Commodities Act, 1955 was in operation. This order superseded the Iron and Steel (Control of Production and Distribution) Order, 1941 and the Iron and Steel (Scrap Control) Order, 1943. Before I proceed further, it is necessary to consider some of the provisions of the Iron and Steel (Control) Order, 1956 (hereinafter referred to as the 'Control Order'). Under Clause 2, the term, 'Controlled source' includes a 'producer' which term means a person carrying on the business of manufacturing iron and steel. The term 'registered producer' means a producer who is registered as such by the Controller. The term 'Controller' means a person appointed as Iron and Steel Controller by the Central Government and includes any person exercising, upon authorisation by the Central Government, all or any of the powers of the Iron and Steel Controller. A 'controlled stockholder' means a stockholder appointed by the Controller to hold stocks of iron and steel under such terms and conditions as he may prescribe from time to time. The term, 'stockholder' means a person holding stocks of iron or steel for sale who is registered as a stockholder by the Controller. Clause 4 of the Control Order lays down that no person shall acquire or agree to acquire any iron or steel from a producer or stockholder except under the authority of and in accordance with, the conditions contained in a quota certificate or permit issued by the Controller Or under the authority of and in accordance with the conditions contained or incorporated in a general or special written order of the Controller. Clause 5 of the Control Order provides that no person who acquires iron or steel under Clause 4, or no producer shall dispose of or agree to dispose of any iron or steel except in accordance with the conditions contained or incorporated in, a special or general written order of the Controller. Clause 8 of the Control Order is important and must be set out: "Surrender of revoked authorities:-- Where any quota certificate, permit or written order, referred to in Clause 4 or 5 is revoked by the authority which issued it, the person to whom it was issued shall forthwith return it to the authority which issued it."
(2.) The provisions of Clause 13 are important and are set out below: "The Controller may, where he is satisfied that such action is necessary in order to co-ordinate the production of iron or steel with the demands for iron or steel which have arisen or are likely to arise under authorisations to acquire duly issued under this part- (a) prohibit, with effect from such date as he may specify, the manufacture by any producer of iron or steel of any of the categories specified in the Schedule to this Order, otherwise than in accordance with any general or special directions issued by the Controller; (b) require, with effect from such date and with reference to such periods as the Controller may specify, any producer to obtain approval to his programme of manufacture of iron or steel of any of the categories specified in the Schedule to this Order; (c) require, with effect from such date as the Controller may specify, any producer to manufacture iron or steel of such categories as he is capable of manufacturing in accordance with programmes of production approved under Sub-clause (b) of this clause or with special instructions issued by the Controller."
(3.) The last clause in the Control Order to be considered is Clause 17, which gives power to the Central Government to give directions as to the procedure to be followed by the authorities issuing quota certificates, permits or written orders, referred to in Clauses 4 and 5, as to the maintenance by the Controller of records in connection with the distribution of iron or steel and generally for the purpose of giving effect to the provisions of Part II of the said Order (Part II contains 3 to 17). The procedure that is followed in the manufacture and distribution of iron or steel is as follows: The Iron and Steel Controller collects the demands from Sponsoring Authorities and the State Governments and forwards the same to the Ministry of Steel, Mines and Fuel, Government of India, at New Delhi, along with the statement of availability of Iron and Steel in the country. The Ministry of Steel, Mines and Fuel then allocates quotas of iron or steel to the Sponsoring Authorities and the State Governments. The State Governments distribute their quota through registered stockholders. The registered stock-holders procure their orders and submit their indents to the Iron and Steel Controller who ultimately plans the same which means that after due scrutiny he gives an order to the producers or registered producers to produce and supply the subject-matter of the indents. This order of the Controller, which is usually stamped on the indents, is taken by the registered stock-holders to the named producer who then proceeds to manufacture and supply the goods. On the 28th March, 1957 the Deputy Iron and Steel Controller issued a notice inter alia to all. producers as follows: "Sub: Suspension of despatch of steel materials against Outstanding orders for 1/56 and earlier. You are hereby directed to note that with effect from 1-4-1957 despatches of materials to all the parties against all the orders outstanding on your books in respect of period 1/56 and earlier periods should be suspended. Despatches of mate rials to the parties against orders outstanding on your books in respect of annual allocation made for the year 1956-57 (1-4-56 to 31-3-57) should, however, continue to be made." On the 7th May, 1958 a notice was issued by the Deputy Iron and Steel Controller inter alia to all registered producers to the following effect: "Sub: Cancellation of all orders outstanding on you prior to 1-4-56 against State Quota of West Bengal. You are hereby directed to cancel with immediate effect all the outstanding orders on account of the Registered Stock-holders of West Bengal against period 1/1956 and earlier allotments (i.e., prior to 1956-57 annual quota) planned on you with symbols RS/AG/W. Beng., RS/W. Beng. and RS/ COT/W.Ben. Please confirm under advice to all concerned. This may be treated as most urgent.";


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