Sen, J. - (1.) Section 3 of the Essential Commodities Act, 1955 confers upon the Central Government power, inter alia, to regulate production, supply and distribution of essential commodities for securing their equitable distribution and availability at fair prices. The power given to the Central Government by sub-section (1) of Section 3 is in very broad terms. Sub-section (2) specifically provides that an order can be made by the Central Government, inter alia, "for controlling the price at which any essential commodity may be bought or sold". Clause (f) of sub-section (2) of Section 3 has also empowered the Central Government to require any person holding in stock, or engaged in the production, or in business of buying or selling, of any essential commodity, to sell the whole or a specified part of the quantity held in stock or produced or received by him to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government as may be specified in the order. Sub-section (3A) of Section 3 provides that 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 the seller as the price therefor-(a) where the price can consistently with the controlled price of the food stuffs, 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 with reference to the average market rate prevailing in the locality during the period of three months immediately preceding the date of the notification.
(2.) Sub-section (3b) of Section 3 provides:- "Where any person is required, by an order made with reference to clause (f) of sub-section (2) to sell to the Central Government or to a State Government or to an office or agent of such Government or to a corporation owned or controlled by such Government, any grade or variety of foodgrains, edible oilseeds or edible oils in relation to which no notification has been issued under sub-section (3A), or such notification having been issued, has ceased to be in force, there shall be paid to the person concerned, notwithstanding anything to the contrary contained in sub-section (3), an amount equal to procurement price of such foodgrains, edible oil seeds or edible oils, as the case may be specified by the State Government, with the previous approval of the Central Government having regard to- (a) 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 oilseeds or edible oils; (b) the general crop prospects; (c) the need for making such grade or variety of foodgrains, edible oilseeds or edible oils available at reasonable prices to the consumers, particularly the vulnerable section of consumers; and (d) the recommendations, if any, of the Agricultural Prices Commissions with regard to the price of the concerned grade or variety of foodgrains, edible oil seeds or edible oils."
(3.) There is no dispute that 'rice' is an 'essential commodity' under the Essential Commodities Act. Andhra Pradesh Rice (Procurement Ex-Mill Prices) Order, 1974 and Andhra Pradesh Rice (Procurement Ex-Mill Prices) Order, 1975 were promulgated requiring persons carrying on business in foodgrains, paddy, rice, rice milling, etc. to supply rice to Food Corporation of India (FCI) at procurement prices fixed by Orders issued by the Andhra Pradesh Government from time to time. The rice millers were entitled to be paid what is called the "notified price", which has been defined to mean the price fixed under the Andhra Pradesh Rice (Procurement Ex-Mill Prices) Order, 1975.;