- (1.) These three appeals which have been filed in this Court with certificates issued by the Punjab High Court under Art. 132(1) of the Constitution are directed against the orders passed by the said High Court by which cl. 11B of Iron and Steel (Control of Production and Distribution) Order, 1941 (hereinafter called the Order) has been declared unconstitutional and inoperative, and the criminal proceedings commenced against M/s. Bhana Mal Gulzari Mal and others under the said clause 11B read with S.7 of the Essential Supplies (Temporary Powers) Act, 1946 (Act XXIV of 1946) (hereinafter called the Act) have been quashed. M/s. Bhana Mal Gulzari Mal Ltd., is a private limited company having its registered office at Chawri Bazar, Delhi. Since 1948 it has been registered as a stockholder by the Iron and Steel Controller (hereinafter called the Controller) under cl. 2(d) of the Order. It appears that under cl. 11B of the Order notifications had been issued from time to time giving a schedule of base prices in respect of iron and steel. On December 10, 1949, the Controller issued a notification under cl. 11B decreasing by Rs. 30 per ton the prices already fixed for all categories of steel Several criminal cases were instituted (Nos. 385-410 of 1954) against the said company, its three directors, its general manager and two salesmen (hereinafter called respondents 1 to 7) on the allegation that they had sold their old stock of steel for prices higher than those prescribed by the said notification of December 10, 1949. When the respondents had thus to face several criminal proceedings they filed three writ petitions in the Punjab High Court against the Union of Indian, the State of Punjab and others (hereinafter called the appellants). By their Writ Petition No. 36 of 1954 (23-3-54) they prayed for a direction, order or writ restraining the appellants from enforcing or giving effect to cl. 11B or the said notification, as well as a writ or order quashing the criminal proceedings commenced against them. The decision in this writ petition has given rise to Criminal Appeal No. 36 of 1955. Writ Petition No, 37 of 1954 (23-3-54) prayed for a similar order specifically in respect of the criminal cases Nos. 385-410 of 1954 then pending against the respondents, and asked for an interim stay of the said proceedings. The order passed on this writ petition has given rise to Criminal Appeal No. 37 of 1955. It appears that under some of the criminal proceedings filed against the respondents orders for search had been passed by the trial Magistrate on May 12, 1953. These orders were challenged by the respondents by their Writ Petition No. 52-D of 1954 (7-4-54). An appropriate writ was asked for quashing the warrants issued under the said orders. From the orders passed on this writ petition Criminal Appeal No. 38 of 1955 arises. In all these writ petitions the respondents' contention was that cl. 11B was invalid and unconstitutional as it violated Art. 19(1) (f) and (g) as well as Art. 31 of the Constitution. They also urged that the said clause was ultra vires the powers conferred on the Central Government by S. 3 of the Act. The notification issued by the Controller on December 10, 1949, was challenged by the respondents on the ground that it was issued under a clause which was invalid and was otherwise unreasonable and void. In substance the High Court has upheld the respondent's plea that cl. 11B is ultra vires as it is violative of the fundamental rights guaranteed under Art. 19(1) (f) and (g) of the Constitution. In the present appeals the appellants seek to challenge the correctness of this conclusion. Thus the main point which calls for our decision in this group of appeals is whether cl. 11B of the Order is valid or not.
(2.) The impugned clause forms part of the Order which has been issued by the Central Government in exercise of its powers conferred by sub-r. (2) of R. 81 of the Defence of India Rules. Before considering the appellant's contention that cl. 11B is valid it would be necessary to refer briefly to the parent Act, and to trace the vicissitudes through which it has passed, to examine its material provisions and their effect on the controversy in the present appeals. It is well known that on September 29, 1939, the Defence of India Act was passed to provide for special measures to ensure the public safety and interest and the defence of British India and the trial of certain offences. The Act and the Rules framed thereunder were enacted to meet the emergency which had arisen as a result of the Second World War. Rule 81(2) (b) of the Rules authorized the Central Government inter alia, so far as appears to it necessary or expedient for securing the defence of British India or the efficient prosecution of war or for maintaining supplies and services essential to the life of the community, to provide by order for controlling the prices or rates at which articles or things the prices or rates at which articles or thing of any description whatsoever may be sold or hired and for relaxing any maximum or minimum limits otherwise imposed on such prices or rates. This Act was followed by Ordinance No. XVIII of 1946 which was promulgated on September 25, 1946. Classes 3 and 4 of this Ordinance are relevant for our purpose. Clause 3(1) provides inter alia that the Central Government, so far as it appears to it necessary or expedient for maintaining or increasing supplies of any essential commodity, or for securing their equitable distribution and availability at fair prices, may by notified order provide for regulating or prohibiting the production, supply and distribution thereof, and trade and commerce therein; sub-cl. 2(c) adds inter alia that without prejudice to the generality of the powers conferred by sub-s. (1), an order made thereunder may provide for controlling the prices at which any essential commodity may be bought or sold. This Ordinance was issued to provide for the continuance during a limited period of powers to control the production, supply and distribution of, and trade and commerce in, certain commodities which were treated as essential for national economy. The essential commodities which were covered by the Ordinance were defined by cl. 2(a) as meaning any of the classes of commodities specified; they included iron, steel and coal. Having provided for the delegation of the specified powers to the Central Government under cl. 3 the Ordinance provided for sub-delegation by cl. 4. Under this clause the Central Government was authorized to direct by a notified order that the power to make orders under cl. 3 shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction, be exercisable by (a) such officer or authority subordinate to the Central Government, or (b) such Provincial Government or such officer or authority subordinate to a Provincial Government, as may be specified in the direction. This Ordinance was later followed by the Act (Act XXIV of 1946) which was passed on November 19, 1946. The preamble to the Act, the definition of essential commodity and the provisions for delegation and sub-delegation which were included in the Ordinance have been re-enacted by the Act. The life of the Act thus passed was continued from time to time until the Essential Commodities Act No. 10 of 1955 was put on the statute book as a permanent measure. The provisions of the Defence of India Act and the Rules framed thereunder came into force to meet the emergency created by the war; but even after the war came to an end and hostilities ceased the emergency created by the war continued and the economic problems facing the country needed the assistance of similar emergency provisions. That explains why those provisions have continued ever since 1939.
(3.) The Order of which cl. 11B is a part was issued on July 26, 1941, by the Central Government in exercise of the powers conferred on it by R. 81(2) of the Defence of India Rules which correspond to the provisions of S. 3 of the Act. It may be pointed out that as a result of the combined operation of cl 5. of Ordinance XVIII of 1946 and S.7 of the Act, the Order must now be deemed to have been issued under S. 3 of the Act. It is necessary to examine briefly the broad features of the scheme of this Order. The Controller specified in the Order is the person appointed as Iron and Steel Controller by the Central Government and includes any person described by cl. 2(a) of the Order. The Order applies to all iron and steel of the categories specified in its Second Schedule. Clauses 4 and 5 regulate the acquisition and disposal of iron or steel, and cl. 8 requires that the use of iron and steel must conform to the conditions governing the acquisition. This clause shows that, in exercise of the powers conferred on the Controller by the proviso to it the Controller has to take into account the requirements of persons holding stocks, the requirements of persons needing such stocks, the transport facilities available and any other factor including a strike or lock-out affecting the production or fabrication. Clauses 10B and 10C empower the Controller to direct sale of iron and steel in cases specified in the said clauses. Clause 11A authorises the Controller, where he is satisfied that such action is necessary in order to coordinate the production of iron and steel with the demands of iron or steel which have arisen or are likely to arise, to prohibit or require production of the said commodities in the manner indicated by sub-cls. (a), (b) and (c) therein. That takes us to cl. 11B the validity of which falls to be considered in the present appeals. It reads thus : "11B., Power to fix prices.- (1) The Controller may from time to time by notification in the Gazette of India fix the maximum prices at which any iron or steel may be should (a) by a producer, (b) by Stockholder including a Controller Stockholder, and (c) by any other person or class of persons. Such price or prices may differ from iron and steel obtainable from different sources and may include allowances for contribution to and payment from any Equalisation Fund established by the Controller for equalizing freight, the concession rates payable to each producer or class of producers under agreements entered into by the controller with the producers from time to time, and any other disadvantages. The Controller may also, by a general or special order in writing, require any person or class of persons enumerated above to pay such amount on account of allowances for contribution to any Equalisation Fund, within such period and in such manner as the Controller may direct in this behalf. 2. For the purpose of applying the prices notified under sub-clause (1) the Controller may himself classify any iron and steel and may, if no appropriate price has been so notified, fix such price as he considers appropriate : Provided that the Controller may direct that the maximum prices fixed under sub-clause (1) or (2) shall not apply to any specified stocks of iron or steel and may, in respect of such stocks specify the maximum prices at which such iron or steel may be sold and communicate the same in writing to the persons concerned and any person or persons holding such stocks of iron and steel for which prices have been so specified shall, at the time of the sale of such iron or steel, or part thereof, mention the number and date of the order of the Controller in every Cash Memo, Bill or other document evidencing the sale or disposal out of the respective stocks to which the order of the Controller applies. 3. No producer or stockholder or other person shall sell or offer to sell, and no person shall acquire any iron or steel at a price exceeding the maximum prices fixed under sub-clause (1) or (2)." Clause 12 gives power to Central Government to give directions to the Controller or other authorities in respect of the procedure to be followed by them in exercising their powers and generally for the purpose of giving effect to the provisions of the Order. It would thus be seen that in issuing this order the Central Government have prescribed a self-sufficient scheme for regulating the production, supply and distribution of steel and iron at fair prices. The Controller is required to take an over-all view of the needs of national economy in respect of steel and iron and to issue appropriate directions in order to effectuate the policy of the Act. The appellants contention is that if cl. 11B is considered in the light of the scheme which the Order has in view it cannot be said that the said clause is violative of Art. 19(1)(f) and (g) of the Constitution.;