N.D.Ojha, J. - (1.) THESE two writ petitions raise a common question of law and can conveniently be disposed of together. The question raised in these writ petitions is in regard to the validity of the Uttar Pradesh Coarse Foodgrains (Levy) Order, 1974. The aforesaid Order was issued by the State Government of U. P. in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955, read with the Order of the Government of India in the Ministry of Agriculture (Department of Food), published under G. S. R. 316 (E) dated June 20, 1972, with the prior concurrence of the Central Government. The paragraphs of the said Order relevant for determination of the question raised are paragraphs 3 and 4 which read as hereunder :- "3. (1) Every licensed dealer shall sell to the State Government at the scheduled price at a purchasing centre :- (a) Fifty per cent of coarse foodgrains in stock on the date of commencement of this order or coming into his custody or possession after the commencement of this Order. (b) Fifty per cent of coarse foodgrains purchased by him or coming into his custody or possession for sale or disposal through him on commission basis or in any other manner every day beginning with the date of commencement of this order and until such time as the State Government may otherwise direct. (2) No licensed dealer shall sell or otherwise dispose of or remove to any other place than his usual place of business or storage in a particular locality his stocks of coarse foodgrains unless he has sold the prescribed percentage to the State Government under sub-clause (1) and obtained a release certificate in token thereof in respect of stocks left in balance with him. (3) Any person on whose behalf the licensed dealer holds any stock of coarse foodgrains, the whole or part of which such dealer is required to sent to the State Government under sub-clause (1) shall, notwithstanding any contract or instrument to the contrary not be entitled to recover from the licensed dealer on account of the value of the stock so sold anything more than the price received by the licensed dealer under the said clause. (4) The scheduled prices referred to in clause 3 are for the fair average quality of coarse foodgrains conforming to the specifications prescribed in Schedule II and shall be subject, in relation to coarse foodgrains below that quality, to deductions specified therein."
(2.) "Coarse foodgrains" as defined in paragraph 2 (a) of the Order means one or more of the Coarse Foodgrains specified in Schedule I. "Fair average quality" according to its definition as contained in paragraph 2 (d) means the quality containing an admixture or impurity not exceeding that specified in Schedule II. "Licensed dealer" occurring in paragraph 3 has been defined in paragraph 2 (e) of the Order to mean a person holding a valid licence under the Uttar Pradesh Foodgrains Dealers Licensing Order, 1964. Sub-paragraphs (h) and (i) of paragraph 2 define "Schedule" and "Scheduled price." "Schedule" means a schedule appended to this Order, whereas "Scheduled price" for the fair average quality means the price specified in column 3 of Schedule I. In Schedule I the maximum price which has been fixed in regard to the foodgrains in question is Rs. 74.00 per quintal. The petitioners in writ petition No. 7322 of 1974 are licensed dealers in the grain and do the business of wholesale sale and purchase of grain, whereas the petitioners in writ petition No. 7788 of 1974 carry on business of selling coarse grains as kachcha and pucca arhatiyas. The ground on which the validity of the impugned order has been challenged is that the price of Rs. 74.00 per quintal as fixed under the Order for the 50 per cent of coarse foodgrains which are required to be sold to the State Government is arbitrary and beyond the powers conferred by Section 3 of the Essential Commodities Act. In order to appreciate the submission made for the petitioners it will be useful to quote the relevant provisions contained in Section 3 of the Essential Commodities Act. They are as hereunder :- "3. Powers to control production, supply, distribution etc., of essential commodities :- (1) if the Central Government is of 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 prices, for securing any essential commodity for the Defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide :- ... ... ... ... ... ... ... ... ... ... ... ... (c) for controlling the price at which any essential commodity may be bought or sold ; (f) for 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 to an officer or agent of such Government or to such other person or class of persons and in such circumstances as may be specified in the order : (3-A) (i) 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 food-stuff 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 food- stuff 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. (ii) Any notification issued under this sub-section shall remain in force for such period not exceeding three months as may be specified in the notification. (iii) Where, after the issue of a notification under this sub-section any person sells food stuff of the kind specified therein, and in the locality so specified in compliance with an order made with reference to clause (f) of sub-section (2) there shall be paid to the seller as price therefor - (a) where the price can, consistently with the controlled price of the foodstuff, 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. (iv) For the purposes of sub-clause (c) of clause (iii) the average market rate prevailing in the locality shall be determined by an officer authorised by the Central Government in this behalf, with reference to the prevailing market rates for which published figures are available in respect of that locality or of a neighbouring locality; and the average market rate so determined shall be final and shall not be called in question in any court. (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 oilseeds 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 oilseeds 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 as the price for the foodgrains, edible oilseeds or edible oils - (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 oilseeds or edible oils; or (ii) where no such price is fixed the price for such grade or variety of foodgrains, edible oilseeds or edible oils prevailing or likely to prevail during the post-harvest period in the area to which that order applies. Explanation :- For the purposes 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."
(3.) THAT the foodgrains in respect of which the impugned order has been issued constitute "essential commodity" within the meaning of Section 2 (a) of the Essential Commodities Act admits of no doubt Likewise, it cannot be doubted that the State Government has the power under Sec. 3 (2) of the Act to issue an order requiring any person holding in stock any essential commodity to sell it to the State Government, and the impugned order in so far as it requires 50 per cent of the coarse foodgrains to be sold to the State Government is covered by the power conferred by Section 3 (2) (f) aforesaid. Sub- section (3-A) contains a provision in regard to foodstuffs generally, whereas sub-section (3-B) deals specifically with foodgrains, and it is an admitted case of the parties that the relevant sub-section which will apply in the instant case is sub-section (3-8). In regard to the grade or variety of foodgrains which the State Government requires under Section 3 (2) (f) of the Act to be sold to it, the State Government is under an obligation to pay the price for the said foodgrains which is to be determined in accordance with clauses (i) and (ii) of sub-section (3-B).;