Manash Nath Roy, J. - (1.) Pahari Mata Iron & Steel Works Private Limited, petitioner No. 1 (hereinafter referred to as the said Company), is an existing Company within the meaning of Company's Act and it carries on business inter alia as iron founders, iron master, iron mongers, iron smith, iron makers. Steel converters, smelters, engineers, tin plate makers and re-rolling in all their respective branches. The same was incorporated for the objects contained in the Memoradum of Association and the petitioner No. 2, Shri Sheo Bhagwan Kajaria (hereinafter referred to as the said Director), is a Director and shareholder of the same.
(2.) Those petitioners have impeached in this rule, the validity and bonafide of an order dated 22nd June, 1974, as mentioned in paragraph 20 of the petition of motion and whereby all supplies of raw materials to them have been directed to be suspended forthwith, on the allegations that they have mis-utilised pig-iron, received by them for their consumption in their foundry, in contravention of clause 7 of the Iron and Steel (Control) Order, 1956 as amended (hereinafter referred to as the said order), which again was issued in terms of clause 11(a) thereunder.
(3.) There is no doubt or any dispute that in exercise of powers conferred by section 3 of the Essential Commodities Act, 1955 (hereinafter referred to as the said Act), and in supersession of all previous orders on the subject, the Central Government has promulgated the said order and the Iron & Steel Controller concerned has been appointed by the said Government, in terms of the powers as conferred by the said order. The said order also shows that under its various provisions, the Iron & Steel Controller has been given diverse powers. The powers which are relevant for the purpose of this rule are quoted hereunder:- "11 A.- Power to suspend supplies under Part II. -Notwithstanding anything contained in this Part or in the conditions governing the acquisition or disposal of any categories of iron or steel the Controller may for reasons to be recorded in writing, order suspension of supplies of Iron or Steel forthwith to any person against whom there exists a credible information or a reasonable suspicion of the contravention of any conditions laid down under this order or of any directions issued thereunder. Note (1)-The provisions of this clause shall be invoked only as an interim action in order to forestall further mis-utilisation of iron and steel and shall be followed up with further action, regard being had to the circumstances of the case. Note (2) -The follow-up action as contemplated in Note (1) shall be initiated within a period of three months of the date of order of suspension of supplies. Note (3)-The Controller may by order for reasons to be recorded in writing, extend the period of follow-up action for a further period not exceeding three months. Note (4)-The order of suspension of supplies shall stand withdrawn if the Controller fails to initiate the follow-up action within the said period of three months or within the extended period if the period of follow-up action has been so extended as the case may be". "28. Powers of the Controller. The Controller may, with a view to securing compliance with this Order- (a) require any person to give such information in his possession in respect of stocks of iron or steel or of scrap acquired by him or in respect of any business carried on by that or any other person : (b) inspect or cause to be inspected any stocks of iron or steel or of scrap held by any person and any books or other documents belonging to or under the control of any person ; (c) enter and search, or authorise any Gazetted Officer to enter and search any premises and seize or authorize the officer aforesaid to seize any article in respect of which he has reason to believe that a contraventions of this Order has been, is being or is about to be committed, and any other article in the premises which he has reason to believe has been or is intended to be used in connection with such contravention." 28B -Power to debar any person from receiving iron or steel or scrap:- (1) The Controller may, by order, for reasons to be recorded in writing debar any person for any period not exceeding five years, from receiving iron or steel or scrap from a registered producer or a registered stock holder or a controller stockholder or from any other source either directly or through any committee, body or 'authority setup under clause 17B or otherwise. (a) if the said person uses iron or steel or scrap for any purpose . other than the purpose for which any such material is acquired by, or sold to him or uses any such material in contravention of any condition subject to which the material is acquired by or sold to him ; or (b) if he is found to have violated any condition laid down under any clause of this order or any direction issued thereunder ; or (c) if he is found to have submitted any false documents or to have made any representation in acquiring any such materials ; Provided that before any such order is made, the person concerned shall be given a reasonable opportunity of being heard. (2) Any person aggrieved by an order of the Controller under sub-clause (I) may, within a period of thirty days of the date of the communication of the order, prefer an appeal to the Central Government. (3) On receipt of an appeal under sub-clause (2) the Central Government shall, after giving the person aggrieved a reasonable opportunity of being heard, dispose of the appeal.";