1959 (12) TMI 38 - SC - Indian Laws

Court strikes down Clause 4 of Metal Control Order 1958, orders publication of principles

The Court partially allowed the petition, striking down Clause 4 of the Non-ferrous Metal Control Order, 1958, as void due to the failure to legally ... Whether cl. 4 of the Order read with the principles is within the Act or not is not free from difficulty? Held that:- Petition partly allowed. The petitioners are therefore entitled to relief only in respect of cl. 4 of the order. We direct that an order be issued restraining the respondents from enforcing cl. 4 of the Non-ferrous Metal Control Order, so long as principles in accordance with law, are not published in the Official Gazette and laid before the Houses of Parliament in accordance with sub-s. (5) and subs. (6) of s. 3 of the Essential Commodities Act. As the petition has succeeded in part and failed in part, we order that the parties will bear their own costs. Issues Involved:1. Violation of Fundamental Rights under Articles 14, 19(1)(f), and 19(1)(g) of the Constitution.2. Legality of Clause 4 of the Non-ferrous Metal Control Order, 1958, and its principles.3. Reasonableness of the restrictions imposed by the Order.4. Discrimination between manufacturers and dealers under Article 14.Detailed Analysis:1. Violation of Fundamental Rights under Articles 14, 19(1)(f), and 19(1)(g):The petitioners, dealers in imported copper, contended that Clause 4 of the Non-ferrous Metal Control Order, 1958, violated their fundamental rights under Articles 19(1)(f) and 19(1)(g) by restricting their right to acquire property and carry on trade. They argued that these restrictions were not saved by Articles 19(5) and 19(6) and thus were void. Additionally, they claimed that the principles specified in the letter dated April 18, 1958, were discriminatory and violated Article 14, which guarantees equal protection of laws.2. Legality of Clause 4 of the Non-ferrous Metal Control Order, 1958, and its principles:The respondents argued that the Order and the principles specified were laws imposing reasonable restrictions in the interest of the general public. The Court noted that the principles specified in the letter were not notified in the Official Gazette nor laid before both Houses of Parliament as required by sub-sections (5) and (6) of Section 3 of the Essential Commodities Act, making them legally ineffective. The Court concluded that the regulation by Clause 4, without the principles being legally specified, was not within the Act and thus void.3. Reasonableness of the restrictions imposed by the Order:The Court examined whether the restrictions imposed by the Order were reasonable. It noted that the price control and permit system introduced by Clauses 3 and 4 were necessary to address the high prices and monopolistic practices in the copper trade. The Court found that fixing the price at landed cost plus 3.5% and the permit system were reasonable restrictions in the interest of the general public, even though they resulted in the elimination of dealers from the trade.4. Discrimination between manufacturers and dealers under Article 14:The Court recognized that the principles specified in the letter placed manufacturers and dealers in different classes, with only manufacturers being eligible for permits. However, it found that this classification had a reasonable connection with the objective of the legislation, which was to control prices and ensure equitable distribution of copper. Therefore, the Court held that the principles did not violate Article 14 of the Constitution.Conclusion:The Court partially allowed the petition. It struck down Clause 4 of the Non-ferrous Metal Control Order, 1958, as void due to the failure to legally specify the principles. The Court directed that an order be issued restraining the respondents from enforcing Clause 4 until the principles are published in the Official Gazette and laid before both Houses of Parliament in accordance with the law. The parties were ordered to bear their own costs.