1970 (2) TMI 131 - SC - Indian Laws

Supreme Court Upholds Essential Supplies Act 1946 & Cotton Textiles Order 1948

The Supreme Court upheld the constitutionality of Sections 3, 4, and 6 of the Essential Supplies (Temporary Powers) Act, 1946, and the validity of the ... Constitutionality of delegated legislation - control orders as reasonable restrictions in public interest - restriction on trade and business under Article 19(1)(g) - right to dispose of property under Article 19(1)(f) - excessive delegation of legislative power - sub delegation of powers - notwithstanding clause providing precedence over inconsistent enactments - implied repeal by subordinate legislation - conflict between control orders and Railway Act provisionsRestriction on trade and business under Article 19(1)(g) - right to dispose of property under Article 19(1)(f) - control orders as reasonable restrictions in public interest - Validity of the Cotton Textiles (Control of Movement) Order insofar as it requires permits for transport of cotton cloth and its compatibility with Article 19(1)(f) and (g). - HELD THAT: - The Court held that the permit requirement does not deprive citizens of the rights to dispose of property or to carry on trade and business guaranteed by Article 19(1)(f) and (g). The Essential Supplies (Temporary Powers) Act was enacted as an emergency measure to maintain supplies and ensure equitable distribution at fair prices; within that policy a requirement of permits to transport essential commodities is a permissible restriction under Article 19(5). The measure was held to be a reasonable restriction imposed in the public interest during the period of emergency and therefore the Control Order does not infringe the fundamental rights pleaded.The Control Order's permit requirement is a valid, reasonable restriction and does not contravene Article 19(1)(f) or (g).Excessive delegation of legislative power - sub delegation of powers - constitutionality of delegated legislation - Validity of sections 3 and 4 of the Essential Supplies (Temporary Powers) Act on grounds of excessive delegation and of empowering delegation/sub delegation. - HELD THAT: - The Court applied the principle that legislature must lay down the policy and standards to guide subordinate authorities. It found that the Act's preamble and provisions articulate the legislative policy-maintenance/increase of supplies and equitable distribution at fair prices-providing adequate standards to guide the Central Government and its delegates. Section 3's delegation of detailed regulatory powers was held permissible within that framework. Section 4, which permits directions as to which subordinate officers or State authorities may exercise powers, was held to enumerate permissible classes of delegates and not to constitute unlawful further delegation. Precedent and Privy Council authority were cited to support delegation of this character, and the US cases relied upon did not nullify the statutory scheme.Sections 3 and 4 are intra vires; the delegation and potential sub delegation authorised by the Act are constitutionally valid.Notwithstanding clause providing precedence over inconsistent enactments - implied repeal by subordinate legislation - constitutionality of delegated legislation - Validity of section 6 of the Act, which provides that orders made under section 3 shall have effect notwithstanding inconsistency with other enactments, and whether its effect is an impermissible delegation or implied repeal by a delegate. - HELD THAT: - The Court found the High Court erred in declaring section 6 unconstitutional. Section 6 does not itself repeal or abrogate other statutes; it is a legislative declaration that orders under section 3 will prevail over inconsistent enactments while in force. Any practical displacement of other laws is the consequence of Parliament's express legislative choice embodied in section 6, not an act of the subordinate authority; therefore there is no impermissible delegation of power to repeal. The Court explained that bypassing operation of another law during the order's continuance is not equivalent to wiping it from the statute book, and even if inconsistency effected an implied repeal, that repeal would flow from Parliament's enactment of section 6, not from the delegate's orders.Section 6 is constitutionally valid; it does not amount to unlawful delegation or improper repeal by the delegate.Conflict between control orders and Railway Act provisions - notwithstanding clause providing precedence over inconsistent enactments - Whether the Control Order operates as an implied repeal or is in direct conflict with sections 27, 28 and 41 of the Indian Railways Act and is therefore void. - HELD THAT: - The Court held there was no direct conflict between the Order's permit/embargo provisions and the cited provisions of the Railways Act. The Order supplements and places limitations on transport in the interest of regulating essential commodities; it does not purport to exclude the Railways Act or supersede its provisions generally. To the extent of any repugnancy the statutory scheme under section 6 establishes the priority of orders made under the Essential Supplies Act; such priority is a legislative choice and does not render the Control Order invalid as an implied repeal beyond that legislatively declared effect.The Control Order is not nullified by, nor in irreconcilable conflict with, the referenced provisions of the Railways Act.Final Conclusion: The Court dismissed the appeal, upholding the constitutionality of sections 3, 4 and 6 of the Essential Supplies (Temporary Powers) Act, 1946, and of the Cotton Textiles (Control of Movement) Order, 1948; the matter is remitted to the trial Court to proceed in accordance with law. Issues Involved:1. Constitutionality of Sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 19462. Alleged excessive delegation of legislative power in Section 3 and 4 of the Act3. Interconnection of Section 3 with Section 6, and the validity of Section 64. Validity of the Cotton Textiles (Control of Movement) Order, 1948, in relation to existing laws, particularly the Indian Railways ActIssue-wise Detailed Analysis:1. Constitutionality of Sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946:The appellant argued that Sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, and the provisions of the Cotton Textiles (Control of Movement) Order contravened the fundamental rights guaranteed by Article 19(1)(f) and (g) of the Constitution. The court held that the requirement of a permit to transport essential commodities was a reasonable restriction in the public interest, especially during an emergency period. The Act aimed to ensure an equitable distribution and availability of essential commodities at fair prices, which justified the restrictions imposed. The High Court's decision to uphold the constitutionality of Sections 3 and 4 was affirmed.2. Alleged Excessive Delegation of Legislative Power in Section 3 and 4 of the Act:The appellant contended that Section 3 of the Act involved excessive delegation of legislative power. The court referred to the majority judgment in the Delhi Laws Act case, which held that essential legislative functions cannot be delegated. However, it was determined that the legislature had laid down a clear principle for maintaining or increasing the supply of essential commodities and ensuring their equitable distribution at fair prices. The delegation of powers to the Central Government was within permissible limits and provided sufficient guidance for the exercise of those powers. Section 4, which allowed further delegation to subordinate authorities, was also upheld as it enumerated the classes of persons to whom the power could be delegated, aligning with the principles established in Shannon v. Lower Mainland Dairy Products Board.3. Interconnection of Section 3 with Section 6, and the Validity of Section 6:The High Court had declared Section 6 of the Act unconstitutional, but the Supreme Court found this to be an error. Section 6 stated that any order made under Section 3 would have effect notwithstanding any inconsistency with other enactments. The court clarified that Section 6 did not repeal or abrogate existing laws; it merely bypassed them where they were inconsistent with the orders made under Section 3. This did not amount to an unconstitutional delegation of legislative power, as the repeal by implication was a legislative act by Parliament itself, not by the delegate. Therefore, Section 6 was held to be constitutional.4. Validity of the Cotton Textiles (Control of Movement) Order, 1948, in Relation to Existing Laws:The appellant argued that the Control Order contravened Sections 27, 28, and 41 of the Indian Railways Act. The court found no direct conflict between the Control Order and the Railways Act. The requirement of a permit and the powers given to the Textile Commissioner did not supersede the provisions of the Railways Act but supplemented them. The Control Order aimed to regulate the transport of cotton textiles to ensure even distribution and fair pricing, which was a reasonable restriction. The court also dismissed the argument that the Textile Commissioner had unregulated and arbitrary discretion, noting that the appellants had not applied for a permit and thus could not claim arbitrary refusal.Conclusion:The Supreme Court upheld the constitutionality of Sections 3, 4, and 6 of the Essential Supplies (Temporary Powers) Act, 1946, and the validity of the Cotton Textiles (Control of Movement) Order, 1948. The appeal was dismissed, and the trial court was directed to proceed expeditiously with the case in accordance with the law.