State power to fix fertilizer prices under Defence of India law upheld despite earlier Central control regime and Article 14 challenge.

The Supreme Court considered whether the State could fix fertilizer prices under the Defence of India Act and Rules despite prior Central control under the Essential Commodities Act and the Fertilizer (Control) Order. The majority treated the later Defence of India regime as an additional valid source of power and held that the State notification could operate where the earlier Central notification did not cover old stock held by dealers. It also found no repugnancy or need for Presidential assent on the reasoning adopted, and rejected the Article 14 challenge because discriminatory treatment was not proved. One opinion dissented, taking the view that the special fertilizer control regime excluded recourse to the Defence of India Rules.

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Issues: (i) whether the State Government could, under the Defence of India Act, 1971 and the Defence of India Rules, 1971, fix the price of fertilizer already controlled under the Essential Commodities Act, 1955 and the Fertilizer (Control) Order, 1957; (ii) whether the State notification dated 14.6.1974 was invalid for inconsistency or repugnancy with the earlier Central notification dated 1.6.1974 and for want of Presidential assent; and (iii) whether the impugned notification offended Article 14 of the Constitution of India.

Issue (i): whether the State Government could, under the Defence of India Act, 1971 and the Defence of India Rules, 1971, fix the price of fertilizer already controlled under the Essential Commodities Act, 1955 and the Fertilizer (Control) Order, 1957.

Analysis: The governing majority view treated both enactments as Central laws, but held that the later Defence of India legislation created a valid additional source of power. It reasoned that the expression used in Rule 114 was wide enough to cover fertilizer, that Parliament could create two concurrent avenues for price regulation, and that the State notification was merely an exercise of power under the later regime. On that approach, the existence of a prior control order under the Essential Commodities Act did not exclude action under the Defence of India Rules.

Conclusion: The State Government had the power to issue the impugned notification; the challenge on this ground failed.

Issue (ii): whether the State notification dated 14.6.1974 was invalid for inconsistency or repugnancy with the earlier Central notification dated 1.6.1974 and for want of Presidential assent.

Analysis: The majority held that the Central notification did not deal with the specific situation of old stock held by dealers on 31.5.1974, whereas the State notification addressed that precise situation. It treated the two notifications as supplementary rather than conflicting, and concluded that the later notification operated in the field left open by the earlier one. It also held that Article 254(2) had no application to a notification issued under delegated authority, and in any event the State measure did not require Presidential assent on the reasoning adopted by the Court.

Conclusion: The impugned notification was not invalid on the ground of inconsistency or repugnancy.

Issue (iii): whether the impugned notification offended Article 14 of the Constitution of India.

Analysis: The majority found that the alleged discriminatory treatment of governmental agencies was not established on the record. The material relied upon did not show that any exempting or differential permission had in fact been granted. Since the foundational factual basis of hostile discrimination was absent, the notification could not be struck down under Article 14.

Conclusion: The challenge under Article 14 failed.

Final Conclusion: The majority upheld the State notification and sustained the dismissal of the dealers' challenge, while vacating interim protection and leaving the dealers without relief.

Ratio Decidendi: Where the later law and the delegated order do not intrude upon a field already occupied in a manner that creates irreconcilable conflict, and the challenged measure addresses a matter left open by the earlier control regime, the later notification may stand; a discrimination challenge also fails absent proof of unequal treatment.

Dissenting Opinion: One opinion held that the Essential Commodities Act, 1955 and the Fertilizer (Control) Order, 1957 constituted the governing special regime for fertilizer, that the Defence of India Rules, 1971 could not be used to fix fertilizer prices for an essential commodity already covered by that regime, and that the State notification therefore lacked authority and could not prevail over the Central notification.

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