1990 (8) TMI 402 - SC - Indian Laws

Court affirms constitutional validity of Essential Commodities Act provision & pricing notification

H.S.S.K. Niyami And Ors Versus Union Of India And Anr

H.S.S.K. Niyami And Ors Versus Union Of India And Anr - 1990 AIR 2128, 1990 SCR (3) 862, 1990 SCC (4) 516, 1990 SCALE (2)286 Issues Involved:1. Constitutional validity of Section 3(3C) of the Essential Commodities Act, 1955.2. Validity and impact of the notification dated March 24, 1966.3. Entitlement to notice and hearing before zoning and price fixation.4. Zoning and price fixation as legislative policy and its judicial review.Detailed Analysis:1. Constitutional Validity of Section 3(3C) of the Essential Commodities Act, 1955:The appellants challenged the constitutional validity of Section 3(3C) of the Essential Commodities Act, 1955, claiming it violated their fundamental rights under Article 19(1)(g) and Article 19(1)(f). However, the court noted that the Act received protection under Article 31C of the Constitution and was included in the 9th Schedule as item No. 126, making it immune from such attacks. Additionally, a recent Constitution Bench judgment in M/s. Shri Sitaram Sugar Company v. Union of India upheld the validity of Section 3(3C), rendering the point no longer res integra.2. Validity and Impact of the Notification Dated March 24, 1966:The appellants contended that the notification dated March 24, 1966, placing their factories in Zone No. 1, caused them significant losses. The notification was issued based on the recommendations of the Sugar Inquiry Commission, which divided the country into five zones for price fixation purposes. The court found that the notification was a statutory one, issued under the powers conferred by the Defence of India Rules, 1962, and the Sugar (Control) Order, 1963. The notification was based on a detailed inquiry and recommendations by experts, making it valid and unassailable.3. Entitlement to Notice and Hearing Before Zoning and Price Fixation:The appellants argued that they were entitled to notice and hearing before being placed in Zone No. 1. The court referred to the exhaustive study conducted by the Sugar Inquiry Commission, which included representations from various stakeholders, including state governments and the sugar industry. The court held that zoning and price fixation are legislative actions and do not require individual notices or hearings. The principles of natural justice do not apply to legislative measures, as established in previous judgments such as Saraswati Industrial Syndicate Ltd. v. Union of India and Union of India v. Cynamide India Ltd.4. Zoning and Price Fixation as Legislative Policy and Its Judicial Review:The court emphasized that zoning and price fixation are integral parts of a legislative policy aimed at ensuring fair prices and equitable distribution of sugar. The policy decisions were based on recommendations from experts and were within the exclusive domain of the Central Government. The court reiterated that such policy decisions do not ordinarily attract judicial review unless they conflict with the Constitution, the governing Act, or general principles of law. The court cited previous judgments, including Shri Sitaram Sugar Company and Anakapalle Coop. Agrl. & Industrial Society Ltd. v. Union of India, to support its conclusion that zoning on a unit-wise basis is impracticable and would defeat the purpose of price control.Conclusion:The court dismissed the appeals, holding that the appellants' contentions were devoid of merit. It concluded that the zoning and price fixation were legislative actions based on expert recommendations and did not require individual notices or hearings. The court upheld the validity of Section 3(3C) of the Essential Commodities Act, 1955, and the notification dated March 24, 1966, affirming that these measures were in the best economic interest of the sugar industry and the general public. The appeals were dismissed without costs.