Regulatory storage limits for essential commodities were upheld as reasonable, non-arbitrary controls to prevent hoarding and secure fair supply.

Storage-limit directions under the Sugar (Control) Order, 1966 were held to fall within Section 3 of the Essential Commodities Act, 1955 because the provision authorises regulation of storage and trade in essential commodities to secure equitable distribution and fair prices. The restrictions on sugar dealers were treated as regulatory rather than prohibitive, since they controlled stock levels to curb hoarding and black-marketing without banning trade, and were therefore a reasonable restriction under Article 19(6). Differential storage limits were also upheld under Article 14 because the classification rested on relevant local conditions, including Calcutta's role as a feeder centre and transit realities.

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Issues: (i) whether the impugned storage-limit directions issued under the Sugar (Control) Order, 1966 were within the scope of Section 3 of the Essential Commodities Act, 1955; (ii) whether the restrictions on sugar dealers violated Article 19(1)(g) of the Constitution of India; and (iii) whether the differential storage limits and practical operation of the order offended Article 14 of the Constitution of India.

Issue (i): whether the impugned storage-limit directions issued under the Sugar (Control) Order, 1966 were within the scope of Section 3 of the Essential Commodities Act, 1955.

Analysis: Section 3(1) authorises regulation or prohibition of production, supply, distribution, trade and commerce in essential commodities where necessary for securing equitable distribution and availability at fair prices. Section 3(2)(d) specifically permits regulation of storage, transport, distribution, disposal, acquisition, use and consumption. Sugar, including khandsari, was treated as an essential and scarce commodity, and the order was directed against hoarding and black-marketing by fixing stock limits.

Conclusion: The directions were within the statutory power and were not ultra vires Section 3 of the Essential Commodities Act, 1955.

Issue (ii): whether the restrictions on sugar dealers violated Article 19(1)(g) of the Constitution of India.

Analysis: A restriction is reasonable if it is not arbitrary or excessive and bears a close nexus with the public interest sought to be served. The order did not prohibit trade in sugar; it only controlled the quantity that a recognised dealer could keep in stock. The object was to prevent scarcity, hoarding and black-marketing and to maintain supply at fair prices. The restriction was therefore regulatory in character.

Conclusion: The restriction was a reasonable restriction under Article 19(6) and did not violate Article 19(1)(g) of the Constitution of India.

Issue (iii): whether the differential storage limits and practical operation of the order offended Article 14 of the Constitution of India.

Analysis: The higher limit fixed for Calcutta was supported by a rational basis, including its role as a feeder centre and the longer transit time from manufacturing regions. The classification was tied to local conditions and was not arbitrary. The argument based on alleged impracticability also failed because the commodity was scarce and readily saleable at prevailing market prices; any occasional hardship did not make the order discriminatory or unconstitutional.

Conclusion: The order did not violate Article 14 of the Constitution of India.

Final Conclusion: The constitutional challenge failed in all material respects, and the stock-control directions were upheld as a valid regulatory measure enacted in the public interest.

Ratio Decidendi: A restriction on trade in an essential commodity is valid if it is regulatory, has a rational nexus with securing equitable distribution and fair prices, and is supported by a non-arbitrary classification based on relevant local conditions.

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