1970 (11) TMI 109 - SC - Indian Laws

Supreme Court upholds Control Orders under Essential Commodities Act 1955, emphasizing legislative nature & regulation.

The Supreme Court of India upheld the constitutionality and validity of Control Orders issued under the Essential Commodities Act 1955, specifically the ... Constitutionality of control orders under the Essential Commodities Act - Delegation of legislative power under the Essential Commodities Act - Excessive delegation - Reasonableness of licensing and permit regime - Absence of appellate provision and availability of alternative remedy by representation - Preference or discrimination between States under Article 303 - Subordinate legislation versus executive instruction - Requisite opinion of the Central Government under the statuteConstitutionality of control orders under the Essential Commodities Act - Preference or discrimination between States under Article 303 - Subordinate legislation versus executive instruction - Requisite opinion of the Central Government under the statute - Validity of the three Control Orders made under s. 3(2)(d) of the Essential Commodities Act and related constitutional challenges under Articles 301-303. - HELD THAT: - The Court upheld the Control Orders as lawful exercises of power under s. 3(2)(d). The orders, having been promulgated under s. 3 and laid before both Houses as required, constitute law made under the statute and are not mere executive instructions. No adequate pleading or foundation was shown to sustain a contention that the Orders gave preference to or discriminated between States within the meaning of Article 303(1); moreover, no demonstration was made that the restrictions were not in the public interest. The recital that the Orders were made under s. 3 was held sufficient to indicate that the Central Government had formed the opinion envisaged by sub section (1), and the Court found no requirement to recite the opinion in the Orders themselves.The constitutional challenges to the Control Orders under Articles 301-303 and the contention that they are mere executive instructions were rejected; the Orders were held validly made under s. 3.Reasonableness of licensing and permit regime - Absence of appellate provision and availability of alternative remedy by representation - Whether restrictions imposed by the Control Orders, including delegation of permit granting to State Governments and senior officers, were unreasonable because there was no statutory appeal or revision against refusal to grant permits. - HELD THAT: - The Court distinguished earlier authorities striking down uncontrolled licensing powers where delegation could be to any person. Here the power to issue permits was vested in the State Government or senior officers of high rank (District Collector or Deputy Commissioner of Civil Supplies), who are presumed to discharge duties responsibly. The Court observed that an aggrieved person could seek redress by representation to the State Government even if the initial decision was taken by the delegated officer, and that absence of a statutory right of appeal is not decisive when the power is vested in senior authorities. Reliance was placed on precedents recognizing that vesting discretion in top ranking officials diminishes the vice of unreasonableness.The challenge on grounds of unreasonableness and absence of appeal was rejected; the permit regime and delegation to senior officers were held not to render the Orders invalid.Delegation of legislative power under the Essential Commodities Act - Excessive delegation - Whether s. 3(2)(d) of the Essential Commodities Act (and its exercise in the Control Orders) is vitiated by excessive delegation of legislative power. - HELD THAT: - Relying on prior authority, the Court held that the statute supplies sufficient guidance and policy for the executive to act; the challenge of excessive delegation to the Central Government was repelled. The legislative scheme and limits imposed by the Act were found to provide adequate framework and standards for exercise of delegated powers, and therefore the contention of excessive delegation could not be sustained.The attack on s. 3(2)(d) as being an excessive delegation was dismissed; the provision and its exercise in the Control Orders were upheld.Final Conclusion: The writ petitions and appeals were dismissed; the Control Orders made under s. 3(2)(d) of the Essential Commodities Act and the delegation and permit regime under them were held constitutionally valid and not vitiated by excessive delegation, discrimination between States, or the absence of an express appellate provision. Issues:1. Constitutionality and validity of Control Orders under the Essential Commodities Act 19552. Validity of s. 5(2)(d) of the Essential Commodities Act3. Allegations of discrimination between states and preference to one state over another4. Nature of Control Orders as executive instructions or subordinate legislation5. Lack of provisions for appeal or revision against permit refusalsAnalysis:The judgment by the Supreme Court of India addressed the issues concerning the constitutionality and validity of Control Orders issued under the Essential Commodities Act 1955. The Control Orders in question were the Rice (Southern Zone) Movement Control Order 1957, the Southern States (Regulation of Exports of Rice) Order 1964, and the Andhra Pradesh Rice and Paddy (Restriction of Movement) Order 1965. The petitioners, who were rice dealers, had applied for permits to export or transport rice products but faced rejections or delays by the authorities. The High Court of Andhra Pradesh had examined the contentions exhaustively, upholding the constitutionality of the Act and Control Orders.The petitioners raised several contentions, including allegations of discrimination between states, lack of provisions for appeal against permit refusals, and excessive delegation under s. 3(2)(d) of the Act. The judgment clarified that the Control Orders were made under the Act to regulate the export and movement of rice products, and were considered as legislation made by Parliament. The Court emphasized that the absence of pleading on discrimination between states precluded arguments on those grounds. The judgment also highlighted that the Control Orders were laid before Parliament, indicating legislative intent and public interest.Regarding the lack of appeal provisions against permit refusals, the judgment distinguished the present case from previous rulings, emphasizing that permits were issued by high-ranking officers like the District Collector or Deputy Commissioner of Civil Supplies. The Court noted that approaching the State Government for a final decision was an available recourse for aggrieved parties. The judgment cited precedents to support the view that the absence of appeal provisions was not necessarily unreasonable when high-ranking officials were involved in permit decisions.Lastly, the judgment addressed the contention of excessive delegation under s. 3(2)(d) of the Act, citing a previous ruling that upheld similar provisions in a different statute. The Court concluded by dismissing the writ petition and appeals, stating that the Control Orders were valid and constitutional. The judgment highlighted that the Central Government had sufficient guidance to exercise its powers under the Act.