Supreme Court voids clause 25 restriction, citing trade limits without compensation. Appeal dismissed, costs against State.

The Supreme Court upheld the High Court's decision, declaring the last portion of clause 25 of the Rajasthan Foodgrains Control Order, 1949 void as it unreasonably restricted trade and lacked compensation principles. The appeal was dismissed, and costs were awarded against the State.

---

---

Issues:
Constitutional validity of clause 25 of the Rajasthan Foodgrains Control Order, 1949 under articles 14, 19(1)(g), and 31(2) of the Constitution.

Detailed Analysis:
The case involved grain merchants in Rajasthan whose stocks were frozen and requisitioned by the State at a lower rate than the prevailing market price. The merchants challenged the validity of clause 25 of the Control Order, claiming it violated their fundamental rights under the Constitution. The High Court held the clause void under articles 19(1)(g) and 31(2) as it restricted the right to carry on business and did not provide fair compensation. The State appealed the decision (paragraphs 1-2).

The Supreme Court analyzed the constitutional validity of clause 25, which authorized freezing and requisitioning of foodgrain stocks. The Court considered the Essential Supplies Act, which allowed for regulation of essential commodities to ensure equitable distribution and fair prices. The Court found the clause reasonably related to the Act's objectives and rejected the argument that it violated article 19(1)(g) (paragraphs 3-4).

However, the Court found the provision in clause 25 allowing stocks to be requisitioned or disposed of at the government's discretion problematic. This unrestricted authority to requisition stocks at arbitrary prices was deemed unreasonable and an infringement on the right to carry on trade or business under article 19(1)(g). The Court highlighted that the lack of compensation fixation principles in the clause also violated article 31(2). Comparisons with other clauses in the Control Order illustrated the unfairness and potential losses faced by grain dealers under clause 25. Consequently, the Court held this portion of the clause void (paragraphs 5-6).

In conclusion, the Supreme Court upheld the High Court's decision, declaring the last portion of clause 25 void due to its unreasonable restriction on trade and failure to specify compensation principles. The appeal was dismissed, and costs were awarded against the State (paragraphs 7-9).

---