Permit-based control of tyre distribution upheld as regulatory, non-discriminatory, and supported by statutory scarcity control

Permit-based control of specified tyres was upheld as a regulatory measure under Clause 6 of the Bihar Essential Commodities (Prices and Stocks) Order, 1967 because it governed distribution and stock movement without banning tyre . The permit system was not struck down as discriminatory, as the committee included stakeholder representatives, guidelines for priority distribution were in place, and no concrete instance of arbitrary or hostile treatment was shown. The orders were also treated as supported by Section 3 of the Essential Commodities Act, 1955, since the record disclosed scarcity and material justifying continued control over selected tyre categories. The writ applications failed on all substantial grounds and were dismissed without costs.

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Issues: (i) Whether the impugned directions controlling sale of specified tyres were ultra vires Clause 6 of the Bihar Essential Commodities--other than foodgrains--Prices and Stocks (Display and Control) Order, 1967 because they amounted to prohibition rather than regulation; (ii) Whether the permit-based distribution mechanism was discriminatory or conferred arbitrary power; (iii) Whether the impugned orders were ultra vires Section 3 of the Essential Commodities Act, 1955 for want of a proper opinion that the orders were necessary or expedient.

Issue (i): Whether the impugned directions controlling sale of specified tyres were ultra vires Clause 6 of the Bihar Essential Commodities--other than foodgrains--Prices and Stocks (Display and Control) Order, 1967 because they amounted to prohibition rather than regulation.

Analysis: Clause 6 empowered the State Government to regulate the distribution of scheduled commodities and to issue directions to dealers and distributors. The impugned orders required sale of specified tyres only against permits and imposed stock and return requirements, but they did not ban the business in tyres or impose a complete or partial prohibition on trade. The control was directed to orderly distribution of scarce commodities and was treated as a regulatory arrangement within the scope of the delegated power.

Conclusion: The challenge failed and the impugned directions were held to be regulatory and within Clause 6.

Issue (ii): Whether the permit-based distribution mechanism was discriminatory or conferred arbitrary power.

Analysis: The mere existence of discretion in the committee to issue permits did not establish discrimination. The committee included officials as well as representatives of truck owners, bus owners and tyre dealers, and no concrete instance of favouritism or hostile treatment was shown. The framework also contained guidelines for priority distribution, which reduced the scope for arbitrary exercise of power. In the absence of proved abuse, the orders could not be struck down as discriminatory.

Conclusion: The challenge on the ground of discrimination was rejected.

Issue (iii): Whether the impugned orders were ultra vires Section 3 of the Essential Commodities Act, 1955 for want of a proper opinion that the orders were necessary or expedient.

Analysis: The record showed scarcity of certain tyre varieties and a corresponding need for control. The Court found material supporting the Government's decision to retain control only over nylon tyres and 5% extra rubber tyres, and there was no basis to hold that the statutory satisfaction required by Section 3 was absent. The contention that the orders were invalid for want of such satisfaction was therefore not accepted.

Conclusion: The orders were not held to be ultra vires Section 3 of the Essential Commodities Act, 1955.

Final Conclusion: The writ applications failed on all substantial grounds and were dismissed without costs.

Ratio Decidendi: A permit-based control scheme for distribution of an essential commodity, adopted to regulate scarcity and accompanied by guidelines, is valid if it regulates rather than prohibits trade and no concrete material shows arbitrary or discriminatory exercise of discretion.

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