Case Note & Summary
The Supreme Court dealt with ten civil appeals by rice millers of Tadepalligudem, Andhra Pradesh, against the Joint Director (Food), Government of India, Vijayawada, challenging price fixation and requisition of rice under the Essential Commodities Act, 1955. The appeals arose from dismissal of writ petitions by the Andhra Pradesh High Court on 21 August 1959. On 6 June 1957, Central Government issued notification under Section 3(3A) of the Act to control rise in prices and prevent hoarding of rice and paddy. On 31 July 1957, Deputy Director (Food) was authorised to exercise powers under Section 3(2)(f), (h), (i), (j) and to determine average market rates. On 20 August 1957, the officer directed rice millers in Tadepalligudem to sell specified quantities of rice to government at calculated prices. For procurement before 14 September 1957, no controlled price existed, so price determined under Section 3(3A)(iii)(c) read with (iv) using published figures of Vijayawada, 80 miles away, with adjustments for transport and quality. On 14 September 1957, Central Government fixed maximum prices for Krishna, West Godavari and East Godavari districts under Section 3(2)(c); procurement from 14 September to 29 December 1957 was at these maximum prices. On 30 December 1957, after new crop arrived, maximum prices were refixed at lower rates for these districts and Guntur; subsequent procurement was at reduced prices. Appellants contended that pre-14 September prices were not properly fixed; notifications of 14 September and 30 December violated Articles 14, 19(1)(f) and (g), and 31(2); and reduced prices should not apply to rice purchased earlier at higher prices. The Court analyzed each contention. On the first period, it held that under Section 3(3A)(iii), sub-clauses (a) and (b) apply only when controlled price exists; since none existed before 14 September 1957, sub-clause (c) applied and officer was not required to first seek agreement. The term 'published figures' meant figures publicised in newspapers, radio or any manner making them known to general public; private account books were not published figures. The officer correctly used Vijayawada published rates with adjustments for transport and inferior quality. On constitutional challenges, the Court held that fixing maximum prices for surplus rice districts was a reasonable classification under Article 14. Sections 3 and 4 of the Act were upheld under Article 19(1)(f) and (g) following Harishankar Bagla and Bhanamal Gulzarilal. Under Article 31(2), the Act provided fair price principles and manner of determination, thus no violation. On reduced price application, the Court said the reduction reflected normal market fall after new crop, and accepting appellant's argument would mean government could never reduce prices once fixed and would create two sets of maximum prices, against purpose of fair price fixation. On finality clause, the Court held Section 3(3A)(iv) did not bar Article 226 jurisdiction but rates should not be lightly interfered unless serious injustice shown. Accordingly, appeals dismissed.
Headnote
A) Essential Commodities Act - Price Fixation - Section 3(3A)(iii) Essential Commodities Act, 1955 - Where no controlled price exists, price payable for requisitioned foodgrains must be fixed under sub-clause (c), not by first attempting agreement under sub-clause (a). The officer correctly applied sub-clause (c) for procurement before 14-09-1957 because no controlled price existed. Held that the contention of prior agreement has no force. B) Essential Commodities Act - Interpretation of 'published figures' - Section 3(3A)(iv) Essential Commodities Act, 1955 - 'Published figures' means figures publicised in newspapers, radio or any manner making them known to general public; private account books shown to tax authorities are not published figures. Officer correctly used Vijayawada published rates with adjustments for transport and quality. C) Constitutional Law - Article 14 - Reasonable Classification - Constitution of India, 1950, Article 14 - Fixation of maximum prices for surplus rice producing districts of Krishna, West Godavari, East Godavari and Guntur formed a distinct class and served object of stabilising prices; no discrimination. D) Constitutional Law - Article 19(1)(f) and (g) - Validity of Sections 3 and 4 - Essential Commodities Act, 1955, Sections 3 and 4; Essential Supplies (Temporary Powers) Act, 1946, Sections 3 and 4 - Following Harishankar Bagla and Bhanamal Gulzarilal, similar provisions upheld; no violation of fundamental rights. E) Constitutional Law - Article 31(2) - Compensation for Acquisition - Constitution of India, 1950, Article 31(2); Essential Commodities Act, 1955, Section 3 - Act provided principles for determining fair price; legislature left details to Central Government due to varied commodities; no violation. F) Essential Commodities Act - Price Revision - Section 3(2)(c), Section 3(3A) Essential Commodities Act, 1955 - Reduction of maximum price on 30-12-1957 after new crop valid and applicable to earlier procured stocks; reflected normal market fall; acceptance of appellant's argument would prevent any price reduction and create two sets of maximum prices. G) Administrative Law - Finality Clause - Section 3(3A)(iv) Essential Commodities Act, 1955; Constitution of India, 1950, Article 226 - Finality of rates does not oust High Court jurisdiction under Article 226 but rates not to be lightly interfered unless serious injustice shown.
Issue of Consideration
Whether price for rice procured before 14-09-1957 was fixed in accordance with Section 3(3A)(iii) and (iv) of the Essential Commodities Act, 1955; Whether the term 'published figures' in Section 3(3A)(iv) includes private account books; Whether notifications fixing maximum price for certain districts of Andhra Pradesh violated Article 14; Whether Sections 3 and 4 of the Essential Commodities Act, 1955 violated Article 19(1)(f) and (g); Whether the price fixation mechanism under the Act violated Article 31(2); Whether reduced prices fixed on 30-12-1957 could be applied to rice procured between 14-09-1957 and 29-12-1957; Effect of finality clause in Section 3(3A)(iv) on High Court jurisdiction under Article 226
Final Decision
Appeals dismissed. The price fixation and requisition orders were upheld. No violation of Articles 14, 19 and 31. The officer correctly fixed prices under Section 3(3A)(iii)(c) and (iv); published figures meant publicly available figures; price reduction on 30-12-1957 applied to earlier stocks was valid.
Law Points
- Section 3(3A)(iii)(c) applies when no controlled price exists
- published figures means figures publicised in newspapers
- radio or other public manner
- private account books are not published figures
- classification of surplus rice districts valid under Article 14
- Sections 3 and 4 of Essential Commodities Act not violative of Article 19(1)(f) and (g)
- price fixation principles in Act satisfy Article 31(2)
- reduction of maximum price after new crop valid
- finality clause does not bar Article 226 jurisdiction but rates not lightly interfered
