1959 (12) TMI 45 - SC - Indian Laws

Issues Involved:
1. Constitutionality of Clause 11B of the Iron and Steel (Control of Production & Distribution) Order, 1941.
2. Validity of the criminal proceedings against the respondents under Clause 11B read with Section 7 of the Essential Supplies (Temporary Powers) Act, 1946.
3. Whether Clause 11B violates Articles 19(1)(f) and (g) of the Constitution.
4. Whether Clause 11B suffers from excessive delegation.
5. Reasonableness of the price fixation under Clause 11B.

Issue-wise Detailed Analysis:

1. Constitutionality of Clause 11B of the Iron and Steel (Control of Production & Distribution) Order, 1941:
The Supreme Court examined whether Clause 11B is valid and constitutional. The clause empowers the Controller to fix maximum prices for iron and steel. The Court noted that the clause forms part of a comprehensive scheme aimed at regulating the production, supply, and distribution of iron and steel at fair prices. The Court found that the clause is a part of the Order issued under the Defence of India Rules, which corresponds to the provisions of Section 3 of the Essential Supplies (Temporary Powers) Act, 1946.

2. Validity of the criminal proceedings against the respondents under Clause 11B read with Section 7 of the Essential Supplies (Temporary Powers) Act, 1946:
The criminal proceedings were initiated because the respondents allegedly sold steel at prices higher than those fixed by the Controller's notification under Clause 11B. The respondents challenged the validity of Clause 11B and the notification. The High Court had quashed the criminal proceedings, declaring Clause 11B unconstitutional. However, the Supreme Court held that Clause 11B is valid, thereby implying that the criminal proceedings were validly initiated.

3. Whether Clause 11B violates Articles 19(1)(f) and (g) of the Constitution:
The respondents argued that Clause 11B violated their fundamental rights under Articles 19(1)(f) and (g), which guarantee the right to acquire, hold, and dispose of property and the right to practice any profession, or to carry on any occupation, trade, or business. The Supreme Court, however, held that the clause does not violate these rights. The Court reasoned that the clause aims to ensure equitable distribution and fair pricing, which are in the public interest and constitute reasonable restrictions under Article 19(6).

4. Whether Clause 11B suffers from excessive delegation:
The respondents contended that Clause 11B conferred uncanalised and unguided power on the Controller, amounting to excessive delegation. The Supreme Court rejected this argument, stating that Sections 3 and 4 of the Act provide sufficient guidance and policy framework for the Controller to exercise his powers. The Court emphasized that the legislative policy is clearly enunciated in Section 3, which aims at equitable distribution and fair pricing of essential commodities.

5. Reasonableness of the price fixation under Clause 11B:
The respondents argued that the flat reduction of Rs. 30 per ton in the price of steel, as directed by the Controller's notification, was unreasonable and confiscatory. The Supreme Court noted that this specific aspect was not adequately challenged in the High Court and that such matters require a detailed factual examination, which is not suitable for writ proceedings. The Court held that the general effect of the notification on all classes of dealers must be considered, and not just the impact on individual transactions.

Conclusion:
The Supreme Court concluded that Clause 11B of the Iron and Steel (Control of Production & Distribution) Order, 1941, is valid and does not violate Articles 19(1)(f) and (g) of the Constitution. The criminal proceedings initiated under Clause 11B read with Section 7 of the Essential Supplies (Temporary Powers) Act, 1946, were also held to be valid. The appeals were allowed, and the orders of the High Court quashing the criminal proceedings were set aside.

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