1968 (4) TMI 89 - HC - Indian Laws

Summary

Issues Involved:
1. Definition of "cultivator" in the Kerala Rice and Paddy (Procurement by Levy) Order, 1966.
2. Clause 7 of the Levy Order concerning price ceiling and compensation.
3. Applicability of Section 3(3) and Section 3(3B) of the Essential Commodities Act.
4. Constitutional validity of the Kerala Paddy and Rice (Declaration and Requisitioning of Stocks) Order, 1966.
5. Constitutional validity of the Kerala Paddy (Maximum Prices) Order, 1965, and the Kerala Rice (Maximum Prices) Order, 1965.
6. Procedural aspects and administrative discretion in the Levy and Declaration Orders.

I. Definition of "Cultivator" in the Kerala Rice and Paddy (Procurement by Levy) Order, 1966

The court examined whether the definition of "cultivator" in Clause 2(b) of the Levy Order was vague and arbitrary, potentially leading to unconstitutional applications. The judgment clarified that the term "cultivator" should be interpreted contextually, meaning a person who has control over the cultivation and disposal of the paddy, not merely someone who physically tills the land. The court held that the definition, when read with the context of the Order, did not offend Article 14 of the Constitution.

II. Clause 7 of the Levy Order Concerning Price Ceiling and Compensation

The court analyzed whether Clause 7, which imposes a ceiling on the price of paddy, violated Article 31(2) of the Constitution. The judgment noted that the price fixed should be a "just equivalent" and consistent with the controlled price. The court concluded that the Maximum Prices Orders of 1965 were valid and that the ceiling price in the Levy Order did not negate the requirement for just compensation. The court found that the provision for payment at the prevailing market rate, subject to the maximum price, did not violate Article 31(2).

III. Applicability of Section 3(3) and Section 3(3B) of the Essential Commodities Act

The court discussed whether the Levy Order should be governed by Section 3(3) or Section 3(3B) of the Essential Commodities Act. It was determined that Section 3(3B), which specifically addresses foodgrains, edible oilseeds, and edible oils, was applicable. The court held that the price specified in the Order, having regard to the controlled price and the price prevailing during the post-harvest period, met the requirements of Section 3(3B).

IV. Constitutional Validity of the Kerala Paddy and Rice (Declaration and Requisitioning of Stocks) Order, 1966

The court examined Clause 4 of the Declaration Order, which directs stock-holders to sell paddy or rice to the Government at the controlled price. The judgment found that this clause did not violate Article 31(2) as it was consistent with the principles of compensation and the controlled price fixed by law. The court also addressed concerns about administrative discretion and procedural fairness, concluding that the provisions for declarations and requisitions were sufficiently guided and supervised to prevent arbitrariness.

V. Constitutional Validity of the Kerala Paddy (Maximum Prices) Order, 1965, and the Kerala Rice (Maximum Prices) Order, 1965

The court upheld the validity of the Maximum Prices Orders, rejecting arguments that they were arbitrary or unconstitutional. The judgment noted that the Orders were made to ensure the availability of rice and paddy at reasonable prices and were necessary in the public interest. The court found no evidence to suggest that the maximum prices fixed in 1965 were inadequate or unfair.

VI. Procedural Aspects and Administrative Discretion in the Levy and Declaration Orders

The court addressed procedural issues and administrative discretion, emphasizing that the Orders provided sufficient safeguards against arbitrary actions. The provisions for objections, appeals, and revisions were deemed adequate to ensure fairness and compliance with constitutional principles.

Conclusion:
The court allowed the State's appeal, upholding the validity of the Kerala Rice and Paddy (Procurement by Levy) Order, 1966, the Kerala Paddy and Rice (Declaration and Requisitioning of Stocks) Order, 1966, and the Kerala Paddy (Maximum Prices) Order, 1965, and the Kerala Rice (Maximum Prices) Order, 1965. The court dismissed the other appeals, affirming that the Orders did not violate Articles 14, 19(1)(f) and (g), or 31(2) of the Constitution.