1959 (1) TMI 37 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of the impugned notification under the Essential Commodities Act, 1955.
2. Whether the impugned notification imposes an unreasonable restriction on the right to trade under Article 19(1)(g).
3. Alleged discrimination in fixing ex-factory prices only for certain regions.

Issue-Wise Detailed Analysis:

1. Legality of the Impugned Notification under the Essential Commodities Act, 1955:
The petitioners challenged the legality of the notification dated July 30, 1958, issued by the Government of India under the Essential Commodities Act, 1955, which fixed the ex-factory price of sugar produced in Punjab, Uttar Pradesh, and North Bihar. They argued that the notification was beyond the authority conferred by Section 3 of the Act and Clause 5 of the Sugar (Control) Order, 1955. The Supreme Court held that the Act and the Order aimed to ensure the equitable distribution and availability of essential commodities at fair prices. The Court found that the impugned notification subserved the purposes of the Act by stabilizing sugar prices for the general public, thus making sugar available at fair prices. The Court concluded that the notification was within the authority conferred by the Act and the Order.

2. Unreasonable Restriction on the Right to Trade Under Article 19(1)(g):
The petitioners contended that the notification imposed an unreasonable restriction on their right to trade under Article 19(1)(g) of the Constitution. They argued that the notification compelled factories to sell sugar at a loss, fixed prices arbitrarily, and lacked reasonable safeguards against abuse of power. The Supreme Court rejected these arguments, stating that the prices fixed were not below the cost of production and were not arbitrary. The Court noted that Clause 5 of the Order provided for factors such as manufacturing cost, taxes, and reasonable margin of profit, which were considered while fixing prices. The Court also dismissed the argument regarding the lack of safeguards, emphasizing that the Central Government's power to fix prices was exercised in the interest of the general public and within the framework of the Act and the Order.

3. Alleged Discrimination in Fixing Ex-factory Prices Only for Certain Regions:
The petitioners argued that the notification was discriminatory as it fixed ex-factory prices only for factories in Punjab, Uttar Pradesh, and North Bihar, while leaving factories in other parts of India uncontrolled. The Supreme Court found that the major part of sugar production in India came from these regions, which were surplus areas. The Court held that controlling prices in these regions effectively controlled prices for the entire country, as other states were deficit areas that imported sugar from these regions. Consequently, the Court concluded that there was no discrimination in effect, and the notification did not create any unreasonable classification.

Conclusion:
The Supreme Court dismissed the petition, holding that the impugned notification was legal, did not impose unreasonable restrictions on the right to trade, and did not result in discrimination. The petitioners were ordered to bear the costs of the petition.