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TMI Blog1959 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... ned to mean " imported copper, lead, tin and zinc in any of the forms specified in the Schedule of the order." The Order was from the very beginning made applicable to imported copper. The price was controlled by cl. 3 of the Order which provides in its first sub-clause that " no person shall sell or offer to sell any non-ferrous metal at a price which exceeds the amount represented by an addition of 3 1/2% to its landed cost," and in its second sub-clause that " no person shall purchase or offer to purchase from any person non-ferrous metal at a price higher than at which it is permissible for that other person to sell to him under sub-cl. (i)." Clause 4 is designed to regulate the acquisition of non-ferrous metal by permit only and provides that " no person shall acquire or agree to -acquire any non-ferrous metal except under and in accordance with a permit issued in this behalf by the Controller in accordance with such principles as the Central Government may from time to time specify ". Clauses 5 and 6 of the Order made it obligatory on the importers to notify quantities of non-ferrous metal imported and to maintain certain books of account, while the last clause, i.e.. cl. 7 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into contracts with different parties. Though no formal order appears to have been passed on these applications, it is not disputed that the applications for permits were refused and no permits were issued to these petitioners. The main contention of the petitioners is twofold. First, it is said that cl. 4 of the Order read with the principles specified in the letter of the 18th April violates the right conferred on them as citizens of India by Art. 19(1)(f) of the Constitution of India to acquire property and also the right conferred by Article 19(1)(g) to carry on trade, that these violations are not within the saving provisions of Art. 19(5) and 19(6) of the Constitution and therefore are void. Secondly, it is said that the fixation of the price at the landed cost plus 31 % as the maximum also abridge the rights conferred on them by Arts. 19(1)(f) and 19(1)(g) of the Constitution and that this also is not saved by the provisions in Arts. 19(5) and 19(6) and so are void. A further contention is that the principles specified being discriminatory in nature as between the manufacturers and dealers in copper have resulted in violating the right to equal protection of laws to the peti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cl. 4 of the order violates any of the fundamental rights under the Constitution. It is urged that once it is found that the Government has power under a valid law to provide for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein as soon as it is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of the essential commodity or for securing its equitable distribution and availability at fair prices, the order made by them can be attacked only if it is outside the power granted by the section or if it is mala fide. Malafides have not been suggested and we are proceeding on the assumption that the Central Government was honestly of opinion that it was necessary and expedient to make an order providing for regulation and prohibition of the supply and distribution of imported copper and trade and commerce therein. So long as the Order does not go beyond such provisions, the Order, it is urged, must be held to be good and the consideration of any question of infringement of fundamental rights under the Constitution is wholly beside the point. Such an extravagant argument ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sold at 3 1/2% above the landed cost has the effect of driving the dealer out of business in imported copper. The statement made on behalf of the Union of India in paragraph 11 of the counter affidavit that an addition of 3 1/2% of the landed cost was made in fixing the price in para. 3 of the Order in order to enable the importers to earn a margin of profit justifies the conclusion that this will be the minimum price at which the importers will sell. Any dealer would have thus to pay at the rate of landed cost plus 3 1/2% thereof in getting any supply of copper from the importers. Such dealer is however prevented from charging from his customer anything more than the landed cost plus 3 1/2% thereof. The position therefore clearly is that henceforth any actual consumer of the commodity would have to get it direct from the importer and the channel of distribution through the dealer would disappear. In deciding whether this total elimination of dealer from trade' in imported copper is within the saving provisions of Art. 19(5) and Art. 19(6) we have first to consider the question whether such total elimination is a mere restriction on the rights under Arts. 19(1)(f) and 19(1)(g) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Art. 19(1)(g) of the Constitution, based his decision that the impugned law did not come within the saving provisions of Art. 19(6) of the Constitution on the view that the test of reasonableness was not satisfied and not on a view that " prohibition " went beyond " restriction ". At p. 764 of the Report the learned Judge says: " The effect of the provisions of the Act, however, has no reasonable relation to the object in view but is so drastic in scope that it goes much in excess of that object. Not only are the provisions of the statute in excess of the requirements of the case but the language employed prohibits a manufacturer of bidis from employing any person in his business, no matter wherever that person may be residing. In other words, a manufacturer of bidis residing in this area cannot import labour from neighbouring places in the district or province or from outside the province. Such a prohibition on the face of it is of an arbitrary nature inasmuch as it has no relation whatsoever to the object which the legislation seeks to achieve and as such cannot be said to be a reasonable restriction on the exercise of the right." The law was struck down because the restriction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be valid and it would be invalid if the test of reasonableness was not passed. Prohibition was in all these cases treated as only a kind of " restriction ". Any other view would, in our opinion, defeat the intention of the Constitution. After Art. 19(1) has conferred on the citizen the several rights set out in its seven sub-clauses, action is at once taken by the Constitution in cls. 2 to 6 to keep the way of social control free from unreasonable impediment. The raison detre of a State being the welfare of the members of the State by suitable legislation and appropriate administration, the whole purpose of the creation of the State would be frustrated if the conferment of these seven rights would result in cessation of legislation in the extensive fields where these seven rights operate. But without the saving provisions that would be the exact result of Art. 13 of the Constitution. It was to guard against this position that the Constitution provided in its cls. 2 to 6 that even in the fields of these rights new laws might be made and old laws would operate where this was necessary for general welfare. Laws imposing reasonable restriction on the exercise of the rights are sav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stion in the background of the facts and circumstances under which the order was made, taking into account the nature of the evil that was sought to be remedied by such law, the ratio of the harm caused to individual citizens by the proposed remedy, to the beneficial effect reasonably expected to result to the general public. It will also be necessary to consider in that connection whether the restraint caused by the law is more than was necessary in the interests of the general public. The position of the copper trade at the end of March, 1958, within two days of which the impugned order was made is fairly clear. Copper is so largely required by the industries in India for producing various consumer's goods and also sheets and other articles which are needed as raw material in other industries that the position that it is an essential commodity cannot be and has not been disputed. The quantity of copper produced in India is so small as compared with the normal needs of the Industry that for many years the Industry had to depend on imports from abroad. It was apparently because of the importance of this metal for the industries in India that copper was kept for a long time in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential to keep prices within reasonable limits, must therefore be held to be a reasonable restriction in the interests of the general public. Was it necessary, however, that the prices should be fixed in such a manner as to eliminate the dealer completely, as has been done in the instant case ? The introduction of a system of permits was also clearly necessary in the interests of the general public. Was it necessary however to specify the principles that would drive the dealer out of business? These questions require careful consideration, for the injury inflicted on the dealer by such elimination is very great and in spite of the presumption of Constitutionality that attaches to every law the Court ought to examine with special care laws which result, as in the present case, in total restraint of rights conferred by the Constitution. That middleman's profits increase the price of goods which the consumer has to pay is axiomatic. It is entirely wrong to think that the middleman gets his profits for nothing and one has to remember that the middleman by forming the distribution channel between the producers and consumers relieves the procedures of the burden of storing goods for a le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the other class have a reasonable connection with the object of the legislation. There is therefore no substance in the contention that the specification of the principles violates Art. 14 of the Constitution. While however cl. 3 of the Order is clearly within the Act, the question whether cl. 4 read with the principles is within the Act or not is not free from difficulty. If the principles had been specified in the Order itself and/or had been notified in the Official Gazette and laid before both the Houses of Parliament in the manner indicated in sub-ss. (5) and (6) of s. 3 of the Act, the regulation by cl. 4 would have been within the Act. These principles were not however mentioned in the Order nor were they notified or laid before both Houses of Parliament in the manner laid down in sub-ss. (5) and (6) of s. 3. The regulation in so far as it is by these principles is therefore not a regulation by an order under s. 3 of the Act but wholly outside it and so would not come within the protection of the saving provisions of cls. 5 and 6 of Art. 19 of the Constitution. But without the principles, cl. 4 of the Order is not effective. The system of permits which this clause is des ..... X X X X Extracts X X X X X X X X Extracts X X X X
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