Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 12
PETITIONER:
SRI KRISHNA RICE MILLS ETC.
Vs.
RESPONDENT:
JOINT DIRECTOR (FOOD) GOVT. OF INDIA, VIJAYAWADA
DATE OF JUDGMENT:
27/01/1965
BENCH:
ACT:
Essential Commodities Act (10 of 1955) s. Scope of-Published
figures’, meaning of-Fixation of price by Central
Government-If violative of Arts. 14, 19 and 31-Commodity
procured by appellant at prevalent price-Government fixing
lower price for requisition-validity.
Constitution of India, 1950, Art. 226-Act providing orders
to be final Effect.
HEADNOTE:
In exercise of the powers conferred by notifications issued
under s. 3 of the Essential Commodities Act, 1955, the
concerned officer directed, on August 20, 1957, various
appellants in Tadepalligudem in Andhra Pradesh, to sell to
the Government of India certain quantities and kinds of rice
at price calculated by him. The officer took into account
the rates published in Vijayawada, about 80 miles from
Tadepalligudem, which was the nearest locality where
published figures were available, and made such adjustments
as were necessitated by considering transport charges and
the quality of rice procured which was inferior to the rice
for which the published price was available in Vijayawada.
On September 14, 1957 the Central Government under s.
3(2)(c), fixed the maximum price, and the officer made
requisitions between September 14, and December 29, 1957 at
that price.
On December 30, 1957, after the new rice crop had come into
the market, the Central Government refixed the maximum price
at less than the maximum price fixed on September 14. 1957,
and Government requisitioned rice thereafter at that price.
from the appellants.
The appellants filed writ petitions in the High Court,
contending that, (1) for the period before September 14,
1957, the price had not been properly fixed according to the
provisions of the Act; (2) the prices fixed by the Central
Government on September 14, 1957, and December 30, were bit
by Arts. 14. 19 and 31 of the Constitution; and (3) the
lesser price fixed on December 30, 1957, should not have
been applied to the rice purchased by the appellants before
that date at the higher rate fixed on September 14, 1957,
and requisitioned from them after December 30. The writ
petitions were dismissed.
Dismissing the appeals to this Court,
HELD : (1)(a) Under s. 3(3A)(iii) there are 3 ways in which
the price has to be fixed as indicated in sub-cls. (a), (b)
and (c). Sub-clauses (a) and (b) apply only to those
situations where a controlled price has been fixed by the
Central Government. Since there was no controlled price
before September 14, 1957 in the present case. sub-cl. (c)
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 12
applied. Hence. the officer had to fix the price under s.
3(3A)(iii)(C), and the contention that he should have first
tried to come to an agreement with the appellants under sub-
cl. (a) has no force. [426A-E]
(b) Under s. 3(3A)(iii)(C) and cl. (iv), the price had to
be calculated with reference to the average market rate
prevailing in the locality, on the ,basis of published
figures available in the locality or a neighbouring
locality, during the period of 3 months immediately
preceding the dates of notification of the price. [426F]
419
(c) The words ’published figures’ mean that figures should
be publicised in some way as in newspapers or on the radio
or in any other manner which makes them known to the general
public. ’the prices entered in the accounts books of the
appellants, cannot. in any circumstances be called
’published figures’ even if they were shown to the tax-
authorities. [427D-F],
(d) Admittedly the rice procured was inferior in quality to
the rice for which the published price was available in
Vijayawada. Hence, merely because in 1964, Central
Government issued a notification, that the difference
between the two qualities is slight, would not mean that the
officer was wrong in treating, in 1957 the rice procured by
him as inferior. [428F-H]
Therefore, it cannot be said that the officer was wrong in
taking the figures published in Vijayawada and making the
necessary adjustments. [429B]
(2) (a) The orders passed by the Central Government fixing
the price relate only to certain districts of Andhra
Pradesh. But these districts are surplus rice producing
districts and form a class by themselves; and fixation of
maximum price therein would subserve the purpose of s. 3(1)
of the Act of stabilising the prices. Hence there is no
violation of Art. 14. [423D-E]
(b) Sections 3 and 4 of the Essential Supplies (Temporary
Powers) Act, 1946, were in terms similar to ss. 3 and 4 of
the Act, and were upheld by this Court in (Harishankar
Bagla’s Case [1955] 1 S.C.R. 380). Therefore, for the
reasons given in that case, which were accepted in (Bhanamal
Guiarilal’s case [1960] 2 S.C.R. 627), Ss. 3 and 4 of the
Act are not hit by Art. 19(1)
(f) and (g). [423D-C]
(c) The Act does not fix the amount of compensation, but
the principles on which and the manner in which the
compensation is to be determined are found in s. 3, which
provides that the price should be fair, and that involves in
it all factors which have to be taken into account in fixing
a fair price. As the Act was dealing with a large number of
commodities of different types in which different factors
would enter in fixing fair prices, the legislature left it
to the Central Government to determine the, fair price in a
just and proper manner, after indicating in sub-ss. (3) and
(3A) the manner in which it should be fixed. Therefore,
there-is no violation of Art. 31(2). [423G-424B]
(3) The contention that the rice procured between September
14 and December 29 by the appellants should have been
requisitioned at the price fixed on September 14 and not the
price fixed on December 30 must also fail.[1425A]
(a) The reason for reduction of prices on December 30 was
that new crop came into market from November 1957, and it is
a well-known economic fact that prices fall whenever the new
crop comes into market and traders. who had purchased at
higher prices, would have to sell at the reduced rates.
Therefore, what would have happened in a free market was all
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 12
that happened when the prices were reduced. [424D-F]
(b) The reduction of price was not unfair and it could not
be said that the loss to the appellants would not have
happened even in the normal course of business. [424F]
(c) If the contention of the appellants is accepted (i) the
Central Government can never reduce prices when once it had
fixed them’ and (ii) there would be two sets of maximum
prices. But that would be against the very purpose of s.
3(1) of fixing a fair price. [424F-G]
(d) If the prices were raised by a subsequent notification,
the appellant would not have contended that the old price
should prevail in relation to the stocks purchased by them
earlier. [424G-H]
(4) Section 3(3A)(iv) provides that the rates determined
shall be final and shall not be called in question in any
court. These words do not take away the jurisdiction of the
High Court under Art. 226 to give relief in a ,proper case;
but they certainly indicate that the rates fixed shall not
be lightly interfered with unless the High Court finds that
there has been serious injustice in the fixation of rates.
[428C-E]
420
JUDGMENT:
CIVIL APPELLATE JURISDICTION, :-Civil Appeals No. 1026 to
1031, 902 to 905 of 1963.
Appeals from the judgment and order dated 21st August, 1959
of the Andhra Pradesh High Court in Writ Petitions Nos. 709,
710, 721 of 1957, 466, 1160 and 1426 of 1958, 1244, 125G and
1257 of 1957 and 1205 of 1957.
A. V. Viswanatha Sastri, K. Rajendra Chaudhuri C.
Narasimhacharya, C. Subba Rao and K. R. Chaudhuri, for the
appellants (in C.A. Nos. 1026 to 1031 of 1963).
K. Rajendra Chaudhuri and K. R. Chaudhuri for the
appellants (in C.A. No. 902 to 904 and 905 of 1963).
N. C. Chatterjee, N. S. Bindra, Yogeshwar Prasad and B. R.
G. K. Achar, for the respondent (in all the appeals.)
The Judgment of the Court was delivered by
WANCHOO, J.-These ten appeals on certificates granted by the
Andhra Pradesh High Court raise common questions and will be
dealt with together. The brief facts necessary for present
purposes are these. On June 6, 1957, a notification was
issued by the Central Government under s. 3(3A) of the
Essential Commodities Act, No. 10 of 1955, (hereinafter
referred to as the Act). The notification said that in the
opinion of the Central Government it was necessary to
control the rise in prices and prevent the hoarding of rice
and paddy in the States and Union territories. Consequently
the Central Government directed by the notification that the
price at which rice or paddy shall be sold in any locality
in the said States and Union territories in compliance with
an order made with reference to cl. (f) of sub-s. (2) of the
said s. 3 shall be regulated in accordance with the
provisions of sub-s. (3A). This order applied amongst other
States to the State of Andhra Pradesh and was to be in force
for a period of three months. On July 31, 1957, the Central
Government made another notification directing that the
powers conferred on it by s. 3 of the Act to make orders
providing for the matters specified in cl. (f) and for the
matters specified in cls. (h), (i) and (j), insofar as they
relate to cl. (f) of sub-s. (2) of s. 3 in relation to
stocks of ,rice and paddy held in any locality in the State
of Andhra Pradesh shall be exercisable also by Shri K. S.
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 12
Krishnan, Deputy Director (Food), Government of India,
Vijayawada. This order was also to be in force for three
months. Further on the same day the Central ;Government
issued another notification by which in pursuance of cl.
(iv) of sub-s. (3A) of s. 3 of the Act, the Central
Government authorised the said Shri Krishnan to determine
the average market rate of rice and paddy prevailing in any
locality in the State of Andhra Pradesh.
On August 20, 1957, Shri Krishnan in exercise of the powers
conferred upon him by the notifications mentioned above
directed a number of rice millers in Tadepalligudem to sell
to the Assistant Director (Food), Government of India,
certain quantities and kinds of rice
421
at the price calculated in accordance with cls. (iii) and
(iv) of sub-s. (3A) of S. 3 of the Act. In consequence of
this order, such quantities of rice as were ordered to be
sold were delivered to the Assistant Director (Food) on
various dates upto September 13, 1957. It may be mentioned
that there was no control of price upto September 13, 1957
and in consequence the price to be paid to the rice millers
had to be determined under S. 3 (3A) (iii) (c) read with S.
3 (3A) (iv) of the Act. This is the first period with which
we are concerned in the present appeals. It may be
mentioned that prices are claimed to have been fixed by Shri
Krishnan for the rice procured under the orders passed on
August 20, 1957 and on subsequent dates in accordance with
the provisions of the Act in September 1957. The appellants
dispute that the prices have been properly fixed under the
provisions of the Act and that is the first matter to be
considered in these appeals, the details of which we shall
refer to later.
On September 14, 1957, the Central Government issued a
notification fixing the, maximum price at which rice and
paddy of various kinds was to be sold in any one transaction
of more than ten maunds in the districts of Krishna, West
Godavari and East Godavari in the State of Andhra Pradesh
under cl. (c) of sub-s. (2) of S. 3 of the Act. Following
this fixation the Deputy Director made requisitions between
September 14, 1957 and December 29, 1957 of different
varieties of rice from various appellants under the powers
vested in him by the notifications already referred to under
cl. (f) of sub-s. (2) of s. 3 of the Act and fixed prices
therefore. He claims to have fixed price therefore in
accordance with S. 3 (3A) of the Act, though actually the
maximum prices fixed by the Central Government were paid.
The contention of the appellants with respect to this period
is that the notification fixing price and the action taken
thereunder is hit by Art. 14, Art. 19(1) (f) and (g) and
Art. 31(2) of the Constitution and therefore they are
entitled to the rates prevailing in the market at the time.
On December 30, 1957, after the new rice crop had come into
the market, the Central Government issued another
notification by which maximum prices were refixed in the
districts of Krishna, West Godavari, East Godavari and
Guntur in the State of Andhra Pradesh under s. 3 (2) (c) of
the Act. These prices were less than the maximum prices
fixed on September 14, 1957. Thereafter there was more pro-
curement of rice by the Deputy Director (food) from the
various appellants and he claims to have fixed prices
therefore in accordance with the provisions of s. 3(3A) of
the Act, though actually he paid the maximum price fixed in
the notification of December 30, 1957. The contention of
the appellants with respect to this period also is that the
prices fixed by the Central Government are hit by Art. 14,
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 12
Art. 19 (1 ) (f) and (g) and Art. 31 (2) of the
Constitution. In addition, it is contended that the reduced
prices fixed on December 30, 1957 could not and should not
have applied to rice purchased by the appellants between
September 14, 1957 and December 29, 1957, when higher market
prices were prevailing under the notification of the Central
Government dated September 14, 1957.
422
The appellants therefore along with a large number of other
rice millers filed writ petitions before the High Court.
With respect to the first period, the appellants prayed that
the Deputy Director be directed to fix the price of rice
requisitioned from them at the rate calculated with
reference to the average of the market rate prevailing at
Tadepallegudem during the period of three months immediately
preceding the date of the notification after giving notice
and opportunity to the appellants to make their
representation regarding the price to be fixed, as it was
contended that the Deputy Director had fixed the price for
this period arbitrarily and without regard to the provisions
of the Act. As to the subsequent two periods after the
Central Government had fixed the maximum price, the
appellants prayed that the Deputy Director be directed to
fix fair prices having regard to the prevailing market rates
on the relevant dates on which the stocks of paddy and rice
were requisitioned and that this should be done after giving
opportunity to the appellants to make their representation
in the matter. The notifications issued by the Central
Government fixing maximum prices were attacked on the ground
that the power vested by the Act in the Central Government
to impose controls was an arbitrary power without limitation
and wag therefore an unreasonable restriction and hit by
Art. 19(1). It was also contended that the price fixation
was hit by Art. 14 as the order of the Central Government
applied to certain districts in the State of Andhra Pradesh
and not to others. Reliance was also placed on Art. 31(2)
of the Constitution which, it was said, was not complied
with. Lastly with respect to the period after December 30,
1957, it was urged that at any rate procurement should have
been at prices fixed in the notification of September 14,
1957 with respect to the stocks purchased by the appellants
between that date and December 29, 1957 and not at the rate
fixed by +,he notification dated December 30, 1957.
These contentions were controverted on behalf of the Deputy
Director (Food), Vijayawada and it was claimed that the
prices were fixed in accordance with the provisions of the
Act. It was also contended that neither the act nor the
orders passed thereunder for procurement of rice in these
particular cases were hit by Art. 14, Art. 19(1) (f) and (g)
and Art 31(2). Lastly it was contended that the entire
procurement during the period after December 29, 1957 was
rightly made at prices fixed in the notification dated
December 30, 1957.
The High Court rejected all the contentions raised on behalf
of the, appellants and dismissed the writ petitions with
costs. The appellants then applied for and obtained
certificates from the High Court; and that is how the matter
has come up before us.
We shall first take up the contention based on cls. (f) and
(g) of Art. 19(1). It is said that the provisions of the
Act impose unreasonable restrictions on the right to
acquire, hold and dispose of property, and to practice any
profession, or to carry on any occupation. trade or
business. We are of opinion that there is no force in this
contention. It is unnecessary for us to give elaborate
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 12
reasons for this conclusion, as the Act and its
predecessors. namely, the Essential Supplies
423
(Temporary Powers) Act, 1946 have already been upheld by
this Court. The Essential Supplies (Temporary Powers) Act
was upheld in Harishankar Bagla v. The State of Madhya
Pradesh(1) while the Act was upheld in Union of India v.
M/s. Bhanamal Gulzarimal.(2) As a matter of fact in
Bhanamal Gulzarimal’s case(2) ss. 3 and 4 of the Act were
not specifically challenged on account of the earlier deci-
sion in Harishanker Bagla’s case.(3) It is therefore too
late in the day for the appellants to challenge the validity
of ss. 3 and 4 of the Act on the ground that they violate
the fundamental rights guaranteed under Art. 19 (1) (f) and
(g). As already indicated, ss. 3 and 4 of the Essential
Supplies (Temporary Powers) Act, 1946 were in terms similar
to ss. 3 and4 of the Act and were upheld by this Court in
Harishankar Bagla scase. (1) Therefore, for the reasons
given in Harishanker Bagla’scase,(2) which were accepted in
Bhanamal Gulzarilal’s case,(2) we hold that ss. 3 and 4 of
the Act are not hit by Art. 19(1) (f) and (g) of the
Constitution.
The next attack on the orders passed under the Act is that
they violate Art. 14 of the Constitution inasmuch as they
relate only to certain districts in the State of Andhra
Pradesh and not to others. The short answer to this
contention is that the districts to which the orders applied
are surplus rice producing districts in the State of Andhra
Pradesh and that is why the orders were confined to those
districts. It was unnecessary to apply the orders to other
districts for the control of price in those districts Would
economically result in stabilising prices in other districts
of the State also. These districts therefore obviously form
a class by themselves and fixation of maximum price in these
districts would subserve the purpose of s. 3(1) of the Act.
The argument based on Art. 14 therefore must be repelled.
The next contention is based on Art. 31(2). That article
provides that no property shall be compulsorily acquired or
requisitioned save for a public purpose and save by
authority of a law which provides for compensation for the
property so acquired or requisitioned and either fixes the
amount of the compensation or specifies the principles on
which, and the manner in which, the compensation is to be
determined and given. It is urged that the Act does not fix
the amount of compensation or specify the principles on
which, and the manner in which, the compensation is to be
determined, and therefore the requisitioning and acquiring
of rice of the appellants under the Act was bad. It is no
doubt true that the Act does not fix the amount of compensa-
tion, but the principles on which and the manner in which
the compensation is to be determined, are in our opinion to
be found in s. 3 of the Act. Section 3(1) provides for
availability of essential commodities at fair prices.
So the first principle which the Act provides is that the
price fixed should be fair, and that involves in it all
factors which have to be taken into account in fixing a
fair price. As the Act was dealing with a large number of
commodities of different types in which different factors
would enter in fixing fair prices it was left to the Central
Government to determine the fair price in a just and proper
(1) [1955] 1 S.C.R. 380.
(2)[1960] 2 S.C.R. 627.
424
manner. The legislature having enacted that the price fixed
should be fair, there is in our opinion sufficient
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 12
indication of the principle on which the price should be
fixed. Further the manner in which the price should be
fixed has also been indicated in sub-ss. (3) and (3A) of s.
3 of the Act. We are therefore of opinion that the argument
based on Art. 31(2) must also fail.
Then we come to the contention that the procurement which
was made after December 29, 1957, when the price was reduced
by the notification of December 30, 1957, as compared with
the price fixed in the notification dated September 14,
1957, should have been in accordance with the notification
of September 14, 1957 at any rate insofar as the rice
purchased by the appellants between September 14 and
December 29, 1957 was concerned. The argument is that in
view of the maximum prices fixed in the notification of
September 14, the appellants had to pay those prices which
in such circumstances really became minimum prices for paddy
and rice purchased by them during that period. The result
of the notification of December 30 was that even though the
appellants had purchased rice and paddy between September 14
and December 29 at higher prices in terms of the
notification of September 14, they had to sell it to the
Government at lower rates. That may in certain cases be so.
But unless it can be shown- that the reduction of price on
December 30, 1957, was not fair, it cannot be said that
procurement after December 30 based on the prices fixed in
the notification of that date was in any manner against the
provisions of the Act or was hit by Art. 19(1) (f). Now the
reason for reduction of prices on December 30 was that the
new crop came into the market from November 1957. It is a
well-known economic fact that prices fall whenever the new
crop comes into the market. There can also be no doubt that
when prices fall, traders who had made purchases at higher
prices have to sell at the reduced rates which are prevalent
after the fall of the prices. Therefore, what would have
happened if there had been a free market is all that
happened when prices were reduced by the notification of
December 30. It cannot therefore be said that there was any
such loss to the appellants as would not have happened even
in the normal course of business. Further if the argument
for the appellants were to lie accepted, it would mean that
it would not be possible for Central Government to reduce
prices once it had fixed them and that would in our opinion
be against the very purpose for which s. 3(1) of the Act was
enacted, namely, fixation of fair prices. Again the result
of acceptance of this argument would be that there would be
two sets of maximum prices prevalent whenever there is a
reduction in the price by a subsequent notification, even
though the higher price may not be a fair price. This is in
our opinion against the very purpose to be found in s. 3(1)
of the Act. Lastly we may refer to the converse case where
prices are raised by a subsequent notification. We have no
doubt that if that is so, the appellants would not come
forward and say that the earlier stocks purchased by them
should be sold at old prices. The present is a case
completely analogous to the case of rise and fall of prices
due to economic factors in a free market. As the appellants
could not possibly complain against rise and fall of prices
due to economic factors in an open market they cannot
complain of the increase or reduction of prices by
notification under s. 3 (1), because that increase or
reduction
425
is also based on economic factors. We are therefore of
opinion that the contention of the appellants that rice
procured by them between September 14 and December 29 should
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 8 of 12
have been requisitioned at least at prices fixed by the
notification of September 14 must fail.
In this view of the matter the case of the appellants for
relief in respect of the last two periods, namely, (i) from
September 14 to December 29, and (ii) from December 30
onwards when the procurement was made at the maximum rates
fixed by the notification of the Central Government must
fail.
We now come to the main argument on behalf of the
appellants, namely, that the prices fixed for the
procurement between August 20 and September 13, 1957 was not
in accordance with the provision of the Act. Now the
provision which applies is sub-s. (3A) of s. 3 of the Act,
which runs as follows :
"(3-A) (i). If the Central Government is of
the opinion that it is necessary so to do for
controlling the rise in prices, or preventing
the hoarding, of any foodstuff in any
locality, it may, by notification in the
Official Gazette, direct that notwithstanding
anything contained in sub-section (3), the
price at which the foodstuff shall be sold in
the locality in compliance with an order made
with reference to clause (f) of subsection (2)
shall be regulated in accordance with the pro-
visions of this sub-section.
(ii) Any notification issued under this sub-
section shall remain in force for such period
not exceeding three months as may be specified
in the notification.
(iii) Where, after the issue of a notification
under this sub-section, any person sells
foodstuff of the kind specified therein and in
the locality so specified, in compliance with
an order made with reference to clause (f) of
sub-section (2), there shall be paid to the
seller as the price therefore-
(a) where the price can, consistently with
the controlled price of the foodstuff, if any,
fixed under this section, be agreed upon, the
agreed price;
(b) where no such agreement can be reached,
the price calculated with reference to the
controlled price, if any;
(c) where neither clause (a) nor clause (b)
applies, the price calculated with reference-
to the average market rate prevailing in the
locality during the period of three months
immediately preceding the date of the
application.
(iv) For the purposes of sub-clause (c) of
clause (iii), the average market rate
prevailing in the locality shall be determined
by an officer authorised by the Central
Government in this behalf. with reference to
the prevailing market rates for which
published figures are available in respect of
that locality or of a neighbouring locality:
and the average market rate so determined
shall be final and shall not be called in
question in any Court."
426
It is not in dispute that the notification as required by
cl. (i) of sub-s. (3A), was issued on June 6, 1957 and under
cl. (ii) the notification was to remain in force for three
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 9 of 12
months. Clause (iii) provides for the manner of fixing the
price after the notification under cl. (i) has been issued.
There are three ways in which the price has to be fixed,
which are indicated in sub-cls. (a), (b) and (c) of cl.
(iii). The first contention of the appellants is that the
Deputy Director should first have ,acted under cl. (a) and
tried to come to an agreement with the appellants and that
his acting under cl. (c) without first trying to come to an
agreement with the appellants was against the provisions of
the Act. We are of opinion that this contention has no
force. Sub-clauses (a) and (b) of cl. (iii) apply only to
those situation where a controlled price has been fixed by
the Central Government. Sub-clause (a) envisages that the
officer concerned may try by agreement to fix a price which
may be even less than the maximum price notified. Sub-
clause (b) lays down that where agreement cannot be reached,
the price has to be fixed with reference to the controlled
price. It cannot be disputed that sub-clause (b) applies
only where there is a controlled or maximum price. Sub-
clause (a) also in our opinion applies only where there is a
controlled or maximum price, for the two sub-clauses are
complementary to each other and must be read to apply to the
same situation. Thus as sub clause (b) undoubtedly applies
only to a ’case where there is a controlled. price, sub-cl.
(a) also applies to a case where there is a controlled
price. The use of the words "if any" in both sub-clauses
must have the said sense and that is that these two sub-
classes apply only When there is a controlled or maximum
price fixed in fact. Therefore we are of opinion that this
is a case where. sub-cl. (c) applied as there was no
controlled price during the relevant period. The argument
that the Deputy Director in this case should have first
tried to come to an agreement with the appellants, and as be
did not do so his fixation of price under sub-cl. (c) was
against the provisions of the Act, must, therefore, fail.
The Deputy Director had thus to fix the price under sub-cl.
(c) of cl. (iii) subs. (3A). That price had to be
calculated with reference to the average market rate
prevailing in the locality during the period of three months
immediately preceding the date of the notification. The
notification was issued in this case on June 6, 1957 and
therefore the Deputy Director had to take into account the
market rates prevailing in the locality between March 6 to
June 5, 1957 and arrive at an average therefrom. Further
cl. (iv) of sub-s. (3A) indicates how sub-cl. (c) of cl.
(iii) had to be applied for working out the average market
rates in the locality, It lays down that these rates shall
be determined by an officer authorised by the Central
Government in this behalf. and it is not in dispute that the
Deputy Director was so authorised. Further such rat(-, has
to he fixed with reference to the prevailing market rates
for which published figures are available in respect of that
locality or of a neighbouring locality. Finally it is
provided that the average market rates so determined shall
be final and shall not be called in question in any court.
Now what the Deputy Director did was to take into account
the rates published in Vijavawada, which it is said is At a
distance of 80
427
miles from Tadepellagudem. It is however not disputed that
there is no nearer locality where published figures are
available. Therefore, if the Deputy Director took into
account the nearest available published figures, i.e.,
prices prevailing at Vijayawada, it cannot be said that he
acted against the provisions of cl. (iv) of sub-s. (3A).
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 10 of 12
What he did was to take into account the published figures
of Vijayawada and then make adjustments taking into account
the transport charges and the quality of rice procured, for
in two cases the rice procured by him was not quoted in the
figures available in Vijayawada. It, however, appears that
these two varieties of rice procured are slightly inferior
to the rice for which the prices were available in
Vijayawada and what the Deputy Director did was to make
adjustments in the prices after taking these factors into
consideration. The result of that was that the prices, be
fixed for these two kinds of rice were lower by Rs. 1.50 or
so than the Vijayawada prices for the slightly superior kind
of rice which were available.
It is however urged that the words "published figures" in
cl. (iv) would include even the prices in the accounts books
of the appellants for these prices must be taken to be
published prices inasmuch as the accounts books used to be
shown to sales tax and income-tax authorities and the
entries therein were therefore published. So the argument
runs that the prices entered in the accounts books of the
appellants being "published figures" of the prevailing
market rates for the very locality from which procurement
was being made, the Deputy Director should have looked at
their bahi Khatas and calculated the prevailing average
market rate for their locality from their bahis. We are of
opinion that this argument has no force. The words
"published figures" must be given their ordinary meaning.
That is that the figures should be publicised in some way,
say, for example, in newspapers, or on the Radio or in any
other manner, so that they are made known to the general
public. The prices entered/in the accounts books of the
appellants cannot in any circumstances be called "published
figures" even if the accounts books are shown to sales-tax
or income-tax authorities. Publication of figures requires
that figures get generally known to the public by such means
as publication in newspapers, or announcement on the Radio
or such other manner as would make figures generally
available to the public. The figures of price in the
accounts books of the appellants cannot be said to be
generally available to the public; nor can the public insist
on looking into the accounts books of the appellants to find
out the prices at which they had procured the rice
themselves. Therefore. the Deputy Director would not have
carried out the provisions of cf. (iv) of sub-s. (3A) if be
had depended upon the prices in the accounts books of the
appellants. As already stated Vijayawada appears to be the
nearest locality where published figures were available. In
these circumstances it cannot be said that the Deputy
Director was wrong in taking the figures published in
Vijayawada and making such adjustment-, as were proper and
necessary in view of the distance of Vijayawada from
Tadepallegudem. He was also entitled to make adjustments
with reference to the kind of rice for which published
figures were available and the kind which he was procuring.
The resultant action taken by him by which the prices at
Vijayawada were reduced
428
by about Rs. 1.50 cannot therefore be said to be against the
provisions of the Act. We may also here refer to the rates
compiled by the State Marketing Officer, Andhra Pradesh
which were placed before the High Court on behalf of the
respondents. These rates were compiled before the
notification of June 6, 1957 in a free market and show that
there is a difference in price between Tadepallegudem and
Vijayawada and prices at Tadepallegudem arc generally lower
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 11 of 12
than the prices at Vijavawada and on an average, the price
at Tadepallegudem is about Rs. 1.20 less than at Vijayawada
for the same quality of rice. If one remembers that the
quality of rice procured from the appellants was a little
inferior to the quality of rice at Vijayawada the difference
of Rs. 1.50 or so in the price at Tadepallegudem cannot be
said to have been arrived at without due regard to the
provisions of sub-s. (3A).
We may also refer to the last part of cl. (iv) of sub-s.
(3A) which says that "the average market rate so determined
shall be final and shall not be called in question in any
Court." The intention of the Legislature by using these
words was clearly that these rates should not be open to
question. It is true that these words do not take away the
jurisdiction of the High Court under Art. 226 to give relief
in a proper case; but the High Court must keep in view these
words which certainly indicate that the rates fixed should
not be lightly interfered with unless the High Court finds
that there has been serious injustice in the fixation of
rates due to the manner in which the officer concerned has
acted without due regard to the provisions of cl. (iv). In
the present case we are not prepared to say that the officer
concerned has acted without due regard to the provisions of
cl. (iv), when he arrived at the conclusion that the prices
at Tadepallagudem should be fixed a little lower than the
prices at Vijayawada. The contention that the prices fixed
by the Deputy Director were not in accordance with the
provisions of the law must therefore be rejected.
Finally our attention is drawn to a recent notification by
the Central Government dated July 31, 1964. In this
notification, Nallarlu and Garikulu rice which were procured
from the appellants and Akkulu rice which is the basis of
price fixation by the Deputy Director have been treated as
of the same quality and defined as coarse rice. The Deputy
Director however fixed prices in 1957 on the basis of Akkulu
rice for which Published figures were available at
Vijavawada and Akkulu rice was a little superior to Nallarlu
and Garikulu rice, which were procured from the appellants
and therefore he reduced the price taking that factor into
account. It is urged that in view of this notification the
Deputy Director was certainly wrong in taking that factor
into account in fixing the price. It appears however from
the evidence that it is really not in dispute that Nallarlu
and Garikulu rice is slightly inferior to Akkulu rice. It
may be that in 1964 the Central Government may have come to
the conclusion that the difference between these three
varieties of rice was so slight that they should be treated
as of the same kind: but that does not mean that in 1957 the
Deputy Director was necessarily wrong in treating Nallarlu
and Garikulu rice as slightly inferior to Akkulu. for that
is what the evidence on record shows. Besides it may be
added that clause 4 of the Order of 1964 leaves it to the
discretion of the State
429
Government to fix different prices for different kinds of
coarse rice within the range prescribed by the Central
Government and so the order also recognizes that there may
be different prices for different kinds of coarse rice. We
are therefore not prepared to hold on the basis (if the
notification of 1964 that the Deputy Director was wrong in
making the adjustments he did in arriving at the price of
Nallarlu and Garikulu rice procured from the appellants as
compared to the price of Akkulu rice in Vijayawada.
In this view of the matter, all the appeals fail and are
hereby dismissed. We, however, direct in the circumstances
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 12 of 12
that the parties will bear their own costs of this Court.
Appeals dismissed.
V.P.S.
430