Nos 712 715 739 760 764 765 770 779 780 781 84 838 855 861 873  874 892 of 1977
A K Sen in WP
712 V M Tarkunde in WP 715 39 J L Jain in WP 861 892  P P Juneja for the petitioners in W P Nos
712 715 739 874 892 and 861 87377
77 D Goburdhan for the Petitioners in WP Nos
760 64  765 7077 2 277 SCI78 302 A K Sen in WP 779 780 section B Sanyal Alit K Mittar  P K Mukherjee for the petitioners WP 779 8077 D P Mukherjee  A K Ganguli for the petitioners in W P Nos
781 78477
section section Ray A K Punja  H K Puri for the Petitioners in WP Nos
838 85577 section N Kackar Sol
WP Nos 812  838 R P Bhatt WP 861 E C Agarwala and Girish Chandra for the respondent 770 L N Sinha  U P Singh for RState of Bihar in W P No 765781 78477 A P Chatterjee Mukti Maitre  G section Chatterjee for RState of West Bengal The following Judgments were delivered BEG CJ
The ninety one writ petitions before us for delivery of our reasons in support of our order dated 23 November 1977 dismissing them raised a common question of the validity of an order hereinafter referred to as the Control Order passed on 30th September 1977 by the Ministry of Civil Supplies and Cooperation of the Government of India which runs as follows ORDER New Delhi the 30th September 1977 section O WHEREAS the Central Government is of opinion that it is necessary and expedient so to do for securing equitable distribution and availability at fair prices of mustard oil NOW THEREFORE in exercise of the powers conferred by section 3 of the 10 of 1955 the Central Government hereby makes the following orders namely  1
Short title extent and commencement
1This Order may be called the Mustard Oil Price Control Order 1977
2 It extends to the whole of India
3 It shall come into force at once
Definition
In this Order dealer means a person engaged in the business of the purchase sale or storage for sale of mustard oil
Price at which a dealer may sell
No dealer shall either by himself or by any person on his behalf sell or offer to sell any mustard oil at a retail price exceeding Rs 10 per kilogram exclusive of the cost of container but inclusive of taxes
Sd T Balakrishnan Joint Secretary to the Govt
of India File No 261677 ECR 303 The order WAS passed in exercise of the powers conferred upon the Central Government by section 3 of the hereinafter referred to as the Act 
This provision lays down 31 If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may by order provide for regulating or prohibiting the production
supply and distribution thereof and trade and commerce therein
2 Without prejudice to the generality of the powers conferred by subsection 1 an order made thereunder may provide a xxx xxx xxx xxx xxx b xxx xxx xxx xxx xxx c for controlling the price at which any essential commodity may be bought or sold d for regulating by licences permits or otherwise the storage transport distribution disposal acquisition use or consumption of any essential commodity e for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale f for requiting any person holding in stock or engaged in the production or in the business of buying or selling of any essential commodity a to sell the whole or a specified part of
the quantity held in stock or produced or received by him or b in the case of any such commodity which is likely to be produced or received by him to sell the whole or a specified part of such commodity when produced or received by him
to the Central Government or a State Government or an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order
Explanation I An order made under this clause in relation to foodgrains edible oilseeds or edible oils may having regard to the estimated production in the concerned area of such foodgrains edible oilseeds and edible oils 304 fix the quantity to be sold by the producers in such area and may also fix or provide for the fixation of such quantity on a graded basis having regard to the aggregate of the area held by or under the cultivation of the producers
Explanation 2
For the purpose of this clause production with its grammatical variations and cognate expressions includes manufacture of edible oils and sugar We are not concerned here with other provisions of section 3 2
Section 33 which will be relevant for the purposes of interpretation runs as follows  3 3 Where any person sells any essential commodity in compliance with an order made with reference to clause f of sub section 2 there shall be paid to him the price therefore as hereinafter provided a where the price can consistently with the controlled price 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 at the market rate prevailing in the locality at the date of sale
 Again section 3A lays down 3A1 If the Central Government is of 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 sub section 2 shall be regulated in accordance with the provisions 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
hi 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 305 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 notification
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
 Additional sub sections 3B and 3C will also require consideration in order to arrive at the correct meaning of section 32
They read as follows 3B Where any person is required by an order made with reference to clause f of sub section 2 to sell to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government any grade or variety of foodgrains edible oilseeds or edible oils in relation to which no notification has been issued under sub section 3A or such notification having been issued has ceased to be in force there shall be paid to the person concerned notwithstanding anything to the contrary contained in sub section 3 an amount equal to the procurement price of such foodgrains edible oilseeds or edible oils as the case may be specified by the State Government with the previous approval of the Central Government having regard to a the controlled price if any fixed under this section or by or under any other law for the time being in force for such grade or variety of foodgrains edible oilseeds or edible oils b the general crop prospects d the recommendations if any of the Agricultural grains edible oilseeds or edible oils available at reasonable prices to the consumers particularly the vulnerable section of the consumers and d the recommendations if any of the Agricultural Prices Commission with regard to the price of the concerned grade or variety of foodgrains edible Oilseeds or edible oils
306 3C Where any producer is required by an Order made with reference to clause f of subsection 2 to sell any kind of sugar whether to the Central Government or a State Government or to an officer or agent of such Government or to any other person or class of persons and either no notification in respect of such sugar has been issued under sub section 3A or any such notification having been issued hag ceased to remain in force by efflux of time then notwithstanding anything contained in sub section 3 there shall be paid to that producer an amount therefore which shall be calculated with reference to such price of sugar as the Central Government may by order determine having regard to a the minimum price if any fixed for sugarcane by the Central Government under this section b the manufacturing cost of sugar c the duty or tax if any paid or payable thereon and d the securing of a reasonable return on the capital employed in the business of manufacturing sugar and different prices may be determined from time to time for different areas or for different factories or for different kinds of sugar
Explanation
For the purposes of this sub section producer means a person carrying on the business of manufacturing sugar
 It is necessary to keep other clauses of section 3 also in one s mind to get a true picture of the statutory context of the power of price control
The drastic measures which the Central Government may adopt extending to virtually taking over of management of appointing Authorised Controllers of particular undertakings so as to carry out the objects stated in section 31 of the Act and the mechanism of control visualised to ensure due and proper exercise of the statutory powers are also very significant
The provisions containing these are  34 If the Central Government is of opinion that it is necessary so to do for maintaining or increasing the production and supply of an essential commodity it may by order authorise any person hereinafter referred to as an authorized controller to exercise with respect to the whole or any art of any such undertaking engaged in the production and supply of the commodity as may be specified in the order such functions of control as may be provided therein
and so long as such order is in force with respect to any undertaking or part thereof 307 a the authorized controller shall exercise his functions in accordance with any instructions given to him by the Central Government so however that he shall not have any power to give any direction inconsistent with the provisions of any enactment or any instrument determining the functions of the persons in charge of the management of the undertaking except in so far as may be specifically provided by the order and b the undertaking or part shall be carried on in accordance with any directions given by the authorized controller under the provisions of the order and any person having any functions of management in relation to the undertaking or part shall comply with any such directions
35 An order made under this section shall a in the case of an order of a general nature or affecting a class of persons be notified in the Official Gazette and b in the case of an order directed to a specified individual be served on such individual i by delivering or tendering it to that individual or ii if it cannot be so delivered or tendered by affixing it on the outer door or some other conspicuous part of the premises in which that individual lives and a written report thereof shall be prepared and witnessed by two persons living in the neighbourhood
3 6 Every order made under this section by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made
 It has also to be remembered that if the mechanism of price control of some essential commodities fails there is under our Constitution with its socialistic orientation and objectives the provision in Article 19 6 ii for the carrying on by the State or by a corporation owned or controlled by the State of any trade business industry or service whether to the exclusion complete or partial of citizens or otherwise
The petitioners assail the control order on four grounds  firstly that it violates the fundamental rights of the petitioners to property under Article 19 1 f and to carry on their trade and business guaranteed by Article 191 g of the Constitution secondly that the petitioners are denied the benefits of Article 14 of the Constitution thirdly that the order is hit by Article 301 of the Constitution 308 and fourthly that the Central Order is outside the scope of section 3 of the Act
We need not consider Article 301 of the Constitution as the petitions do not beyond citing the provision set out any facts to show how this Article is involved
This Article is meant for protecting inter State as well as intrastate freedom of trade commerce and intercourse
But Article 302 provides Parliament may by law impose such restrictions on the freedom of trade commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest Although Article 302 does not speak of reasonable restrictions yet it is evident that restrictions contemplated by it must bear a reasonable nexus with the need to serve public interest
It the tests of Section 3 of the Act are satisfied by an Order it could not fail to serve public interest
Hence from this point of view also it is enough if we consider whether the Control Order falls within section 3 of the Act
It was evidently for this reason that beyond mentioning Article 301 counsel for the petitioners did not quite rightly advance much argument to show how Article 301 is involved here
We will therefore not consider it any more here
It was however vehemently urged on behalf of the petitioners that the Control Order is assailable for violating Article 14 and 191 f and g despite the fact that the Act itself was placed in 1976 in the 9th Schedule of the Constitution
The result of placing it there by a constitutional amendment is that section 3 of the Act became free from any limitations based on the provisions of Part III of the Constitution
Article 31B providing for a removal of the protection to fundamental rights given by Part III of our Constitution lays down  31B Validation of certain Acts and Regulations
Without prejudice to the generality
of the provisions contained in article 31A none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void or ever to have become void on the ground that such Act Regulation or provision is inconsistent with or takes away or abridges any of the rights conferred by any provisions of this Part and notwithstanding any judgment decree or order of any court or tribunal to the contrary each of the said Acts and Regulations shall subject to the power of any competent legis lature to repeal or amend it continue in force
 It is evident that Article 31B protects only Acts and Regulations specified in the Ninth Schedule from the vice of invalidity for inconsistency with provisions of Part III of the Constitution but not anything done or to be done in future under any of the provisions of 3 0 9 any Act so specified such as an order passed under section 3 of the Act
 If section 3 of the Act which was held in Shri Hari Kishan Bagla vs State of Madhya Pradesh1 to pass the tests of validity imposed by articles 14 and 19 1 f and g read with articles 19 5 and 6 a Control Order passed under section 3 would also be required to pass these tests as its scope could not be wider than that of the provisions which authorises its promulgation
A delegate or derivative power could not rise higher or travel beyond the source of that power from which it derives its authority and force
If Bagla s case supra is good law no party has questioned its correctness Articles 14 and 191 f and g could be deemed to be if one may so put it written into section 3 of the Act itself
They would control the scope of orders which could be passed under it
That is undoubtedly  the way in which guarantees of fundamental rights could and should function if the Act containing section 3 itself had not been placed in the Ninth Schedule so as to take away be guaranteed of fundamental rights from the substance of it
The question of interpretation before us is  What is the effect of putting the Act in the Ninth Schedule upon Control Orders passed under section 3 of the Act The answer to this question must necessarily depend upon the effect of such a change of the legal position upon the provisions of section 3 itself which authorise control orders passed under it
If the effect was to widen the orbit of section 3 of the Act or to remove the limitations put by Article 14 and 19 upon the exercise of powers under it the logical and natural result would be to enlarge also the scope or sweep of the orders passed under it
But if it has no such effect upon section 3 of the Act itself orders passed under it would continue to be subject to provisions of section 3 of the Act as controlled by Articles 14 and 19 of our Constitution so that they will have to satisfy what may be described as a dual test  firstly that of provisions of section 3 of the Act itself and secondly that of provisions of Chapter III of the Constitution containing fundamental rights
Learned Counsel for the petitioners suggested that the placing of the Act in the Ninth Schedule protected only the grant of powers under section 3 of the Act but not their exercise
Article 31B no doubt speaks of specified Acts and Regulations
But it makes no distinction whatsoever between any grants of powers and their exercise
Powers are granted or conferred so as to be exercised and not to be kept in cold storage for purposes of some kind of display only as though they were exhibits in a show case not meant for actual use
The whole object of a protection conferred upon powers meant for actual use is to protect their use against attacks upon their validity based upon provisions of Part 111
If his be the correct position it would quite naturally and logically follow that their use is what is really protected
1 1955 1 SCR380
310 In practice it is the exercise of power which is generally assailed and not the mere conferment of it which raises the somewhat different question of legislative competence
Indeed the Ninth Schedule does not provide any protection at all against attacks based upon either the vice of excessive delegation or want of legislative compete defects which could be said to vitiate the grant of powers despite their place in the Ninth Schedule
But questions of conflict with fundamental rights and of transgression of Legitimate or reasonable limit upon their exercise arise when citizens complain of unreason
able impediments to the exercise of their fundamental rights
The distinction between protection to a mere grant of powers and to their exercise therefore seems specious in the context of the protection
It cannot explain why if section 3 is protected by the Ninth Schedule
the exercise of power granted by it which manifests itself
in control orders is not protected
It would be so protected if at all not be cause the orders to be made in future as such are protected but because the power actually conferred and found in existence in section 3 is protected
The protection is given to a power which is specified and in existence which has to be used of certain purposes and not to what may be specified in future
If orders passed under section 3 of the Act also get a protection it would be what may be described as a derivative protection so long as the orders are covered by section 3 of the Act
It is available only so long as and because the source of their authority section 3 of the Act is protected by the Ninth Schedule
Orders purporting to be made under section 3 of the Act must however satisfy the tests found in section 3 itself in every case
They can never escape the basic tests whether section 3 the source of their authority is protected by the Ninth Schedule or not
The further tests imported by Articles 14 and 19 of the Constitution into section 3 could be applied to these orders only so long as these added tests are attached to or can be read into section 3 of the Act but not after they have been deliberately delinked or removed from section 3 if one may so describe the effect of the inclusion of the Act in the Ninth Schedule
The Solicitor General contended that section 3 of the Act constituted what he described as skeleton legislation over which the exercised of powers given by section 3 built so to say a body of flesh and blood
The term skeleton legislation is used sometimes for denoting the broad outlines of a particular scheme found in an Act of which details are to be filled in later by administrative orders of experts
It is doubtful whether the  could be spoken of as a piece of skeleton legislation
Section 3 sub s1 of the Act provides for delegation of powers to the Central Government in order that it may carry out certain purposes by framing appropriate schemes and evolving policies which may meet the purposes of the Act
These schemes and policies to serve the stated purposes may differ as
regards the nature of means adopted and even in the particular objectives sought at particular times to accord with changing circumstances
311 Orders passed under section 3 of the Act in pursuance of such schemes or policies do not become parts of the Act for the purposes of the Ninth Schedule of the Constitution
On the strength of the views expressed by this Court in Godavari Sugar Mills Ltd  Ors
vs section B Kamble  Ors1 with which we respectfully agree the most one can say is that orders passed under the Act before its inclusion in the Ninth Schedule could also be said to be protected directly by the Ninth Schedule if mentioned there
But there could be no independent and direct protection of this Schedule conferred upon orders passed under the Act before us just as none could be given to either the amendments of an Act or to regulations passed under the Act which were considered in Godavari Sugar Mills case supra
As already indicated above the impugned control order is assailed mainly on the ground that it violates Articles 14 and 191 f and g of the Constitution
It is alleged that the manufacturers of oil having invested a great deal of capital in Mustard oil manufacturing industry and having purchased oil seeds at higher rates than those which have entered into the calculation of the Government in fixing the price of mustard oil for the consumer cannot be made to sell oil into which Mustard seed is converted at prices below those at which they could themselves produce oil
It is submitted that to require them to do so amounts to confiscation of property contrary to law as well as a restriction upon the right guaranteed by Article 191g of the Constitution upon them to carry on an industry or business free from unreasonable restrictions
Valid restrictions it is submitted can only be reasonable and in the interests of the general public
It was suggested that the protection of Article 311 against deprivation of property contrary to law was also involved here
The main question to be decided therefore is whether Part III of the Constitution is available at all to test the validity of the impugned control order
In Latafat Ali Khan  Ors
vs State of UP1 a Constitution Bench of this Court decided such a question quite rightly in our opinion as follows at p 720  It seems to us that if a statutory rule is within the powers conferred by a section of a statute protected by article 3 1 B it is difficult to say that the rule must further be scrutinised under articles 14 19 etc Rule 44 seems to us to be a rule which does not go beyond the powers conferred under section 6xvii read with section 44 of the Act
At any rate section 6xvii and rule 44 are part of a scheme of land reform in UP and would be protected from attack under article 31B of the Constitution
In that case the rule made under the provisions of the Imposition of Ceiling on Land Holdings Act 1960 of UP was under attack
The section under which the rule was made enjoyed the protection of both Articles 3 1 A and 3 1B of the Constitution
Hence it was held that the rule was not to be questioned if it fell within the empowering 1  2 1971 Suppl
SCR719at720
312 provision of the Act
The position before us is very similar
The Control order passed under section 3 of the provisions of the Act before us included in the Ninth Schedule is assailed on the ground that although section 3 of the Act may be protected by the 9th Schedule of the Act yet an order passed under this provision is not so protect ed
Although we agree that the impugned order is not protected for this reason yet if the section under which it was passed is protected from any attack based on the provisions of Part III of the Constitution the only question which survives is whether the control order is covered by the protected empowering provision
If it falls outside the empowering provision it would be invalid in any case
If it falls within the empowering provision but could be found to be struck by the provisions of article 19 1  f and g of the Constitution an attack on the control order by reason of Article 191 f or g would be really one against the empowering provision itself which is protected
The control order therefore enjoys what may be called a derivative protection
All that has to be shown by the Central Government is that it falls within the empowering provision
No further test based on fundamental rights in Chapter III of the Constitution can be applied to it in such a case
All the tests of validity of the impugned price control or fixation order are therefore to be found in section 3 of the Act
Section 3 makes necessity or expediency of a control order for the purpose of maintaining or increasing supplies of an Essential commodity or for securing its equitable distribution at fair prices the criteria of validity
it is evident that an assessment of either the expediency or necessity of a measure in the light of all the facts and circumstances which have a bearing on the subjects of price fixation is essentially a subjective matter
It is true that objective criteria may enter into determinations of particular selling prices of each kilogram of mustard oil at various times
But there is no obligation here to fix the price in such
a way as to ensure reasonable profits to the producer or manufacturer
It has also to be remembered that the object is to secure equitable distribution and availability at fair prices so that it is the interest of the consumer and not of the producer which is the determining factor in applying any objective tests at any particular time
Hence the most important objective fact in fixing the price of mustard oil which is consumed generally by large masses of people of limited means is the paying capacity of the average purchaser or consumer
Statistics of rise in prices of mustard oil throughout the country indicated a very sharp rise during the period preceding the control order
It was no longer available at a reasonable price to the average consumer
It is difficult to understand how the average consumer could buy mustard oil at more than Rs 10 for each kilogram of mustard oil unless his purchasing capacity was increased by pumping money into his pocket artificially
This would necessarily imply a general rise in wages of the working classes and salaries of middle classes which do not share the profits of an inflationary economy
In other words a 313 fixation of price above Rs 10 per kg
of mustard oil could have contributed to push the country down the slippery slope of inflation towards economic crisis and disaster
Price control and planning may have been forced upon all nations of the world due to the needs and exigencies of modern total warfare
But as has been observed the problems of the aftermath or of the peace and reconstruction which follow according to some they break out are no less demanding
In addition it is common knowledge that the population explosion unemployment and rising prices in our country due to the inflationary spiral pose problems with no less grave implications for the whole country than a war
It would be no exaggeration to say that the fate of every government depends ultimately upon a satisfactory solution of these problems and particularly on its capacity to check rise in prices of essential commodities
We have listened to long arguments directed at showing us that producers and sellers of oil in various parts of the country will suffer so that they would give up producing or dealing in mustard oil
It was urged that this would quite naturally have its repercussions on consumers for whom mustard oil will become even more scarce than ever ultimately
We do not think that it is the function of this Court or of any Court to sit in judgment over such matters of economic policy as must necessarily be left to the Govt
of the day to decide
Many of them as a measure of price fixation must necessarily be are matters of production of ultimate results on which even experts can seriously err and doubtless differ
Courts can certainly not be expected to decide them without even the aid of experts
It is impossible for any Court to take evidence from all over the country to determine whether particular concerns or parties which have come up before this Court or could not reasonably produce mustard oil at a cost which could make it reasonable for them to sell it at Rs 10 per kg
Learned Counsel before us have tried to perform this impossible task
We think that it should not even have been attempted in a case of this kind because the price at which mustard oil was sold commonly in the market not very long ago and the price which prevailed at the time when the control order of 30th September 1977 was passed are matters of common knowledge
All that the Govt
need have done was to take a policy decision based on what could reasonably be the paying capacity of the average buyer of mustard oil and the likely effects of the intended price fixation
It seems to us to have done that
It is true that sufficient material from these points of view was not placed before us by the Union of India
Nevertheless the matter is so obvious and glaring that we do not think that detailed statistics are needed
We deliberately do not go into the great mess of materials which have been sought to be placed before us from the point of view of present cost of producing mustard oil and the fixation of a reasonable price based on a determination of that
The more essential questions to answer from the point of view of provisions of section 3 of the Act were  Can the mass of ordinary consumers pay more than Rs 10 per kg  Even if the price of mustard oil is fixed at less than the cost price to the ducers is it not necessary to take such a measure in order to break the 314 vicious inflationary spiral and bring down prices  The last question could only be answered by waiting and watching the ultimate effects of a particular price fixation on prices of mustard seed and cost of production of mustard oil ultimately
If the object of price fixation suggested by this question is very necessary to take into account from the point of view of availability of mustard oil at fair prices to consumers as we think it is the actual cost of production to the purchasers could certainly not be the sole or the decisive factor
It could only be one out of a Dumber of relevant facts and circumstances
The net result of the mass of statistics placed before us on behalf of the petitioners is that the price fixed should have been about Rs 3 per kg
more that is to say about Rs 13 per kg
Even if we accept this to be correct estimate for normal times when fair and reasonable profits to the producers could be an important consideration we think that a price fixed at Rs 10 per kg as a part of an attempt to break the vicious inflationary circle is not at all an unreasonable step
Students and observers of economic systems tell us that inflation is no problem in socialist countries because the whole
economy is so completely controlled that there is no question of a rise in prices
Under which our system is known as a mixed economy planning and price fixation are part of that social control which becomes inevitable under certain conditions
Indeed it seems quite unavoidable under any system which adopts socialistic measures to achieve the common good
The argument on behalf of the Union is that the result of this fixation even below cost price will necessarily produce desired effects upon the free sector in which price of mustard seed is still not controlled
The control imposed will make it impossible for producers to offer excessive prices for mustard oil seed demanded by the growers
Hence it was argued that the cost of production was bound to come down in course of time if petit loners could only wait a little
Fixation at even uneconomic selling price implied temporary loss to the producers so as to serve their own ultimate interests and those of general welfare
Such sacrifices ought it was suggested be readily borne by producers of mustard oil in a system like ours
If they were not able to bear them they could close down their factories
They could hot claim a right to carry on business or manufacture on their own terms
Such is not the right guaranteed even by article 19 1 g of the Constitution
However as we have already indicated it seems that the Act was put in the Ninth Schedule to prevent the invocation of Articles 14 19 and 31 for obstructing measures so necessary as price fixation of essential commodities is for promoting the objectives of a socialist welfare economy
This in our opinion would be a sufficient answer to all the arguments which had been put forward at considerable length before us on the unconstitutionality of fixing the price of mustard oil below what is claimed to be the cost price
It may be mentioned en passant that even during the interval between the passing of our order dismissing Writ Petitions for the enforcement of fundamental rights protected by Part III of the Constitution and the delivery of these reasons so beneficial was the effect of the order of 30th September 1977 that price of mustard oil has 315 fallen in the neighbourhood of Rs 7 per kg
Apparently this is enough to cover reasonable profits of producers as well as middlemen
We are informed that the impugned Control Order has itself been withdrawn by the Central Government
We can take judicial notice of those facts which illustrate the extreme inadvisability of any interference by any court with measures of economic control and planning directed at maximising general welfare
It is not the function of the Courts to obstruct or defeat such beneficial measures devised by the Govt
of the day
Courts cannot pass judgments on the wisdom of such actions unless actions taken are so completely unreasonable that no law can be cited to sanction them
If the impugned order of 30th September 1977 falls within this provision as we think it does no question of violating a fundamental right could arise
If an impugned order were to fall outside section 3 of the Act no question of applying any test of reasonableness contemplated by Article 196 need arise because it would then be a purely illegal I restriction upon the right conferred by Article 191 g which would fall for lack of authority of any law to support it
We have also heard considerable argument on principles of fair fixation of price which it was submitted must take into account the cost of production as well as a reasonable amount of profit to the manufacturer and the middleman
As indicated above such principles apply only in those cases where there is an obligation upon the price fixing authority to take certain matters
into account which have a bearing on cost of production and are designed to secure fair share of profits to the producers
Section 3 of the Act set out above as already indicated has very different purposes in view
It may be that the cost of production and reasonable amount of profits to the manufacturers have an indirect bearing on matters set out in section 31 of the Act
But in cases where the effects of a policy or a measure adopted in achieving purposes set out in Section 3 1  are matters of guess work after experimentation the actual consequences can be indicated with a fair amount of certainty only by giving sometime for a policy to work and reveal its results
Presence of such features in a case cannot invalidate price fixation of which the direct objects are set out in section 31 of the Act
Mr Kacker learned Solicitor General has rightly drawn our attention to a distinction between merely regulatory orders and those of price fixation or price control under section 3 2 c of the Act
A price fixation to meet the general purposes set out in section 31 of the Act aimed at reversing the vicious inflationary spiral of rising prices may appear arbitrary or unreasonable judged by standards applicable to price fixation aimed at giving reasonable profits to producer  which is not the object of section 31 of the Act
The whole evidence of the petitioners is misdirected inasmuch as it proceeds on the assumption that what could be no more than a relevant consideration is the whole and sole object of section 31 of the Act
About other matters there is practically no evidence so that we are left in the region of guesswork
316 No case has been cited before us to show that an Order meant to serve a purpose the execution of which may as indicated above require fixation of price even below cost price for the time being is outside Section 3 1 of the Act
It was rightly urged on behalf of the Union that the Control order is a temporary and experimental device for achieving a particular purpose covered by Section 31 of the Act at a particular time in a particular state of affairs
It was submitted that after the purpose is achieved the order could be and will be withdrawn by the Govt
of India
As already stated above that order has been withdrawn because the purpose has been achieved
Even if that purpose had not been achieved the order could be withdrawn if it became evident to the Government that such control would not achieve the desired object
It is extremely hazardous for Courts to enter the sphere of experimentation in matters of economic policy which must be left to the Government of the day
It will be seen from the provisions of Section 3 3 of the Act that price fixation on certain given principles is enjoined only when there is an order under Section 2 f of the Act compelling the sale of a whole stock or a specified part of it to the Central or a State Government or to authorities or persons as directed by them
Again Section 3 a iii provides a machinery for price fixation in special cases
Similar is the position with orders under sections 3B and 3C
The whole machinery of control of supplies with a view to their equitable distribution and securing their availability at fair prices it will be seen is much more comprehensive than the machinery for price fixation in special cases on given principles
The cases cited before us on price control relate to the sphere in which the criteria for fixation of were indicated either by a statutory provision or by orders thereunder
In Panipat Cooperative Sugar Mills vs Union of India1 this Court said  Two principal questions arise in these appeals  1 what is the true interpretation of section 3 3C and 2 whether the price of Rs 12463 was in accordance with the provisions of section 3 3C  Thus statutory principles for price fixation were under consideration there
Again in Shree Meenakshi Mills Ltd vs Union of India2 there were directions given under the Cotton Textiles Control Orders prescribing sales through certain channels
The principles on which the sale prices of textiles were to be fixed in accordance with relevant rules were explained by this Court
In Meenakshi Mills  case supra may CJ disapproved of the decision of this Court in Premier Automobiles Ltd vs Union of India3 in the following words 1 1973 2 SCR 860
2 3  317 lm15 The Premier Automobiles supra decision does not consider that the concept of fair prices vanes with circumstances in which and the purposes for which the price control is sought to be imposed
This decision because of the special agreement there does not consider that the fixation of fair price with a view to holding the prices line may be stultified by allowing periodic increase in price
 It was also observed there  In Premier Automobiles case supra this Court said that the concept of fair price fixed under section 18G takes in all the elements to make it fair for the consumer leaving a reasonable margin of profit to the manufacturer without which no one will engage in any manufacturing activity
These observations were made on the basis of the agreement of the parties there that irrespective of technical or legal points the Court should base its judgment on examination of correct and rational principles and should direct deviation from the report of the Commission of Inquiry appointed by it with the concurrence of the parties only when it is shown that there has been a departure from the established princi ples or the conclusions of the commission are shown to be demonstrably wrong or erroneous   In other words the judgment was not to provide a precedent for anything similar to be done by Courts in other cases
In Saraswati Industrial Syndicate Ltd etc
vs Union of India1 the cases mentioned above were discussed by this Court in the context of Suger Control Order 1966 where clause 7 laid down certain matters to be considered in determining fair price
It was held there Price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material
It could not therefore give rise to a complaint that a rule of natural justice has not been followed in fixing the price
Nevertheless the criterion adopted must be reasonable The guiding factors laid down in clause 7 of the Sugar Control Order 1966 were held to afford only indicate to help the Government in fixing prices on the lines indicated in the Control Order
We think that unless by the terms of a particular statute or order price fixation is made a quasi judicial function for specified purposes or cases it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation
A legislative measure does not concern itself with the facts of an individual case
It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class
In the case before us the Control Order applies to sales of mustard oil anywhere in India by any dealer
Its validity does not depend on the observance 1  3 277SCI78 318 of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity
The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed or in other words by reasonableness judges by possible or probably consequences
It is true that even executive or legislative action must be confined to the limits within which it can operate
It must fall reasonably within the scope of the powers conferred
The scope of the powers conferred depends upon the terms of the empowering provision
As we have already mentioned the empowering provision in the instant case is widely worded
The validity of section 3 has not been challenged before us
As indicated above it could not be challenged by reason of Article 31B after its inclusion in the 9th Schedule of the Constitution
The result necessarily is that in a case in which the Central Government is the judge of expediency and necessity to the extent that even the protection of guaranteed fundamental rights cannot stand in the way of its view or opinion of such necessity and expediency it challenge on the grounds on which it was attempted before us could not succeed
We may also mention that the view we have taken of the dominant purpose of section 31 of the Act is in accordance with the following elucidation of its purpose in Meenakshi Mills case supra The question of fair price to the consumer with reference to the dominant object and Purpose of the legislation claiming equitable distribution add Availability at fair price is completely lost sight of if profit and the producer s return are kept in the forefront
The maintenance or increase of supplies of the commodity or the equitable distribution and availability at fair prices are the fundamental purposes of the Act
 We do not think that we need deal with American cases in price fixation such as Leo Nebbia vs People of the State of New York1 where the guarantee of due process against capricious action was involved
in this country such guarantees in regard to rights of property or to carry on industry or trade or business could only arise by reason of Articles 14 and 19 of the Constitution which it excluded here because of the protection conferred upon section 3 of the Act by the 9th Schedule of the Constitution
I may however mention that in Permian Basin Area Rate cases2 where the majority of learned judges of the US Supreme Court laid down inter alia with regard to price fixation by a body of experts of Federal Power Commission required to proceed quasi judicially that in order to over turn the Commission s judgment the petitioners must undertake the heavy burden of making a convincing showing that it is invalid because it is unjust and unreasonable in its consequences
That was a case in which a Commission was charged with a duty to fix rates in accordance 1 291 US 78 Law
En 502
2  p 312
319 with certain principles after taking evidence and hearing parties effected
Nevertheless the duty of the petitioners was held to extend to demonstrating the unreasonableness and injustice of the consequences
A fortiori patent injustice and unreasonable injury to the interests of consumers must be shown if a measure of price control in the nature of either legislative or purely administrative action is assailed
So long as the action taken is not so patently unjust and unreasonable as to lead to the irresistible conclusion that it could not fall within section 31 of the Act it cannot be set aside or declared invalid
The test has to be that of consequences on objects sought by section 3  1  of the Act
Judged by this test we think that the Order of 30th September 1977 fell within the purview of section 3 of the Act and it has served its purposes
For reasons given above the order of dismissal of Writ Petitions already passed by us on 23rd November 1977 is in our opinion fully justified
ORDER Y V CHANDRACHUD P N BHAGWATI section MURTAZA FAZAL ALI P N SHINGHAL AND JASWANT SINGH JJ
We will give our reasons later since as at present advised with great respect we are not disposed to agree with a part of the reasoning of the learned CJ Dated May 5 1978 CHANDRACHUD CJ
On September 30 1977 the Government of India in its Ministry of Civil Supplies and Cooperation issued the Mustard Oil Price Control Order 1977 in exercise of the power conferred by section 3 of the  10 of 1955
The Price Control Order provides by clause 3 that no dealer shall either by himself or by any person on his behalf sell or offer to sell any mustard oil at a retail price exceeding Rs 10 per kilogram exclusive of the cost of container but inclusive of taxes
Clause 2 defines a dealer  to mean a person engaged in the business of purchase sale or storage for sale of mustard oil
The Price Control Order was challenged in this Court by several dealers on the ground mainly that it violates articles 14 19 1  f and 19 1 g of the Constitution
Article 301 was cited but not argued upon with any seriousness
The argument that the Price Control Order offends against the right to property and the right to carry on trade or business requires for its appreciation and decision the awareness that by the 40th Amendment passed in 1976 the was placed in the Ninth Schedule to the Constitution as item 125
One of the main con tentions of the Union Government in answer to the petitioners  challenge to the constitutionality of the Price Control Order is that since the Act by reason of its being placed in the Ninth Schedule is immune from attack on the ground that its provisions violate the funda 320 mental rights guaranteed by Part III of the Constitution the Price Control Order which is but a creature of the Act must enjoy the same immunity
This contention has found favour with the learned Chief Justice Shri M H Beg but with respect we are unable to share his view
Article 3 1 A of the Constitution saves laws which provide for matters mentioned in clauses a to e thereof from a challenge under articles 14 19 or 31 notwithstanding anything contained in article 13 of the Constitution
Article 31A which was introduced by the Constitution First Amendment Act 1951 validates certain Acts and Regulations providing that without prejudice to the generality of the provisions contained in Article 31A none of the Acts and Regulations specified in the Ninth Schedule nor any of the provisions thereof shall be deemed to be void or ever to have become void on the ground that such Act Regulation or provision is inconsistent with or takes away or abridges any of the rights conferred by any provisions of Part III
On a plain reading of this article it seems to us impossible to accept that the protective umbrella of the Ninth Schedule takes in its ever widening wings not only the Acts and Regulations specified therein but also Orders and Notifications issued under those Acts and Regulations
Article 31B constitutes a grave encroachment on fundamental rights and doubtless as it may seem that it is inspired by a radiant social philosophy it must be construed as strictly as one may for the simple reason that the guarantee of fundamental rights cannot be permitted to be diluted by implications and inferences
An express provision of the Constitution which prescribes the extent to which a challenge to the constitutionality of a law is excluded must be construed as demarcating the farthest limit of exclusion
Considering the nature of the subject matter which article 31B deals with there is in our opinion no justification for extending by judicial interpretation the frontiers of the field which is declared by that article to be immune from challenge on the ground of violation or abridgement of fundamental rights
The article affords protection to Acts and Regulations specified in the Ninth Schedule
Therefore whenever a challenge to the constitutionality of a provision of law on the ground that it violates any of the fundamental rights conferred by Part III is sought to be repelled by the State on the plea that the law is placed in the Ninth Schedule the narrow question to which one must address oneself is whether the impugned law is specified in that Schedule
If it is the provisions of article 31B would be attracted and the challenge would fail without any further inquiry
On the other hand if the law is not specified in the Ninth Schedule the validity of the challenge has to be examined in order to determine whether the provisions thereof invade in any manner any of the fundamental rights conferred by Part III
It is then no answer to say that though the particular law as for example a Control Order is not specified in the Ninth Schedule the parent Act under which the Order is issued is specified in that Schedule
The Mustard Oil Price Control Order 1977 was passed under section 3 of the  which by the relevant part of its sub section 1 empowers the Central Government to provide by an order for regulating or prohibiting the production 321 supply and distribution of an essential commodity or trade and commerce therein if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at a fair price
Since the Act of 1955 has been placed in the Ninth Schedule none of its provisions including of course section 31 is open to attack on the ground that it ever was or is inconsistent with or takes away or abridges any of the rights conferred by any provision of Part III of the Constitution
But that is the farthest that the immunity offered by article 31B can go
In other words speaking of a provision directly in point section 31 of the Act of 1955 is not open to challenge on the ground to take a relevant instance that it violates the guarantee contained in article 19 1 f or 19 1 g of the Constitution
But there is no justification for extending the protection of that immunity to an Order passed under section 3 of the Act like the Mustard Oil Price Control Order
Extending the benefit of the protection afforded by article 31B to any action taken under an Act or Regulation which is specified in the Ninth Schedule appears to us to be an unwarranted extension of the provisions contained in article 31B neither justified by its language nor by the policy or principle underlying it
When a particular Act or Regulation is placed in the Ninth Schedule the Parliament may be assumed to have applied its mind to the provisions of the particular Act or Regulation and to the desirability propriety or necessity of placing it in the Ninth Schedule in order to obviate a possible challenge to its provisions on the ground that they offend against the provisions of Part III
Such an assumption cannot in the very nature of things be made in the case of an Order issued by the Government under an Act or regulation which is placed in the Ninth Schedule
The fundamental rights will be eroded of their significant content if by judicial interpretation a constitutional immunity is extended to Orders the validity of which the Parliament at least theoretically has had no opportunity to apply its mind
Such an extension takes for granted the supposition that the authorities on whom Dower is conferred to take appropriate action under a statute will act both within the framework of the statute and within the permissible constitutional limitations a supposition which past experience does not justify and to some extent falsifies
In fact the upholding of laws by the application of the theory of derivative immunity is foreign to the scheme of our constitution and accordingly orders and Notifications issued under Acts and Regulations which are specified in the Ninth Schedule must meet the challenge that they offend against the provisions of Part III of the Constitution
The immunity enjoyed by the parent Act by reason of its being placed in the Ninth Schedule cannot proprio vigore be extended to an offspring of the Act like a Price Control Order issued under the authority of the Act
it is therefore open to the petitioners to invoke the writ jurisdiction of this Court for determination of the question whether the provisions of the Price Control Order violate articles 14 19 1 f and 19 1 g of the Constitution
The learned Solicitor General relies justifiably on two decisions of this Court in Vasantlal Maganbhai Sanjanwala vs The State of Bom 32 2 bay and Others1 and Latafat Ali Khan and Ors
vs The State of UP2 in support of his argument that the Price Control Order must receive the protection of the Ninth Schedule to the same extent as the under which that order was issued and which has been placed in the Ninth Schedule
In Vasantlal Maganbhai1 the vires of section 62 of the Bombay
Tenancy and Agricultural Lands Act 1948 was challenged on the ground that it suffered from the vice of excessive delegation
In exercise of the power con feared by section 62 the State Government had issued a Notification fixing the maximum rent payable by tenants of lands situated in the areas specified in the schedule appended to the Notification
The validity of that Notification was challenged on the ground
that it offended against Article 31 of the Constitution
The first contention was rejected by the majority which held that section 62 did not suffer from excessive delegation On the second question it was held by the Court that since the Bombay Tenancy Act was placed in the Ninth Schedule the Notification which was issued under section 62 of that Act could not be challenged on the ground that it violated article 31
Subba Rao J who was in minority did not consider the latter point regarding the validity of the Notification issued under section 62 because he took the view that section 62 suffered from the vice of excessive delegation and was therefore unconstitutional
This decision undoubtedly lends support to the contention of the Union Government that if an Act or Regulation is specified in the Ninth Schedule any order or notification issued under it would equally be entitled to the protection of that Schedule
We are however of the opinion respectfully that the decision in Vasantlal Maganbhai supra does not reflect the true legal position which according to us is that the immunity enjoyed by an Act placed in the Ninth Schedule cannot be extended to an order or notification issued under it
The decision of
the Court appears to have been influenced largely by the consideration that the only argument advanced against the validity of the notification was that in substance it amended the provisions of section 61 and was therefore a fresh legislation to which article 31B could not apply
The Court rejected that argument and held that if section 62 was Valid the exercise of the power validly conferred on the Provincial Government could not be treated as a fresh legislation
The decision in Latafat Ali Khan supra contains no reasons beyond the bare statement that if a statutory rule is within the powers conferred by a section of a statute protected by article 3 1 B it is difficult to say that the rule must further be scrutinised under articles 14 19 etc
It is clear from the judgment that since the Court was of the opinion that  at any rate the impugned provisions of UP Imposition of Ceiling on Land Holdings Act and the Rules were part of a scheme of land reform and were therefore protected from attack under article 31 A of the Constitution it did not think it necessary to examine the question whether statutory rules framed under the Act which was placed in the Ninth Schedule would enjoy the same immunity
1  2 1971 Supp
SCR 719
323 The decision of this Court in Godavari Sugar Mills Ltd and Ors vs section B Kamble and Ors1 appears to us to be in point and it supports the petitioners  contention that the benefit of article 31B of the Constitution cannot be extended to an order or notification issued under an Act which is placed in the Ninth Schedule
The Bombay High Court while affording protection of article 31B to the Maharashtra Agricultural Lands Ceilings on Holdings Act 1961 which was included in the Ninth Schedule also granted the benefit of that protection to the later Amending Acts of 1968 1969 and 1970 on the ground that they were only ancillary or incidental to section 58 of the Principal Act
That view was rejected by this Court on the ground that if the protection afforded under article 31 B is
extended to amendments made to an Act or Regulation subsequent to its inclusion in the Ninth Schedule the result would be that even those provisions would enjoy the protection which were never scrutinised and could not in the very nature of things have been scrutinised by the prescribed majority vested with the power of amending the Constitution
That according to the Court would be tantamount to giving a power to the State Legislature to amend the Constitution in such a way as would enlarge the contents of the Ninth Schedule to the Constitution
Khanna J who spoke for the Court observed that Article 31B carves out a protected zone that any provision which has the effect of making an inroad into the guarantee of fundamental rights must be construed very strictly and that it is not permissible to the Court to widen the scope of such a provision or to extend the frontiers of the protected zone beyond what is warranted by the language of the provision
In the result it was held that the entitlement to protection cannot be extended to provisions which were not included in the Ninth Schedule and that this principle would hold good irrespective of the fact whether the provision in regard to which the protection was sought dealt with new substantive matters or with matters which were merely incidental or ancillary to those already protected
This decision shows unmistakably that the circumstance that a Control Order is a mere creature of the parent Act and is incidental or ancillary to it cannot justify the protection of the Ninth Schedule being extended to it on the ground that the parent Act is incorporated in that Schedule
But having
won the battle on a point of law undoubtedly of public importance the petitioners have to lose the war of price fixation because there is no substance in their grievance that the Price Control Order offends against articles 14 191f and 191g
Taking first the challenge under article 14 for consideration the argument is that the impugned Order treats the entire country as one unit regardless of regional variations relating to factors like the cost of procurement of raw material and freight
The contention in other words is that the order is over inclusive since it treats unequals as equals by imposing an identical burden upon a wider range of individuals than those who can legitimately be treated as constituting one single class for the purpose of remedying the mischief at which the law aims
In the first place the averments in the various Writ Petitions are far too vague and general to justify the application of article 14
The petitioners have failed 1 1975 3 SCR885 324 to show by acceptable data that they fall into a separate class altogether and cannot therefore be subjected to the restraints of a single order of price fixation
It may be that economic factors governing the mustard oil trade vary from region to region as in the case of any other trade and further the pattern of the trade may differ in different growing regions and manufacturing centres like Uttar Pradesh Rajasthan Bihar West Bengal Punjab and Orissa
But that by itself cannot justify the argument that different prices must be fixed for different regions and that failure to do so would necessarily entail discrimination Dealers  in Mustard Oil wherever they operate can legitimately comprise a single class for the purpose of price fixation especially as it is undisputed that the two basic constants of the trade are that the cost of mustard seed constitutes 94 per cent of the cost of the mustard oil and that about 312 kilograms of seed goes into the extraction of one kilogram of oil
Fixation of different price this background frustrate the very object commodity should be made available for different regions will in of the exercise that an essen to the consumer at a fair price
Consumer goods have a disconcerting tendency to disappear from regions where prices are lower and they notoriously migrate to areas where higher prices rule
Besides the grievance of the West Bengal dealers that since they have to import mustard seed from Uttar Pradesh their cost of production is higher than in Uttar Pradesh can be met with the answer that in any event West Bengal has also to import at least 13rd of its total annual requirement of 13 lakhs of Metric tonnes of Mustard Oil
Uttar Pradesh grows 66 of the total production of mustard seed whereas West Bengal grows only 6
The question really is whether dealers in different regions can be said to be so differently situated in the context of and in relation to the purpose for which the Price Control Order is issued that one common price for dealers all over the country can reasonably be described as discriminatory as against some of them
As observed earlier there is no reliable data to support this contention and we cannot accept the charge of over inclusiveness for the mere reason that dealers in a certain region have to import their raw material from another region
Perhaps the high rate of turnover and consumption in a region like West Bengal may easily absorb the additional cost of freight
We are therefore unable to hold to use the language of Mathew J in State of Gujarat vs Shri Ambica Mills Ltd 1 that the Government of India in fixing one common price for mustard oil for the whole country has acted like Herod who ordered the death of all male children born on a particular day because one of them would some day bring about his downfall
It is interesting that in matters of price fixation whichever method the authorities adopt is made the subject matter of challenge for one reason or another often conflicting and contradictory
In Saraswati Industrial Syndicate Ltd vs Union of India1 one of the contentions on behalf of the manufacturers of sugar was that sugar prices should not have been determined on the basis of 22 different zones but should have been determined either on an All India basis or for a unit of fix zones
That contention was rejected by this Court but the case is 1   762
2  325 an instance of how a division of the country into separate zones for the purpose of fixing the price of an essential commodity does not offer a commonly acceptable solution
It is doubtless that if lower prices were fixed for Uttar Pradesh on the ground that the dealers there were not required to import raw material from outside a hue and cry would have been raised that the Government of India was victimising the dealers in a particular area for the irrelevant reason that it grew the raw material in abundance
In the ultimate analysis the mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators the processual basis of price fixation has to be accepted in the generality of cases as valid
That takes us to the petitioners  contention that the Price Control Order is violative of the petitioners  right under articles 191 f and 19 1  g of the Constitution
The case of Ms Prag Ice  Oil Mills who are petitioners in Writ Petition No 712 of 1977 is as follows  The average cost of production mustard oil when the Price Control Order was issued was about Rs 135110p  per quintal ie Rs 1351 per kilogram
Taking into consideration overhead costs and allowing for a reasonable margin of profit the fair selling price of mustard oil would come to Rs 1401 per kilogram at the factory gate
Petitioners being wholesalers sell their goods to other wholesalers and retailers some of whom have to transport the goods at considerable distances from the petitioners  factory
Under the impugned Order the price of mustard oil is fixed at Rs 10 per kilogram which means that the petitioners have to sell the goods to the retailer at about Rs 850 per kilogram since the retailer has to provide for a margin of at least Rs 150 per kilogram for his costs and a small I profit
Thus the petitioners have to suffer a loss of over Rs 5 per kilogram as a result of the Price Control Order
By this method the petitioners are deprived of their right to acquire and hold their property and carry on their trade or business of extracting manufacturing and selling mustard oil
The price of Rs 10 per kilogram has been fixed according to the petitioners arbitrarily and without any application of mind
These allegations contained in the Writ Petition of Ms Prag Ice  Oil Mills may be taken as representing broadly the grievance of the other petitioners who are more or less similarly situated
Those allegations have been traversed by Shri V Srinivasan Deputy Secretary to the Ministry of Civil Supplies and Cooperation Government of India on behalf of the Union Government
Shri Srinivasan has stated in his affidavit that in March 1977 the retail price of mustard oil in several mustard oil consuming centres ranged between Rs 975 and Rs 1081 per kilogram
It became necessary to issue the impugned Order in view of the fact that the price of mustard oil was increasing persistently in spite of the fact that the prices of other edible oils were showing a declining trend
The available stocks disappeared from the market suddenly and the Government had to intervene in order to control the distribution of an essential commodity in public interest
The fixation of price in these circumstances was necessarily empirical for which purpose the Government took into account prices which were 326 prevailing in the market when the goods were freely available the general level of prices of other edible oils the purchasing power of the consumer and the amount of loss which the industry was able to absorb after it had made huge profits in prosperous years
The affidavit further says that even at Rs 10 per kilogram it was possible for the petitioners to make a small profit but whether or not the dealers
made any profit the validity of the Price Control Order was not liable to be challenged on the ground that the dealers would incur a loss if they were obliged to sell mustard oil at Rs 10 per kilogram
The question as to which was the fair price to the consumer was kept by the Government in the forefront and by that method alone could the dominant object of the be achieve effectively
Shri Srinivasan s affidavit further states that mustard seed is grown mainly in the rabi season ie from September to October and February to March and the peak marketing season is from April to June
The mustard crop is by and large grown by small farmers who have no staying ability and who in their anxiety to dispose of their produce as quickly as possible after the harvest sell their produce between April and June
From this it is stated to follow that the millers effect the bulk of their purchases during the first quarter of the year and therefore the petitioners could not be heard to contend that the price of mustard seed after the coming into force of the impugned Price Control Order should be taken into account for determining the cost which they have to incur in producing mustard oil
The affidavit con tains a table showing the prices paid by the millers and the prices received by the farmers for the mustard seed
The fair price of the mustard oil according to the Government could be fixed on the basis of weighted average price or the mean price of the mustard seed
But in order not to cause hardship to the dealers the price was fixed at Rs 10 per kilogram on the basis of the average of the highest and the lowest of the market prices prevailing during the period of bulk arrivals of the seed in the market The prices ranging at ten different centres are alleged to have been taken into account namely Aligarh Allahabad Hapur Gauhati Hathras Jullundur Kanpur Moga Rohtak and Sriganganagar
 Those prices yield a mean price of around Rs 350 per quintal of mustard seed and upon that basis the retail price works out to be less than Rs 10 viz Rs 995 per kilogram
Considering these rival contentions and the data which has been producedbefore us in support thereof we are unable to accept the petitioners  submission that the Price Control Order is violative of their rights under articles 19 1 f  and 19 1 g of the Constitution
In the first place it is impossible to determine in these Writ Petitions the accuracy of the petitioners  case that they purchase mustard seed from month to month and from week to week as the crushing of the seed progresses
We see no reason to doubt the statement contained in the affidavit filed on behalf of the Government of India that most of the growers of mustard seed are small agriculturists who have hardly any staying ability and are therefore compelled to sell their produce immediately after the harvesting season that is to say between March 32 7 and June
If the prices of mustard seed prevailing during that period are taken into account it is difficult to accept that the price of Rs 10 per kilogram is so patently unreasonable as to be violative of the petitioners right to hold property or to do trade or business
the petitioners that it is futile to fix the price of oil without at the same time fixing the ceiling price of the raw material namely the mustard seed
This Contention is also effectively met by the respondent s plea that the bulk of the purchases are made by the petitioners immediately after the harvesting season and that considering the pattern of the trade in mustard seed it is wholly unnecessary to control the price of the seed in order effectively to control the price of mustard oil
It is significant that whereas mustard seed was sold in certain areas at prices ranging between Rs 480 and Rs 530 per quintal in September 1977 prices after the promulgation of the impugned Price Control Order had come down to a range between Rs 365and Rs 390 per quintal
This has not been denied by the petitioners but they describe the phenomenon as irrelevant for the purpose of determining the legality of the Price Control Order
Their contention in which we find no  substance is that the
consequence of the Price Control Order cannot be looked at for the purpose of deciding whether the price of mustard oil was fixed in accordance with legally acceptable principles
The proof of pudding as the saying goes is in the eating and no court can shut its eyes to the fact that the Price Control Order produced the salutary and tangible result of bringing down the price of raw material
The basic rule of construction in these matters as observed in Vrajlal Manilal  Co  Ors
vs State of Madhya Pradesh  Ors1 is that a mere literal or mechanical construction is not appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards hereunder are concerned
In cases of such a kind two rules of construction have to be kept in mind  1 that courts generally lean towards the constitutionality of a legislative measure impugned before them upon the presumption that a legislature would not deliberately flout a constitutional safeguard or right and 2 that while construing such an enactment the court must examine the object and the purpose of the impugned Act
the mischief it seeks to prevent and ascertain from such factors its true scope and meaning
Section 31 of the  empowers the Central Government to fix the prices of essential commodities if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at a fair price
Sub section 2 c of section 3 provides that without prejudice to the generality of the power conferred by sub section 1 an order made under that sub section may provide for controlling the price at 1 1970 SCR400409 328 which any essential commodity may be bought or sold
The dominant purpose of these provisions is to ensure the availability of essential commodities to the consumers at a fair price
And though patent injustice to the producer is not to be encouraged a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 31 and section 32c of the 
The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration
We are not impressed by the play of statistics on the part of the petitioners which is designed to show that as a result of the Price Control Order they are faced with a loss of about Rs 5 per kilogram on the sale of mustard oil
We will ignore while we are on this point the pronounced reiteration of the respondent that the peti tioners have made huge profits in past years and that their concerns are sufficiently prosperous to be able to absorb a small loss for a temporary period
But even in the absence of satisfactory proof of the extent of the profits made by the petitioners in past years we are of the opinion that the circumstance that the petitioners may have to suffer a loss over a short period immediately following upon the pro mulgation of the Price Control Order will not render the Order constitutionally invalid
The interplay of economic factors and the laws of demand and supply are bound eventually to have their impact on the pattern of prices prevailing in the market
If the dealer cannot lawfully sell the finished product at more than Rs 10 per kilogram the price of raw material is bound to adjust itself to the price of the product
Subsequent events unmistakably demonstrate the effect of such interplay and the favourable reaction which the Price Control Order has produced on the price of mustard seed
But above all things it is necessary to bear in mind in matters of the present nature what Krishna Iyer J said in B Banerjee vs Anita Pan1 that such provisions have to be viewed through a socially constructive not legally captious microscope to discover a glaring unconstitutional infirmity that when laws affecting large chunks of the community are enacted stray misfortunes are inevitable and that social legislation without tears affecting vested rights is virtually impossible
Having considered the matter from every possible angle we are unable to accept the petitioners  contention that the impugned Price Control Order is so unreasonable as to be constitutionally invalid
As observed by Beg J in Saraswati Industrial Syndicate supra it is enough compliance with the constitutional mandate if the basis adopted for price fixation is not shown to be so patently unreasonable as to be in excess of the power to fix the price
Learned counsel for the petitioners expressed the fear that the fixation of an uneconomic price will drive the manufacturers out of the market and thus the very source of supply of an essential 1 19752 SCR 774 782
329 commodity will dry up  thereby frustrating the object of the that the consumer must get his basic needs at a fair price
The fallacy of this contention is that immediately prior to the promulgation of the Price Control Order the consumer was denied the chance to get the mustard oil at a price which lie could reasonably afford
For him therefore the supply had already dried up
If after the issuance of the order the supply position shows no improvement that consequence cannot be legitimately attributed to the operation of the Price Control Order At best the Order can then be said to have failed to achieve its purpose
This discussion will not be complete without reference to the decision of a Constitution Bench of this Court in Shree Meenakshi Mills Ltd vs Union of India1
The question which arose in that case was as regards the validity of a notification fixing fair prices of cotton yarn
It was contended on behalf of the petitioners therein that the price fixed was arbitrary because the fluctuation in the price of cotton was not taken into consideration the price of raw materials the liability for wages and the necessity for ensuring reasonable profit to the trader were not taken into account and above everything else the industry was not ensured a reasonable return on its investment
These contentions were rejected by this Court on the ground that just as the industry cannot complain of rise and fall of prices due to economic factors in an open market it cannot similarly complain of some increase in or reduction of prices as a result of a notification issued under section 31 of the because such increase or reduction is also based on economic factors
Dealing with the contention that a reasonable profit must be assured to the manufacturers the Court held that ensuring a fair price to the consumer was the dominant object and purpose of the and that object would be completely lost sight of if the producer s profit was kept in the fore front
Ray CJ speaking for the Court observed  In determining the reasonableness of a restriction imposed by law in the field of industry trade or commerce it has to be remembered that the mere fact that some of those who are engaged in these are alleging loss after the imposition of law will not render the law unreasonable
By its very nature industry or trade or commerce goes through periods of prosperity and adversity on account of economic and sometimes social and political factors
In a  largely free economy when controls have to be introduced to ensure availability of consumer goods like foodstuff cloth and the like at a fair price it is an impracticable proposition to require the Government to go through the exercise like that of a Commission to fix the prices Another passage from the judgment of the learned Chief Justice which has an important bearing on the instant case is to the following effect 1 1974 2 SCR398
330 When available stocks go underground and the Government has to step in to control distribution and availability in public interest fixing of price can therefore be only empirical
Market prices at a time when the goods did not go underground and were freely available the general rise in prices the capacity of the consumer specially in case of consumer goods like food stuff cloth etc
the amount of loss which the industry is able to absorb after having made huge profits in prosperous years all these enter into the calculation of a fair price in an emergency created by artificial shortages
 On this aspect of the matter the Court cited with approval a passage from an American decision Secretary of Agriculture vs Central Reig Refining Company1 to the effect that Courts of Law cannot be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation
Counsel for the petitioners relied upon the decisions in Panipat Co operative Sugar Mills vs Union of India2 and Anakapalle Cooperative Agricultural and Industrial Society Ltd vs Union of India3 in support of their contention that fixation
of a price without ensuring a reasonable return to the producers or dealers is unconstitutional
The infirmity of this argument as pointed out in Meenakshi Mills vs Union of India supra is that these two decisions turn on the language of section 33c of the under which it is statutorily obligatory to ensure to the industry a reasonable return on the capital employed in the business of manufacturing sugar
These decisions can therefore have no application to cases of price fixation under section 3 1 read with section 3 2 c of the Act
Cases failing under sub sections 3A 3B and 3C of section 3 of that Act belong to a different category altogether
It is customary in price fixation cases to cite the oft quoted decision in Premier Automobiles Ltd  Anr etc
vs Union of India4 which concerned the fixation of price of motor cars
It is time that it was realized that the decision constitutes
no precedent in matters of price fixation and was rendered for reasons peculiar to the parti cular case
At page 535 of the Report Grover J who spoke for the Court stated at the outset of the judgment  Counsel for all the parties and the learned Attorney General are agreed that irrespective of the technical or legal points that may be involved we should base our judgment on examination of correct and rational principles and should direct deviation from the report of the Commission which was an expert body presided over by a former judge of a High Court only when it is shown that there has been a departure from established principles or the conclusions of the Commission are shown to be demonstrably wrong or erroneous
 By an agreement of parties the 1 94Law Ed 381
2 ATR 3 ATR 4  331 Court was thus converted into a Tribunal for considering every minute detail relating to price fixation of motor cars
Secondly as regards the escalation clause the Court recorded at page 543 that it was not disputed on behalf of the Government and the Attorney General accepted the position that a proper method should be devised for escalation or de escalation
Thirdly it is clear from page 544 of the Report that the Learned Attorney General also agreed that a reason able return must be allowed to the manufacturers on their investment
The decision thus proceeded partly on an agreement between the parties and partly on concessions made at the Bar
That is the reason why the judgment in Premier Automobiles supra cannot be treated as a precedent and cannot afford any appreciable assistance in the decision of price fixation cases
The contention that the Price Control Order is arbitrary because it is not limited in point of time is without any merit
In the very nature of things orders passed under section 31 read with section 32 of the are designed primarily to meet urgent situations which require prompt and timely attention
If a price control order brings about an improvement in the supply position or if during the period that such an order is in operation there is a fall in prices so at to bring an essential commodity within the reach of the ordinary consumer the order shall have lost its justification and would in all probability be withdrawn
That in fact is what has happened in the instant case
It appears that the supply position having improved or so at any rate seems to be the assessment of the situation by the Government the order has been recently withdrawn
Learned counsel for the petitioners laid great stress on the circumstance that as is shown by the affidavit filed on behalf of the Union Government the Price Control Order did not take into account the circumstance that the cost of production of mustard oil includes a fairly large margin of profit of the middleman
It is urged that small millers cannot afford to take large investments and lock up their limited capital and therefore resort is required to be had to the intervention of the middleman who is in a position to invest a large capital in the purchase of raw material and who naturally expects a fair return on his investment
The intervention of the middleman is an acknowledged reality of all trades and businesses
The fact that the middleman s profit increases the price A goods which the consumer has to pay was described by this Court in Narendra Kumar and Others vs The Union of India and Others1 as axiomatic
As observed in that case since the middle mans charges often add to a considerable sum it has been the endeavour in modern times for those responsible for social control to keep the middleman s activities to the minimum and to attempt to replace them largely by cooperative sale societies of producers and cooperative purchase societies of consumers
The elimination of the middleman is bound to cause trouble and inconvenience 1 1960 2SCR375
332 but the ultimate savings in the cost of the finished product could more than balance that inconvenience
The argument of the petitioners really amounts to a rigid insistence that they are entitled to carry on their business as they please mostly in a traditional manner regardless of its impact on public interest
But property rights are not absolute and important as the right of property may be the right of the public that such rights be regulated in common interest is of greater importance
These correlative rights as observed in Lea Nebbia vs People of the State of New York1 are always in collision  No exercise of the private right can be imagined which will not ever slight affect the public no exercise of the to regulate abridge his liberty or affect his property
But subject only to constitutional restraint the private right must yield to the public the words of Justice Roberts who delivered the opinion of in Leo Nebbia supra  The Constitution does not secure to any one liberty to conduct his business in such fashion as to inflict injury upon the public at large or upon any substantial group of the people
Price control like any other form of regulation is unconstitutional only if arbitrary discriminatory or demonstrably irrelevant to the policy the legislature is free to adopt and hence an unnecessary and unwarranted interference with individual liberty
 Counsel for the petitioners characterised the fixation of price in the instant case as a veiled transgression of power conferred by section 3  1 of the 
In support of that submission the judgment of this Court in K C Gajapati Narayan Deo anti Others vs The State of Orissa2 was cited in which it was said that when a legislative power is defined by reference to purpose legislation not directed to that purpose will be invalid
We are unable to appreciate how if the Government has got the power to fix a fair price of an essential commodity it can be said that they have under a pretext trespassed upon a field which does not properly belong to them
The power conferred by section 31 of the is undoubtedly purposive
But it seems to us incontrovertible that the Price Control Order was promulgated by the Government in order to achieve the purpose set out in section 31 of the Act
The fact that a legislative remedy or an administrative order passed in exercise of a statutory power is effective to mitigate an evil may show that it has failed to achieve its purpose highlighting thereby the paradox of reform
But as observed in Joseph Beaubarnais vs People of the State of Illinois1  that is the price to be paid for the trail and error inherent in legislative efforts to dial with obstinate social issues
We are therefore unable to hold that by fixing a fair price for mustard oil the Government has committed a veiled and subtle trespass upon private rights or upon a legislative field which is not open to them to occupy
1 78 Lawyers  Edition 940
2  3 96 Lawyers Edition 919
333 To sum up it seems to us impossible to accept the contention of the petitioners that the impugned Price Control Order is an act of hostile discrimination against them or that it violates their right to property or their right to do trade or business
The petitioners have taken us into the mutest details of the mechanism of their trade operations and they have attempted to demonstrate in relation thereto that a factor here or a factor there which ought to have been taken into account while fixing the price of mustard oil has been ignored
Dealing with a similar argument it was observed in Metropolis Theater Company vs City of Chicago1 that to be able to
find fault with a law is not to demonstrate its invalidity
It may seem unjust and oppressive yet be free from judicial interference
The problems of government are practical ones and may justify if they do not require rough accommodations illogical it may be and unscientific
But even such criticism should not be hastily expressed
What is best is not always discernible the wisdom of any choice may be disputed or condemned
Mere errors of government are not subject to our judicial review
It is only its palpably arbitrary exercises which can be declared void
 The Parliament having entrusted the fixation of prices to the expert judgment of the Government it would be wrong for this Court as was done by common consent in Premier Automobiles supra to examine each and every minute detail pertaining to the Governmental decision
The Government as was said in Permian Basin Area Rate Cases supra is entitled to make pragmatic adjustments which may be called for by particular circumstances and the price control can be declared unconstitutional only if it is patently arbitrary discriminatory or demonstrably irrelevant to the policy which the legislature is free to adopt
The interest of the producer and the investor is only one of the variables in the constitutional calculus of reasonableness  and Courts ought not to interfere so long as the exercise of Governmental power to fix fair prices is broadly within a zone of reasonableness 
If we were to embark upon an examination of the desperate contentions raised before us on behalf of the contending parties we have no doubt that we shall have exceeded our narrow and circumscribed authority
Before closing we would like to mention that the petitioners rushed to this Court too precipitately On the heels of the Price Control Order
Thereby they deprived themselves of an opportunity to show that in actual fact the Order causes them irreparable prejudice
Instead they were driven through their ill thought haste to rely on speculative hypotheses in order to buttress their grievance that their right to property and the right to do trade was gone or was substantially affected
A little more patience which could have been utilised to observe how the experiment functioned might have paid better dividends
The impugned Price Control Order is therefore valid and the challenge made thereto by the petitioners his to fail
These are our reasons in support of the order passed earlier that the Petitions be dismissed with costs
SR Petitions dismissed
1 57Lawyers Edition730


Summary:
Sub section 1 of section 3 of the which is placed in the Ninth Schedule of the Constitution empowers the Central Govt
to provide by an order for regulating or prohibiting the production supply and distribution of an essential commodity or trade or commerce therein if it is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing its equitable distribution and availability at a fair price
In exercise of the power conferred by section 3 of the  10 of 1955 the Government of India in its Ministry of Civil Supplies and Cooperation issued on September 30 1977 the Mustard Oil Price Control Order 1977
The Price Control Order provided by Clause 3 that no dealer was either by himself or by arty person on his behalf to sell or offer to sell any mustard oil at a retail price exceeding Rs 10 per Kg
exclusively of the cost of container but inclusive of taxes
Clause 2 defines a dealer to mean a person engaged in the business of purchase sale or storage for sale of mustard oil
The Price Control Order was challenged in this Court by several dealers on the ground mainly that it violated Articles 14
191f and 191g of the Constitution article 301 was cited but not argued upon with any seriousness
Upholding the validity of the impugned Price Control Order and dismissing the appeals the Court HELD Per majority The Mustard Oil Price Control Order 1977 is constitutionally valid
The impugned Price Control Order is not an act of hostile discrimination against the traders
It does not violate their right to property or their right to trade or business
319C 331G 294 Per Chandrachud J was he then was On behalf of Bhagwati Murtaza Fazal Ali Shirghal Jaswant Singh JJ
and himself
On a plain reading of article 31 A it cannot be said that the protective umbrella of the Ninth Schedule takes in not only the acts and regulations specified therein but also orders and notifications issued under those acts and regulations
320 C a article 31 B constitutes a gave encroachment on fundamental rights and though it is inspired by a radiant social philosophy it must be construed as strictly as one may for the simple reason that the guarantee of fundamental rights cannot be permitted to be diluted by implications and inferences
The Constitution which prescribes the extent to which a challenge to the constitutionality of a law is excluded must be construed as demarcating the farthest limit of exclusion
Considering the nature of the subject matter which article 31 B deals with there is no justification for extending by judicial interpretation the frontiers of the field which is declared by that article to be immune from challenge on the ground of violation or abridgement of fundamental rights 320 D E b The article affords protection to Act and Regulation specified in the Ninth Schedule
Therefore whenever a challenge to the constitutionality of a provision of law on the ground that it violates any of the fundamental rights conferred by Part III is ought to be repelled by the State on the plea that the law is placed in the Ninth Schedule the narrow question to which one must address oneself is whether the impugned law is specified in that Schedule
If it is the provisions of article 31 B would be attracted and the challenge would fail without any further inquiry
On the other hand if the law is not specified in the Ninth Schedule the validity of the challenge has to be examined in order to determine whether the provisions thereof invade in any manner any of the fundamental rights conferred by Part III
It is then no answer to say that though the particular law as for example a Control Order is not specified in the Ninth Schedule the parent Act under which the order is issued is specified in that Schedule 320 E G c Extending the benefit of the protection afforded by article 31 B to any action taken under an Act or Regulation which is specified in the Ninth Schedule
is an unwarranted extension of the provisions contained in Article 31 B neither justified by its language nor by the policy or principle underlying it
When a particular Act or Regulation is placed in the Ninth Schedule the Parliament may be assumed to have applied its mind to the provisions of the particular Act or Regulation and to the desirability property or necessity or placing it in the Ninth Schedule in order to obviate a possible challenge to its provisions on the ground that they offend against the provisions of part III
Such an assumption cannot in the very nature of things be made in the case of an order issued by the Govt
under an Act or Regulation which is placed in the Ninth Schedule The fundamental rights will be eroded of their significant content if by judicial interpretation a constitutional immunity is extended to Orders to the validity of which the Parliament at least theoretically has had no opportunity to apply its mind
Such an extension takes for granted the supposition that the authorities on whom power is conferred to take appropriate action under a statute will act within the permissible constitutional limitations a supposition which past experience does not justify and to some extent falsifies
321 C F 2
The unholding of laws by the application of he theory of derivative immunity is foreign to the scheme of our Constitution and accordingly Orders and Notifications issued under Acts and Regulations which are specified in the Ninth Schedule must meet the challenge that they offend against the provisions of Part III of the Constitution
The immunity enjoyed by the parent Act by reason of its being placed in the Ninth Schedule cannot proprio vigore be extended to an off spring of the Act like a Price Control Order issued under the authority of the Act
It is therefore open to the petitioners to invoke the 295 writ jurisdiction of this Court for determination of the question whether the provisions of the Price Control Order violates article 14 1911f and 191g of the Constitution
321 F G
Vasantlal Maganbhai Sanjanmal vs State of Bombay and Ors
   Latafat Alikhan and Ors
vs State of UP 1971 Supp
SCR 719 Explained
Godavari Sugar Mills Ltd and Ors
vs section B Kamble and Ors
 Applied
Price Control Order does not offend against article 14 of the Constitution 323 F a The averments in the various Writ Petitions are far too vague and general to justify the application of article 14
The petitioners have failed to show by acceptable data that they fall into a separate class altogether and cannot therefore be subjected to the restraints of a single order of price fixation
323 H 324 A b Variation in economic factors governing the mustard oil trade from region to region or differences in the pattern of trade
in different growing regions and manufacturing centres cannot by itself justify the argument that different prices must be fixed for different regions and that failure to do so would necessarily entail discrimination
324 A B c Dealers in mustard oil wherever they operate can legitimately comprise a single class for the purpose of price fixation especially as it is undisputed that the two basic constants of the trade are  i the cost of mustard seed constitutes 94 per cent of the cost of the mustard oil and ii about 312 kilograms of seed goes into the extraction of one kilogram of oil
Fixation of different prices for different regions will in this background frustrate the very object of the exercise that an essential commodity should be made available to the consumer at a fair price
324 B C d There is no reliable data to support the contention that dealers in different regions are so differently situated in the context of and in relation to the purpose for which the Price Control Order is issued that fixation of common price for dealers all over the country can reasonably be described as discriminatory as against some of them
324 E e The charge of over inclusiveness for the mere reason that dealers in a certain region have to import their raw material from another region cannot be accepted
Perhaps the high rate of turnover and consumption in a region like West Bengal may easily absorb the additional cost of freight
The Government of India
in fixing one common price for mustard oil for the whole country has not acted like Herod who ordered the death of all male children born on a particular day because one of them would some day bring about his downfall
324 F F State of Gujarat vs Sri Ambica Mills Ltd   782 referred to
f The mechanics of price fixation has necessarily to be left to the judgment of the executive and unless it is patent that there is hostile discrimination against a class of operators the processual basis of price fixation has to be accepted in the generality of cases as valid
325 B Saraswati Industrial Syndicate Ltd vs Union of India  referred to 4
The Price Control Order is not violative of the petitioners  rights under articles 191f and 191g of the Constitution
326 G a It is impossible to determine in these writ petitions the accuracy of the petitioners  allegation that they purchase mustard seed from month to
month and from week to week as the crushing of the seed progresses
Most of 296 the growers of mustard seed are small agriculturists who have hardly any staying ability and are therefore compelled to
sell their produce immediately after the harvesting season that is to say between March and June
If the prices of mustard seed prevailing during that period are taken into account it is difficult to accept that the price of Rs 10 per kilogram is so patently unreasonable as to be violative of the petitioners  right to hold property or to do trade or business 326 G H 327 A b Since the bulk of the purchases are made by the petitioners immediately after the harvesting season considering the general pattern of the trade in mustard seed it is wholly unnecessary to control the price of mustard seed in order effectively to control the price of mustard oil
327 B C c The contention that the consequence of the Price Control Order cannot be looked at for the purpose of deciding whether the price of mustard oil was fixed in accordance with legally acceptable principles cannot be upheld
No Court can shut its eyes to the fact that the Price Control Order produced the salutary and tangible result of bringing down the price of raw material
327 C D d A mere literal or mechanical construction is not appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards thereunder are concerned
In cases of such a kind two rules of construction have to be kept in mind  1 that Courts generally lean towards the constitutionality of a legislative measure upon the presumption that a legislature will not deliberately flout a constitutional safeguard or right and that 2 while construing an enactment the Court must examine its object and the purpose the mischief it seeks to prevent and ascer tain from such factors its true scope and meaning
327 E F Vrajlal Manilal  Co and Ors
vs State of MP and Ors
  409 reiterated
e The dominant purpose of the provisions of sub section 1 and 2c of Section 3 of the is to ensure the availability of essential commodities to the consumers at a fair price
And though patent injustice to the producer is not to be encouraged a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 31 and section 32c of the 
The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration
328 A B f Even in the absence of satisfactory proof of the extent of the profits made by the petitioners in past years the circumstance that the petitioners may have to suffer a loss over a short period immediately following upon the promulgation of the Price Control Order will not render the Order constitutionally invalid
The interplay of economic factors and the laws of demand and supply are bound eventually to
have their impact on the pattern of prices prevailing in the market
If the dealer cannot lawfully sell the finished product at more than Rs 10 per kilogram the price of raw material is bound to adjust itself to the piece of the product
Subsequent events unmistakably demonstrate the effect of such interplay and the favourable reaction which the Price Control Order has produced on the price of mustard seed
In matters of the present nature such provisions have to be viewed through a socially constructive
not legally captious microscope to discover a glaring unconstitutional infirmity that when laws affecting large chunks of the community are enacted stray misfortunes are inevitable and that social legislation without tears affecting vested rights is virtually impossible
328 C F B Panerjee vs Anita Pan   782 followed
g The impugned Price Control Order is not so unreasonable as to be constitutionally invalid
It is enough compliance with the constitutional mandate if the basis adopted for price fixation is not shown to be so patently unreasonable as to be in excess of the power to fix the price
328 G 297 Saraswati industrial Syndicate vs Union of India   referred to
h Immediately prior to the promulgation of the price control order the consumer was denied the chance to get the mustard Oil at a price which he could reasonably afford
For him therefore the supply had already driedup
If after the issuance of the order the supply position shows no improvement that consequence cannot be legitimately attributed to the operation of the Price Control Order
At worst the Order can then be said to have failed to achieve its purpose
329 A B i Just as the industry cannot complain of rise and fall of prices due to economic factors in an open market it cannot similarly complain of some increase or reduction in prices as a result of a notification issued under section 31 of the because such increase or reduction is also based on economic factors
Ensuring a fair price to the consumer was the dominant object and purpose of the and that object would be completely lost sight of if the producer s profit was kept in the forefront
329 D E Shree Meenakshi Mills Ltd vs Union of India  Secretary of Agriculture vs Central Reig Refining Co 94 Law
Edn 381 applied
Panipat Cooperative Sugar Mills vs Union of India ALR  Anakapalle Cooperative Agricultural and Industrial Society Ltd vs Union of India AIR 1973 SC 734 held inapplicable
Premier Automobiles Ltd  Anr
vs Union of India   distinguished j Courts of law cannot be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation
331 A B 5
The contention that the Price Control Order is arbitrary because it is not limited in point of time is without any merit
In the very nature of things orders passed under section 31 read with section 32 of the are designed primarily to meet urgent situations which require prompt and timely attention
If a price control order brings about an improvement in the supply position or if during the period that such an order is in operation there is a fall in prices so as to bring an essential commodity within the reach of the ordinary consumer the order shall have lost its justification and would in all probability be withdrawn
That in fact is what has happened in the instant case
It appears that the supply position having improved
or so at any rate seems to be the assessment of the situation by the Government the order has been recently withdrawn
331 C E 6
The intervention of the middlemen is an acknowledged reality of all trades and businesses
The fact that the middleman s profit increases the price of goods which the consumer has to pay is axiomatic
It has been the endea vour in modern times for those responsible for social control to keel the middleman s activities to the minimum and to attempt to replace them largely by cooperative purchase societies of consumers
The elimination of the middlemen is bound to cause trouble and inconvenience but the ultimate saving in the cost of the finished product could more than balance that inconvenience
The argument of the petitioners really amounts to a rigid insistence that they are entitled to carry on their business as they please mostly in a traditional manner regardless of its impact on public interest
But property rights are not absolute and important as the right of property may be the right of the public that such rights be regulated in common interest is of greater importance
331 G H 332 A B Led Nebbia vs People of the State of New York 78 Law Edn
p 940 and Narendra Kumar and  Ors
vs Union of India and Ors
  referred to
298 7
If the Government has got the power to fix a fair price of an essential commodity it cannot be said that they have under a pretext trespassed upon a field which does not properly belong to them
The power conferred by section 31 of the is undoubtedly purposive
The Price Control Order was promulgated by the Government in order to achieve the purpose set out in section 31 of the Act
The fact that a legislative remedy or an administrative order passed in exercise of a statutory power is ineffective to mitigate an evil may show that it has failed to achieve its purpose highlighting thereby the paradox of reform
By fixing a fair price for mustard oil the Government has not committed a veiled and subtle trespass upon private rights or upon a legislative field which is not open to them to occupy
332 E G K C Gajapati Narayannai Rao and Ors vs State of Orissa   Joseph Beauharis vs People of the State of Illinois 96 Law
919 referred to
To be able to find fault with a law is not to demonstrate its invalidity
The Parliament having entrusted the fixation of prices to the expert judgment of the Government it would be wrong for this Court to examine each and every minute detail pertaining to the Governmental decision
The Government is entitled to make pragmatic adjustments which may be called for by particular circumstances and the price control can be declared unconstitutional only if it is patently arbitrary discriminatory or demonstrably irrelevant to the policy which the legislature is free to adopt
The interest of the producer and the investor is only one of the variables in the constitutional calculus of reasonableness and Courts ought not to interfere so long as the exercise of Governmental power to fix fair prices is broadly within a Zone of reascuableness
The impugned Price Control Order is therefore valid and the challenge made thereto by the petitioners has to fail
333 B G Metropolis Theater Co vs City of Chicago 57 Lawyers Edn 730 Premier Automobiles  Anr
vs Union of India  permian Basin Area Rate Cases  312 referred to
Per Beg CJ On behalf of Desai J and himself Contra 1
Article 31 B no doubt speaks of specified Acts and Regulations
But it makes no distinction whatsoever between any grants of powers and their exercise
Powers are granted or conferred so as to be exercised and not to be kept in cold storage for purposes of some kind of display only as though they were exhibits in a show case not meant for actual use
The whole object of a protection conferred upon powers meant for actual use is to protect their use against attacks upon their validity based upon provisions of Part ITT
If this be the correct position it would quite naturally and logically follow that their use is what really protected
30F H 2
A delegated or derivative power could not rise higher or travel beyond the source of that power from which it derives its authority and force If Bagla s case is good law no party has questioned its correctness Articles 14 and 19i f d g could be deemed to be written into Section 3 of the Act itself They would control the scope of orders which could be passed under it
That is undoubtedly the way in which guarantees of fundamental rights could and should function if the Act containing Section 3 itself had not been placed in the Ninth Schedule so as to take away the guarantees of fundamental rights from the substance of it
309 B C Hart Krishna Bagla vs State of MP  referred to
If the effect was to widen the orbit of section 3 of the or to remove the limitations put by Articles 14 and 19 upon the exercise of powers under it the logical and natural result would be to enlarge the scope or sweep of the Orders passed under it
But if it has no such upon section 3 of the Act itself orders passed under it would continue to subject to provisions of section 3 of the Act as controlled by Articles 14 and of the Constitution so that they will have to satisfy what may be described 299 as a dual test firstly that of provisions of section 3 of the Act itself and secondly that of provisions of Chapter III of the Constitution containing fundamental rights
309 D F 4
The Ninth Schedule does not provide any protection at all against attacks based upon either the vice of excessive delegation or want of legislative competence defects which could be said to vitiate the grant of powers despite their place in the Ninth Schedule
The distinction between protection to a mere grant of powers and to their exercise therefore seem specious in the context of the protection
It cannot explain why if section 3 is protected by the Ninth Schedule the exercise of power granted by it which manifests itself in control orders is not protected
It would be so protected if at all not because the Orders to be made in future as such are protected but because the power actually conferred and found in existence in section 3 is protected
The protection is given to a power which is specified and in existence which has to be used for certain purposes and not to what may be specified in future
310 A C 5
If orders passed under section 3 of the Act also get a protection it would be what may be described as a derivative protection so long as the Orders are covered by section 3 of the Act
It is available only so long as and because the source of their authority Section 3 of the
Act is protected by the Ninth Schedule
Orders purporting to be made under section 3 of the Act must however satisfy the tests found in section 3 itself in every case They can never escape the basic tests whether section 3 the source of their authority is protected by the Ninth Schedule or not
The further tests imported by Articles 14 and 19 of the Constitution into section 3 could be applied to these orders only so long as these added tests are attached to or can be read into section 3 of the Act but not after they have been deliberately delinked or removed from section 3
The term skeleton legislation is used sometimes for denoting the broad outlines of a particular scheme found in an Act of which details are to be filled in later by administrative orders of experts  cannot be spoken of as a piece of skeleton legislation
310 D F G 6
Section 3 sub section 1 of the Act provides for delegation of powers to the Central Government in order that it may carry out certain purposes by framing appropriate schemes and evolving policies which may meet the purposes of the Act
These schemes and policies to serve the stated purposes may differ as regards the nature of means adopted and even in the particular objectives sought at particular times to accord with changing circumstances
Orders passed under section 3 of the Act in pursuance of such schemes or policies do not become parts of the Act for the purposes of the Ninth Schedule of the Constitution
Orders passed under the Act before its inclusion in the Ninth Schedule could also be said to be protected directly by the Ninth Schedule if mentioned there
But there could be no independent and direct protection of this Schedule conferred upon orders passed under the Act
310 G H 311 A B Godavari Sugar Mills Ltd and Ors
vs section B Kamble and Ors referred to
If the section under which the control order was passed is protected from any attack based on the provisions
of Part III of the Constitution the only question will be whether the Control Order is covered by the protected empowering provision
If it falls outside the empowering Provisions it would be invalid in any case
If it falls within the empowering Provision but could be found to be struck by the provisions of article 191f and g of the Constitution an attack on the Control Order by
reason of Article 191f and g would be really on against the empowering provisions itself which is protected
The Control order therefore enjoys what may be called derivative protection
312 A C Latafat Alikhan and Ors
vs State of UP 1971 SUPP
SCR 719  720 applied
The Act was put in the Ninth Schedule to prevent the invocation of Articles 14 19 and 31 for obstructing measures to necessary as price fixation of 300 essential commodities is for promoting the objectives of a socialist welfare economy
This would be a sufficient answer to all the argument on the unconstitutionality of fixing the price of mustard oil below what is claimed to be the cost price
314 G As the impugned order of 30th September 1977 falls within the provisions of section 3 question of violating a fundamental right does not arise
If an impugned order were to fall outside section 3 of the Act no question of applying any test of reasonableness contemplated by Article 196 need arise because it would then be purely illegal restriction upon the right conferred by article 191g which would fail for lack of authority of any law to support it
315 B C 9
Section 3 makes necessity or expediency of a control order for the purpose of maintaining or increasing supplies of an essential commodity or for securing its equitable distribution at fair prices the criteria of validity
It is evident that an assessment of either the expediency or necessity of a measure in the light of all the facts and circumstances which have a bearing on the subjects of price fixation is essentially in a subjective matter
Objective criteria may enter into determination of particular selling prices of each kilogram of mustard oil at various times
But there is no obligation here to fix the price in such a way as to ensure reasonable profits to the producer or manufacturer because the object is to secure equitable distribution aid availability at fair prices so that it is the interest of the consumer and not of the producer which is the determining factor in applying any objective tests at any particular time
The most important objective fact in fixing the price of mustard oil which is consumed generally by large masses of people of limited means is the paying capacity of the average purchaser or consumer
312 D G 10
Principles of fair fixation of price apply only in those cases where there is an obligation upon the price fixing authority to take certain matters into account which have a bearing on cost of production and are designed to secure fair share of profits to the producers
Section 3 of the Act has very different purposes in view
It may be that the cost of production and reasonable amount of profits to the manufacturers have an indirect bearing on matters set out in section 31 of the Act
But in cases where the effects of a policy or a measure adopted in achieving purposes set out in section 31 are matters of guess work after experimentation the actual consequences can be indicated with a fair amount of certainty only by giving sometime for a policy to work out and reveal its results
Presence of such features in a case cannot invalidate price fixation of which the direct objects are set out in section 31 of the Act
315 D F A price fixation to meet the general purposes set out in section 31 of the Act aimed at reversing the vicious inflationary spiral of rising prices
may appear arbitrary or unreasonable judged by standards applicable to price fixation aimed at giving reasonable profits to producers which is not the object of section 31 of the Act
315 G H The whole machinery of control of supplies with a view to their equitable distribution and securing their availability at fair prices  1 is much more comprehensive than the machinery for price fixation in special cases on given principles
Price fixation on certain given Principles is enjoined under section 33 of the Act only when there is an order under section 2f of the Act compelling the sale of a whole stock or a specified Part of it to the Central or a State Government or to authorities or persons as directed by them
Again section 3 a iii provides a machinery for price fixation in special cases
Similar is position with orders under sections 3B and 3C 316 D E 11
It is not the function of Supreme Court or of any Court to sit in judgment over matters of economic policy as must necessarily be left to the Government of the day to decide
Many of them as a measure of price fixation must necessarily be are matters of prediction of ultimate results on which even experts can seriously err and doubtless differ
Courts can certainly not be expected to decide them without even the aid of experts
That a price fixed at Rs 10 per kg as a part of an attempt to break the vicious inflationary circle is not at all an unreasonable step
313 C D 301 But the Court can take judicial notice of subsequent facts
The effect of the order of 30 9 77 was so beneficial that the rice of mustard oil has fallen in the neighbourhood of Rs 7 per kg
which illustrates the extreme inadvisability of any interference by any
Court with measures of economic control and planning directed at maximising general welfare
It is not the function of the
Courts to obstruct or defect such beneficial measures devised by the Government of the day
Courts cannot pass judgments on the wisdom of such actions unless actions taken are so completely unreasonable that no law can be cited to sanction them
314 H 315 A B 12
Unless by the terms of a particular statute or order price fixation is made a quasi judicial function for specified purposes or cases it is really legislative in character because it satisfies the tests of legislation
A legislative measure does not concern itself with the facts of an individual case
It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class
In the case before us the control order applies to sales of mustard oil anywhere in India by any dealer
Its validity does not depend on the observance of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity
The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed or in other words by reasonableness judges by possible or probably consequences
317 G H 318 A Panipat Corporation Sugar Mills vs Union of India 1973 2 SCR 860 Meenakshi Mills Ltd vs Union of India  Premier Automobile Ltd vs Union of India   Saraswati Industrial Syndicate Ltd etc
vs Union of India   referred to
Even executive or legislative action must be confined to the limits within which it can operate
It must fall reasonably within the scope of the powers conferred
The scope of the powersconferred depends upon terms of the empowering provision
The empowering provision in the instant case is widely worded
The validity of section 3 has not been challenged
and it could not be challenged by reason of Article 31 B after its inclusion in the 9th Schedule of the Constitution
318 B C 14
In a case in which the Central Government is judge of expediency and necessity to the extent that even the protection of the guaranteed fundamental rights cannot stand in the way of its view or opinion of such necessity and expediency a challenge on the grounds on which it was attempted could not succeed
318 C D 15
Patent injustice and unreasonable injury to the interests of consumers must be shown if a measure of price control in the nature of either legislative or purely administrative action is assailed
So long as the action taken is not so patently unjust and unreasonable as to lead to the irresistible conclusion that it could not fall within section 31 of the Act it cannot be set aside or declared invalid
The test has to be that of consequences on objects sought by section 31 of the Act
Judged by this test the order of 30th September 1977 fall within the purview of section 3 of the Act and it has served its purposes
319 A C Leo Nebbia vs People of the State of New York 29 US 78 Law
Edn 502 Permian Basin Area Rate Cases 20 Law Edn
2d p 312 referred to