Case: P.P. Enterprises Etc Vs. Union of India and Others Etc

In exercise of powers conferred by section 3 of the Essential Commodities Act, 1955, Sugar Control order 1966 was issued by the Government of India, Ministry of Agriculture. Clause S of that order empowered the Central Government to issue directions, inner alia, to recognised dealers regarding production, maintenance of stock, storage, sale, grading, packing, making weighment, disposal, delivery and distribution ofOrder No. GSR-410-E/Ess. Com./Sugar dated the 14th of Jul y, 1980 the Central Government issued the following directions:"In exercise of the powers conferred by clause 5 of the Sugar (Control) order, 1966, and in supersession of the order of the Government of India in the Ministry o f Agriculture (Department of Food) No. GSR-60 (e)/Ess. Com./Sugar, dated the 26th February, 1980, the Central Government hereby directs that no recognised dealer shall keep in stock at any time-(1) Vacuum pan sugar, in the places mentioned below, in excess of the quantities mentioned against each-(i) in Calcutta and extended area-(a) recognised dealers who import sugar from outside West Bengal-3, 500 quintals,(b) other recognised dealers-250 quintals;(ii) in other places-(a) in cities and towns with a population of one lakh or more-250 quintals;(b) in other towns with a population of less than one lakh-100 quintals.(2) Khandsari (open pan sugar) in excess of 250 quintals.Provided that no recognised dealer shall hold any stock of Vacuum pan sugar or Khandsari (open pan sugar) for a period exceeding ten days from the date of receipt by him of such stock of sugar or Khandsari. . .Provided further that nothing in this order shall apply to the holding of stocks of sugar-(i) on Government account;by the recognised dealers nominated by a State Government or an officer authorised by it to hold such stock for distribution through fair price shops; or(iii) by the Food Corporation of India.Explanation:-For the purpose of this order, "Calcutta and extended area" means the areas specified in the Schedule to the notification of the Government of West Bengal No. 7752 F.S./14-R-92/61, dated the 16th December, 1964."

Court's reasoning:
The language of section 3 (1) coupled with clause (d) of subsection (2) of section 3 is wide enough to cover the impugned order. Section 3 (1) authorises the Central Government to pass an order for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein if it is of opinion that it is necessary or expedient to do so for securing the equitable distribution and availability. at a fair price of the essential commodity. The same power has been made more specific by clause (d) of sub-section (2) of section 3, which provides for regulating by licences. p ermits or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity. Sugar, which term includes khandsari, is an essential commodity and over the years it has become a scarce commodity. In the public interest it became essential to pass the impugned order to secure its equitable distribution and availability at fair prices. To that end it became necessary to prevent hoarding and black-marketing. The expression " to secure their equitable distribution and availability at fair prices" is wide enough to cover the impugned order. Likewise, the expression "storage and distribution" used in clause (d) of sub-section (2) of section 3 should be giv en a liberal construction to give effect to the legislative intent of public welfare. So construed, the impugned order is fully protected and is not ultra vires section 3 of the Essential Commodities Act, 195 5.This leads us to th e second contention, namely, the impugned order being violative of Article 19 (1) (g) of The Constitution inasmuch as it imposed unreasonable restriction on the right of the petitioners to carry on trade orfacts of the present cases are materially different from the facts of H . Sanjeeviahs case (supra). In that case the impugned provisos to rule 2 completely prohibited the transport of the forest produce between sun-set and sun- rise. But in the cases in hand the direction enjoined a recognised dealer not to k eep sugar in stock at any time in excess of the quantity specified therein. It only seeks to regulate the limit of storage of sugar and does not prohibit its storage. The case of H. Sanjeeviah, therefore, is not of much help to the petitionersnow take up the last contention, namely, the impugned order being violative of Article 14 of the Constitution. The learned counsel seeks to invoke Article 14 on two grounds: (1) the impu gned order applies two standards, one for the dealers, at Calcutta, who had been authorised to keep 3, 500 quintals at one time, while the dealers at other places have been authorised to keep only 250 quintals in cities with a population of one lakh or more, and only 100 quintals in other towns with a population of less than onefixation of limits for storing sugar in Calcutta and other places is not arbitrary but is based on reasonable classification. The government is the best judge of the situation in a particular State and that quantity of sugar will meet the exigencies of the situation at a particular place is purely a governmental function. For one, Calcutta serves as a feeder line to meet the requiremen ts of sugar to the eastern part of the country, and therefore, the stocks of sugar to be held by the dealers in Calcutta are not required for consumption in Calcutta alone Besides, Calcutta being far away from the sugar manufacturing units in Bih ar and Uttar Pradesh, from where bulk of supplies are obtained, sugar is transported by the wholesale dealers in railway wagons which take sometime unusually longer time in transit. These and various other factors have been taken into consideration by the Government while fixing the storage limits of sugar for the dealers insecond ground for invoking Article 14 of the Constitution is that the impugned order is unreasonable and impracticable in that no dealer can be sur e of the sale of sugar on any particular day. If per chance a dealer is not able to dispose of the excess sugar on a particular. day he would expose himself to punishment under the Act. No provision has been made in the order or in the rules for the purchase by the Government of the excessargument though attractive cannot be accepted. Over the years sugar has become a scare commodity and people have to purchase it even at a prohibitive price. In the circumstances it A cannot be exp ected that the dealers would not be able to sell the sugar in their stock. There is absolutely no difficulty in selling the sugar at any time at the prevalent market price. If in a rare case there is difficulty on that score we hope and trust that the concerned Government would allow a reasonable time within which the petitioners are permitted to dispose of the excess quantity of sugar, if any. In any case, in some given case there may be some hardship but it cannot be said on that account that the impugned order is violative of Article 14 of the Constitution.