11 January 1954
Supreme Court


Case number: Writ Petition (Civil) 326 of 1953






DATE OF JUDGMENT: 11/01/1954


CITATION:  1954 AIR  224            1954 SCR  803  CITATOR INFO :  RF         1954 SC 465  (8)  RF         1956 SC 479  (19)  R          1956 SC 559  (4)  F          1956 SC 676  (51)  E          1957 SC 397  (16)  RF         1957 SC 896  (12)  F          1958 SC 538  (12)  R          1958 SC 578  (168)  E&D        1960 SC 475  (9,11,13)  F          1961 SC 705  (15)  R          1961 SC1602  (12)  RF         1964 SC 370  (6)  D          1971 SC 474  (6)  R          1974 SC 366  (61,94)  D          1974 SC 651  (17)  R          1978 SC 771  (14)  RF         1978 SC1457  (63)  RF         1981 SC1829  (95)  RF         1988 SC1089  (11)

ACT:      Constitution  of India, Arts. 19(1) (g), 19  (6)--Clause  4(3)  of  the  Uttar  Pradesh  Coal   Control  Order,  1953,  whether ultra vires the Constitution.

HEADNOTE:    A  law   or   order   which   confers   arbitrary    and uncontrolled power  upon  the  executive  in  the matter  of regulating   trade   or  business  in   normally   available commodities   must be held to be unreasonable.   Under   cl. 4(3)  of the  Uttar Pradesh  Coal Control Order, 1953,   the licensing  authority has been given absolute power to  grant or  refuse to grant,  renew  or refuse to  renew,   suspend, revoke,   cancel  or modify  any  licence under  this  Order and the only thing he has to do is to record reasons for the action he takes. Not only so,  the power could be  exercised by  any person to whom the State Coal Controller may  choose to delegate  the same,  and the choice can be made in favour of  any and every person. Such provisions cannot be held  to



be reasonable:    Held, therefore that  the  provision of cl. 4(3)  of the Uttar  Pradesh  Coal Control  Order, 1953,  must be held  to be void as 104 804 imposing an unreasonable  restriction  upon  the freedom  of trade  and business guaranteed under art. 19 (1) (g) of  the Constitution  and not coming within the protection  afforded by cl. (6) of the article. Yick Wo v. Hopkins (118 U.S. 356 at 373) referred to.

JUDGMENT: ORIGINAL JURISDICTION:  Petition No. 326 of 1953.     Original  Petition under article 32 of the  Constitution of India.     S.C.   Isaacs  (S.  K.  Kapur,  with  him)    for    the petitioners. H. J. Umrigar for the respondents.     1954.  January  11.  The  Judgment  of  the  Court   was delivered by MUKHERJEA  J.--This  is  an application  presented   by  the petitioners   under   article 32    of   the   Constitution, complaining   of  infraction of  their  fundamental   rights guaranteed  under  article  14 and clauses (f)  and  (g)  of article   19  (1)  of  the  Constitution  and   praying  for enforcement  of the same by issue of writs in the nature  of mandamus.     To  appreciate the contentions that have been raised  on behalf of the petitioners,  it  would be  necessary to  give a    short   narrative   of   the   material   facts.    The petitioners  are  a firm of traders who had,  prior  to  the cancellation of their licenee, been carrying on the business of retail  sellers of coal  at a coal  depot held by them in the  town   of   Kanpur.   It is  said  that   the  District Magistrate of Kanpur as well as the District Supply Officer, who  figure respectively as respondents Nos. 2 and 3 in  the petition,  had  been for a  considerable time  past  issuing directives   from   time  to  time upon the  petitioners  as well  as  other coal depot holders of  the  town,   imposing restrictions  of various  kinds upon the sale of coal,  soft coke,  etc.  It  is  stated that  prior   to  the   14th  of February,  1953,  the prices that were fixed by the District Officers  left  the  coal dealers a margin of  20  per  cent profit upon the sale of soft coke and 15 per cent profit  on the  sales of hard coke and steam coal,  such profits  being allowed  on the landed costs of the goods  up to the  depot. The  landed  costs 805 comprised  several items  and besides ex-colliery price, the middleman’s  commission and the railway freight, there  were incidental expenses of various kinds including labour  duty, loading   and  unloading  charges,  cartage   and   stacking expenses.  After making a total  of these cost elements,  an allowance was given for shortage of weight at the rate of  5 rods  and odd seers per ton in the case of soft coke  and  3 rods  and odd seers in the case of hard coke and steam coal, and  it was on the basis of the net weight  thus arrived  at that  the price was calculated.  On the  14th  of  February, 1953,  the  District  Supply  Officer  issued  a   directive reducing the selling prices of coke, coal, etc., much  below the  existing rates.  This  reduction  was  effected  in   a three-fold  manner.  In the first place, the  allowance  for



shortage of weight  was made much less than before; secondly a sum of Rs. 4-12-0 only was allowed for all the  incidental expenses, and thirdly, the margin of profit was  cut down to 10  per  cent.  On the 22nd of May, 1953,  a  representative petition  was  filed  by seven colliery  depot  holders   of Kanpur   including  the present petitioners challenging  the validity of the executive order, dated the 14th of February, 1953,   mentioned  above inter alia on the ground  that   it infringed the  fundamental rights of the petitioners   under articles   14  and  19 of  the Constitution.  There  was  an application   for ad interim stay in  connection  with  this petition  which  came  up for  hearing  before  the  learned Vacation Judge of this court on the Ist of July,  1953.   On that  day  an undertaking  was given by the State  of  Uttar Pradesh  to  the effect that they  would withdraw the  order of   the   14th   February,   1953,   and   apparently   the consideration  that weighed with the  State in  giving  this undertaking  was that  it  was  a purely   executive   order without  any legislative  sanction behind it.  The  order of the  14th February was in fact  withdrawn,  but on the  10th of July,  1953, the State of Uttar Pradesh promulgated by  a notification   an order intituled "The  Uttar  Pradesh  Coal Control  Order,  1953"  purporting  to  act  in exercise  of the  powers  conferred  upon  it  by_section  3(2)  of   the Essential  Supplies Act, 1946,  read with the notified order of the  Government of India issued under 806 section 4 of the Act. As  the constitutionality of this Coal Control   Order  is  the  main  object  of  attack  by   the petitioners   in   the  present  proceeding,  it   would  be convenient   to  set  out the  material provisions   of  the order  in  respect  of which the   controversy  between  the parties primarily centers:         "THE UTTAR PRADESH COAL CONTROL                    ORDER, 1953.     2.  In this Order unless there is anything repugnant  in the subject or context .     (a)  "Coal"   includes   coke  but   does   not  include cinder and ashes. (c)  "The  Licensing   Licensing   Authority"   means    the District   Magistrate  of the District or any other  officer authorised   by  him to perform his  functions   under  this Order  and  includes  the District  Supply  Officer  of  the district.     (d)  "Licensee" means a person holding a  licence  under the provisions of this Order in Form ’A’ or in Form ’B’.     3.  (1) No person shall stock, sell, store for  sale  or utilise    coal  for  burning  bricks  or  shall   otherwise dispose   of coal in this State except  under a  licence  in Form ’A’  or ’B’  granted under this Order or in  accordance with the provisions of this Order. (2) Nothing contained in sub-clause (1)--  (a)  Shall in so far as it relates to taking out a  licence for  stocking  or storing coal for  their  own  consumption, apply   to  the  stocks  held  by persons   or  undertakings obtaining   coal on permits  of the District Magistrate   or the  State Coal Controller for their own consumption.     (b)  Shall  apply to any person or  class  of   persons’ exempted  from  any provision  of the above   sub-clause  by the State Coal Controller, to the extent of their exemption.     4.  (1) Every application for licence under  this  Order shall  be made in the form given in Schedule I  appended  to this Order. 807     (2) A licence granted under this Order shall be in  Form



’A’  or Form ’B’ appended to this Order and the holder of  a licence  granted   under this  Order shall comply  with  any directions  that  may  be issued to  him  by  the  Licensing Authority  in  regard  to the  purchase,  sale,  storage  or distribution of coal.     (3) The Licensing Authority may grant, refuse to  grant, renew or refuse to renew a licence and may suspend,  cancel, revoke  or modify  any licence or any terms thereof  granted by him under the Order for reasons to be recorded.  Provided that  every  power which is under this Order exercisable  by the  Licensing  Authority shall also be exercisable  by  the State  Coal Controller or any person  authorised by  him  in this behalf.   7. The State Coal Controller may by  written order likewise  require any person holding stock of coal to sell the  whole or any part of the stock to such person or class  of persons  and on such terms  and prices as may be determined in accordance with the provisions of clause (8).     8.  (1) No licensee in Form ’B’ and no person acting  on his behalf shall sell, agree to sell or offer for sale, coal at  a  price  exceeding  the price to  be  declared  by  the Licensing Authority in accordance with the formula given  in Schedule III.     (2)  A licensee in Form ’A’ or any other person  holding stock of coal or any other person acting for or on behalf of such  licensees or person transferring or disposing of  such stocks to any person in accordance with clause 6 or clause 7 shall  not charge for the coal a price exceeding the  landed cost,- plus incidental and handling charges, plus an  amount not  exceeding  10  per cent of the landed cost  as  may  be determined  by  the  Licensing Authority or the  State  Coal Controller.     Explanations:--(1)  Landed  cost  means  the  excolliery price  of  the coal plus the L.D.C.C. and Bihar.  Sales  tax plus  middleman’s  commission  actually  paid  and   railway freight. 808     (2)  Incidental and handling charges  mean  the cost  of unloading  from  wagons,  transporting  to  stacking   site, unloading  at  the  stacking site, plus  godown  rent,  plus choukidari charges, if any, not exceeding Rs. 8-8-0 per  ton as  may  be determined by the Licensing Authority   or   the State  Coal  Controller according to local conditions.     11.  The District Magistrate shall within a week of  the commencement  of this Order prepare and publish in  a  local paper a list of persons carrying on the business of sale  of coal  in his district and upon the publication of the  list, the persons included therein will be deemed for purposes  of this Order to be licensee until three months next  following the  publication  of  the  list in Form A or  B  as  may  be specified.    12.  If any person contravenes any of the  provisions  of this   Order,   or   the   conditions  of  licenee   granted thereunder,  he shall be punishable under section 7  of  the Essential  Supplies  (Temporary  Powers)  Act,  1946,   with imprisonment  for a term which may extend to three’years  or with  fine or with both and without prejudice to  any  other punishment   to  which  he  may  be  liable    ........    " ’ Schedule III referred to in the Order is as follows:                 SCHEDULE III.     (Formula  for  declaration of prices of  soft  coke/hard coke/steam coal). 1.  Ex-colliery Price               Actuals.



2.  L.D.C.C. and Bihar Sales tax    Actuals. 3. Middleman’s commission           Actually Raid                                     subject to the maximum                                     laid down under clause                                     6 of the Government of                                     India Colliery Order                                         1945 4.  Railway freight                Actuals. 5. Incidental and handling    chargers including             Maximum of Rs. 8-8-0 per                                  per ton as may be determ-                                  ined by the licensing (i) Unloading from wagons.       Licensing  Authority                                 according to local condition (ii)  Transport  upto premises     provided that  at  places 0of    stacking                        which    are    extra oridenarily (iii) Unloading  and stacking   distant form the railway at the premises or depot.      way head a higher rate may be                                allowed by the Licensing                                  Authority. 809 (iv) Godown rent and chaukidari  charges, if any (v) Weighing charges, if any. 6.   Local taxes Octroi, etc.          Actuals. 7.    Shortage                Not exceeding 31/2 maunds per                               ton in the case of soft coke                               and 2-1/2 maunds in the case                               of hard coke and steam coal                               as  may  be determined by the                               Licensing Authority. 8.    Profit                  At 10 per cent on total items                               1 to 6 above except item No.5     It  is  said  that  on  the  16th  of  July,  1953,  the respondent No. 2 issued a declaration  whereby he fixed  the retail  rates  for  the sale of soft  coke,  coal,  etc.  at precisely  the same figures as they stood in  the  directive issued  on  the  14th   of   February,  1953.   The  result, according  to the petitioners, was that the  selling  prices were  reduced so much that it was not possible for the  coal traders   to carry on their business at all.  In  accordance with  the provision of clause 11  of the Control  Order  set out above,  the  petitioners’  name  appeared in the list of B  licence holders and they did apply for a licence  in  the proper  form as required by clause (4). The licence,  it  is said,  was prepared,  though  not actually delivered over to the  petitioners.   By a letter dated the  3rd  of  October, 1953,  the   Area  Rationing  Officer, Kanpur,  accused  the petitioners   of  committing a number of irregularities   in connection   with  the  carrying on of the coal  depot.  The charges  mainly were that there were two other  depots  held and  financed by the petitioners themselves in the names  of different  persons and  that  the petitioners   had  entered into  agreements  for sale of coal at more  than  the  fixed rates. The petitioners  submitted an explanation  which  was not considered to  be  satisfactory  and by  an order  dated the  13th of October,  1953, the District  Supply   Officer, Kanpur,    cancelled   the   petitioners’licence.   In   the present   petition  the  petitioners  have  challenged   the validity  of the  Coal Control  Order of the 10th  of  July, 1953,   the   declaration  of prices  made  on the  16th  of July   following  and  also  the  order  cancelling      the petitioners’ licence on the 13th of October, 1953. 15--95 S. C. I./59



     The   constitutional  validity of the   Uttar  Pradesh Coal Control Order has been assailed before us substantially on   the  ground that  its  provisions  vest  an  unfettered and   unguided  discretion  in  the  licensing authority  or the  State  Coal  Controller in the matter  of  granting  or revoking  licenses,  in fixing prices of coal  and  imposing conditions  upon the  traders;  and these arbitrary   powers cannot   only  be  exercised  by  the  officers   themselves but   may   be  delegated  at  their option  to  any  person they like.  It is  argued that these provisions imposing  as they  do  unreasonable restrictions upon the  right  of  the petitioners   to  carry  on  their’  trade   and    business conflict   with  their  fundamental rights under article  19 (1)(g) of the Constitution and  are hence void. With  regard to  the order dated the 16th  of July,  1953, by  which  the prices  of coke, coal, etc. were fixed,  it is pointed   out that  it was  not only made in exercise  of  the   arbitrary power   Conferred upon       the  licensing   authority   by the  Coal  Control Order,     but the prices, as fixed,  are palpably  discriminatory  as would   appear  from  comparing them   with  the  prices fixed under the very  same  Control Order  in  other places within  the State of  Uttar  Pradesh like Allahabad, Lucknow  and Aligarh. The order of the  13th OCtober,   1953,  cancelling  the  petitioners’  licenee  is challenged  on the ground that the charges made against  the ,petitioners  were vague and indefinite  and that the  order was   made   with   the  ulterior  object  of  driving   the petitioners   out  of  the   coal  business altogether.   It is   said   further that  as  a result of  the  cancellation order,   the   petitioners   have been   made  incapable  of disposing of the stocks already in their possession,  though at   the  same  time  the holding of such,stock   after  the cancellation  of their  licence  has become an offence under the Coal Control Order.     It  is not disputed before us that coal is an  essential commodity    under   the  Essential   Supplies    (Temporary ,Powers) Act of 1946, and by virtue of the delegation powers by  the Central  Government to  the   Provincial  Government under  section 4 of the Act, the Uttar  Pradesh   Government was  competent  to  make provisions, by notified order,  for regulating the  supply and 811 distribution   of  coal  in such a way as   they  considered proper with a  view to secure  the  objects as specified  in section  3   of the  Act.  All that is  necessary  is   that these  provisions should not infringe the fundamental rights of   the   citizens  guaranteed  under  Part  III   of   the Constitution   and  if they impose restrictions   upon   the carrying  on of trade or business, they must be   reasonable restrictions    imposed  in the  interests  of  the  general public as laid down in article  19 (6)of the Constitution.    Nobody   can   dispute  that   for   ensuring   equitable distribution   of  commodities   considered   essential   to the  community  and their  availability  at fair prices,  it is  quite  a  reasonable thing to  regulate  sale  of  these commodities  through  licensed vendors to  whom  quotas  are allotted in specified quantities  and who are not  permitted to  sell  them   beyond the prices that  are  fixed  by  the controlling    authorities.   The  power   of  granting   or withholding  licences or of fixing  the prices of the  goods would  necessarily  have  to be vested  in   certain  public officers or bodies and they would certainly have to be  left with  some amount  of discretion  in  these matters.  So far no  exception can be taken; but the mischief   arises   when the   power   conferred  on  such officers is  an  arbitrary



power  unregulated by any rule or principle and it  is  left entirely   to  the discretion of particular persons   to  do anything   they  like  without any check or control  by  any higher authority. A law or  order, which  confers  arbitrary and uncontrolled  power upon the executive in the matter  of regulating  trade   or  business   in   normally   available commodities cannot but  be held  to be unreasonable. As  has been  held,  by  this  court in Chintamon v.  The  State  of Madhya  Pradesh(1), the   phrase  "reasonable  restriction,’ connotes  that  the  limitation  imposed  upon  a person  in enjoyment  of a    right  should not be arbitrary or  of  an excessive nature beyond what is required in the interest  of the    public.    Legislation,    which    arbitrarily    or excessively invades the right, cannot be said to contain the quality  of  reasonableness,  and  unless   it   strikes   a proper balance between the freedom guaranteed under (1) [1950] S. C.R. 759. article  19  (1)  (g) and the social  control  permitted  by clause  (6) of article 19, it must be held to be wanting  in reasonableness.  It is  in the light  of  these   principles that  we  would proceed to examine  the provisions  of  this control  Order,  the validity of Which  has   been  impugned before us on behalf of the petitioners.      The  provision  contained in clause 3(1) of  the  Order that  "no  person shall  stock,  sell, store  for  sale   or otherwise utilise or dispose of coal except under a  licence granted  under  this  Order"  is  quite unexceptional  as  a general  provision;  in fact,  that  is  the primary  object which the control Order is intended to serve.  There are two exceptions   engrafted  upon  this general rule:  the  first is laid down in sub-clause (2) (a) and  to that no objection has   been or can be  taken. The  Second  exception,   which is  embodied  in subclause (2)(b)has  been  objected  to  by the learned counsel’ appearing  for the  petitioners.   This exception provides that nothing in clause 3 (1) shall  apply to  any  person  or  class of  persons   exempted  from  any provision  of  the  above  sub-clause   by  the  State  Coal Controller,  to  the extent of such exemption.  It  will  be seen   that  the Control Order nowhere  indicates  what  the grounds for exemption are,  nor have any  rules been  framed on this point.  An unrestricted power has been given to  the State  Controller  to make exemptions, and even if  he  acts arbitrarily  or  from improper motives, there  is  no  check over it  and no way  of obtaining redress. Clause 3 (2)  (b) of  the Cntrol Order seems to us, therefore, prima facie  to be  unreasonable.  We  agree, however, with Mr. Umrigar that this  portion  of  the Control Order, even  though  bad,  is severable from the rest and we are not really concerned with the  validity or otherwise of this provision in the  present case as no action  taken under it is  the  subject matter of any complaint before us.     The  more formidable objection has been taken on  behalf of  the  petitioners  against clause 4 (3)  of  the  Control Order   which  relates  to  the  granting  and  refusing  of licences.   The licensing authority has been given  absolute power  to  grant  or refuse  to grant, renew  or  refuse  to renew, suspend, revoke, cancel or 813 modify  any  licenee  under  this  Order and the only  thing he has to do is to record reasons for the action he   takes. Not  only  so,  the power could be exercised by  any  person to  whom the  State Coal Controller may choose  to  delegate the  same, and the choice can be made in favour of  any  and every  person.  It  seems to us that such provision   cannot be  held to be reasonable. No rules have been framed and  no



directions  given on these matters to regulate or guide  the discretion  of  the licensing   officer.   Practically   the Order   commits   to  the  unrestrained  will  of  a  single ’individual the power to grant, withhold or cancel  licences in  any  way he chooses and there is nothing  in  the  Order which  could  ensure a proper execution  of  the  power   or operate as  a check  upon injustice  that might result  from improper  execution   of the same.   Mr.  Umrigar   contends that  a sufficient  safeguard  has  been  provided   against any abuse of power by reason of the fact that the  licensing authority  has got to record reasons for what he does.  This safeguard, in our opinion, is hardly effective; for there is no  higher  authority  prescribed in  the  Order  who  could examine the propriety of these reasons and revise or  review the  decision   of the subordinate   officer.  The  reasons, therefore, which  are required  to be  recorded are only for the personal  or subjective satisfaction  of the   licensing authority   and   not  for  furnishing  any  remedy  to  the aggrieved  person.  It  was pointed out  and  with   perfect propriety   by   Mr. Justice  Matthews  in   the  well-known American case of Yick  Wo v. Hopkins(1), that the action  or non-action of officers placed in such position  may  proceed from  emmity or prejudice,   from  ....  partisan   zeal  or animosity,  from favouritism and Other improper   influences and  motives which are easy of concealment and difficult  to be  detected and exposed and  consequently  ’the   injustice capable of being wrought under’cover  of  such  unrestricted power becomes apparent  to every man, without the  necessity of detailed investigation. In our  opinion, the provision of clause 4(3) of the Uttar Pradesh Coal control Order must  be must   be   held  to  void  as  imposing   an   unreasonable restriction  upon   the  freedom (1) 118 U. S. 356 at 373. 814 of  trade   and business_guaranteed   under  article   19(1) (g)of the Constitution and  not coming within the protection afforded by clause (6) of the article.     As  this provision forms an integral part of the  entire structure   of  the Uttar Pradesh Coal  Control  Order,  the order cannot operate properly unless the provision of clause 4  (3)  is brought  in conformity with   the  constitutional requirements    indicated   above.  The   licenee   of   the petitioners  having  been  cancelled  in pursuance with  the above   clause  of  the  Control  Order,   the  cancellation itself  should  be  held to be  ineffective  and     is  not necessary  for  us  to enquire further whether  or  not  the grounds  upon  which the  licensing authority purported   to act   were vague or idefinite  or  could  constitute  proper grounds for cancellation.     The  two  other clauses of the Control  Order  to  which exception   has been  taken  on behalf  of  the  petitioners are clauses (7) and (8). Clause (7) empowers the State  Coal Controller  to direct, by written order, any person  holding stock  of coal to sell the whole or any part of the stock to such person or class of persons and on such terms and prices as may be determined in accordance  with  the  provision  of clause (8).  Clause  8 (1) provides that no licensee in Form ’B’  shall sell or agree to sell coal at a  price  exceeding the  price to be declared by  the  licensing  authority   in accordance with the formula  given  in Schedule  III.   With regard  to  both  these   clauses,  the  contention  of  the petitioners’   counsel, in substance,  is that  the  formula for  determining the price, as laid down in  Schedule   III, is  per  se unreasonable as it is made   dependent  on   the exercise of an unfettered and uncontrolled discretion by the



licensing authority.  An unfair determination  of the  price by  the licensing authority, it is argued, would be  totally destructive  of the business  of  the coal  traders and  the grievance  of the petitioners is that that is  exactly  what has been done by the declaration of prices made on the  16th of July, 1953.     We  have examined the formula given in Schedule  Iii  to the Control Order  with  some care and on the materials that have been actually placed before us,  we are 815 not   in   a  position  to   say  that   the   formula    is unreasonable.   ’The   prices,   as   said   already,    are calculated  on the basis  of the landed  costs of coke   and coal up to the  depot, ’to which  a profit  of 10 per   cent is  added.  The  landed costs comprise seven  items  in  all which  are  enumerated’ in Schedule  III.  With   regard  to items 1, 2, 3, 4  and 6 of the Schedule the actual costs are taken into, account  and to that  no objection  can possibly be  taken. The entire dispute is with regard  to  incidental charges  specified   in   item  5  and  the   allowance   or shortage which forms item 7.   So far as incidental  charges are   concerned, the Schedule allows a maximum of Rs.  8-8-0 per  ton  to  be  determined  by  the  licensing   authority according   to  local  conditions.  The   rates  undoubtedly vary   according  to  local  conditions  and some amount  of discretion must have to be left in such cases  to the  local authorities.   The   discretion  given   to  the   licensing authority   in  fixing these  rates  is,  however,   not  an unlimited  discretion,  but  has  got to be  exercised  with reference to the condition prevalent in the  locality   with which   the   local   officers, must   be  presumed   to  be familiar. The  grievance  of the  petitioners is that in the declaration  of 16th of July, 1953, the licensing  authority allowed  incidental charges only at the rate of  Rs.  4-12-0 per  ton  and  that  is  grossly unfair.  It is pointed  out that  at   Lucknow,  Aligarh, Allahabad  and  other   places much   higher  rates  were  allowed,  ’though    the   local conditions of these places  are almost identical; and  there has been consequently a discrimination in this respect which makes  the declaration  void altogether.   The    statements that    have  been  made   by   the   petitioners   in  this connection   are not supported  by  any    affidavit of  any person  who is familiar with the  local  conditions  in  the other   places and  on  the  materials   that we  have   got here we are unable  to  say  that  the rates  fixed  by  the licensing authority  of Kanpur  are  really  discriminatory. It   is  certainly  not  open to us to  substitute  our  own determination  in tile matter of fixing the prices for  that of  the  licensing authority and provided we  are  satisfied that the discretion that has been vested in a public officer is not an uncontrolled  discretion and no  unfair 816 discrimination  has  resulted from the exercise  of  it,  we cannot  possibly  strike  down  as  illegal  any  order   or declaration made by such officer.      The  same  reasons  apply,  in  our  opinion,   to  the seventh  item of Schedule  III which relates  to  allowances for  shortage   of weight.  Here  also  the   Control  Order specifies    a  maximum  and  the   determination   of   the allowance   in  particular  cases  has  been  left  to   the discretion   of   the  licensing  authority.  We   are   not satisfied  from  the materials placed before  us  that  this provision   is   unfair  or  discriminatory.   The   formula allows  a profit of loper cent upon the cost items with  the exception of item No. 5 which relates to incidental charges.



We   do not  know why  this  item has  been omitted and  Mr. Umrigar,  appearing for  the  respondents, could not suggest any  possible reason for it.  But even then, the  result  of this  omission would only be to lower the  margin of  profit a little below  10 per  cent and nothing  more. If the other traders   in  the  locality      are  willing  to  carry  on business  in coal with that amount of profit,  as is  stated on  the  affidavits  of  the respondents, such  fixation  of profit  would undoubtedly be in the interests of the  public and  cannot be held to be unreasonable.  The   counsel   for the  petitioners  is not right in his  contention  that  the Control  Order has only fixed the maximum profit at  10  per cent  and  has left it to the discretion  of  the  licensing authority  to reduce it in any way he likes.   Schedule  III fixes  the profit at 10 per cent upon the landed costs  with the exception of item No. 5 and as this is not the  maximum, it  would have  to  be  allowed  in  all  cases   and  under clause 8 (1), the ’B’ licensees are to sell their stocks  of coal  according  to  the prices fixed  under  Schedule  III. Clause 8 (2) indeed is not very clearly worded, but we think that all that it provides is to impose a disability upon all holders of coal stocks to charge prices exceeding the landed costs  and a profit upon the same not above  10   per   cent as   may  be  determined  by  the licensing  authority.  The determination spoken of here must be in accordance with what is  laid  down in Schedule III and that, as  has  been  said above, does specify a fixed rate and not a maximum and does’ not 817 allow  the  licensing authority to make  any  reduction  he: likes.   On the whole we are of the opinion that clauses  (7 is  and (8) of the Control Order do not impose  unreasonable restrictions  upon  the  freedom of  trade  enjoyed  by  the petitioners and consequently the declaration. of the 16th of July,  1953, cannot I;e held to be invalid.  The  result  is that,  in our opinion, clause 4 (3) of the Control Order  as well  as the cancellation of the petitioners licence  should be held to be invalid and -a writ in the nature of  mandamus would   issue  against  the  respondents  opposite   parties preventing them from enforcing the cancellation order.   The rest  of the prayers of the petitioners are disallowed.   We make no order as to costs. Petition partly allowed. Agent  for  the  petitioners: Ganpat  Rai. Agent for the respondents: C. P. Lal.