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PETITIONER: PRAG ICE & OIL MILLS & ANR. ETC.

       Vs.

RESPONDENT: UNION OF INDIA

DATE OF JUDGMENT21/02/1978

BENCH: BEG, M. HAMEEDULLAH (CJ) BENCH: BEG, M. HAMEEDULLAH (CJ) CHANDRACHUD, Y.V. BHAGWATI, P.N. FAZALALI, SYED MURTAZA SHINGAL, P.N. SINGH, JASWANT DESAI, D.A.

CITATION:  1978 AIR 1296            1978 SCR  (3) 293  1978 SCC  (3) 459  CITATOR INFO :  R          1980 SC 738  (9)  RF         1980 SC2097  (3)  R          1981 SC 873  (30,68)  R          1981 SC 998  (4)  F          1983 SC 634  (22)  R          1983 SC 937  (31)  R          1983 SC1015  (9)  F          1983 SC1019  (34)  F          1984 SC 657  (17)  R          1984 SC1130  (43)  R          1985 SC1367  (37)  RF         1986 SC1999  (11)  R          1987 SC1802  (10)  F          1987 SC2351  (7)  R          1988 SC1737  (85)  R          1990 SC1277  (40)  E          1990 SC1851  (25)  RF         1992 SC1033  (37)

ACT: Constitution  of  India,  1950, Art.  31B  read  with  Ninth Schedule-Scope   and  ambit  of-Whether  Art.  31B   affords protection  only  to the Acts and Regulations  specified  in Ninth  Schedule, or also to orders and notifications  issued under those Acts and Regulations. Constitution  of  India,  1950, Art  32  "Locus  Standi"  of ’dealers’  to invoke the jurisdiction of the  Supreme  Court under  Art.  32 and challenge the provisions  of  the  Price Control  Order as offending fundamental rights  under  Arts. 14, 19(1) (f) and (g). Mustard Oil Price Control Order 1977 constitutional validity of-Whether  it  violates Arts. 14 and 19 (1)  (f)  and  (g)- Whether it is open to such a challenge at  all-Applicability of the doctrine of derivative protection. Distinction  between (a) "merely regulatory Order and  those of price fixation or price control Order" under s. 3(2)  (c) of  the Essential Commodities Act, and (b) "protection to  a mere  grant  of  powers"  and  "exercise  of  that   power", explained.

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Price  fixation,  tests  of-Courts  cannot  interfere   with economic  policies of the Government in cases of  beneficial legislation.

HEADNOTE: Sub-section  (1) of section 3 of the  Essential  Commodities Act,  1955  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 s. 3  of the Essential Commodities Act, 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. 19(1)(f) and 19(1)(g) of the Constitution, Art. 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). 1.   On a plain reading of Art. 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)  Art.   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

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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  Art. 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 Art.  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   Art.   14,   19(11)(f)  and   19(1)(g)   of   the Constitution. [321 F-G]. Vasantlal  Maganbhai Sanjanmal v. State of Bombay and  Ors., [1961] 1 SCR 341, Latafat Alikhan and Ors. v. State of U.P., [1971] Supp.  S.C.R. 719; Explained. Godavari Sugar Mills Ltd. and Ors. v. S. B. Kamble and  Ors. [1975] 3 S.C.R. 585; Applied. 3.   Price Control Order does not offend against Art. 14  of the Constitution [323 F] (a)  The averments in the various Writ Petitions are far too

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vague and general to justify the application of Art. 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  3.12  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 v. Sri Ambica Mills Ltd., [1974] 3 SCR  760 @ 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. v. Union of India [1975] 1 S.C.R. 956. referred to. 4.   The  Price  Control  Order  is  not  violative  of  the petitioners’ rights under articles 19(1)(f) and 19(1)(g)  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]

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(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. v. State of M.P.  and  Ors. [1970] 1 S.C.R. 400, 409, reiterated. (e)  The  dominant purpose of the provisions of  sub-section (1)  and 2(c) of Section 3 of the Essential Commodities  Act 1955 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 s. 3(1)  and s.  3(2)(c) of the Essential Commodities Act.  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 v. Anita Pan, [1975] 2 SCR 774 @ 782 followed. (g)  The impugned Price Control Order is not so unreasonable as to be constitutionally invalid.  It is enough  compliance

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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 v. Union of India, [1975]  1 SCR 956; 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  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 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 3(1) of the Essential Commodities Act 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 Essential Commodities Act 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. v. Union of India, [1974] 2  SCR 398, Secretary of Agriculture v. Central Reig Refining  Co., 94 Law.  Edn. 381; applied. Panipat  Cooperative  Sugar Mills v. Union of  India,  A.LR. 1973   SC  536;  Anakapalle  Cooperative  Agricultural   and Industrial Society Ltd. v. Union of India, A.I.R. 1973  S.C. 734; held inapplicable. Premier Automobiles Ltd. & Anr. v. Union of India, [1972]  2 S.C.R. 526; 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  s. 3(1) read with s. 3(2)  of  the  Essential Commodities  Act  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

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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 v. People of, the State of New York, 78 Law  Edn. p.  940 and Narendra Kumar and’ Ors. v. Union of  India  and Ors., [1960] 2 SCR 375 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 s. 3(1)  of the Essential Commodities Act is undoubtedly purposive.  The Price  Control  Order was promulgated by the  Government  in order to achieve the purpose set out in s. 3(1) 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., v. State of Orissa [1954]  SCR; 1; Joseph Beauharis v. People of the  State  of Illinois, 96 Law.  Edn. 919 referred to. 8.   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. v. City of Chicago, 57 Lawyers  Edn. 730;  Premier  Automobiles & Anr. v. Union of  India  [1972] S.C.R. 526; permian Basin Area Rate Cases, 20 Law.  Ed.  2d. 312 referred to. Per Beg, C.J. (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

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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 19(i)  (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 v. State of M.P., [1955] 1  S.C.R.  380; referred to. 3.   If  the effect was to widen the orbit of section  3  of the  Essential Commodities Act 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.   Essential Commodities Act,  1955,  cannot  be

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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. v. S. B. Kamble and Ors., [1975] 2 S.C.R. 885 referred to. 7.   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 Art. 19(1)(f) and (g)  of  the Constitution,  an attack on the Control Order by. reason  of Article  19(1)(f)  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. v. State of  U.P.,  [1971]  SUPP. S.C.R. 719 @ 720; applied. 8.   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 s. 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  19(6)  need arise  because it would then be purely  illegal  restriction upon  the right conferred by Art. 19(1)(g) 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

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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 3(1) 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 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 s.  3(1) of the Act. [315 D-F] A  price  fixation to meet the general purposes set  out  in section  3(1)  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 3(1) 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  s. 3(3) of the Act only when  there  is  an order  under  s. 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 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]

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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 v. Union of India, [1973]  2 SCR 860; Meenakshi Mills Ltd. v. Union of India [1974] 2 SCR 398; Premier Automobile Ltd. v. Union of India, [1972] 2 SCR 526;  Saraswati Industrial Syndicate Ltd. etc. v.  Union  of India, [1975] 1 SCR 956; referred to. 13. 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 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  3(1) 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, 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 v. People of the State of New York, 29 U.S.  (78 Law.  Edn.) 502; Permian Basin Area Rate Cases (20 Law  Edn. 2d) p. 312 referred to.

JUDGMENT: ORIGINAL JURISDICTION: Writ Petition 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 861-873/77. 77.  D.  Goburdhan for the Petitioners in WP Nos.  760-64  & 765-70/77 2-277 SCI/78

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302 A. K. Sen (in WP 779-780), S. B. Sanyal, Alit K. Mittar & P. K. Mukherjee for the petitioners WP 779-80/77 D.   P. Mukherjee & A. K. Ganguli for the petitioners in  W. P. Nos. 781-784/77. S.   S. Ray, A. K. Punja & H. K. Puri for the Petitioners in W.P. Nos. 838-855/77 S.   N. Kackar, Sol.  Genl. (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 R/State of Bihar in W. P. No. 765781-784/77 A.  P.  Chatterjee,  Mukti Maitre &  G.  S.  Chatterjee  for R/State of West     Bengal The following Judgments were delivered BEG,  C.J.-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 S.  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 Essential Commodities Act,  1955  (10  of 1955),  the  Central Government hereby makes  the  following orders namely : 1.   Short title, extent and commencement. (1)This 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. 2.   Definition.-In  this  Order, "dealer"  means  a  person engaged in the business of the purchase, sale or storage for sale of mustard oil. 3.   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. 26(16)/77-ECR)" 303 The  order  WAS passed in exercise of the  powers  conferred upon  the Central Government by section 3 of  the  Essential Commodities  Act,  1955  (hereinafter referred  to  as  ’the Act’).  This provision lays down:               "3(1) 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.

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             (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  3(3), 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

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             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:               "3A(1) 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 3(2).  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

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             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

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particular  undertakings,  so as to carry  out  the  objects ’stated  in  section 3(1) 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 :               "3(4) 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.               3(5) 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".

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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 19(1)   (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 19(1) (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

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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 v.  State  of Madhya Pradesh(1) 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 19(1) (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

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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   Essential Commodities  Act,  1955, could be spoken of as  a  piece  of "skeleton"  legislation.   Section 3, sub-s.(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. 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. v. S. B. Kamble &  Ors.,(1) 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

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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  19(1) (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 19(1)(g) 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 31(1)  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.  v.  State  of  U.P.,(1)   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  Art.  3  1  B,  it  is               difficult to say that the rule must further be               scrutinised under Arts. 14, 19 etc, Rule  4(4)               seems  to  us to be a rule which does  not  go               beyond the powers conferred under s.  6(xvii),               read  with s. 44 of the Act.  At any rate,  s.               6(xvii) and rule 4(4) are part of a scheme  of               land  reform  in U.P. and would  be  protected               from   attack   under   Art.   31B   of    the               Constitution". In  that  case, the rule made under the  provisions  of  the Imposition of Ceiling on Land Holdings Act 1960 of U.P.  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)  [1975] 3 S.C.R. 885. (2)  [1971] Suppl.S.CR.719at720. 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 Art. 19 (1 )  (f) and (g) of the Constitution, an attack on the control order, by  reason of Article 19(1) (f) or (g), would be really  one

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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

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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

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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  19(6) need arise because it would then be a  purely illegal  I restriction upon the right conferred  by  Article 19(1) (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

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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 3(1) 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 3(1) 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 3(1) 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 3(1)  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 3(1) 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 3(1) 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.

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In  Panipat  Cooperative Sugar Mills v. Union  of  India(1), this Court said :               "Two   principal  questions  arise  in   these               appeals : (1) what is the true  interpretation               of s. 3 (3C) and (2) whether the price of  Rs.               124.63  was in accordance with the  provisions               of S. 3 (3C) ?" Thus,  statutory  principles for price fixation  were  under consideration  there.  Again, in Shree Meenakshi Mills  Ltd. v. Union of India(2), 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, C.J., disapproved  of the  decision of this Court in Premier Automobiles  Ltd.  v. Union of India(3), in the following words (1)  [1973] 2 S.C.R. 860. (2)  [1974] 2 S.C.R. 398. (3)  [1972] 2 S.C.R. 526. 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.  v.  Union  of India(1)  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

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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) [1975] 1 S.C.R. 956. 3-277SCI/78 318 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 3(1) 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 v. People of the State of New  York(1),  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  cases(2), where  the  majority of learned judges of the  U.S.  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

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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 U.S. (78 Law.  En.) 502. (2)  20 L. Ed. 2d. 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 3(1) 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, S. 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 C.J.                     (Dated May 5, 1978) CHANDRACHUD,  C.J.-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 Essential  Commodities Act, 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 Essential Commodities Act 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,

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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 Essential  Commodities  Act,  1955, 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

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section  3(1), 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, s. 3(1) 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 v. The State of Bom- 32 2 bay and Others(1) and Latafat Ali Khan and Ors. v. The State of  U.P.(2),  in  support of his  argument  that  the  Price Control  Order  must  receive the protection  of  the  Ninth Schedule to the same extent as the Essential Commodities Act under which that order was issued and which has been  placed in the Ninth Schedule.  In Vasantlal Maganbhai(1), the vires of  section  6(2) 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  6(2),  the   State

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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 6(2) 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 6(2) 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 6(2) because he took  the view  that section 6(2) 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 6(1) and was therefore a fresh legislation to which  article 31B  could not apply.  The Court rejected that argument  and held  that if section 6(2) 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  Art. 3 1 B, it is difficult to say  that  the rule must further be scrutinised under arts. 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 U.P.  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) [1961] 1 S.C.R. 341. (2) [1971] Supp. S.C.R. 719. 323 The decision of this Court in Godavari Sugar Mills Ltd.  and Ors  v.  S. B. Kamble and Ors.(1), 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

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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,  19(1)(f),  and 19(1)(g).   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 S.C.R.885. 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

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mustard oil and that about 3.12 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  1/3rd  of  its  total   annual requirement  of 1.3 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 India(1) 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) [1974] 3 S.C.R. 760, 762. (2)  [1975] 1 S.C.R. 956. 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 19(1) (f) and 19 (1 ) (g) of the Constitution.  The

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case of M/s 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.  1351.10p  ’  per quintal   i.e.   Rs.  13.51  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. 14.01 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. 8.50 per kilogram since the retailer has to provide  for a margin of at least Rs. 1.50 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 M/s.  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. 9.75  and  Rs. 10.81 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 Essential  Commodities  Act  be achieve effectively. Shri Srinivasan’s affidavit further states that mustard seed is grown mainly in the rabi season, i.e., 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,

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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. 9.95 per kilogram. Considering  these rival contentions and the data which  has been produced,before 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.  365/and 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

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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. v. State of Madhya Pradesh & Ors.(1) 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  3(1)  of  the  Essential  Commodities  Act,   1955, 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] S.C.R.400,409. 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  3(1)  and  section  3(2)(c)  of  the Essential Commodities Act.  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

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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 v. Anita Pan.(1) 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)  [1975](2) S.C.R. 774, 782. 329 commodity  will dry up , thereby frustrating the  object  of the Essential Commodities Act 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. v. Union of India(1).   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 3(1) of the Essential Commodities Act 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  Essential  Commodities  Act and that  object  would  be completely lost sight of, if the producer’s profit was  kept

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in  the  fore-front.   Ray C.J.,  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 S.C.R.398. 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  v.  Central  Reig Refining  Company(1)  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 v. Union of  India(2)  and Anakapalle  Cooperative Agricultural and Industrial  Society Ltd.  v.  Union of India(3) 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 v. Union of India, (supra) is that these two decisions turn  on  the  language of section 3(3c)  of  the  Essential Commodities Act 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.  v. Union  of India(4) which concerned the fixation of price  of motor  cars.   It  is time that it  was  realized  that  the

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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)  A.T.R. 1973 S.C. 536. (3)  A.T.R. 1973 S.C. 734. (4)  [1972] 2 S.C.R. 526. 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  3(1)  read  with  section  3(2)  of  the  Essential Commodities  Act  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 with,drawn. 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

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to  pay, was described by this Court in Narendra  Kumar  and Others  v. The Union of India and Others(1)  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] 2S.C.R.375. 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  v. People of  the  State  of  New York(1),  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 Essential Commodities Act. In support of that submission the judgment of this Court  in K.  C.  Gajapati  Narayan Deo anti Others v.  The  State  of Orissa(2)  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 3(1) of the Essential Commodities  Act 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 3(1) 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 v. People of the  State  of Illinois(1)  , 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

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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)  [1954] S.C.R. 1. (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  v. City of Chicago(1) 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. S.R.                    Petitions dismissed.

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(1) 57Lawyers Edition730. 4-277SCI/78 334