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PETITIONER: THE CHAMBER OF COMMERCE, HAPUR, AND THREE OTHERS

       Vs.

RESPONDENT: THE STATE OF UTTAR PRADESH ANDTWO OTHERS.

DATE OF JUDGMENT: 18/10/1954

BENCH: DAS, SUDHI RANJAN BENCH: DAS, SUDHI RANJAN MAHAJAN, MEHAR CHAND (CJ) HASAN, GHULAM BHAGWATI, NATWARLAL H. JAGANNADHADAS, B.

CITATION:  1955 AIR    8            1955 SCR  (1) 838

ACT: Uttar  Pradesh Food-grains(Futures and Options  Prohibition) Order,  1951-Uttar Pradesh Food-grains (Futures and  Options Prohibition) Order, 1945-Restrictions on dealings in  pulses other  than  grams-In  both  orders-Order  of  1951   partly declared  ultra vires by Supreme Court--Not so s. 9  thereof which repealed Order of 1945-Whether Order of 1945 still  in force-Proper procedure for clarification of the matter.

HEADNOTE: Uttar Pradesh Food-grains (Futures and Options  Prohibition) Order,  1951, made it illegal and a punishable  offence  for any  person to enter into any futures in pulses  other  than gram, or to pay or receive or to agree to pay or receive any margin relating to such futures.  By s. 9 of that Order  the Order  of 1945 containing similar provisions  was  repealed. An application under Art. 32 of 839 the Constitution presented by several persons (including the present   petitioners)   for  the   enforcement   of   their fundamental right under Art. 19(1)(g) of the Constitution to carry  on  their  business and restraining  the  State  from enforcing  the  Order  of 1951 in so far as  it  related  to pulses other than gram and for a declaration that s. 2(a) of the  Order  read with items 6, 7, 8 and 9  of  the  schedule thereto  was illegal and ultra vires the  State  Government’ succeeded  in  the  Supreme Court and  the  State  of  Uttar Pradesh  was directed by the Supreme Court by  its  judgment dated the 15th ’day, 1952, to abstain from giving effect  to it. On the 10th June, 1953, a letter (Exhibit B to the petition) was  addressed  by  the  Deputy  Commissioner,  Food,  Uttar Pradesh,  to all Regional Food Controllers and  Deputy  Food Controllers  and all District Magistrates in  Uttar  Pradesh instructing  them  to  regard  all  futures  in   foodgrains mentioned in the Schedule to the 1945 Order including pulses other than gram as punishable. It  was contended on behalf of the State (1) that section  3 of  1946  Act which reproduced s. 3 of  the  1946  Ordinance

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conferred  on  the Central Government  extensive  powers  to control  production, supply, distribution of and  trade  and commerce  in  essential  commodities  and  this  power   was delegated  by  the  Central  Government  to  the  Provincial Government  by notification dated 21st October, 1946,  under s. 4 of the 1946 Ordinance.  The subsequent amendments  made by  two Notifications dated 5th March, 1947, and dated  15th November,  1947, withdrew the power so delegated  only  with respect to "edible oils and oil seeds and pulses other  than gram"   and  such  withdrawal  was  only  with   regard   to production,  supply, and distribution of  those  commodities but was not with regard to trade and commerce therein;  (ii) that the Order of 1951 having been declared ultra vires, the Order  of 1945 which was continued by s. 5 of the  Ordinance of  1946 and then by s. 17 of the Act of 1946 was  still  in force. Held,  (repelling the contentions) (i) that as the Order  of 1945  ceased  to  have  effect with  regard  to  the  price, production, distribution and movements of those commodities, that  Order  could not in any way continue  to  regulate  or control  trade or commerce in those commodities and the  two Notifications of 1947 quite effectively superseded the Order of  1946 so far as it purported to regulate or  control  the price, production, distribution and movement of or trade and commerce in edible oils and oil seeds and pulses other  than gram; (ii) that the Order of 1951 was not declared ultra vires and invalid in its entirety by the judgment of the Supreme Court dated 15th May, 1952.  The Order was declared invalid in  so far as it purported to restrict the dealings in edible  oils and  oil seeds and pulses other than gram.  The rest of  the Order  of 1951 and in particular s. 9 thereof by  which  the Order of 1945 had been withdrawn, remained unaffected by the judgment of the Supreme Court. 840 Strong disapproval was expressed by the Supreme Court of the wholly  unwarranted attitude adopted by the officers of  the State of Uttar Pradesh in circumventing the decision of  the Supreme Court on a flimsy pretext. The  contentions advanced on behalf of the State  Government should  have been advanced before the Supreme Court  on  the previous occasion when it delivered its judgment dated  15th May, 1952, or the matter should have been brought before the Supreme Court by way of review if any review was competent.

JUDGMENT: ORIGINAL JURISDICTION: Petition No. 309 of 1953. Under  article  32  of the Constitution  of  India  for  the enforcement of Fundamental Rights. K.   C. Jain and B. P. Maheshwari for the petitioners. K.   B.  Asthana  and C. P. Lal for the  respondents.  1954. October 18.  The Judgment of the Court was delivered by DAS  J.-This  is  a petition made under article  32  of  the Constitution  by  the Chamber of Commerce, Hapur  and  three individual  persons  praying  for a writ in  the  nature  of mandamus directing the State of Uttar Pradesh and two of its officers  in the Food Department to abstain  from  enforcing the   Uttar  Pradesh  Food  Grains  (Futures   and   Options Prohibition)  Order,  1945,  or  any  orders  or  directions contained  in the letters issued by the  respondents  copies whereof are annexed to the petition and marked B and D.  The facts  and circumstances leading up to this application  may be shortly stated at the outset.

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The  Chamber of Commerce, Hapur, is a  company  incorporated under the Indian Companies Act with its registered office at Hapur.   There  are  about 200 members of  this  Chamber  of Commerce including petitioners Nos. 2 to 4. Petitioner No. 3 is also its ?resident and Petitioner No. 2 is also a  member of  its  Executive Committee.  The members  of  the  Chamber carry  on  business in foodgrains including pulses  both  on ready  and  forward basis.  The Chamber acts as  a  clearing agent  for  a commission and guarantees the  performance  of forward  contracts  by its members upon  payment  of  margin money according to the rules. 841 On  or about the 1st September, 1945, the U. P.  Government, in exercise of powers conferred on it by rule 81 (2) of  the Defence  of India Rules, issued Notification  No.  8071/c.s. promulgating  the United Provinces Food Grains (Futures  and Options  Prohibition) Order, 1945, (hereinafter called  "the 1945  Order").   Section  2  (a) of  that  Order  defined  " foodgrains"  as meaning any of the foodgrains  mentioned  in the  schedule  thereto.   Arhar, peas, urd  and  moong  were mentioned as items 6, 7, 8 and 9 of that schedule.   Section 3 provided as follows " 3. No person shall- (a)enter into any futures in foodgrains or pay or receive or agree  to  pay or receive any margin relating  to  any  such futures; (b) enter into any options in foodgrains. The  Defence of India Rules expired on the  30th  September, 1946, and consequently all orders made thereunder were  also due  to expire on the same date.  On the 1st October,  1946, however,  there  came  into  force  the  Essential  Supplies (Temporary Powers) Ordinance, 1946 (hereinafter referred  to as "the 1946 Ordinance") promulgated by the Governor-General and published in the Gazette of India on the 25th September, 1946.  Section 3 of that Ordinance conferred on the  Central Government  extensive powers to control production,  supply, distribution  of  and  trade  and  commerce  in,   essential commodities  as defined in section 2(a) thereof.  Section  4 authorised  the  Central Government to  direct  by  notified order that the power to make orders under section 3  should, in  relation to such matters and subject to such  conditions as might be specified in the direction, be excercisable also by  such  officer subordinate to it or  by  such  Provincial Government or such officer thereof as might be specified  in the  direction.  Section 5 of that Ordinance ran as  follows :- "  5.  Continuance in force of existing  orders.Until  other provisions are made under this Ordinance, any order, whether notified or not, made by whatever authority under rule 80-B, or sub-rule (2) or sub-rule (3)    of rule 81 of the Defence of India Rules, in respect 842 of  any  matter specified in section 3, which was  in  force immediately before the commencement of this Ordinance shall, notwithstanding  the expiration of the said rules,  continue in  force  so far as consistent with this Ordinance  and  be deemed  to  be  an  order made  under  section  3;  and  all appointments   made,   licenses  or  permits   granted   and directions  issued  under  any  such  order  and  in   force immediately before such commencement shall likewise continue in  force  and be deemed to be made, granted  or  issued  in pursuance of this Ordinance.  " The  1945 Order, therefore, continued in force  until  other provisions were made under the 1946 Ordinance. In  exercise of powers conferred on it by section 4  of  the

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1946 Ordinance the Government of India, on the 21st October, 1946,   made  the  notified  order   No.   C.G.603(2)-IIl(1) directing that the powers conferred on it by section 3(1) of that  Ordinance  should,  in  relation  to  foodstuffs,   be exercisable  also by any Provincial Government,  subject  to certain conditions therein set out. In  November,  1946,  was  passed  the  Essential   Supplies (Temporary Powers) Act, 1946 (hereinafter called "the Act"). Section  3  of  the Act reproduced section  3  of  the  1946 Ordinance  with certain modifications not material  for  our present  purpose.   Section  4 of  the  Act  corresponds  to section  4 of the 1946 Ordinance.  The relevant portions  of section 17 of the Act provide as follows : --- "  17.   Repeal  and savings.- (1)  The  Essential  Supplies (Temporary  Powers)  Ordinance, 1946 (XVIII  of  1946),  is- hereby repealed. (2)Any  order  made  or deemed to be  made  under  the  said Ordinance  and in force immediately before the  commencement of  this Act shall continue in force and be deemed to be  an order  made  under  this Act;  and  all  appointments  made, licences or permits granted and directions issued under  any such order and in force immediately before such commencement shall  likewise continue in force and be deemed to be  made, granted or issued in pursuance of this Act. 843 (3).................................................... (4)................" In  exercise of powers conferred on it by section 4  of  the Act  the  Central  Government, by  Notification  No.  C.  G. 603(2)-III(1),  dated  the  5th  March,  1947,  amended  the abovementioned  notified  order No. PY 603(2)-I,  dated  the 21st October, 1946, by inserting after the word  "foodstuff" the words "including cocoanut oil but excluding other edible oils  and oilseeds.  " The net result of  this  notification was  that "edible oils and oilseeds" were excluded from  the scope or operation of the delegated power.  In other  words, the  power  delegated  to  the  Provincial  Government   was withdrawn  in respect of "edible oils and oilseeds" so  that the  Provincial  Government could not thenceforth  make  any order controlling the production, supply and distribution of or trade and commerce in "edible oils and oilseeds".  On the same day another Notification, being Notification No. C.  G. 603(2)-III(2),  was  issued  by the  Central  Government  in exercise  of powers conferred on it under section 3  of  the Act  directing that no order made or deemed to be made by  a Provincial Government under the Act should have effect  from that  date  so as to prohibit or restrict  the  movement  of edible  oilseeds  or oils other than cocoanut oil  from  any place in a Province to any other place within or outside the Province,  or  so  as  to regulate  or  control  the  price, production  or distribution thereof in any way.   Therefore, the  1945 Order ceased to have effect so as to  prohibit  or restrict the movement of edible oilseeds or oils other  than cocoanut  oil  or  so  to regulate  or  control  the  price, production or distribution thereof in any way. On the 15th November, 1947, two Notifications were issued by the  Central  Government.  By Notification No.  PY.  603(2)- VI(1) made under section 4 of the Act the Central Government made  a further amendment in Notification No.  PY.  603(2)-1 dated  the 21st October, 1946. by inserting  after-the  word "oil-seeds"  the  words "and pulses other than  gram".   The effect  of this amendment was that "pulses other than  gram" were 844 also  excluded from the operation of the power delegated  to

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the  Provincial  Governments.   In other  words,  the  power delegated  to  the Provincial Governments was  withdrawn  in respect  also  of  "pulses other than  gram",  so  that  the Provincial Governments could not thenceforth make any  order controlling  the production, supply and distribution  of  or trade  or  commerce in edible oils and oilseeds  and  pulses other than gram.  Simultaneously by Notification No. PY. 603 (2)-VI(2)  made on the 15th November, 1947, under section  3 of  the  Act the Central Government directed that  no  order made  or  deemed to be made under the Act  by  a  Provincial Government  should  have  effect from that  date  so  as  to prohibit or restrict the movement of pulses other than  gram from  any place in a Province to any other place  within  or outside  the  Province or so as to regulate or  control  the price, production or distribution thereof in any way.  As  a result  of this Notification the 1945 Order also  ceased  to have  effect so as to prohibit or restrict the  movement  of pulses  other than gram or so as to regulate or control  the price, production or distribution thereof in any way. Then came the Uttar Pradesh Foodgrains (Futures and  Options Prohibition) Order,’ 1951.  It was promulgated by the  State of  Uttar Pradesh on the 20th September, 1951.   By  section 2(a)  this Order defined "foodgrains" as meaning any of  the foodgrains specified in the schedule thereto.  Arhar,  peas, urd  and  moong  were  items Nos. 6, 7,  8  and  9  of  that schedule.  Section 3 of the Order ran as follows " No person shall-- (a)enter into any "futures in foodgrains" or pay or  receive any margin relating to any such futures; (b) enter into any options in foodgrains." Section  8  made a contravention of any  provision  of  the. Order  or  any  order  issued  thereunder  punishable  under sections 7 and 7-A of the Act of 1946.  By section 9 of this Order the 1945 Order was withdrawn. As  the  Uttar  Pradesh  Foodgrains  (Futures  and   Options Prohibition)  Order,  1951 directly made it  illegal  and  a punishable offence for any person to enter into any  futures in, amongst others, arhar, peas, urd and  moong or  to  pay  or receive or to agree to pay  or  receive  any margin  relating  to any such futures.  IO  members  of  the Chamber   of   Commerce,  Hapur,  including   the’   present petitioners Nos. 2 to 4, on the 29th October, 1951, made  an application   to  this  Court  under  article  32   of   the Constitution  for-  enforcement of their  fundamental  right under article 19(1)(g) to carry on their business and prayed for  the issue of a mandamus restraining the State of  Uttar Pradesh from enforcing the Uttar Pradesh Foodgrains (Futures and  Options  Prohibition)  Order, 195 1, in so  far  as  it related  to pulses other than gram and from  exercising  any power  there. under and for a declaration that section  2(a) read  ’with items 6, 7,8 and 9 of the schedule  thereto  was illegal and ultra vires the powers of the State  Government. That application succeeded and the offending Notification to the  extent  it dealt with arhar, peas, urd  and  moong  was declared invalid and the State of Uttar Pradesh was directed to abstain from giving effect to it. As will appear from the judgment pronounced by this Court on the 15th May, 1952,  on that  application,  it was not seriously disputed  that  the effect  of  the amendments referred to above  was  that  the power to control and regulate trade originally delegated  to the Provincial Government by Notification No. PY.  603(1)-I, dated the 21st October, 1946, was modified so as to  exclude from the scope of such delegation pulses other-than gram". On  the 10th June, 1953, a letter (Ex.  B to  the  petition) was  addressed  by  the  Deputy  Commissioner,  Food,  Uttar

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Pradesh,  to  all  Regional  Food  Controllers  and   Deputy Regional  Food Controllers and all District  Magistrates  in Uttar  Pradesh  instructing them to regard  all  futures  in foodgrains  mentioned  in  the schedule to  the  1945  Order including  pulses  other  than  gram  as  punishable.    The reasoning  advanced  was that the Uttar  Pradesh  Foodgrains (Futures  and Options Prohibition) Order, 1951, having  been declared  ultra  vires by the judgment  pronounced  by  this Court on the 15th May, 1952, that Order became unenforceable and 108 846 consequently  the 1945 Order continued in force.  A copy  of this letter was forwarded, amongst others, to the Chamber of Commerce,  Hapur,  for  information and  guidance.   By  its letter  dated the 25th June, 1953, the Chamber  pointed  out that the earlier Order of 1945 had been withdrawn by section 9 of the Order of 1951 and as the last mentioned section had not been declared ultra vires by the Supreme Court the  1945 Order could not be regarded as continuing in force.  On  the 17th September, 1953, the Regional Food Controller of  Uttar Pradesh  wrote  a  letter (Ex.  D to the  petition)  to  the President, Chamber of Commerce, Hapur, asking the latter  to immediately  stop all future transactions pertaining to  the foodgrains  mentioned in the schedule to the 1945  Order  in which  delivery was contemplated within the State  of  Uttar Pradesh  and  threatening  action to be  taken  against  the Chamber.   This  threat of action necessitated  the  present petition for the reliefs mentioned above. Learned  advocate appearing for the State seeks  to  justify the attitude of the State on two grounds.  It is urged  that section  3  of the 1946 Act which  reproduced  with  certain modifications section 3 of the 1946 Ordinance, conferred  on the   Central   Government  extensive  powers   to   control production,  supply, distribution of and trade and  commerce in  essential commodities.  This power was delegated by  the Central Government to the Provincial Governments by  Notifi- cation  No. PY. 603(2)-1 issued on the 21st  October,  1946, under  section  4  of the 1946  Ordinance.   The  subsequent amendments made by Notification No. C.G. 603(2)-III(1) dated the  5th March, 1947, and Notification No. PY.  603(2)-VI(1) dated  the  15th  November,  1947,  withdrew  the  power  so delegated only with respect to "edible oils and oilseeds and pulses  other than gram" and such withdrawal was  only  with regard  to the production, supply and distribution of  those commodities  but  not  with regard  to  trade  and  commerce therein.   The second ground advanced is that the  Order  of 1951  having  been declared ultra vires the Order  of  1945, which was continued first by section 5 of the 1946 Ordinance and then by section 17 of the Act, remained 847 in  full  force.  In our judgment there is no  substance  in either of the two arguments. As  we  have  already pointed out,  two  Notifications  were published on the 5th March, 1947,and two Notifications  were issued on the 15th November 1947.  By Notification No. C. G. 603(2)-III(1)  dated the 5th March, 1947,  and  Notification No.  PY. 603 (2)-VI (1), dated the 15th November, 1947,  the earlier  Notification No. 603(2)-I, dated the 21st  October, 1946,  was  amended by inserting therein the  words  "edible oils and oilseeds" and "pulses other than gram" and  thereby excluding   those   commodities  from  the  scope   of   the delegation.  As a result of these amendments the  Provincial Governments  could not, from and after the respective  dates of those amending Notifications, make any order  controlling

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production, supply, distribution of or trade and commerce in those  commodities.  These Notifications did not  puport  to affect  Notifications that had been previously  -made.   But simultaneously  with these amending Notifications  two  more Notifications  were  issued, namely, Notification  No.  C.G. 603(2)-III(2),  dated the 5th March, 1947, and  Notification No.  PY.  603(2)-VI(2), dated the 15th November,  1947.   By these Notifications the Central Government directed that  no order  made  or  deemed  to  be made  under  the  Act  by  a Provincial  Government should have effect so as to  prohibit or  restrict  the movement of edible oils and  oilseeds  and pulses other than gram or to regulate or control the  price, production or distribution of those commodities in any  way. As  a result of the joint operation of  these  Notifications the  1945 Order ceased to have effect so as to  prohibit  or restrict the movement of edible oils and oilseeds and pulses other  than  gram  or  to regulate  or  control  the  price, production  or distribution of those commodities.   As  that Order  of  1945  ceased to have effect with  regard  to  the price,  production,  distribution  and  movement  of   those commodities,  it  is not easy to comprehend how  that  Order could  continue to regulate or control trade or commerce  in those  commodities.   Trade  or commerce  in  any  commodity cannot   be   controlled  unless  the   price,   production, distribution  and  movement of that commodity  can  also  be controlled. 848 It  follows, therefore, contrary to the contentions  of  the State,   that   these  two  Notifications  of   1947   quite effectively superseded the 1945 Order so far as it purported to  regulate or control the price, production,  distribution and  movement  of or trade and commerce in edible  oils  and oilseeds and pulses other than gram. The second branch of the argument is equally fallacious.  It is  wholly incorrect to say that the judgment pronounced  by this Court on the 15th May, 1952, declared the Uttar Pradesh Foodgrains  (Futures and Options Prohibition)  Order,  1951, ultra vires and invalid in its entirety.  That judgment only declared  it  invalid  to the  extent  of  the  restrictions complained of by the then petitioners, namely, in so far  as it  purported  to  restrict  dealings  in  edible  oils  and oilseeds and pulses other than gram.  The rest of that Order of 1951 and in particular section 9 by which the 1945  Order had  been withdrawn remained unaffected by that judgment  of this Court.  It is quite difficult to appreciate how, in the circumstances,  the Order of 1945 can be regarded as  having been  revived by the judgment in respect of edible oils  and oilseeds and pulses other than gram in spite of the  express withdrawal  of that Order by section 9 of the Order of  1951 which otherwise remains operative. In our judgment there is no substance whatever in either  of the  two  branches of argument advanced before us  and  this application must succeed.  Accordingly we grant prayers (a), (b), (c) and (d) of the petition. Before   concluding   we  desire  to  express   our   strong disapproval  of the wholly unwarranted attitude  adopted  by the officers of the State of Uttar Pradesh.  Assuming  there was any substance in their contentions, the same should have been  advanced before this Court on the  previous  occasion, for  the  contentions,  if wellfounded, would  have  been  a complete  answer  to that application.  If  the  contentions were subsequently discovered, then the same should have been brought  before  the Court by way of review, if  any  review lay. 849

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Instead of adopting that straightforward course the officers of the State have sought to circumvent the decision of  this Court  on  a flimsy pretext and covertly, to  challenge  its correctness  on  an obviously untenable plea which  has  not even  the  merit of -a seeming plausibility.   This  conduct verges  dangerously on a contempt of this Court.  We  desire to  make  it quite clear that we view with  great  disfavour such  unworthy  attempt to get round the  decision  of  this Court.