RAM Chandra MAWA LAL And Others Etc. v. State Of Uttar Pradesh And Others Etc. (1984) — Supreme Court judgment

RAM CHANDRA MAWA LAL AND OTHERS ETC. STATE OF UTTAR PRADESH AND OTHERS ETC. January 9, 1984

[S. Murtaza FAZaL ALL, A. VARADARAJAN AND M, P. T HAKKAR, IU. ]

Defence of India Rules, 1971 promulgated under’ Defence of India Act, 197]— Rule {14—Interpretation of—Whether State Government can fix price of én article declared to be essential commodity under the Essential Commodities Act, 1955 in

. respect of which Central Government has already fixed price under Fertilizer

(Control) Order, 1957 pronulgated under the Essential Commodities Act, 1955.

Defence of India Rules, 1971—Rule 114 (3) (Score of—Expression ‘anv™ article—includes fer tilizers. ;

Central and State statutes irreconcilable. .

Uttar Pradesh Fertilizer Prices (Supplementary) Order, 1974—Validity of.

On October 11, 1973, the Central Government in exercise of power under.

_ cl. (3) of the Fertilizers (Control) Order, 1957 promulgated under s. 3 of the Essential Commodities Act, 1955; issued a notification fixing the maximum retail selling price © of certain fertilizer which dealers could charge from consumers leaving wiih the .

dealers a ve.y low margin of profit. Some time later in order to compensate the manufacturers for the higher cost of inputs, the Central Government issued another notification on June J, 1974 fixing a very high retail selling price of the fertilizer to be charged by the dealers from the consumers. The dealers started charging the higher price fixed by notification dated June 1, 1974 even for the stocks of fertilizer acquired by: them prior to June 1, 1974 at the lower rate thus carning fabulous profit, On June 14, 1974 the Statc of Uttar Pradesh issued a notification (Utar Pradesh Fartilizer Prices (Supplementary) Order, 1974) in exercise of power under rule 114 of the Defence of India Rules, 1971 promulgated under the Defence of India Act, 1971. This notification stated that the stocks of fertilizer acquired upto May 31,1974 by the dealers and which remained unsold with them should be sold only at the price fixed by the Central Government’s notification dated October 11, 1973 and not by notification of June 1, 1974. The appellants (dealers) challenged

Interpretation—Rule of—What is test for ascertaining whether conflict between before the High Court the legality and validity of the State Government’s notification dated June 14, 1974 on the grounds: (1) that the fertilizer in question having been declared an essential commodity under the Essential Commodities Act, 1955, an

Act specially enacted inter alia for regulating}prices of essential commodities, its price _ , could be regulated only under that Act and not under the Defence of India Rules; (2) that the notification being inconsistent with the Central Government’s notifica-

~ tion dated June I, 1974 was invalid; and (3) that the notification being discrimina- tory was violative of Art. 14 of the Constitution.’ The High Court upheld the

- RAMCHANDRA MAWALAL ?, U. P. STATE 349

“ validity‘of the impugned natification and dismissed the writ petitions. Hence. these ~ appeals,

Dismissing the appeals by majority, HELD :

{Per Murtaza Fazal Ali and Thakkar, JW)

Rules of 1971, are Central legislations enacted by the Parliament. There is no create two avenues or sources of power for the regulation of prices of articles. ince Parliament can constitutionally and validly enact two statutes creating two » sources of power, and since, under both the statutes prices of fertilizers can be regulated, there is no illegality in acting under ‘eithér’ or ‘both’. [357 D-E]

Under the DIR power has been conferred, inter ulia. to gequlate the price of ‘any’ article. The expression ‘any article’ is wide enough in its amplitude to ) envelope ‘fertilizers’; The fact that ‘fertilizers’ have been declared .as an essential commodity under the Essential Commodities. Act, 1955 and its price - can be regulated under the powers conferred: by that Act, is altogether immaterial. [357 H; 358 A] . : The Centre andthe State both cannot speak on the same channel and create disharmony, If both speak, the voice of ihe Centre will drown the voice of the State. The State has to remain ‘silent’ or it will be ‘silenced’. But the State has the right to ‘speak’ and can ‘speak’ (with unquestionable authority)

{ where. the Centre is ‘silent’, without introducing disharmony. If the Centre sits only ona portion of the Chair, the State can sit on the rest of the portion with arms thrown on the shoulders ‘of each other. While the State cannot sit .on the lap or on the shoulders of the Centre, both can certainly walk hand-in-hand,.

A ending support to each other, ina friendly manner, towards the same destination, If the Centre has built a wall, end has: left a gap from which intruders can infiltrate, the State can fill “the gap in the wall, and thus make its own contribution to the common cause. What is more, each in theory end principle must be presumed to be conscious of the need for accord and need for * ~yccommodating each other inthe interest of ‘NATIONAL HARMONY’. [360C-F]

A general statute applies to all persons .and localitics within its jurisdic-

. 4 tional scope, prescribing the governing. law upon the subject it encompasses, uniess a special statute exists to treat a refinement of the subject with particularity or to prescribe a different law for,a particular locality. Where, however, the later special or local statute is not irreconcilable with the general statute to the degree that both statutes cannot have a coterminous operation, the general

+ statute will not be repealed, but the special or focal statute will exist as an exception to its terms. (361 B- Cc]

Sutherland's Statutory Construction, 3rd Edition. Vol, 1. Page 488, referred to. . . “

One of the tests for ascertaining whether the inconsistency is an irreconcilable or intolerable one, is to pose this question: Can the State law be obeyed or

Both the Essential Commodities Act, 1955, as also the Defence of India onstifutional or jurisprudential limitation on_ ihe competence of the Parliament to ,

350 . SUPREME COURT REPORTS . {1984].2 s.cr.

respected without flouting or violating the Central law in letter and spirit? EH «the answer is in the affirmative, the State law cannot be invalidated. Not at any rate when {he State Jaw merely ‘promotes’ the real object of both the laws, and | is in the real sense ‘supplementary’ or ‘complementary’ to the Central law, . , - [361 G-H; 362 A]

‘ In the present case, the Central notification is altogether silent on the lower rates. The impugned State notification, of the other hand, deals exclusively ‘with this aspect. The State notification speaks on a.refinement of the subject about which the Central notification is blissfully unaware and on which it is altogether silent. Both notifications can therefore safely be construed as supplementary and friendly rather than inconsistent or hostile. [360 B-C]

Ih the instant case, assuming that there is inconsistency between the Central Government's notification and that of the State Government, it does not appear to be an irreconcilable or intolerable one, soas td invalidate the State Govern- ‘ment’s notification. In the present case the test, answers in favour of the validity . ‘Of the impugned State notification. The Central notification is not violated if the dealers sell the fertilizers from out of the existing stocks acquired. at the lower rates, for both the notifications fix the minimum selling price and the maximum

_selling price fixed under the State notification is not higher than that fixed under.

the Central notification. What is more, the State notification ‘promotes and serves‘ the object and purpose of both the Centre and the -State. ‘Promotes and serves’ in the sense, that the manifest object of fixing maximum ceiling price is to make available to the cultivators who grow ‘the food for the NATION to obtain the inputs at reasonable prices and to protect them from exploitation so that the food production is not retarded. [362 A-C]

Art.-254(2) does not envision Presidential assent to ‘notifications’ issued’

under an Act (as distinguished from daws made by legislature’). [363 F}

_ Kerala State Electricity Board v. Indian Aluminium Co. (1976] 1 8.C.C. 466 at p. 478, referred to. .

The impugacd notification is not violative of Art. 14 of the Constitution since the very basis of the challenge on the score of hostile discrimination is found to be non-existent .[ 364 D] , 7

(Per Vardarajan J. dissenting) ,

It cannot be assumed that Parliament which had already ‘legislated . inthe

Essential Commodities Act, 1955, a permanent measure, in respect of fertilizer - interided to legislate once again and could have felt the need to legislate once again in the temporary Defence of India Act, 1971 in respect of the same article, especially because what could be done under the Defence of India Act and the Rules which. may be framed thereunder could as well be done with equal force under the Essential Commodities Act and orders which may be passed thereunder. [377 B-C} . Section 3(2) of the Essential Commodities Act lays’ down that the Central

Government may, having regard to the local conditions of any area and other relevant circumstances, fix different prices or rates in respect of different areas ramification regarding sales from out of existing stocks acquired by the dealers at .

"RAMCHANDRA MAWALAL ¥. U. P. STATE 351 and for different classes of consumers. The’ State. Government could have requested the Central Government to act under s.3(2) of the Essential Commodities Act and fix a different price or rate for the sale by dealers in that State of - fertilizer carried over from ‘the stock held on 31.5.1974. Section 5(b) of the Essential Commodities Act provides for delegation of powers and says that the Central Government may, by. notified order, direct that the power to make or issue notifications under 8.3 of that Act shall, in relation to such matters and subject to such conditions, if any, as may be specified in the direction be exercisable also by such State or such officer or authority subordinate to a State Government as may be specified in the direction. The Central Government has not tssued any direction under s.5(b) of the Essential Commodities Act delegating its power to issue notification-under s.3 of that Act to.the State Government or any officer or authority of that Government. The State Government has thus: not’ resorted to the provisions contained in s,3(2) or s.5(b) of the Essential Commodities Act, but — has proceeded to fix the price of fertilizer on its own under the Defence of India Rules, 1971 which it cannot do under those Rules and the Defence of India Act, 1971 in respect of the essential commodity. [377 H; 378 A-D]

The Defence of India Act, 1971, which was a general and temporary’ Act, and the Rules framed thereunder cannot apply io fertilizer which is an essential, commodity governed by the Essential Commodities Act, 1955 and the Fertilizer (Control) Order, 1957 made under the provisions of that Act. Therefore, ’ the State Government cantiot without delegation issue any notification under the Defence of India Actand-Rules, 1971 in regard to the price of. fertilizer, an cssential commodity governed by the Essefttial Commodities Act and the Fertilizer (Control) Order, 1957. [378 H; 379 A-B] °

There does not appear td be any provision in Art. 254(2) of the _ Constitution for placing any notification made by a State Government under the Defence of India Rules, 1971 for consideration by the President. [380 C} .

If the State Government’s impugned notification is assumed to be a law enacted by that State’s Legislature on Entry 26 of List II, since the Act of Parliament passed on Entry 33 of List [land the Fertilizer (Control) Order, 1957 passed under that Act were already in force-the assent of the President hadto be received in order that the State Government’s notification assumed to bea Jaw enacted by the State’s Legislature may prevail in thé State as required by Article 254(2) of the Constitution, There is nothing on record to show. that the impugned notification of the State Government was placed before the President for his assent and that his assent has been received. Therefore, the State Government's impugned notification even asa law cannot prevail over the earligr notification of the Central Government, [389 EG; 380 C]

Zaverbhai Amaidas v. State of Bombay, (1955) 1 SCR 799, referred to,

There is a clear conflict between the two notifications is respect of the same essential commodity, fertilizer, for under the Central Government’s notification dated 1.6.1974 the price at which a dealer can sell fertilizer of the concerned variety is Rs. 2000 per ton while under the State Government's notification dated 14.6.1974 is only Rs. 1050 per ton though no doubt t is restricted to the stock carried over from 31,5.1974 which is immaterial in judging the power of the State Government to fix the price of an_ essential commodity by a notification

€2 wv we, wu

352 _ SUPREME COURT REPORTS [1984] 2 s.e.r.- made under, the Defence of India Rules, “1971 in respect of which the Central Government ha¢ already fixed the price under the Fertilizer (Control) Order, 1957. Once the Central enactment and the Central Government's notification govern the price of an essential commodity the State Government’s notification issued in exercise of the delega‘ed authority uader the Defence of India Act and the Rules framed thereunder cannot prevail. (380 F-H]-

The two enactments have to be read in. such a way that there is no conflict between them while giving effect to them in their respective fields of operation. Ifthe Essential Commodities Act, 1955 and the Fertilizer (Control) Order, 1957 are considered to apply exclusively to fertilizer, an essential

‘ commodity, and the Defence of India Act, 1971 and the Defence of India Rules, 1971 are considered to apply to other conunodities excluding essential com- ° modities there would be no conflict whatsoever between- the Essential Commodities Act and the Defence of India: Act and between the notification issued under Fertilizer (Control) Order, 1957 and the Defence of India Rules, 1971. (381 A; 383 D-E] .

" The author of the -two enactments, Essential Commodities Act, 1955 and Defence of India Act, 1971 is the same, namely, Parliament; and Parliament ntust be held to have not intended to contradict itself while dealing with distinct matters or situations under those enactments. If the State Governments are frec to fix their own prices in notifications issued by them under the Defence of India Rules, 1971 when the Central Government’s notification fixing a:single price for the whole country .in respect of an essential commodity is in force that .

notification of the Central Government ‘will become otiose. The, question is whether.Parliament would have intended such a consequence. The answer can only bean emphatic no. (382 D-E]

Craies on Statute Law (seventh edition) at Page 222 ‘and Maxwell on, the Interpretation of Statutes, referred to. :

What has been done by the State Government under the impugned notification is utterly lacking in power and cannot be allowed to stand merely because it relates only to a comparatively small quantity of fertilizer carried .

over from the stock of 31.5.1974 and was intended to benefit and protect agricultural consumers and prevent dealers from making undue profits. [384 F] * . .

Civic APPELLATE JURISDICTION: Civil Appeal Nos. 1568-76, 1609-12, 1656, 1672, 1675-80, 1707, 1616, 1644, 1645, 1646, 167], 1673, 1708 of

1974,

From the Judgment and Order dated 14th August & 12th Sep-_ tember, 1974 of the ‘Allahabad High Court in Civil Writ Petition Nos. 3422, 3498, 3430, 3462, 3491, 3429, 3427, 3423, 3472, 3443, 3473, 3474, 3494, -3439, 788, 774, 786, 787, 791, 793, 869, 3428, 3502, 3420, 3421, 3528, 3478, 3477, & 3478 of 1974.

Yogeshwar Prashad, S. C. Manchanda, S. K. — Bagga,

“YY

; -RAMCHANDRA MAWALAL ¥. U. P. STATE (Thakker iY, oe ) 353

Pramod Swarup, O. P. Agarwal, Ms. Baby Krishnan G.S. Chatterjee. Mrs. S. Dikshit, R.N. Trivedi & Miss R. Govind for the Appellants.

The following Judgments were delivered

THAKKAR, J. The Constitution which promises a socialistic pattern of Society in the preamble and traces. the contours of the socialistic: philosophy which permeates the spirit of the Constitution, can neither command nor commend the exercise of the Constituticnal . Jurisdiction to issue HIGH PREROGATIVE WRITS under Art. 32, 226 or 227, in order not to remove injustice, but to do injustice, in

~ order not to prevent exploitation of the poor by the rich, but to permit such exploitation. And yet the CONSTITUTIONAL JURISDIC- TION of the Court (as polar'zed from its ‘ERROR JURISDICTION’ has been invoked in order to use the hand of the Court for transferring money from the pockets of poor cultivators (who feed the Nation) to the pockets of tlie dealers in fertilizers (who feed themselves) by challenging a notification on technical grounds. Such jurisdiction is invoked to enable the ‘dealers’ to .reap .a ‘rich’ harvest of ‘unjust enrichment? through the instrumentality of the Court at the cost and expense of the cultivators. We firmly believe that the Court exercising CONSTITUTIONAL JURISDICTION is not obliged to grant a writ in such circumstances. But we need not . elaborate on the theme furthermore as the High Court has rejected the petition on merits and as we are of the same opinion.

Events leading to. the institution of the Writ Petitions under ’ ‘Article 226 of the Constitution of India giving rise to this group of ~ appeals (by certificate of fitness grantéd by the Allahabad High Court) ‘ have taken the following course :

(i) On October 1!, 1973 the Central Government issued a notification fixing the maximum retail selling price of certain varieties of fertilizers to the consumers. It was issued in exercise of powers under clause (3) of the

. Fertilizer (Control) Order of 1957 promulgated under Section 3 of the Essential Commodities Act of 1955 (referred to as ‘Act’ hereinafter),

(ii) Some time later, on June 1, 1974, the Central Government issued a Notification whereby the maximum retail selling price of different varieties of fetilizers was steeply revised upwards in order to compensate the ‘manufac-

Le i

- (iii)

SUPREME COURT REPORTS: © [1984] 2s.cr.

turers’ in the context of the spurt in the prices of various inputs. The extent of the rise may be illustrated by

_taking the instance of ‘Urea 46% Nitrogen’, Its price was revised upwards from Rs. 1090 per ton to Rs, 2000 per ton.

On June 14, 1974 the State of Uttar: Pradesh issued the Uttar Pradesh Fertilizer Prices (Supplementary) Order, 1974 in exercise of the powers conferred by Rule 114 of the Defence of India Rules, 1971, . adverted to as. ‘D,LR.’- hereinafter. Under this notification the regis- tered ‘dealers’ were prohibited from charging to the cul-

” tivators price in excess of the maximurh price prevailing

(iv)

immediately prior to the upward revision authorised by the Central Government on June 1, 1974, in respect of stocks acquired at pre-revision rates held .by the dealers on the eve of the. upward revision of prices.

The net result of the two iast mentioned notifications was as follows : The dealers could sell to the cultivators fertilizers at the higher rates authorised by the notification dated June 1, 1974 from out of the stocks acquired thereafter under both the notifications. As regards the

"stocks acquired after June I, 1974 the registered dealers were not affected by the notification issued by the State ©

. Government under the DIR in asmuch as the notification issued by ‘the Central Government authorising the upward revision remained unaffected by the notification

_ issued: by the State. The dealers however could not sell the fertilizers at the higher rates from out-of the’ existing stock acquired by them at the lower rates imme- | diately prior to the upward revision effected on June'1, 1974, in view of the aforesaid notification issued by the

~ State Government on June 14, 1974. Taking the ins-

‘tance of ‘Urea 46% Nitrogen’ the net impact of the impugned State notification «was that the ‘dealers’ were not permitted to charge to the cultivators Rs. 2000 per ton instead of Rs, 1090 per ton in. respect of stocks

(v)

acquired at the lower rates.

It was in this background that the dealers instituted the petitions giving rise to the present appeals by certificate, challenging the legality and validity of the

RAMCHANDRA MAWALAL ¥. U. P. STATE (Thakkar, J.) 355 impugned notification issued by the State Government on June 14, 1974.

Now,‘ the following facts are not in dispute : (i) The registered ‘dealers’ were entitled to a fixed profit margin of Rs. 45 per ton (and no more) under the terms and conditions of the licence held by them.

(ii) The stocks acquired prior to June {,. 1974 were meant | for sale to the cultivators at the pre-upward revision _rates at which rates the dealers had acquired the stocks. This stock had “remained unsold- with the, dealers till then because the cultivators -had not been able to effect their purchases till that date.

(iii) The price rise was authorised to compensate the ‘manufacturers’ in the context of the spurt in the price of ‘various ‘inputs’ and had no bearing on the selling price for the ‘dealers’ who were- not concerned with the cost of production.

{iv) Incase the State Government had not issued the impugned notification dated June 14, 1974, the dealers would have been enabled to charge about twice the prices at which the stocks were made available to them for sale prior to the notification, For instance, ‘Urea 46% Nitrogen’? made available to the dealers for effecting sales to the cultivators at Rs. 1090 per ton could have ° been sold to the cultivators at Rs. 2000 per ton. Thus they would have been enabled to make a wind fall bum= per profit of Rs. 910 per ton (in respect of ‘Urea 46% ~* Nitrogen’) as against permitted profit margin of Rs, 45* _ per ton (i.e. about 1000% in place of about 5%) and to secure ‘unjust enrichment’. for themselves to such . 2 unconscionable extent at the cost of the cultivators.

It is in the backdrop of these undisputed facts that the. question fegarding the validity of the impugned notification dated June 14, 1974 issued by the State of Uttar Pradesh came to be challenged before the High Court of Allahabad.

The impugned notification was issued in order to meet a problem

356° SUPREME COURT REPORTS [1984] 2 s.c.r.

which arose in the peculiar facts and circumstances of the situation. The. problem arose apparently because the competent authority exercising the powers of the Central Government under the Essential Commodities Act overlooked that the dealers who were concerned with. the distribution of the fertilizers to the cultivators, on a fixed and assured profit margin of Rs. 45 per ton, would be having with them stock-in-trade obtained at the pre-enhancement prices. And - that they, might tak> undue advantage of the situation by charging a higher rate to the consiimers even in respect of the stocks acquired at the lower rates, The dealers could and should have sold the stockin-trade acquired at the pre-enhancement price at the hitherto pre- ' vailing rates till the oid stocks were exhausted. That is what would have been éxpected of them, having regard to the fact that they were getting a fixed and assured margin of profit of Rs. 45/- per ton and that the enhancement of the price was necessitated and made solely, to neutralize the rise in the. cost of the inputs, which phenomenon affected only the ‘manufacturers’ and not ,the ‘dealers’, There was therefore no occasion os justification on their part for charging a _ higher price to the consumers in regard to the sales effected from the existing ‘stocks acquired at the lower rates, The notification issued — by the Central Government on June. 1, 1974 was silent on the question of selling prices in respect of sales from out of stocks acquired earlier at the lower rate. Since the said notification issued by the Central ’ Government was silent, the State Government, which appears to have been more vigilant, stepped in and exercised powers which were conferred on it by the DIR.

The challenge before the High Court was made on threv main grounds, viz?

(A) The Central- Government having issued‘a notification’ in exercise of powers under the Essential Comricdities Act, 1955, the State Government could not have issued the impugned notification under the Uttar Pradesh Fertilizer Prices (Supplementary) Order, 1974 issued « in exercise of the powers conferred under Rule 114 of the ‘D.I.R.. The power to . fix the maximum price in respect of fertilizers could be exercised only under the

Essential Commodities Act, it being a special Act, and could not have been exercised by the State Government. by issuing an order under the ‘D.LR.’.

(B) Even if the State Government had the Power to issue

RAMCHANDRA MAWALAL ¥. U, P. STATE (Thakkar, J.) 357 the notification under the D.I.R., the notification was

‘ invalid by réason of its inconsistency with the notification issued by the Central Government on June 1, 1974 under the Essential Commodities Act, 1955.

The High Court of Allahabad negatived all the three contenticns by ‘an extremely well considered and well reasoned judgment. In the present group of appeals by certificate, the original petitioners have reiterated the same contentions before this Court.

Re; Ground A: -The argument in substance is that Essential Commodities Act, 1955, is a special Act under which the price relating

“toa commodity declared to be an essential commodity can be regulated.

The power to regulate the price in respect of such an essential commodity cannot therefore be exercised under Defence,of India Rules, 1971 or under any other provision of law.

- Now, both the Essential Commodities Act, 1955, as also the Defence of India Rules of 1971, are Central legistations enacted by the Parliament. The ‘D.I.R.? were ‘brought into force by the Parliament in 197} in order to meet an emergency Situation. The legislative competence of the Parliament to enact the legislation on the subject in question, namely, fixation of prices of all articles, is not questioned. The Parliament having-competence to legislate in regard to the subject has enacted both the legislations, one in 1955, another in 1971,

The impugned notification has been issued under the latter statute. The.‘D.1.R.’ having been enacted later, it cannot, and it has not been, contended that the doctrine of repeal is attracted. Since there is legislative competence, since the statute is not eclipsed by the doctrine of express or implied repeal,, how can the power exercised under the valid statute be assailed ? The only argument advanced, a miscanceived one in our opinion, is, that since the ‘Act’ deals with essential commodities, and fertilizer has been declared under the Act as an essential commodity, the power conferred by the ‘D.L.R.’ cannot be exercised in respect of regulation of the price

- of such a commodity or article. It is not disputed that under the.

DIR power has beén conferred, inter-alia, to regulate the price of ‘any’ atticle. The expression ‘any article’ is wide enough ir in its amplitude

358 . SUPREME COURT REPORTS [1984] 2 s.c.r.

to envelope ‘fertilizers’, The fact that ‘fertilizers’ have been declared as an essential commodity, and its price can be regulated under the ‘powers conferred by the Act, is altogether immaterial. There is no constitutional or jurisprudential limitation on the competence of the Parliament.to create two avenues or-sources of power for the regulation of prices of articles, There is nothing in principle or

‘precedent to support the proposition that two avenues or sources of power caminot be validly created: What then is the fabric of- the challenge ?_ The only answer offered by the counsel is that the Act is a'statute specially enacted, inter alia, for regulation of the prices of commodities declared to be essential and therefore in respect of such

. commodities, the power can be exercised only under the Act.- We. are unable to accede to this argument, Since, ‘as discussed earlier,

Parliament can constitutionally and validity enact two statutes creating

‘two sources of power; and since, under both the statutes prices of:

. fertilizers can be regulated, there is no illegality in acting under ‘either’

or ‘both’. Counsel, however seeks support from the following passage from “Craies on Statute Law)

“Kets of Parliament some times contain general enactments relating to the whole subject-matter of the statute, and also specific and particular enactments relating to certain special matters; and if the general and specific enactments prove to be in any way repugnant to one another, the question: will arise, which is to contro! the other? In Pretty v. Solly, (1859) 26 Beav.606, 610, “Romilly M.R. stated as "follows what he considertd to be.the rule of construction ‘under such circumstances. ‘‘The general rules,” said he, “which: are applicable to particular and general enactments in statutes are very clear; the only difficulty is in their applica-tion. © The rule is, that whenever there is a particular enactment — and: a general enactment in the same ,statute, and the latter, taken in its most comprehensive sense, would over rule the . former, the particular’enactment must be operative, and the general enactment must be .taken to affect only the other — - parts of the statute to which it may properly apply.”

(Emphasis added)

It is overlooked that the said passage deals with different pro-

(1) Statute Law of Craies, 7th Edition, 222

» ~

- RAMCHANDRA MAWALAL ?. U, P. STATE (Thakkar, J.) 359 visions in the ‘‘same”’ statute, That when there is a special provision inthe very same statute in regard to a subject matter, the special provision of the statute will ordinarily prevail, in rivalry or com-

: petition with the general provision, is a proposition with which there - “is no quarrel. But then we are not at all concerned. with any rivalry between two provisions of the ‘same’ statute. We are faced with two enactments by the same legislature which create two sources of | power to achieve the same purpose. To repeat what has been observed earlier, there is no fegal bar, to‘creating two sources of power, And there is no authority in principle or precedent for contending that one source of power és more valid than the other. Or that the power validly conferred by the same Jegislature can be exercised only

‘under one, and not the other, of the two statutes, leaving aside the question of irreconcilable or intolerable inconsistency. We, therefore, . confirm the view of the High Court and repel the challenge. + . , : aay : Re: Ground B: The validity of the impugned, notification issued by the State under the ‘DIR’ is assailed on the ground that it is

~ inconsistent with the earlier notification issued by the Centre. As - discussed earlicr, the Central notification does not ‘specifically’ deal with the question as regards selling price in respect of sales from the existing stocks acquired by the dealers at the pre-enhancement prices which remained’ unsold with them as the cultivators could not effect purchases till then. In other words the Central notification does not deal with this ramification at all. It does not show awareness of this dimension and is altogether silent on the subject. The impugned

. State notification, issued later, on the other hand, deals, specifically, pointedly, and solely, with this dimension. It is in this perspective that the issue has to be judged bearing in mind the undisputed.position . that there is no Centre-State conflict involved in the sense that (1) the

Centre which is not even impleaded as a party, does not question the . power of the State or the validity of the notification as impinging on its (Centre’s) jurisdiction or authority; (2) Centre has not asserted its superior authority from the standpoint of Centre-State-power- equation in order to supérsede the State notification.

The question’ clamouring for solution. in this scenerio has. two

. facets, VIZ 7

(1) Whether there is any inconsistency between the Central notification on the one hand and the State notification on the other, and;

_ 360 . SUPREME, COURT REPORTS [1984] 2 scr,

(2) whether the inconsistency is.an irreconcilable cr intolerable one. ;

> . | . . e fs there inconsistency. ? .

- The Central notification, as discussed earlier, is altogether silent " on the ramification regarding sales from out of existing stocks acquired by the dealers at lower rates: The impugned State notification, on the - other hand, deals-exclusively with this aspect. The State notification sp2aks on a refinement of the subject about which the Central noti-.

fication is blissfully unaware and on. which it is altogether silnt. The two do-not ove lap. ‘There is therefore no real inconsistency. . The: principle may be stated thus. The Centre and the State both ‘ cannot speale on the same channel and creaté disharmeny. If both speak, the voice of the Centre will drown the voice of the Slate. The’

State has to remain ‘silent’ or it will be ‘silenced’. But the State has the right to ‘speak’ and can ‘speak’ (with” unquestionable authority)

where the Centre is ‘silent,’ without introducing. disharmcny. If the Centre sits only on a portion of the Chair, the State can sit on the rest’ of the portion with arms thrown on the shoulders of each other.

While the State cannot sit on the lap or.on the shoulders of the Centre, | both can certainly walk hand-in-hand lending support to each other, ‘in a friendly manner, towards the same destination: If the Centre has built a’ wall, and has left;a gap from which intruders can infiltrate, the State can fill the gap in the wall, and thus-make its own contribu- .

- - tion to the Common Cause. What is more, each in- theory and principle must be presumed’ to be conscious of the need for accord and need for accommodating each other in the interest of ‘ NATIONAL HARMONY’. - ; .

"The Centre can object to the State speaking on the same channel, of sittirig on its shoulders, and perhaps; even override the State. But - the Centre and the State can certainly accommodate. each other in a _ friendly spirit in the overall NATIONAL INTEREST when both of them are trying to supplement each ather. In fhe present case both

‘notifications can. safely be construed as supplementary and friendly rather than inconsistent or hostile. The Centre does not question the authority of thé State, and, evidently, the Centre does net object to the State speaking on the nuance on which the Centre has, maintained .silence.’ There is therefore no rea! element of inconsistency in the two ’. notifications: - The following’ passage extracted from Statutory

‘RAMCHANDRA MAWALAL v. U. P. STATE (Thakkar, J) 361 . Construction by gutherland (para 2022) .) Shows that the aspect rela> fh +. ting to. ‘refinement’ is a well recognized factor and that the state law | . can be treated as ‘an exception when the inconsistency is not irreconcilable*:— : * *

RON general Statute applies to all persons and _ localities within its jurisdictional scope, prescribing the governing law upon the subject it encompassen, unless a special statute exists re to treat a refinement of the subject with particularity or to — A prescribe a different law for.a particular locality. . Likewise where a later statute adapted for a particular locality con- ra * flicts with a general law of state-wide application, the special ° ** * of local law wiil supersede the gencral enactment. Where, however, the later spesial or local statute is not irreconcilable ‘with .the gencral statute ‘to the degree ‘that both statutes _ cannot have a coterminous operation, the general statute a _ will not be re pealed, but the special or local statute will exist "as an exception to its terns. ” .

(Emphasis added) Assuming for the sake of argument that it is considered to be an inconsistency, it does not appear to be.an irreconcilable or intoae israble one, so as io invalidate it, as will be presently shown. .

Is the alleged inconsistency irreconcilable or intolerable.one ?

, There are degrees of inconsistencyin the cqntext of conflict of laws. ‘Pher> can be apparent or surface inconsistency which may be ~ _ considzred-as a non-hostile, tglerable, benign, one, subject to ‘the Asy Unguesiioned power of the Centré to override the State if so minded. °

' +.On principle, every apparent inconsistency cannot be presumed to be hostile or intolerable.. More so when the Centre does not even raise a ‘whisper of discord. One of the tests for ascertaining whether thr. ineofisistency Is an irreconcilable or intolerable one, is to pose

- this question ; Can the State law be obeyed or respected without or flouting or violating the Centra! law in letter and spirit? If the answer . * is in the affirmative, the State law cannot be invalidated.- Not.at any ~---. tate when the State law merely ‘promotes’ the real object of both thé (1) Sutheralnd’s Statutory Construction, ° 3rd Edition, Vol. !; Page 488

362 oo SUPREME COURT REPORTS ,_— [1984] 2S.c.R.

laws, and is in the real sense ‘supplementary’ or ‘complementary’ to the Central law.’ In the present case the test answers in favour of the validity of the impugned State notification. The Central notifica- tion is not violated if the dealers sell the fertilizers from out of the .

existing stocks acquired at the lower rates, for both the notifications fix the’ maximum selling price and the maximum selling price fixed

“under the State notification is not higher than that fixed under the —

Central notification. » What is more, the ‘State notification ‘promotes and serves’ the object and purpose of both the Centre and the State. ‘Promotes and serves’, in the sense, that the manifest object of fixing maximum ceiling price is to make. available to. the cultivators who grow the food’for the NATION to obtain the inputs at reasonable prices and to protect them from exploitation so that the food production is not retarded. It is not contended even by the petitioners, for the very good reason that it is incapable of being so contended, that the object of the price regulation is to enable the dealers to make unconscionable profit. Thus the impugned State notification promo- — tes rather than. ‘defeats’, the ‘life-aim’ of Central as also the State - ' notifications. -It helps’ rather than ‘hurts’ the objectives and ‘goals:

of the Centre, and there is no-conflict whatsoever of ‘interest’, ‘purpose’,

"ot ‘perspective’. The State has done only that which the Centre presumably would have readily done if it was fully aware of the situation from all angles of vision. For, the only impact.of the impugned: notification is that the ‘cultivator’ for whose protection the price regulation is essentially made, is saved. from exploitation — without hurting the. legitimate claim of the dealer, who, in any case, gets his fixed profit margin of Rs. 45/- per ton.

In Australian Boot Trade Bmployce's ‘s Federation v. Whybrow Co.,) the High Court of Australia in-a somewhat similar situation

‘held that there was no inconsistency between a State law fixing a minimum wage for workers in the boot trade of 1$ per hour. and a federal law fixing a minimum wage for the same workers of 1} $ per hour. Speaking through Barton, J. the court observed :—

“The determinations of the wages boards (in effect the State law) and. the proposed award (in effect, the Common- "wealth law) are courched in the affirmative in respect of the material part of each, the provision as to. the minimum wage. _ None of them prescribed an inflexible - rate. The (State) determinations prescribe a. minimum. and it is in each case

) (1910) C.L.R. Vol. 10, 266 at 299, -

‘silent’,

~() 11976] 1 S.C.C. 466 at 478

. RAMCHANDRA MAWALAL ¥. U. P. STATE (Thakkar, J.) - 363 “lower than tke ‘minimum named by, the proposed (Commonwealth) award. By paying the latter minimum. an employer will be obeying both laws. The affirmative words of the’ (Commonwealth) award, therefore, do not “impart a contradiction” between it and the (State) determinations. Jt ‘is impossible to say that the employer cannot obey thé one without disobeying the other. Therefore, the former and the latter may stand together. Therefore, according | to the proper test, they are not inconsistent.”’ -

(Emphasis added).

It would thus appear that in a somewhat parallel situation the

Australian High Court-had taken the view. that since both Jaws can be obeyed without disobeying any, there is no conflict. In the present case also an ‘endeavour must be made. to place a harmonious interpretation which would avoid-a collision bétween the two. Another “way of, looking at the problem is this :

though issued by the State, has its source of” power in the ‘DIR’

_ which is a Central Statute enacted. by the Parliament. The State is _merely an instrumentality for executing the purpose of the Central

Act. The impugned notification which is ‘later’ in point of time must, therefore, prevail to the extent it ‘speaks’ on the refinement or nuance of the matter on which nuance the earlier notification is

In any view of the matter, therefore, the challenge from this platform cannot succeed.

It may be mentioned that a half-hearted argument was advanced

. that Art. 254(2) would be attracted and Presidential assent worft become necessary in order to give effect to the impugned notification. There is no merit in it in as much as Art. 254(2) does not’ envision Presidential! assent to ‘notifications’ issued under an Act (as distinguished from ‘laws made by legislature’) as has been observed by a

Constitution Bench of this Court in Kerala State Blectricity Board v.

Indian Aluminium Co. wherein Alagiriswami, J. speaking for

- himslef and for Bhagwati, Goswami and Sarkaria JJ. says -—

“Was it necessary to get the President’s assent for this notification as contended by some of the respondents ? Quite clearly no Presidential assent was possible to the’ nottfication. Article 254(2) does not contemplate Presidential .

The impugned notification, ©

364 =.) SUPREME COURT REPORTS.’ co, | 1984) 26cR.

1 ¢ assent to notifications issued under the Act.. The article - contemplates. Presidential assent only to laws ‘made by the legislature of a State.’’ "This ground of-‘attach also _ accordingly fails. Co

Regarding ground (C): The appellants contended that the impugned notification was violative of Art. 14 of the Constitution of “India and was therefore invalid. The argument was advanced-cn the assumption that the State Governmént had permitted govermen- . tal agencies falling within the definition of ‘dealer’ in .the Fertilizer Control Order, 1957 to sell. the stocks held by the said agencies. imme-

’ diatety preceding the issuance of the impugned notification dated

June 1, 1974 at the higher, rates. This allegation has been controverted by the State of Uttar Pradesh. .A reference to the counter-affidavit ° sworn by the Accounts Officer, Fertilizers ‘and Manuals Directorate of Agriculture, field in-C.M.P. No. 6773 of 1974 clearly shows that the State, Government had not granted ‘any such permissicn. Thus, ’ the very ‘basis of the challenge on the score of hostile discrimination is found to be non-existent. The High Court was perfectly justified in rejecting this contention. We, therefore, confirm .the, view taken by the High Court. .

Thus all the grounds called into aid’ by ihe appellants for - ‘challenging the impugned notification are found to- be devcid of

" substance.

“Under the circumstances the appeals fail. and are dismissed.

_ Having regard to the facts and circumstances of the case there will ~ begro order ‘Tegarding costs. :

The interim orders passed by this. Court are hereby vacated, In the result, the concerned District Magistraté will now have to take appropriate steps to pass on and pay to the cultivators the differential amount deposited by the dealers pursuant to this Court’s orders dated

September 2, 1974, and, Oztobér, 10, 1974, as early as possible. And, .

in any event; within six months of this otder, after proper verification: We order accordingly. Appeals ‘dismissed. Interim orders vacated.

RAMCHANDRA MAWALAL Y. U. B. STATE (Varadarajan, J.) 365

VARADARAIAN, J. Civil’ Appzal 1656 of 1974 is by special leave. The other appeals are “by vertificate granted by the Allahabad High Court. All the appzals arise out of the judgment.of.a Division Bench ofthat High- Court in a baich of Writ Petitions out of which “W.P.

No. 3421 of 1974 was treated as the leading case, Civil Appeals 1568-1576 of 1974 and batch have.arisen out of that batch of Writ Patitions. In. the other set of Civil” Appeals another, Writ Petition of 1974 is said to have been treated as the leading case by the High

~ Court, The decisions were réncered in’ Writ Petition No. 3421 of

1974 for one batch and in another Writ Petition of 1974 for the other batch. But in all the appeals before us, the judgment i in WP. No. 3421 of 1974 alone was referred to.

’ Tne Writ Petitions filed under ‘Article 226 of the Constitution challenged the validity ‘of a notification dated 14-6-1974 issued by the -Government of Uttar Pradesh in exercise of the power conferred - ‘by Rule 114 of the Defence of India Rules, 1971, directing that no registéred dealer of fertilizer shall charge or retain, enter into or enforce any contract for charging, in ‘respect of any fertilizer ‘sold to any person on or after 1.6. 1974, from-any stock held on 31.5.1974, a price exceeding the maximum price fixed by the Central Government for the sale of fertilizer under. an earlier notification dated 11.10.1973 “issued Under Clause 3 of the Fertilizer (Control) Order, 1957 made in exercise of the power conferred by s. 3 of the Essential Commodities Ast, 1955, aS It prevailed on 31-5-[974. The Writ Petitions challenged also an order dated 18.6.1974 ‘passed by the District Agricultura! Officers directing registered dealers -of fertilizers to refund the excess price charged on the sale of fertilizer effected on or after 1.6.1974 from out of the stock which was in existéncé on 31.5.1974, The,

Writ Petitions sought the, quashing of the said ‘notification dated 14.6.1974 and also a direction to the District Agricultural Officers and other District Authorities not to ask’ the dealers to refund: thé excess in respect of sales completed prior to the date of that notification.

_. The High. Court has, while upholding’ the. validity of the notification dated 14.6.1974 and dismissing the prayer for quashing the same, directed the District Agricultural Officers and other District Authori- ties not to enforce the order for refund of the excess price. realized * on the sale’ of fertilizer up to 14.6.1974 from thé stocks which were in existence On 31.5.1974. This part of the High Court’s order has become final‘and has not been challenged by the State Government.

_ This’ Court ‘has. directed by -orders dated 2.9.1974 and 30.10.1974 that the excess price charged on the sale of fertilizer which was in the possession of the appellants . before 1.6. 1974 ‘should be deposited

B .

”

.- * Va ”

366 SUPREME COURT REPORTS . [1984] 2S8.0R

With thé District Magistrate concerned within a fortnight of the sales, -to remain in a separate account. . ; :

Tae fertilizer in question is admittedly a commodity controlled under the Fertilizer (Control) Order, 1957 issued by the’ Central ‘Government in exercise of the powér conferred by s.3 of the Essential Commodities Act, 1955. °The-maximum price for sale of fertilizers by ‘registered dealers to consumers i8 fixed under Clause 3 of the Fertilizer (Control) Order, 1957 by notifications issued from time to time. The sale price of one of the varieties of fertilizers with which

We ate conéerned in these appeals has been fixed at. Rs. 1050 per ton by a notification dated 11.10.1973 which was in force on 31.5.1974, The price fixed in that notification.for the sale of that variety of ferti~ lizer, to registered dealers was, Rs. 1005 per ton leaving a margin of Rs. 45 por-ton on sale to consumers at Rs. 1050 per ton. The Cente tal Government, ii supersession of the notification “dated 11.10.1973 fixed the maximum sale price of that variety of fertilizer at Rs. 2000 per ton by a notification dated. 1.6.1974; thus giving an incteaes of | Rs, 950 per ton for that variety to the dealers. The dealers started sclling at the new rates fixed in that notification for the scveral varieties of fertilizers. The Government of Uttar Pradesh being of the viewthat the Central Government's notification dated 1.6.1974 was not intended to apply to old stock procured by dealers at considerably

- lower prices from producers which was in existence oh 31.5.1974, issued the impugned notification dated 14.6.1974 dirccting that the old stock should be sold at the old rate of Rs. 1050 per ton with _ effect from 1.61974. The Writ Petitions were filed by thé dealers, -some of them for. quashing the State Government’s notification “dated 14.6.1974, some for quashing that notification as also for direct- ‘ing the District Agricultural Officers and other District Authorities not to enforce the order mentioned above and sorhe for the latter direction alone, —_ .

_ The question for consideration by the High Court was the validity of the State Government’s notification dated 14.6.1974 as regards the stock of fertilizer available with the dealers at the end of 31.5.1974,

4.¢., whether that notification will: prevail ‘over thie Central Govern- - ment’s notification dated 1.6.1974,

The first contention urged for the dealers befofe the High Court was that fertilizer was not a-commodity essential to the community Within the meaning of s.3 of the Defence of India Act, 1971 and, therefore, the State Government had no power to fix its price oT give a

RAMCHANDRA MAWALAL v. U. P. STATE (Varadarajan, J) 367 any other direction in regard thereto. ‘he lcarned Judges of the High Court held that chemical fertilizers being necessary for increased production of food crops and oil ‘seeds cropsunder modern scientific methods of agriculture would be: commodities essential for the life * of the community and that the argument.that trade in chemical ferti- * lizgers cannot be regulated under 8.3 of the Defence of India“Act, 1971 is untenable. Before us no argument was advanced by the learned counsel for the appellants that chemical fertilizers are not essential commodites. On the other hand, it was repeatedly contended that it is an essential commodity within the meaning of s.2(1)(a) of the Essential Commodities Act, 1955 and is specifically meftioned as such in s.2(1)(a) (xi) of that Act. There is no dispute before us about this matter though there is dispute whether fertjlizer can be brought within the words ‘“‘any article’? mentioned in Rule 1/4(2) of the Defence of

. India Rules, 1971, Therefore, that question does not arise for detailed ea consideration by us. a

The second ground of attack before the High Court was that the State Government lacked: the power to control the price of chemical fertilizer on ihe ground that no such power-is conferred on-it by the . Defence of India Act, 1971 and the rules framed thereunder in respect of chemical fertilizer as being needed for-the preparation of the defence or connected with the prosecution: of war.. This contention was’

rejected by the learned Judges of the High Court. It is not necessary~ - for us to consider this aspect of the matter as no such argument was advanced before us by the learned counsel for the appellants. .° The dispute before us is as to whether chemical fertilizer would fall within the words “any article” found in Rule 114(2) of the Defence, of India ° Rules framed in exercise of the power conferred by s.3 of the Defence of India Act, 1971 though it is not disputed that the impugned State Government notification dated 14.6.1974 was issued when _ the

~ emergency which was lifted on 22,3.1977 was in force.

The next contention urged before the High Court was that as the Central Government had already fixed the price of chemical fertilizer by the notification dated 1.6.1974 issued under the Fertilizer (Control)

Order, 1957 made in exercise of the power conferred by s'3(2) (c) of the Esgential Commodities Act, 1955, the State Government had no power to fix its price under Rule 114(2) of the Defence of India Rules, ° 1971 by the later notification dated 14. 6.1974 in exercise of its dele-

-gated power. This contention was rejected by the learned Judges of the High Court as being unacceptable. The argument of the learned Advyocate-General appearing for the State of Uttar Pradesh

* , ¥

- 368 . SUPREME COURT REPORTS | [1984] 2 S.C.R.

“before the “High Cour: was that by the impugned notification dated:

. 14,6.1974 the State Government had not fixed any price, but had only directed that certain stocks of fertilizers which were in the posscssion

‘sof dealers on 31.5.1974 shall be sold at the rates fixed by the Central’

Government in the, earlier Notification dated 11.10.1973 which had been supersedéd by its own notification dated, 1.6.1974, has not been accepted by thé learncd Judges of the High. Court as. the basis of their decision. Ona the other hand, they have proceeded on the basis that the State Government has fixed the dealers’ sale price of the

_ fertilizer bythe impugned notification in exercise of the power con- ferred by Rule 114 of the Defence of India Rules, 1971.

The undisputed fact is that the price fixed for the sale of the:

fertilizer to dealers was Rs. 1005 per.ton ‘under the Central Government’s previous notification dated 11, 10.1973 which ‘was superseded by its subsequent notification dated 1.6. 1974 in which the price fixed

" for sale of the Same variety of fertilizer to dealers was Rs. 1960 per - ton from the date-of that notificatio#. The price. fixed for sale by dealers was .Rs. 1050. per ton under the’ superseded notification dated 11.10.1973 and Rs. 2900 per ton.in the notification dated

- 16.1974. The learned Judges of the High Court noted the obvious ( ~ fact that the dealers would get an excessive margin of Rs. 995 per ton — .

in respect of the old stock purchased by: them-at Rs, ,1005 per-ton by selling that.stock at the new sale price of Rs. 2000 per ton fixed

“by the notification dated 1.6.1974, whereas under the notification © dated 11.10.1973 their margin was only Rs. 45 per ton. They have | expressed the view that it could be a legitimate circumstance to per-

,suade them to -exeércise their discretion under Article 226 of the Con-_

Stitution against the’ appellants.

“The learned Judges rejected’ the contention urged ¢ on. 1 bhalf of the dealers that there is conflict. of power: exercised’ by-the Central Government ‘and the: State Government in the same commodity, fertilizer, by the two notifications dated 1.6.1974 and” 14.6.1974-on

” the ground that the Essential Commodities Act, 1955. under which the Fertilizer (Contre!) Order, 1957 has beeh made and the Central

‘Government’s notification dated 1.6.1974 has been issued and the |

Defence of India Act, 1971, under which the Defence of India Rules, 1971 have’ been framed and. the State’ Government’s notification dated 14.6.1974 has been issued, are both Central enactments opera- ting in different fields ‘and have different objects, that it is only an ~ accident that the, two notifications relate to the same commodity, °

‘fertilizer, considered as an essential commodity by the Central Gov- we ro

RAMCHANDRA MAWALAL’ ¥. U.P. STATE (Varadarajan, J.) 369 ernment under the Essential Commodities Act and as a commodity essential to the community by the State Government under the Defence _ ‘of India Rules, that the State Government has unfettered power under Rule 114 of the Defence of India Rules, 1971 to ‘fix the price of fertilizer and regulate its supply notwithstanding ‘the fact that fertilizer ~ js an essential commodity ynder -the Essential Commodities Act,.

1955 and that the State.Government can also. do under the Defence of India Rules,- 1971 framed under the Defence of India Act, 1971 what-the Central Government can do under the Fertilizer (Contro!)

Order, 1957 made under the Essential Comimodities Act, 1955. The — iearned Judges rejected the argument of the learned Advocate- General . that the Central Government’s notification dated 1:6.1974 does not’ Apply to stock” of fertilizer’ which the dealers had carried forward from the stock which was available on 31.5.1974 and héld that in view | of's.37 of the Defence of Iridia Act, 197! whicli says that the provisions of that Act or any Rule made thereunder or any Order made under any such Rul: shall have effect not withstanding anything inconsistent therewith contained in any enactment other than’that Act, or in any , instrument ‘having effect by virtue of any enactment other than that

Act confers supremacy on the later State Government ‘notification dated 14.6.1974 over that of the Central Government dated 1.6.1974.

’ They held that the similar provision in. s.6 of the Essential Commodi- ties Act, 1955 which says that any order made under s.3 of that Act Shall have effect notwithstanding anything inconsistent therewith

- in any other enactment or any instrument having effect. by virtue of any enactment other than that Act’ will not ‘have any effect on the

- power of the State Government exercised under the Rulés made under the later Defence of India Act, 1971 which also is a Central enactment -

‘on the ground that the provisions of the later enactment prevail over those in the earlier enactment of the same Jegislative_body in view of s.37 of the later Act.

The iearned Judges ‘of the High Court rejected the contention urged on behalf of the dealers that the Essential Commodities Act is a special Act dealing with essential commodities and the Defence of India Act, 1971 is a general Act dealing with all other commodities

- and, therefore, the notification dated 1.6.1974 issued by the Central . Goverament under the Fertilizer (Control) Order, 1957 made under the provisions of that Act must prevail over the State Government’s notification dated 14.6.1974 issued under the Defence of India Rules,

4971, framed under the ‘Defence of India -Act, 1971. They have.

observed that no question of special or. general Act arises in these cases in view of, the provisions contained in Ss. 37 of the Defence of

4. %

= o

° 370 , SUPREME COURT REPORTS [1984] 2 s.c.r.

India Act, 1971 and that s.6 of the Essential Commodities Act, 1955 draws within its ambit only those Acts which were in existence and _ in force on the date of commencement of that Act and that it cannot take within its ambit the later Defence of India Act, 1971.

‘The learned Judges of the High Court rejected the contention ;

urged on behalf of the dealers that the State Government’s impugned notification dated 14.6.1974 is malafide and motivated and the result of colourable exercise of power. There is no need to refer to this ground of attack in detail as no argunient was advanced in this ‘Court about any such ground, .

The next contention urged before the learned Judges of the High —

Court on behalf of the dealers was that the State Government’s noti- fication dated 14.6.1974 was discriminatory on the ground that some — governmental agencies falling within the definition of “dealer”? in the Fertilizer (Control) Order, 1957 were permitted to sell their stock of fertiltzer carried oyer from 31.5.1974 at the new rate mentioned in the Central, Government’ s notification dated 1.6.1974. The learned Judges rejected this contenton on the ground that-the impugned notification dated 14.6, 1974 applies to all dealers of fertilizer equally - and does not provide for any such discriminatory treatment to governmental agencies and that the executive oder to that effect, if any, - may be illegal and would not invalidate. the impugned notification as -being discriminatory.

- The learned Judges of the High Court thus upheld the validityof the State Government’s: impugned notification dated 14.6.1974 and held that it is only prospective in operation and would apply only to sales of fertilizer made from 14.6.1974 out of the stock which: was available with the dealers at the end of 31.5.1974.

. The appéllants are dealers in fertilizer as defined in Clause 2(c) of the Fertilizer (Control) Order, 1957. According to that clause ‘dealer’ means any person carrying on the business of selling fertilizer, whether wholesale or retail. According to Clause 2(d) of that Order, fertilizer means any substance used or intended to be used as a fertilizer _of the soil and specified in column 1 of Schedule I and includes a - mixture ‘of fertilizers and a special mixture of fertilizers. Trade and commerce in, and the production; supply. and distribution of the * products of any industry whete the control of such industry by the Union ds declared by Parliament by law to be expedient in -public interest fall under entry 33 of the Concurrent List 11] in the Seventh .

“4 .

—

RAMCHANDRA MAWALAL 1. U.P. STATE (Varadarajan, J.)° 371

Schedule of the Constitution. Trade and commerce within the State — subject to the provisions of Entry 33 of List III fall under entry 26 of the Siate List II in the same Seventh Schedule, Fertilizer is an essential commodity under s,2(a)(xi) of the Essential Commodities Act, 1955, " The Fertilizer (Control) Order; 1957, has been made in exercise of the power conferred by s.3 of the Essential Commodities Act in réspect of fertilizer. Under Clause 3(1) of that Order the Central Government has power, with a view to regulating equitable distribution of fertilizers and making fertilizers available at fair prices, by a notification ift the official gazette, to fix the maximum price or rates at which any fertilizer may be sold by a manufacturer or a dealer. The Central Government had issued the notification dated 11.10.1973

. fixing the maximum sale price by producers fo dealers as Rs. ‘1005 per ton and the maximum sale price by dealers to consumers as Rs. 1050 per ton, in respect of the variety of fertilizer with which we are

.concerned in these appeals. There is nothing on record to show - that when that notification of the Central Government was.in force _ there was any notification of the State Government of Uttar Pradesh fixing the maximum price of fertilizer for sale by dealers. - Subse- ‘quently, the Central Government issued the notification No. G.S.R. 254E dated 1.6.1974 fixing the maximum price at which a dealer could ~ sell that variety of fettilizer as Rs. 2000 per ton in supersession of the earlier notification dated 11.10.1973. There is no dispute that the price fixed for sale. of that variety of fertilizer by the producer to the dealer is Rs. 1960 per ton. Under s 3(1) of the Defence of India Act, 1971 the Central Government had power, by notification . in the Official Gazette, to make such rules as appear to it necessary or expedient for securing the defence of India and civil defence, the public safety, the maintenance of public order or the efficient conduct of military operations, or for maintaining supplies and services essential to the life of the community. Section 1(3) of that Act said that the Act shall come into force at once and shall remain in force during the period of operation of the Proclamation of Emergency.and for six months therevfter, There is'no dispute that the‘ Emergency which was in force when that Act was passed. was lifted on 22.3.1977. Rule 114(2) of the Defence of India Rules, 1971 made in exercise of the power conferred by s.3(1) of the Defence of India Act, 1971 says that if the Central Government or the State Government is.of opinion, that it is necessary or expedient so ‘to’ do for securing the defence of India and civil defence, the efficient conduct of military operations : of the maintenance or increase of supplies and services essential to the life of the community or for securing the equitable distribution and availability of any article or thing at fair prices, it may, by order.

. 372 a SUPREME COURT REPORTS ° (1984) 2 scx, provide .for régulating or ‘prohibiting the production, manufacture, supply and distribution, use and consumption of articles or things. and trade and commerce therein or for preventing any corrupt practice:

or abuse’ of authority in. respect of any’ such. matter.

Rule 114(3)(h) gives power to ‘the Central : ‘Governmént or the

State Government to fix the prices or rates at-which articles or things of any description whatsoever may be’ sold or. hired or for relaxing any maximum or minimum limits otherwise imposed on such prices or rates, It is under that rule that the State Government issued the impugned notification No. A-490(V)/XII-1974 dated 14.6.1974 fixing , ‘the . maximum pricé of the, concerned variety of fertilizer in these terms : “‘No registered dealer’ shall charge or retain or enter into or -- ‘enforce any contract for charging, .in respect of any fertilizer sold to any . person on or after June 1, 1974 from out of’ any stock carried over _ by him from May 31, 1974 a price exceeding the maximum price fixed under Clause 3 of the Fertilizer (Control) Order, 1957 as it prevailed gn May 3], 1974.” The reference to the price as it prevailed on May 31, 1974 is to the price fixed in the Central -Government’s noti-- fication dated 11.10.1973 which has been specifically superseded by the Government's notification dated 1.6.1974. ‘The High Court has . held that the impugned notification dated 14.6.1974 is prespéctive |

- _in- operation and tan apply only to sales made from 14.6.1974 of the

Gq.

fertilizer which was carried over from the stock held at the close of 31,5.1974, It ig not disputed that the notification could be, only

_proSpective in operation and would not apply to sales effected up to 14.6.1974 of the fertilizer carried over from the stock which was. held | _ at the.end of 31.5.1974. It is also not disputed. that the State Gev- .

ernment issued the impugned notification with the object of preventing

- dealers from profiting to the extra extent of ‘Rs, 950 per ton in respect of the stock which had been purchased by them prior to. 1.6. 1974 at:

, Rs.-1005 per ton by selling the same at Rs. 2900 per ton fixed in

_ the notification dated 1.6.1974 while that stock coiid have been sold prior to 1.6.1974 only at Rs. .1050 perton, The question ‘is which of these two notification is valid and should prevail in regard to the fertilizer carried over from the stock held by dealers at the close of 31.5,1974. ,

“The Central “Governments notification dated 16. 1974 issued ‘under Clause 3(1). of the Fertilizer (Control) Order, 1957 made in exercise of the power conferred bys. 3(1) of the Essential Commodities Act, 1955, and the State Government's impugned notification dated

¢t

RAMCHANDRA MAWALAL Y, U. P. STATE (Varadarajan, J) 373

14.6.1974 issued under Rule 114 of the Defence of India Rules, 1971 made in exercise of the powers conferred by.s.3(1) of the Defence of India Act, 1971 relate to the same commodity, fertilizer, which isdeclared to be an essential comniodity under s.2(a)(xi) of the Essential Commodities Act; 1955, and may ordinarily fall. under. the | term

“article of things of any. description whatsoever” occurring in- Rule

114(3)(h) of the Defence of India Rules, 1971 and both of them fix. the maximum price at which dealers can sell the fertilizer. The Central Government’s notification dated 1.6.1974 applies to the whole country while the impugned notification dated 14.6.1974 of the State Government can apply only to- the State. of Uttar Pradesh.

The appellants’ attack on the impugned notification i is two-fold, The first ground of attack forcibly urged by Mr.. P. ‘Govindan Nair,

_ Senior Counsel appearing for.one set of appellants is that the impunged notification is altogether invalid in.law and non ést on the ground that the State Goverriment has -no power whatsoever to issue the notification under the Defence of India Rules i in respect of an essential

- commodity, fertilizer, covered by the Central Government’s notifica- __ tion issued under the Fertilizer (Control) Order, 1957, made in exercise of the power‘conferred by the Essential Commodities Act. .The seccnd .

- ground of attack urged by Mr. Yogeshwar Prasad, Senior Counsel appéaring for the other set of appellants is based ‘on Article 14 of the Cohstitution, namely, that it is discriminatory and, therefore, bad in law. Mr. S.C. Manchanda, Senior Counsel appearing for the respondents in all.the appeals naturally submitted that there is no .

Substance in any of these two grounds,

The second ground of attack projected by Mr. Yogeshwar

Prasad may be taken up first for, consideration. This ground has been considered by the learned Judges of the High Court as the fifth ground of attack before them at, pages 29 to 31 of the paper, book in

_ Civil Appeals 1568-1576 of 1974, and rejected by them. The sub-: mission of Mr. Yogeshwar Prasad is that some governmental agencies falling within the definition of “dealer” in the Fertilizer (Control) ‘Order, 1957 were permitted by the State. Goverriment to sell the -ferfilizer carried over from the stock held’ at the close of 31.5: 1974 at the new enhanced rate of Rs. 2000 per ton. fixed in the Central Gevernment’s notification dated 1.6.1974 and that it is discriminatory ’

against the private dealers who are required by the impugned notifica- tion to sell at the old rate of Rs. 1050 per ton fixed in the Central Government’s old notification dated 11.10.1973. To show that such

' a directidn was given by the State Government, Mr. Yogeshwar ae)

374 SUPREME COURT REPORTS FILE 2 s.0r.

Prasad invited attention to the first sentence in the radiogram 23.7.1974 issued by the Chief Secretary to the Govérnment of Uttar Pradesh. That sentence ‘reads as follows : “All stocks of fertilizer available with ASO, AGRO Cooperatives and Cane Unions be. distributed without any condition regarding purchase of fertilizers at new rates”, It is not possible to make out what exactly was intended to. be conveyed: by that sentence in the radiogram. In the counter-affidavit of the Accounts Officzr, Fertilizers and Manuares Directorate of Agriculture, Government of Uttar Pradesh, filed in C.M.P. 6773 of

'. 1974 on the file of this Court, if is stated that'the State Government has not allowed any State owned agency to sell the stocks of fertilizer carried over from 31.5.1974 at the rates fixed in the Central Government’s notification dated 1.6.1974, that the radiogram was not meant to permit Agricultural ‘Supplies Organisation and the Agro Industrial

. corporation and other governmental agencies to sell the stocks carried over from 31,5.1974 at the -tevised rates and that it was issued to

_ remove only the condition. There is no other material on the record to show that any direction was given by the State Government for the governmental agencies to sell the fertilizer carried over from

31.5.1974 at the enhanced rate fixed in the Central Government’s ° notification dated 1.6.1974. Therefore, the very basis of the contention of Mr. Yogeshwar Prasad that, there is any discrimination against

_ private dealers like the appellants represented by him compared with governmentaf agencies in the matter of the sale price of fertilizer has not been established. Even if: any such direction had been given, it would certainly be bad in law as being discriminatory. It would not, however, invalidate the impugned. notification which per se applies to all dealers of fertiltzers in the entire State of Uttar Pradesh, whether private or governmental.’ Consequently, the impugned notification of the State Government cannot be held to be bad in Jaw on .

the ground of discrimination if it is otherwise valid.’ Mr. Manchanda relied upon the aforesaid counter-affidavit in support of his contention that there is-no basis ‘for the contention that there is any discrimination against private dealers. The second ground of attack

‘ projected by Mr. Yogeshwar Prasad fails and has been rightly rejected by the learned: Judges of the High Court. . The first ground is as regards the power + of the State Government ‘to issue the impugned motification dated 14.6.1974, fixing for the sale of fertilizers by dealers to consumers a price different from the one fixed in the Central _Government’s notification dated 1.6.1974. In considering this question the fact that the notification was issued by the State Government with the object of preventing dealers in the State _

SRAMCHANDRA MAWALAL ¥. U: P. STATE ( Varadarajae, J) "375 of Uttar Pradesh from driving undue excessive profit from-a ericultural A consumers in respect of the fertilizer which had been purchased by the ‘dealers at Rs. 1005 per ton under the old Central’ Government's noti: fication. dated 11.10.1973 ‘and, that it applies to the fertilizer which was ir stock at the end of 31.5.1974, should not weigh with the Court, . for th. question is of the power of the State Government -to issue the notification. The question is whether ‘the State Government 8B .has power to fix the price of fertilizer under the Defence of India Rules, 1971,.framed in exercise of the powers ‘conferred by the Defence

>» of India Act, 1971 after the Central Government had already fixed

4 the price under the Fertilizer (Control) Order, 1957 made in exercise of the power conferred: by the Essential Commodities Act, 1955... | ~ If in Jaw the State. Government could fix ‘the price in.respect of the C . limited stock of fertilizer carried over frorh 31.5.1974, it can certainly fix the price of the fertilizer received by the dealers even after 1.6.1974 in respect of which the Central Governments notification dated 1.6. 1974 would undoubtedly apply.

e 7 The Essential Commodities Act, 1955 in an enactment passed D ‘by Parliament to provide, in the interest. of the general public. for the: control of the production, supply and distribution and trade and commerce in certain commoditics which have’ been notified under

’ that Act*as essential! commodities. The very object of the Essential

’ Commodities Act 1s to check the inflationary trends in prices and to ensure the.equitable distribution of essential commedities. Section E

~ 1(2) of that Act makes it applicable to the whole of India. It is a permanent enactment in the sense that its operation is not restricted

» to any’ particular pericd. ‘The Fertilizer, (Control) Order, 1957 has been made in’ exercise of the power conferred by s 3(2)(C) of the Essen- = - _ tial Commoditiés Act, 1955 for controlling the price at which any +‘ essential commodity may’ be bought or sold. Fertilizer has been F declared to be an essential commodity under s.2(a)(xi) of the Essential . Commodities Act as mentioned above. Therefore, the price fixed in the notification issued under the Fertilizer (Control) Order, 1957) - ‘. squarely applies to fertilizer, The Defence of India Act, 1971.also | is an Act. of Parliament which was intended to provide for special measures to ensute the public safety and interest, the defence of India G and civil defence and for the trial of certain offences and for matters

4 connected therewith. That. Act also extended to the whole of India,

.- but under 5.1(3), it came into force at once. and femained in force

+ during the period of operatfon of the Proclamation: of Emergency and for a’ period of six months thereafter. Sub-clause (a) of Sub- ' section (3) of 8. I. saves anything duly done under the Act as if the

“h.

. ; 376 a _ SUPREME COURT REPORTS - ; {issa]2 s S.C.R. A “Act had 1 not expired, “AS stated earlier the Emergency which wassin - - force when: the State Government’s impugned notification dated - 14.6.1974 was issued, ‘was lifted: on 22.3,1977. The life of the Deferice '-of India’ Act, 1971 thus extended upto six months after 22.3.1977; In : ~ that way the Defence of India Act, 1971 was.a temporary enactment intended to > be i in operation for only : a limited pericd. |

* , ~ ™ The Defence of India ‘Rules, 1971 had been ‘issued in exercise” of the power conferred by 8.3 of the Defence of India Act, 1971. Under Rule 114(2) of those Rules; if the Central. Government or’ the State . Government.is of opinion thatrit is necessary or expedient.so to- do. ° 3 Cc: ’ for securing-the défence of India and civil defence, the efficient conduct a - of military operations or the maintenance or increase of suppliés and services essential. to the life. of the community or for securing the’ _ equitable distribution and‘ availability of any article of thing at fait ' prices, it may, by order, provide for regulating or prohibiting ‘the -production, manufacture, supply and distribution, use and consump- -p © .tion of articles or ‘things and trade and commerce therein or for

“ preventing any corrupt practice or: abuse of. authority in respect of — any such matter. oo, :

~ Sub-rule Gy. of Rulé 114 said that without ‘prejudice to- the generality of ‘the powers conferred by sub-rule (2) an order made .. ’ FE | thereunder may provide for controlling - the prices. or rates at which « . articles. or things of, any description “whatsoever may be sold or © 4 _ hired or: for, relaxing any maximum or minimum limits otherwise .”imposed on: such- prices or ratés. The State’‘Government’s impugned notification Has been issued, as already: stated, in exercise of the power “conferred by this sub-rule of Rule 114,"

The Central. Government had already. assumed power’ ‘under! "the: Essential Commodities Act, 1955 to control the price of essential + commodities inchiding’ fertilizer.as a permanent measure, and could do under the provisioris of that Act in relation to that essential comae modity what it may do under the Defence of India Act, 1971, a tem-_ —G porary. measure, if fertilizer could be brought ‘under the deseription of “articles -or things -of. any description whatsoever’’.. Byt since” it had already assumed the power under the: Essential Commodities ~ Act, 1955" to control the price of fertilizer it’ was not necessqry for it . to get itself armed once again with the power jo control the‘price of... 7 H ihe same essential commodity under the Defence of India Act, 197] |, « which came about 16 years later. Therefore, the contention cf Mr.

. a

* "ON

_ RAMCHANDRA MAWALAL y. U.P. STATE (Varadarajan, J.) 17..

Govindan Nair ‘that the Essential, Commodities Act, 1955 is a special’ enactment relating to -only: éssentia] commodities and the Defence of

‘India‘ Act, 1971 is a general enactment relating to all other commodi- - : ties, and that. the words “articles or things ‘of any description whatsoever” occurring in Rule 114(3)(h) of the Defence of India’ Rules,

1971-cannot be understood to include -essential commodities has, force and. has to be accepted, It cannot be assumed that Parliament which had already legislated in the Essential Commnicdities Act, 1955, -a permanent measure, in. respect of fertilizer intended to legislate once « . again and could have felt:the need to ‘legislate once again in the tem-.

porary Defence of -India ‘Act, 1971 in respect of the same. article, especially’ because what could be- done under the Deferice of India Act and the Rules which may be framed thereunder could as well be done with equal. force under the Essential Commodities Act and

- orders which may be passed thereunder. Therefore, the contention that the State Government has no power to fix the price of. essential ’

-cammodities, covered by the Essential Commodities Act, 1935 ‘and _ - the Fertilizer (Control) Order, 1957 in exercise of the power con- ‘ferred on it"by Rule 114 of the Defence of India Rules, 1971 issued. “under the Defence of India A Act. 197) is well- founded and ‘has to be accepted,

Section 302)(c). of the Essential ‘Commodities Act, 1955, pursuant.

“to which the Fertilizer (Control) Order, 1957 has been ‘made says that without prejudice to the generality of the powers conferred by sub-

“section.(1).an otder made, thereunder: may provide for controlling the price at which any essential commodity may be brought or sold. © This sub-clause of s.3 of the Essential Commodities Act-has not left anything to’be done under the Defence of India Act, 1971 in the matter © .

of fixation of price of any ‘essential commedity whether it be for securing ahy essential commodity for the defence of India or fox the effective military operation or for securing the equitable distribution and availability of essential commodities at fair’ prices or distribution ~ theréof. and trade and commerce therein as envisaged in s.3(1) of that Act.

’

if the State Government felt that there was any special circum-

"stance to be -taken into” decount for fixing the price of the essential ' commodity, fertilizer; in the State of Uttar Pradesh at a rate lower than the one fixed by the Ceritral Government in its notification dated .

'1.6.1974, it could have achieved that abject, by getting steps to be -

“taken under ‘the Essential Commodities, Act ‘itself. Section 32) of that Act lays down that the Central Government 1 may, having regard oe

‘to the local conditions: of any ared and other relevant citcumstances, fix different prices or rates in respect of different areas and for different

-classes of consumers. Thé State Government could have requested | the Central Government to act under s.3(2) of the Essential Commodi-

~ ties Act and fix a different price or rate for the sale by dealers in that

State of fertilizer carried over from the stock held on 31.5.1974. Section ‘5(b) of the Essential Commodities Act provides for delegation

‘ of powers and says that the Central Government may; by notified order, direct that the power to make or issue notifications, under s.3 of that Act shall, in relation to such matters and Subject to such con- also by such State or such officer or authority subordinate.to a State Government as may be specified in the direction. The Central Gov-

. ernment. has not issued any direction under s. 5(b) of the’ Essential

Commodities Act delegating its power to issue notification under

8.3 of that Act to the State Government or any officer or authority

‘of that Government. The State Governnient has thus not resorted

_ to the provisions contained in s.3(2) or s.5(b) of the Essential Commo-. — ' dities Act, but has. proceeded to fix the price of fertilizer.on its own under the Defence of India Rules, 1971. which it cannot do under those Rules and the Defence of India Act, 1971 in respect of the essential commodity.

Section 6 ‘of the Essential Commodities Act, 1955 saves any order made under s.3 of that Act from. the impact of any other enact-

378 ~ SUPREME COURT REPORTS 11984} 2 s.cr. 7

_ ditions, if any, as may -be specified in the direction be exercisable '

-ment. It is not possible to accept: the contention that the other: Act ;

or enactment referred to in s.6 of the Essential Commadities Act, 1955 would be only.the Act or enactment which was in force on the - ‘date of commencement of that Act and not any future Act or Acts.

- This contention has been wrongly rejected by the learned Judges. of the High Court, Section 6 of the Essential’ Commodities Act says’

that-an order made under s. 3 shall have effect notwithstanding any- thing inconsistent therewith contained’ in any enactment other than .

that Act or any instrument having effect by virtue of any enactment other than that Act, It is true that there is a similar saving provision in 8.37 of the Defence of India Act, 1971 which says that the provisions | - of that Act or any Rule made thereunder or any order made under any such Rule shall have effect notwithstanding anything inconsistent : therewith contained in any ehactment other than-that Act or in any .

instrument having effect -by virtue of any enactment other than that -

Act. But as stated: ‘above, the Defence of India Act, 1971, which was a general and temporary Act and the Rules framed thereunder cannot apply -to fertilizer which is an essential commodity ‘governed t > . , @ |

_ RAMCHANDRA MAWALAL ¥. U. P. STATE ¢ Varadarajan, I) 379 by the Eésenitial Commodities Act, 1955 and the Fertilizer (Control)

Order, 1957 made under the provisions of that Act, Therefore, the State Government cannot without delegation issue any notification under the Defence of India Act and Rules, 1971 in regard to the price of fertilizer, an essential. commodity governed by the Essential Commodities Act and the Fertilizer (Control) order, 1957. The learned Advocate-General of the State was perhaps fully conscious of -the legal position that the State Government @annot fix-the price-of an essential commodity by any notification under the Defence of India Rules,- 1971 in the circumstances when he took the patently unacceptable stand before the learned Judges of the High Court_that the State

: Government did not in fact fix the price of fertilizer in its impugned | notification dated 14,6.1974 but it only directed that certain stock of ° fertilizer which was in the possession of dealers at the end of 31.5.1974 and was carried over by-them shall be sold at the rate fixed in the

Central Government’ s earlier niotification- dated 11.10. 1973, which ... as stated above; has been spécifically superseded by ‘its, subsequent — notification dated 1.6.1974.- If the State Government had not fixed the price at which fertilizer can be sold be dealers by the impugned ' notification dated “14,6.1974 though it is no doubt in respect of the stock carried over from .31.5.1974, one fails to see what else it did or why it was considered necessary. Therefore, the learned Judges of the High Court have rightly rejected it hat submission of the learned Advocate-General.

' As stated above, trade and, commercé in and the production, supply and distribution of the products. of any industry where the control of such indusiry by the Union is declared by Parliament by law to be expedient in the’ public interest fall under entry 33 of the © Concurrent List II], and trade and commerce within the State subject to the provisions of Entry 33 in the Concurrent List III fall under

Entry 26 of List II of the Seventh Schedule to the Constitution. . If the State Government’s impugned notification is assumed to be a° law enacted by that State’s Legilsture on Entry 26 of List II, since the Act of Parliament passed on Entry 33 of List III and the Fertilizer

(Control) Order, 1957 passed under that Act were already in force, _ the assent of the President had to be received in order, that the State’

. Government’s notification assumed to be a Jaw-enacted by the State’ s ’ Legislature may prevail in -the State as required by Article 254(2) of the Constitution which feads thus :° a “Where a law made by’ the Legislature of a State with | respect to one of the matters enumerated in the Concurrent

_ List contains’ any provision repugnant to the provisions of an earlier law made by Parliament or an existing law :with - tespect to that matter, then, the'law, so made by the Legisla- . ture of such State shall, if it has been reserved for the con- - sideration of the President'and has received his assént, prevail

_ in that State:

. Provided that nothing in this clause shall prevent Parliament from enacting at any time any law with respect to the same matter including a law adding to, amending, : varying , or repealing the law so made. by the Legislature of the ‘State.”’

' There is nothing’o ‘on record to show that the impugned notifica- °

_ tion of the State Government was placed béfore the President for his assent and that his assent has been received: Therefore, the State

Government’s impugned notification. ever? as a law cannot prevail : Over the earlier notification of the Central Government,

_ The: learned Judges of the High Court-were not right in rejecting .

~ the submission made:before them that there is conflict between the _ two notifications of the’ Central Government dated 1.6.1974 and of ‘the State Government dated 14.6.1974 and in-holding that the State . Government has unfettered power under ‘the Defence. of India Act, 197] to fix the price’ of fertilizer and regulate its supply notwithstanding the fact that fertilizer és an ‘essential commodity ‘under the Essential -

_ Commodities Act, 1955 in obserying and that what the Central Gov- “ emment can ‘do under the Fertilizer (Control) Order,’ ‘1957 -the State ‘Government can do under the Defence of India Rules, 1971.- There

‘js a clear conflict between the two notifications in respect of the same -—

‘essential’ commodity, fertilizer, for’ under the Central Government’s notification dated 1.6.1974 the price-at which a dealer can sell fertilizer ~ of the concerned’ variety is Rs. 2000 per ton while under the State Gevernment’s notification dated 14, 6.1974 itis only Rs. 1050 per ‘ton though no doubt it is restricted to the stock carried over from

31.5.1974 which is immaterial in judging the power of the State Gov- _ ernment to fix the price of an essential corimodity by a notification

; made under the Defence of India Rules, 1971 in respect .of which. - . the Central Government had already ‘fixed the pice under the Fer- , tilizer: (Control), Order,‘1957; Once the Central enactment and the ©

Central. Government’s notification govern the pricé of an essential’ . commodity the State Government’s notification issued in exercise . of the delegated authority under the Defence of India Act and the

Rules framed thereunder cannot prevail, The 2 Wo enactments have

RAMCHANDRA MAWALAL v. U. P. STATE (Vevadarejan, WJ) 381°

. to be read in. “stich a way that there is no conflict between them while _ " giving effect to theagjn their’ respective fields of operation, On the question of conflict and interpretation of statutes, we find the. following passage in Craies on Statute Law (seventh edition) at page 222°:

“Acts: of Parliament sometimés contain general enactnents relating to the whole subject-matter of the statute, and also’ specific and particular enactments relating to certain special matters; and if the general and specific enactments prove to bein any way repugnant to one another, the question “will arise, which is to control the other? In Pretty v. Solly™) Romilly MLR. stated ‘as follows what he consideted to be

- the rule of. construction under such circumstances. “The general rules,” said he, “which are applicable to ‘particular. -. and general enactments in statutes are very clear; the only difficulty is in their application. The rule’is, that whenever

. there is a particular: ‘enactment and: a _general enactment in *° the same statute, and the latter, taken in.its most compre- hensive sense, would’ over rule the former, the particular enact- . “

‘ment must’’ be operative, .and the general enactment msut be taken to affect-only the other parts of the statute to which it may properly apply”.

"The following passage found at page. 187 of the twelfth, edition of Maxwell o on the ‘Interpretation of. Statutes may also be noticed ; :

“If two sections of the same statute are repugnant, the

’ ’ known rule is that the last must prevail”. But, on the general principle that an author must:be supposed not to have inten- .

_ , ded to: contradict himself, the Court will endeavour to con- |

—strue thé language of the legislature in such a: way as te .

‘avoid having to apply. the rule, leges posteriores priores cont: — ' rarias abrogant. For example, the provision in Order’ 47 of the Country Court Rules 1936 that “‘the scale of costs in‘an action for the recovery of a sum of money. only shall “be determined.... as .regards the costs of the plantiff, by ‘the amount. recovered” was not construed as peremptory, for this would have brought it out of harmony with the « earlier provision in the same Order that ‘“‘the costs of proceedings in a Country Court shall be in the discretion of the

Court. ”

(0855) "76 Beav- 606. a,

382 -. , SUPREME COURT REPORTS -1984)2 S.C.R.

AL. -* One way in which reppgnancy can be avoided is by . regarding. two! apparently conflicting pr6Bsions as dealing ‘with distinct matters or Situations. *

There - will be clear conflict between the two notifications Af it _ is understood that the State Government also can, fix the price of B ~ any essential. commodity covered by the Essential Commodities Act, - 1955 and the Fertilizer (Control) Order, 1957 in exercise of the power conferred on it by the Defence of India Act, 1971 and the Defence ) of India Rules, 1971. The conflict can be avoided only if it is held that the Essential Commodities Act, 1955 and_ the Fertilizer (Control). oe Order, 1957 deal with essential commodities and the Defence of India, * ‘C.. Act, 1971 and thé Defence of India Rules, 1971 deal with all other -_ . articles and things of any description whatsoever. The author of’ ‘the two enactments, Essential Commodities Act, 1955 and Defence of India Act, 197] is the same, namely, Parliament, and Parliament ‘must be held to have not intended to contradict itself while dealing * with distinct matters or situations Under those enactments. If the D State Governments are free to fix their own prices in notifications "issued by. them under the Defence of India Rulees, 1971 when the Central Government’s notification fixing a single price for the whole country in respect of-an essential commodity is in force that notifica~ tion of the Central Government will become otiose. The qucstion is whether Parliament would have intended such a consequence. AM E The answer can only be an emphatic ho. That situation has to be . clearly avoided by a proper interpretation of the respective powers ~ 3 , of the Central and State Governments under the two Acts,.and by Fan holding that the Essential Commodities Act, 1955, arid the Fertilizer -~ ' (Control) Order, 1957 deal with essential commodities and the Defence of India Act, 1971 and the Defence of India Rules, 1971 dealt with F. - all other commodities notwithstanding that fact that Rule 1143)(h) a “ mentions “articles or things of any description whatsoever”.

‘\

In Municipal Corporation of Delhi Vv, Shiv. Shankar) it is

. observed:

G . “To determine if a later statutory provision repeals by. < implication an, earlier one it is accordingly necessary to . closely scrutinise and conSider the ‘true meaning and effect. * i es both of the earlier and the later statute. Until this is done aw it cannot be satisfactorily ascertained if any fatal mconsis- * -

~, @) 11973] 3 S.C.R. 607.

G) [195571 SCR. 799. a

“RAMCHANDRA MAWALAL ¥. U. P. STATE (Varadarajan J.) 383 - tency exists between them: The meaning, scope and effect of the two statutés, as discovered on scrutiny, determine “ the legislative intent,as*to whether the éarlier law shall cease or shall only be supplemented. “Ifthe objects of the two _ statutory provisions are, different and the language of each Statute is Testticted*to its own objects er subject; then they. . are generally intended to run+ in parallel lines without meet-ing and there: would be’ no real conflict though’ apparently it may appear to be so on the’ surface. Statutes in- ‘pari: materia although in apparent conflict should also so far as reasonably possible, be construed to be in harmony with ‘each other and it ig only .when there is ‘an irreconcilable - “vonflict between the new provision and the prior statute relating to the same subject matter, that the former, being the later expression of the legislature, may be held to prevail, the prior law yielding to the extent of the conflict”.

If the Essential Commodities Act, 1955 and the “Fertilizer

“(Control) Order, 1957 are considered to apply exclusively to fertilizer, an essential. commodity, and the Defence of India Act, 1971 and the Defence of India Rules, 197] are considered to apply to other commodities excluding essential commodities there would be'no. conflict whatsoever between the Essentiat Commodities Act and thé Defence

“of India Act, and between the notifications issued under Fertilizer

(Control) Order, 1957 arid the Defence of India Rules, 1971. If that is not done there will-be real conflict between the two and, there- ° fore, the two Acts must be so construed as to avoid’ conflict in the manner indicated above: : .

Mr, Manchanda invited attention to the following observation, :

“in Zaverbhai Amaidas v. The State of Bombay? - *

“It is true; as already pointed out, that on a question | under article 254(1) whether-an Act of Parliament prevails - _ against a law of the State, no question of repeal arises; but the principle on whicti: the rule of implied repeal rests, ° namely, that if the subject-matter of the later. legislation » is identical with that of-the earlier, so that they cannot ‘both _ stand together, then the earlier is repealed by the later enactment, will be- equally applicable to a question under article 254(2) whether the further legislation by Parliament is in

“3840-0 7 ‘SUPREME. COURT REPORTS _ S84] 28.0, mo respect: of the same matter as that of the State law.’

There. is no- question of placing the later law, Defence of India -

_ Act, 1971, for consideration by’ the President under Atticle 254(2)

. of the Constitution for both’ the laws, the Essential Commodities - 7

Act, 1955 and Defence of India Act, . 1971 are laws passed by Patliament. There does not appear fo be any provision for placing any

_ Notification made by a.State Government under the Defence of India _

Rules, 1971 for consideration by the President. As already ‘stated, if the ‘impugned State Government’s notification is, however, considered to be in the-nature of a State law-there'i is nothing on the record to show that it was placed before the President for consideration and © had received his assent as already stated.

~ .

“a - State of Bombay (supra) Mr. Manchanda made a half-hearted plea that the impugned State Government's notification relates only to fertilizer ‘which was carried over from .the+stock held at the close

" of 31.5.1974-and that-it is intended to protect agricultural consumers :

from dealers making undue profit. and should therefore, be’ held to be, - valid in law. It is not possible to accept this submission of ‘Mr. ‘Manchanda. There. is no basis, whatsoever, to presume, and it will.

be totally uacharitable to the Central Government to presume, that .

the Central Government which had assumed powers under the Essential Commodities Act, 1955 to control the distribution of fertilizer , and make it available at fair prices to consumers was ignorant of or:

.had overlooked, the fact while making the notification dated 1.6.1974 , fixing a higher price*for dealers to-sell fertilizer to consumers with effect from-that date that there may be some “stock of fertilizer on. 31.5.1974 purchased by dealers ‘at lower prices which’ maybe carried‘. ‘Over for.salé subsequently, What’ has been done by the State Gov-. ernment under the impugned notification is utterly, lacking in power and cannot be allowed to stand merely because it relates only to acomparatively small quantity of fertilizer carried over from the stock _ of. 31.5.1974. and was intended to benefit and. protect agricultural ‘ consumers and' prevent’dealers from making undue : profits. For the | “reasons stated above the appeals are allowed and the’ impugned State Government’s notification dated ' 14,6:1974 is quashed.” There will;, ‘be an order directing the District Agricultural Officers - and other’;

District Authorities in the State of Uttar Pradesh not to ask the dealers i

“to refund the excess in respect of the sales completed prior to. the date: _ of the impugned notification. The District Magistrates. concerned.-

“shall returh thé. monies es deposited with’ them by the dealers pursuant

Relying upon the above decision i in Zaverbhai Amaidas v. The , ra

~ RAMCHANDRA MAWALAL ¥. U.P. STATE (Varadarajan, J.) 385 . oe. .

-. to.this Court’s orders dated 2.9.1974 and 30.10:1974. The respondents

LO shall pay the. appellants’ costs. There will beone set.-of advocate’s fees in the batch of appeals in which the appellants are represented - by Mr. Govindan Nair.and another set of advocate’s fees in the otlier_ set of. appeals in which.Mr. Yogeshwar Prasad appears for the appellants. mo 2 Fe ‘ HS.K. Appeals dismissed... - € ‘.

Text of the official Supreme Court Reports (S.C.R.) edition, extracted from the court’s PDF. Page headers and margin letters have been removed; a stray one may remain inside a paragraph. For citing, rely on the official PDF.

RAM Chandra MAWA LAL And Others Etc. v. State Of Uttar Pradesh And Others Etc.

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