{"id":109507,"date":"1964-03-25T00:00:00","date_gmt":"1964-03-24T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/sri-venkata-seetaramanjaneya-vs-state-of-andhra-pradesh-etc-on-25-march-1964"},"modified":"2018-05-04T15:06:32","modified_gmt":"2018-05-04T09:36:32","slug":"sri-venkata-seetaramanjaneya-vs-state-of-andhra-pradesh-etc-on-25-march-1964","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/sri-venkata-seetaramanjaneya-vs-state-of-andhra-pradesh-etc-on-25-march-1964","title":{"rendered":"Sri Venkata Seetaramanjaneya … vs State Of Andhra Pradesh Etc on 25 March, 1964"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Sri Venkata Seetaramanjaneya … vs State Of Andhra Pradesh Etc on 25 March, 1964<\/div>\n
Equivalent citations: 1964 AIR 1781, \t\t 1964 SCR (7) 456<\/div>\n
Author: P Gajendragadkar<\/div>\n
Bench: Gajendragadkar, P.B. (Cj), Wanchoo, K.N., Shah, J.C., Ayyangar, N. Rajagopala, Sikri, S.M.<\/div>\n
           PETITIONER:\nSRI VENKATA SEETARAMANJANEYA RICE ANDOIL MILLS AND ORS.\n\n\tVs.\n\nRESPONDENT:\nSTATE OF ANDHRA PRADESH ETC.\n\nDATE OF JUDGMENT:\n25\/03\/1964\n\nBENCH:\nGAJENDRAGADKAR, P.B. (CJ)\nBENCH:\nGAJENDRAGADKAR, P.B. (CJ)\nWANCHOO, K.N.\nSHAH, J.C.\nAYYANGAR, N. RAJAGOPALA\nSIKRI, S.M.\n\nCITATION:\n 1964 AIR 1781\t\t  1964 SCR  (7) 456\n CITATOR INFO :\n RF\t    1967 SC 997\t (22,34,45,51)\n R\t    1989 SC2105\t (7)\n\n\nACT:\nMadras\tEssential  Arcticales  Control\t and  Requisitioning\n(Temporary)  Powers  Act, 1949 (Mad. 29 of 1949),  ss.\t3(1)\n(2)Applicability  of  the  Act to  electricity\tsupplied  by\nState-Intention\t of Legislature,  consideration\t of-Notified\norders enhancing agreed rate by State-Whether valid under s.\n3-Regulate, meaning of-Increase of tariff-If reasonable\t and\nin  interest of general public-Whether contravenes Arts.  14\nand  19(1)-Constitution of India, Arts. 14 and 19(1)(g)\t and\n(f).\n\n\n\nHEADNOTE:\nElectricity  was supplied to the appellants by\tthe  respon-\ndent-state  for\t many  years past,  and\t several  individual\nagreements  were passed between them prescribing  the  terms\nand   conditions  for  the  supply.   One  of  these   terms\nstipulated  the rate at which the supply had to be  charged.\nThese  agreements did not contain any provision\t authorising\nthe State to increase the rates during their operation.\t The\nrespondent-state  issued two notified orders  enhancing\t the\nagreed\trates.\t The orders indicated that the\tmain  reason\nwhich\tinspired   the\tincrease  was  that   the   existing\nelectricity  tariffs  which were  formulated  several  years\nbefore,\t  had\tbecome\tcompletely  uneconomic\t and   meant\ncontinuously  growing loss to the State.  A large number  of\nconsumers  challenged the validity of the two orders in\t the\nHigh Court under Art. 226.  The writ petitions were  allowed\nand the respondent was restrained from enforcing the revised\nrates.\tThese decisions were challenged by the respondent by\nappeals\t in the High Court, which took a different view\t and\ndismissed the writ petitions.  On appeals to this Court,  it\nwas  contended,\t inter\talia  that  the\t respondent  had  no\nauthority to increase the rate changing this important\tterm\nof the contract by taking recourse to s. 3(1) of the  Madras\nEssential  Articles Control and\t Requisitioning\t (Temporary)\nPowers\tAct,  that  the\t power to  regulate  the  supply  of\nessential   articles  had  to  be  applied  in\t regard\t  to\ntransactions between citizens and citizens and could not  be\napplied\t to  an\t essential article which  the  State  itself\nsupplied;  that\t the  power to\tregulate  conferred  on\t the\nrespondent  by\ts.  3(1)  could not  include  the  power  to\nincrease  the  tariff rate, that the  notified\torders\twere\ninvalid as they contravened the provisions of Art.  19(1)(f)\nand (g) and that of Art. 14 of the Constitution.\nHeld:\t  (i) The challenge to the validity of the notified\norders on the ground that they were outside the purview of\ns. 3(1) of the Act could not be sustained.\nThe State is not bound by a statute unless it is so provided\nin  express terms or by necessary implication.\tIn  applying\nthis rule, the court must attempt to ascertain the intention\nof   the  Legislature  by  considering\tall   the   relevant\nprovisions of the statute together and not concentrating its\nattention on a particular provision which may be in dispute.\nWhere the question is not so much as to whether the State is\nbound  by the statute, but whether it can claim the  benefit\nof the provision of a statute, the same rule of construction\n457\nmay  have  to be applied' Where the statute may be  for\t the\npublic\tgood and by claiming the benefit conferred on it  by\nits  provisions the State may allege that it is serving\t the\npublic\tgood,  it  would still\tbe  necessary  to  ascertain\nwhether\t the  intention of the legislature Was to  make\t the\nrelevant provisions applicable.\nDirector  of  Rationing and Distribution v.  Corporation  of\nCalcutta,<\/a>  [1961]  1 S.C.R. 158 and Province  of  Bombay  v.\nMunicipal Corporation of the City of Bombay,<\/a> [1945-46]\tL.R.\n73 I.A. 271, applied.\n(ii) In construing s. 3 of the Act of the usual rule of con-\nstruction  must\t be  adopted,  s. 3  must  not\tbe  read  in\nisolation, but must be considered in its proper setting\t and\ndue  regard must be had for the other provisions of the\t Act\nand its general scheme and purpose.\n(iii)  The  purpose of the Act is to secure  the  supply  of\nessential articles at fair prices, it would be irrelevant as\nto who makes the supply; what is relevant is to regulate the\nsupply at a fair price.\n(iv) It is well-settled\t that  the function of a clause like\ncl. (2) of s. 3 is merely illustrative.\t In other words\t the\nproper approach to adopt in construing cls. (1), and (2)  of\ns.  3 is to assume that whatever is included in cl.  (2)  is\nalso included in cl. (1).\nKing  Emperor v. Sibnath Banerjee, 72 I.A. 241\tand  Santosh\nKumar Jain v. State, [1951] S.C.R. 303, applied.\n(v)  The  word 'regulate' is wide enough to confer power  on\nthe  State to regulate either by increasing the rate or\t de-\ncreasing  the  rate,  the  test being what  is\tit  that  is\nnecessary  or expedient to be done to maintain, increase  or\nsecure\tsupply of the essential articles in question and  to\narrange for its equitable distribution and its\tavailability\nat fair prices.\n(vi) Having  regard to all the circumstances in\t this  case,\nthe change made in the tariff were reasonable and in the in-\nterests of the general public.\n(vii)  There was absolute no material on the record  of\t the\nappeals\t on which a plea under Art. 14 of  the\tConstitution\ncould even be raised.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL  APPELLATE JURISDICTION: Civil Appeals Nos.  429\t439,
\n591,  592, 597, 689, 694, 724, 725 and 727 of 1962  and\t 15,
\n139,  140,  159, 267 to 269, 331, 334, 337, 340,  342,\t343,
\n347, 352, 389, 746 and 748 of 1963.  Appeals from the  judg-
\nments  and  order dated December 19, 1958,  March  7,  1959,
\nMarch  11,  1959,  April 22, 1959, April 24,  1959  in\tWrit
\nAppeals Nos. 135, 122 of 1957 etc.
\nT.   V. R. Tatachari, for the appellants (in C.A. Nos. 429
\nto 434 and 694 of 1962 and C.A. No. 269\/63).\n<\/p>\n
M.   C.\t Setalvad, P. Kodandaramayya, E. V.  Bhagarathi\t Rao
\nand T. V. R. Tatachari, for the appellants (in C.A. Nos. 438
\nand 439\/62).\n<\/p>\n
M.   C. Setalvad, and R. Ganapathi Iyer, for the  appellants
\n(in C. A. Nos. 436, 437, 724, 725 and 727\/62).\n<\/p>\n
458<\/span><\/p>\n
K. Srinivasamurthy and Naunit Lal, for the appellants (in  C.
\nAs.  Nos. 591, 582, 597, and 689\/62 and 140, 267 and   268\/63).
\nK.  Jayaram and R. Thiagarajan, for the appellants (in\tC.A.
\nNos.  139,  159,  330,\t334, 337, 340,\t342,  343,  347\t and
\n352\/63).\n<\/p>\n
K.   R.\t Chaudhuri, for the appellants (in C.A. Nos. 15\t and
\n389 of 63).\n<\/p>\n
A.   Vedavalli and A. V. Rangam, for the appellant (in
\nC.   As. Nos. 746, and 748 of 63).\n<\/p>\n
D.   Narsaraju, T. Anantha Babu, M. V. Goswami and B.  R. G.
\nK. Achar, for the respondents (in C. As.  Nos. 435437,\t724,
\n725 and 727\/62).\n<\/p>\n
D.   Narsaraju, T. Anantha Babu, Yogeshwar Prasad and B.  R.
\nG.  K. Achar, for the respondents (in C. As.   Nos.  429434,
\n438, 439 and 694\/62 and 269 of 63).\n<\/p>\n
D.   Narsaraju,\t T. Anantha Babu, M. S. K. Sastri and B.  R.
\nG. K. Achar, for the respondents (in C.A. Nos. 591, 597\t and
\n689\/62\tand  140, 267 and 268\/63) and respondent No.  1\t (in
\nC.A. No. 592\/62).\n<\/p>\n
 J.V.K. Sharma and T.Satyanarayana, for respondent No. 2 (in
\nC.A. No. 592\/62).\n<\/p>\n
D.   Narsaraju,\t T. Anantha Babu, R. Gopalakrishnan and\t BR.
\nG.  K. Achar, for the respondents (in C. As.  Nos. 15,\t139,
\n331, 334, 337, 340, 342, 343, 347, 352, 159, 389 and 746-748
\n\/63).\n<\/p>\n
March 25, 1964.\t The judgment of the Court was delivered by
\nGAJENDRAGADKAR,\t C. J.-The principal question of  law  which
\narises\tin  this group of 37 civil appeals  relates  to\t the
\nconstruction  of section 3 of the Madras Essential  Articles
\nControl and Requisitioning (Temporary Powers) Act, 1949 (No.
\n29  of\t1949) (hereinafter called ‘the Act’).\tThe  dispute
\nwhich  has  given rise to these appeals\t centres  round\t the
\nvalidity  of two notified orders issued by  the\t respondent,
\nState of Andhra Pradesh on the 28th January, 1955, and\t30th
\nJanuary, 1955 respectively, and it is the contention of\t the
\nappellants  that  the said notified orders are\toutside\t the
\npurview\t of  s. 3. The appellants in all these\tappeals\t are
\nsupplied electricity by the respondent for many years  past,
\nand  several individual agreements have been passed  between
\nthem  and  the\trespondent during the period  1946  to\t1952
\nprescribing  the  terms\t and conditions on  which  the\tsaid
\nsupply would be made to them.  One of these terms stipulated
\nthe  rate  at  which the supply of  electricity\t had  to  be
\ncharged
\n459<\/span>
\nagainst\t the consumers.\t The impugned orders have  purported
\nto  increase this rate, and the appellants contend that\t the
\nrespondent had no authority to change this important term of
\nthe  contract  to their prejudice by taking recourse  to  s.
\n3(1)  and issuing notified orders in that behalf.  That,  in
\nsubstance,  is\tthe nature of the  controversy\tbetween\t the
\nparties before us.\n<\/p>\n
It appears that the Government\tof Madras, and subsequently,
\nits  successor,\t the  respondent, had a\t single\t power\tgrid
\nsystem\tfor  the  whole\t State\tcomprising  Tungabhadra\t and
\nMachkund  Hydro\t Electric System and the Thermal  System  of
\nNellore.   The entire energy was integrated into  one  power
\nsystem.\t  The Government of Madras entered  into  agreements
\nwith   several\tconsumers  in  the  State,   including\t the
\nappellants,  for  the  supply  of  energy  in  bulk  at\t the
\nspecified  rates  which were called tariffs, for  the  years
\n1951 and 1952.\tThese agreements were to be in operation for
\nten  years.  It is common ground that these  agreements\t did
\nnot  contain  any provision authorising\t the  Government  to
\nincrease  the  rates during their  operation.\tThe  charges
\nfixed  were calculated at graded regressive rates  according
\nto  increasing slabs of consumption units, and\tthe  overall
\nunit rates including the demand charge were not to exceed 66
\nannas  without prejudice to the monthly minimum payment\t and
\nthe  guaranteed consumption.  The Government of Andhra\tthen
\nissued\tthe  two impugned orders relating  to  Machkund\t and
\nNellore,  and  Tungabhadra  and\t Chittoore  District   areas
\nrespectively,  enhancing the agreed rates.   These  enhanced
\nrates  were specified in Schedules A and B attached  to\t the
\nsaid  orders.\tAccording to these orders,  these  increased
\ntariffs\t were  to take effect from the date on\twhich  meter
\nreadings were to be taken in the month of February, 1955 and
\nwere  to operate for the future.  The increase in the  rates
\neffected   by\tthese  orders  was  thus  to   operate\t not
\nretrospectively,  but  prospectively.  The  impugned  orders
\nindicate that the main reason which inspired the said orders
\nwas  the  knowledge that the  existing\telectricity  tariffs
\nwhich  were  formulated nearly 15 years before,\t had  become
\ncompletely  uneconomic; the charges of labour and the  price
\nlevel of all material had enormously increased; and that in-
\nevitably meant continuously growing loss to the\t Government.
\nThe  Accountant-General\t made  queries in  respect  of\tthis
\nrecurring  loss\t and  drew pointed attention  of  the  State
\nGovernment  to\tthe  deficits in the working  of  the  Power
\nSystem.\t  Accordingly, the question of revision\t of  tariffs
\nwas  considered in the State of Madras, but was not  decided
\nbecause\t  reorganisation   of  the  States   was   then\t  in
\ncontemplation.\t After the respondent State wits  born,\t its
\nChief Engineer sumbitted proposals for
\n460<\/span>
\nrevisions  of  tariffs\tin  all the  areas  covered  by\t the
\nrelevant schemes.  That is how the impugned notified  orders
\ncame to be issued by the respondent.\n<\/p>\n
The  appellants\t were naturally aggrieved by  these  orders,
\nbecause\t they added to their liability to pay the rates\t for
\nthe  supply  of\t electricity  by  the  respondent  to  them.
\nAccordingly,  a large number of consumers moved\t the  Andhra
\nPradesh\t High Court under Art. 226 of the Constitution,\t and
\nchallenged  the\t validity of the two impugned  orders.\t The
\nlearned\t single Judge who heard these writ petitions  upheld
\nthe  appellants’  plea and came to the conclusion  that\t the
\nimpugned   orders  were\t not  justified\t by  the   authority
\nconferred  on  the respondent by s. 3 of the Act,  and\twere
\nunauthorised,  illegal and inoperative.\t In the result,\t the
\nwrit petition filed by some of the appellants before us were
\nallowed\t and  an appropriate order was\tissued\tagainst\t the
\nrespondent restraining it from enforcing the revised  tariff
\nrates.\n<\/p>\n
These  decisions  were\tchallenged  by\tthe  respondent\t  by
\npreferring  several  Letters Patent Appeals.   The  Division
\nBench  which  heard  these Letters  Patent  Appeals  took  a
\ndifferent view; it held that on its fair and reasonable con-
\nstruction,  s. 3 did confer authority on the  respondent  to
\nissue the impugned orders, and so, the challenge made to the
\nvalidity of the said orders could not be sustained.  That is
\nwhy  the Letters Patent Appeals preferred by the  respondent
\nwere allowed and the writ petitions filed by the  appellants
\nwere dismissed.\t It is against these orders that the  appel-
\nlants  have come to this Court with a certificate issued  by
\nthe said High Court.\n<\/p>\n
After the Division Bench had pronounced its decision on this
\npoint,\tseveral\t other writ petitions were  filed  by  other
\nconsumers,  and\t naturally the single Judge who\t heard\tthem
\nfollowed  the decision of the Division Bench  and  dismissed
\nthe  said writ petitions.  The consumers who were  aggrieved
\nby the decision of the learned single Judge were then allow-
\ned to come to this Court directly by special leave,  because
\nthe points which they wanted to raise were exactly the\tsame
\nas  were raised by the other consumers who had come to\tthis
\nCourt against the principal decision of the Division  Bench.
\nThe present group of appeals thus consists of matters  which
\nhave been decided by a Division Bench of the Andhra  Pradesh
\nHigh  Court, as well as those which have been decided  by  a
\nlearned\t single\t Judge, and they all raise the\tsame  common
\nquestion about the construction of s. 3 of the Act, and\t the
\nvalidity of the impugned notified orders.
\nBefore addressing ourselves to the question of construing s.
\n3,  it is necessary to recapitulate the legislative  history
\nof  the\t Act.  It will be recalled that\t during\t the  Second
\nWorld
\n461<\/span>
\nWar, the Government of India passed the Defence of India Act
\n(No. 35 of 1939) on the 29th of September, 1939.  By  virtue
\nof the powers conferred on the Central Government by s. 2 of
\nthe  said  Act, several Rules came to be framed\t by  Central
\nGovernment  known  as the Defence of India  Rules.   Amongst
\nthese  Rules  was  Rule\t 81(2)\twhich  clothed\tthe  Central
\nGovernment  with power to issue orders which may  appear  to
\nthe  Central  Government to be necessary  or  expedient\t for
\nsecuring  “the\tdefence of British India, or  the  efficient
\nprosecution  of\t the war, or for  maintaining  supplies\t and
\nservices  essential  to the life of the\t community”.   These
\nRules  were in operation during the continuance of the\twar.
\nAfter the war came to an end, it was realised that the\teco-
\nnomic situation in the country continued to be serious,\t and
\nfor  the  proper  regulation of\t economic  affairs,  it\t was
\nthought\t necessary to continue the orders issued  under\t the
\nDefence\t of India Rule 81(2), because shortage of supply  of
\nessential  articles  was very much in  evidence\t then.\t The
\npurpose of continuing the orders was to ensure the supply of
\nessential  articles to the community at large at  reasonable
\nprices\tand to secure their equitable distribution.  In\t due
\ncourse, the Defence of India Act came to an end in 1946, but
\nthe Central Legislature thought it necessary to pass another
\nAct  to take its place and that was the\t Essential  Supplies
\n(Temporary Powers) Act, 1946 (No. 24 of 1946).\tOn the\tsame
\nlines, the Madras Legislature passed an Act in 1946 (No.  14
\nof 1946).  Later, it was replaced by Act No. 29 of 1949 with
\nwhich  we are concerned in the present appeals.\t  After\t the
\nrespondent   State   was  created  under   the\t Scheme\t  of
\nReorganisation\tof States, it passed Act No. 1 of  1955\t and
\nthis Act received the assent of the President on the 21st of
\nJanuary,  1955.\t  By  this  Act,  the  Legislature  of\t the
\nrespondent  State  virtually adopted the Madras Act.   As  a
\nresult, the impugned orders are, in substance, referable  to
\ns. 3 of the Madras Act.\n<\/p>\n
Before\twe  part with this topic, it may be  mentioned\tthat
\nwhen the Madras Act was passed, its Schedule gave a list  of
\nthe  essential\tarticles  as defined by s.  2(a)  and  these
\narticles  were\t12 in number.  When the\t Andhra\t Legislature
\npassed Act No. 1 of 1955 and adopted the Schedule of  essen-
\ntial articles for its purpose, the number of these  articles
\nwas reduced to two; they are charcoal and electrical energy.
\nThe  Andhra Act was originally intended to be  in  operation
\nuntil  the  25th January, 1956, but it was  later  continued
\nfrom  time  to\ttime.  It is common  ground  that  when\t the
\nimpugned  orders  were passed, section 3 of be\tAct  was  in
\noperation  and the present appeals have been argued  on\t the
\nbasis  that the said section is constitutionally  valid,  so
\nthat  the  main point which calls for our  decision  is\t the
\nconstruction of the said section.\n<\/p>\n
462<\/span><\/p>\n
Mr. Setalvad for the appellants contends that in  construing
\ns. 3, we ought not to concentrate on the words used in s.  3
\nin  isolation, but must look at the said section along\twith
\nthe  other  provisions of the Act.  The rule  of  harmonious
\nconstruction,  he urges, requires that we must\tso  construe
\nall  the provisions of the Act as to avoid any\tconflict  or
\nrepugnancy between them.  So construed, section 3, according
\nto  him, cannot be said to confer power on the respondent to
\nenhance the tariff rate chargeable against the appellants in
\nrespect\t of the supply of energy made by the  respondent  to
\nthem.\tThe whole scheme of the Act indicates  clearly\tthat
\nthe  power  to regulate the supply of an  essential  article
\nwhich  has been conferred on the State Government has to  be
\napplied\t in  regard  to\t transaction  between  citizens\t and
\ncitizens  and  cannot be applied to  an\t essential  article:
\nwhich  the  State  itself supplies.  It\t would\tbe  odd,  he
\nsuggests,  if  the State Government is given  the  power  to
\nissue  a  notified order regulating the rates  at  which  it
\nshould\tsupply energy which it itself produces.\t  Therefore,
\nthe dealings by the State Government in the matter of supply
\nof  energy to the consumers should be deemed to\t be  outside
\nthe  provisions\t of s. 3, and that would make  the  impugned
\norders invalid.\n<\/p>\n
The  question  as to whether the State Government  would  be
\nbound by the provisions of legislative enactments passed  by
\nthe  State  Legislature has sometimes led to  difference  in
\njudicial  opinion;  but the decision of this  Court  in\t the
\nDirector of Rationing and Distribution v. The Corporation of
\nCalcutta  and  Ors.<\/a>(1) must be taken to\t have  settled\tthis
\nquestion.   The effect of the majority decision rendered  in
\nthat  case  is\tto recognise the validity  of  the  rule  of
\ninterpretation\tof statutes enunciated by the Privy  Council
\nin  Province of Bombay v. Municipal Corporation of the\tCity
\nof  Bombay<\/a> (2) and that rule is that the State is not  bound
\nby a statute unless it is so provided in express terms or by
\nnecessary  implication.\t  In  applying\tthis  rule,  it\t  is
\nobviously necessary that the Court must attempt to ascertain
\nthe  intention\tof the Legislature by  considernig  all\t the
\nrelevant   provisions  of  the\tstatute\t together  and\t not
\nconcentrating its attention on a particular provision  which
\nmay  be in dispute between the parties.\t If,  after  reading
\nall  the  relevant provisions of the statute, the  Court  is
\nsatisfied  that\t by  necessary\timplication  the  obligation
\nimposed by the statute should be enforced against the State,
\nthat conclusion must be adopted.  If there are express terms
\nto  that  effect, there is, of course,\tno  difficulty.\t  In
\ndealing with this vexed question, sometimes it is  necessary
\nalso to enquire whether the conclusion that the State is not
\nbound by the specific provision of a given statute,
\n(1) [1961] 1 S.C.R. 158.\n<\/p>\n
(2)73 I.A. 271.\n<\/p>\n
463<\/span><\/p>\n
would  hamper the working of the statute, or would  lead  to
\nthe  anomalous position that the statute may lose its  effi-
\ncacy,  and  if the answer to either of these  two  questions
\nindicates that the obligation imposed by the statute  should
\nbe  enforced against the State, the Court would be  inclined
\nto  infer by necessary implication that the State, in  fact,
\nis bound by the statute.\n<\/p>\n
Where,\thowever, the question is not so much as\t to  whether
\nthe State is bound by the statute, but whether it can  claim
\nthe benefit of the provision of a statute, the same rule  of
\nconstruction may have to be applied.  Where the statute\t may
\nbe  for\t the  public  good,  and  by  claiming\tthe  benefit
\nconferred on it by its provisions the State may allege\tthat
\nit  is serving the public good, it would still be  necessary
\nto ascertain whether the intention of the legislature was to
\nmake the relevant provisions applicable to the State.\tThis
\nposition  is also established by the decision of  the  Privy
\nCouncil\t in Province of Bomboy(1) and it still continues  to
\nbe a law in this Country.\n<\/p>\n
Incidentally, we may add that where the Crown seeks to\ttake
\nadvantage of a statute and urges that though it is not bound
\nby  the statute, it is at liberty to take advantage  of\t it,
\nEnglish\t Law does not easily entertain such a  plea,  though
\nthere are observations made in some judicial  pronouncements
\nto the contrary.  As Halsbury points out, “it has been\tsaid
\nthat,  unless it is expressly or impliedly  prohibited\tfrom
\ndoing  so,  the Crown may take advantage of a  statute\tnot-
\nwithstanding that it is not bound thereby.” Having made this
\nstatement, Halsbury has added a note of caution by  ,,saying
\nthat  “there  is only slender authority for this  rule,\t and
\nsince  both the rule and such authority as does\t exist\thave
\nalso been doubted, the rule cannot, perhaps, be regarded  as
\nsettled law(2)”.\n<\/p>\n
To  the same effect is the comment made by Maxwell  when  be
\nquotes\twith approval the view expressed by Sir\t John  Simon
\nthat the decisions which recognise the right of the Crown to
\ntake  advantage\t of  a statutory  provision  “start  with  a
\npassage\t in an unsuccessful argument of a law officer  which
\nwas  not  even relevant to the case before  the\t court,\t but
\nwhich  has been taken out by a text-writer and repeated\t for
\ncenturies  until  it  was believed that it  must  have\tsome
\nfoundation(3)”.\n<\/p>\n
Therefore,  in construing s. 3 of the Act, we cannot  permit
\nthe respondent to rely upon the artificial rule that since
\n(1) 73 T.A. 271.\n<\/p>\n
(2)”, Halsbury’s Laws of England, Vol. 36, p. 432, para 654.
\n(3) Maxwell on Interpretation of Statutes, 11th Ed. p. 136
\n464<\/span>
\nthe  respondent claims a benefit under s. 3, that  construc-
\ntion  should be adopted which supports such a claim.   Thus,
\nthe  position is that when we construe s. 3, we\t must  adopt
\nthe  usual  rule of construction; we must not read s.  3  in
\nisolation,  but must consider it in its proper\tsetting\t and
\nmust  have due regard for the other provisions of  the\tAct,
\nand its general scheme and purpose.\n<\/p>\n
Reverting  then to Mr. Setalvad’s main argument, it  may  be
\nconceded  that when the Act was passed in 1949,\t mainly\t and
\nprimarily  the\tpower  conferred  by  s.  3  on\t the   State
\nGovernment must have been intended to regulate the supply of
\nessential  articles  made by one citizen  to  another.\t The
\nState had not then entered commercial activities on a  large
\nscale  and when s. 3(1) contemplated notified orders  issued
\nfor  the  purpose  of securing\tequitable  distribution\t and
\navailability  at  fair\tprices of  essential  articles,\t the
\nlegislature  could not have in its mind supply of  essential
\narticles  made\tby the State itself.  That is one  point  in
\nfavour\tof Mr. Setalvad’s construction.\t If we\texamine\t the
\nscheme of the Act, it may also have to be conceded that some
\nof the provisions may not be applicable to the State.  Take,
\nfor  instance,\tthe provision of s. 4 which  relate  to\t the
\npowers of requisitioning and acquisition of properties,\t and
\nthe  subsequent\t two  sections that  deal  with\t payment  of
\ncompensation  and  release  from  requisition  respectively;
\nthese provisions may not be applicable to the State.   Take,
\nagain,\tthe control of agriculture which is contemplated  by
\ns.  7; it would not be applicable to the State.\t Section  12
\nwhich  deals with penalties may also be inapplicable to\t the
\nState, and so, would s. 13 be inapplicable, because it deals
\nwith  abetment\tand  assistance\t of  contravention  of\t the
\nprovisions of the Act.\tTherefore, the general scheme of the
\nAct  and  some of its provisions seem to  suggest  that\t the
\nState may not have been within the contemplation of the Act.
\nBut  it is obvious that the rule of harmonious\tconstruction
\non  which  Mr. Setalvad has solely rested his case,  can  be
\ninvoked\t successfully by him only if the words used in s.  3
\nare  capable of the construction which he suggests.  If\t the
\nsaid  words  are capable of two constructions one  of  which
\nsupports the appellants’ case and the other that of the res-
\npondent, it would be legitimate to adopt the first construc-
\ntion, because it has the merit of harmonising the provisions
\nof s. 3 with the general scheme and purpose of the Act.\t  On
\nthe other hand, if the words used in s. 3(1) are not reason-
\nably  capable of the construction for which  the  appellants
\ncontend, then it would be unreasonable and illegitimate\t for
\nthe  Court  to limit the scope of  those  words\t arbitrarily
\nsolely for the purpose of establishing harmony between the
\n465<\/span>
\nassumed object and the scheme of the Act.  Therefore, it  is
\nnecessary to examine the words used in s. 3 very  carefully.
\nLet us first read s. 3(1):-\n<\/p>\n
\t      “The State Government so far as it appears  to
\n\t      them   to\t be  necessary\tor   expedient\t for
\n\t      maintaining,  increasing or securing  supplies
\n\t      of  essential  articles or for  arranging\t for
\n\t      their equitable distribution and\tavailability
\n\t      at fair prices may, by notified order, provide
\n\t      for  regulating  or  prohibiting\tthe  supply,
\n\t      distribution   and  transport   of   essential
\n\t      articles and trade and commerce therein”.\n<\/p><\/blockquote>\n
Sub-section (2) provides that without prejudice to the gene-
\nrality of the powers conferred by sub-section (1), an  order
\nmade thereunder may provide for objects specified in clauses\n<\/p>\n
(a) to (k).  The majority of these objects may not be appli-
\ncable  to the State, while, conceivably, some may be  appli-
\ncable to it.\n<\/p>\n
Section\t 3(1)  is obviously intended to secure\tsupplies  of
\nessential  articles  and  to  arrange  for  their  equitable
\ndistribution and availability at fair prices.  If electrical
\nenergy\tis  one of the essential articles mentioned  in\t the
\nSchedule,  there  can  be no difficulty in  holding  that  a
\nnotified  order can be issued under s. 3(1)  for  regulating
\nthe  supply of the said energy and making it available at  a
\nfair  price.   Indeed,\tit is not  disputed  and  cannot  be
\ndisputed that if electrical energy is produced by a  private
\nlicensee  and  is  then supplied to the\t consumers,  such  a
\nsupply\twould fall within the mischief of s. 3(1),  and\t the
\nterms  on which it can and should be made to  the  consumers
\ncan be regulated by a notified order.  There can also be  no
\nserious\t dispute that the terms of a contract  entered\tinto
\nbetween\t a  private supplier of electrical  energy  and\t the
\nconsumer  could\t be modified by a notified  order.   Section
\n3(1)  undoubtedly confers power on the State  Government  to
\nvary  and modify contractual terms in respect of the  supply
\nor distribution of essential articles.\tIf that be so, on  a
\nplain  reading of s. 3(1) it seems very difficult to  accept
\nthe  argument that the supply of electrical energy which  is
\nincluded  in  s. 3(1) if it is made, by a  private  producer
\nshould go outside the said section as soon as it is produced
\nby  the State Government.  The emphasis is not on  who\tpro-
\nduces and supplies, but on the continuance of the  equitable
\ndistribution  and  supply  of  essential  articles  at\tfair
\nprices.\t  If  the object which s. 3(1) has in mind  is\tsuch
\nequitable  distribuiton and availability at fair  prices  of
\nessential articles, then that object would still continue to
\nattract the provisions of s. 3(1) even though the  essential
\narticle may be produced by the State and may be supplied  by
\nit to the consumers.\n<\/p>\n
466<\/span><\/p>\n
The words used in s. 3(1) are so clear, unambiguous and wide
\nthat  it  would be unreasonable to limit their\tscope  arti-
\nficially  on  the ground that by giving effect to  the\twide
\nlanguage  of the section, we might reach a result  which  is
\nnot  completely\t harmonious or consistent with\tthe  assumed
\nobject\tand  purpose of the Act.  Indeed, as  we  have\tjust
\nindicated, if the purpose of the Act is to secure the supply
\nof essential articles at fair prices, it would be irrelevant
\nas to who makes the supply; what is relevant is to  regulate
\nthe supply at a fair price.  Therefore, we are not  prepared
\nto  accede to Mr. Setalvad’s argument that s. 3(1) does\t not
\nconfer\ton the respondent the power to modify the  terms  of
\nagreements between it and the appellants.
\nMr.  Setalvad,\tno doubt, contended that  in  construing  s.
\n3(1),  we  may\thave regard to the fact\t that  most  of\t the
\nclauses\t  under\t s.  3(2)  would  be  inapplicable  to\t the
\nrespondent  State, and so, he virtually suggests  that\teven
\nthough the words in s. 3(1) may be wide, their width  should
\nbe controlled by the limited scope of the clauses prescribed
\nby  subsection\t(2).   We are not prepared  to\taccept\tthis
\nargument.   After the decision of the Privy Council in\tKing
\nEmperor v. Sibnath Banerjee(1), it is well-settled that\t the
\nfunction  of  a\t clause\t like clause  (2)  of  s.  3  merely
\nillustrative (vide also Santosh Kumar Jain v. The State(3)).
\nIn  other words, the proper approach to adopt in  construing
\nclauses\t (1) and (2) of s. 3 is to assume that\twhatever  is
\nincluded in clause (2) is also included in clause (1).\tThat
\nis  not\t to  say that if the words of clause  (1)  are\twide
\nenough\tto  include cases not included in clause  (2),\tthey
\nmust,  for  that reason, receive  a  narrower  construction.
\nTherefore,  we\tmust  ultimately go back to  clause  (1)  to
\ndecide\twhether the supply of electrical energy made by\t the
\nrespondent to the appellants can be regulated by a  notified
\norder  issued  under  it  or not, and  the  answer  to\tthat
\nquestion must, in our opinion, be in the affirmative.
\nIn  this  connection,  it may be pertinent to  refer  to  s.
\n3(2)(b)\t which provides for controlling the prices at  which
\nany essential article may be bought or sold.  It is not easy
\nto see why this clause cannot take in articles which may  be
\npurchased  or  sold by the State.  The clause is  so  worded
\nthat the transactions of sale and purchase of all  essential
\narticles would be included in it.  It is true that where the
\nState  wants to sell its essential articles, it may be\table
\nto  regulate  the  prices and control them by  means  of  an
\nexecutive  order; but that is not relevant and\tmaterial  in
\nconstruing the effect
\n(1) 72 I.A. 241 at p. 248.\n<\/p>\n
(2) 1951 S.C.R. 303.\n<\/p>\n
467<\/span><\/p>\n
of the words; if the words take within their sweep essential
\narticles sold by the State, there is no reason why it should
\nnot be competent to the State to issue a notified order con-
\ntrolling the prices in that behalf.\n<\/p>\n
In  regard  to\tthe purchase of essential  articles  by\t the
\nState, the position is still clearer.  If the State wants to
\npurchase essential articles, power to regulate the prices of
\nsuch,  articles\t would\tseem to be clearly  included  in  s.
\n3(2)(b).  In-‘ deed, during the course of his arguments, Mr.
\nSetalvad   did\t not  seriously\t  dispute   this   position.
\nTherefore,  when  the  State  wants  to\t purchase  essential
\narticles, it can regulate the price in that behalf by  means
\nof a notified order issued under s. 3(1) and that shows that
\nin the cases of both sale and purchase of essential articles
\nby the State, s. 3(2)(b) read with s. 3(1) would clothe\t the
\nState with the power to issue the relevant notified order.
\nThen,  it was faintly argued by Mr. Setalvad that the  power
\nto  regulate conferred on the respondent by s.\t3(1)  cannot
\ninclude\t the  power to increase the tariff  rate;  it  would
\ninclude the power to reduce the rates.\tThis argument is en-
\ntirely misconceived.  The word “regulate” is wide enough  to
\nconfer\tpower  on the respondent to regulate either  by\t in-
\ncreasing  the rate, or decreasing the rate, the\t test  being
\nwhat  is  it that is necessary or expedient to\tbe  done  to
\nmaintain,  increase,  or  secure  supply  of  the  essential
\narticles  in  question\tand to\tarrange\t for  its  equitable
\ndistribution  and  its\tavailability at\t fair  prices.\t The
\nconcept\t of  fair prices to which s. 3(1)  expressly  refers
\ndoes  not mean that the price once fixed must either  remain
\nstationary, or must be reduced in order to attract the power
\nto  regulate.\tThe power to regulate can be  exercised\t for
\nensuring the payment of a fair price, and the fixation of  a
\nfair  price would inevitably depend upon a consideration  of
\nall  relevant and economic factors which contribute  to\t the
\ndetermination  of  such\t a fair price.\tIf  the\t fair  price
\nindicated  on a dispassionate consideration of all  relevant
\nfactors\t turns\tout to be higher than the  price  fixed\t and
\nprevailing,  then  the\tpower to  regulate  the\t price\tmust
\nnecessarily include the power to increase the price so as to
\nmake  it fair.\tThat is why we do not think Mr. Setalvad  is
\nright in contending that even though the respondent may have
\nthe power to regulate the prices at which electrical  energy
\nshould be supplied by it to the appellants, it had no  power
\nto  enhance the said price.  We must, therefore,  hold\tthat
\nthe  challenge\tto  the validity of  the  impugned  notified
\norders on the ground that they are outside the purview of s.
\n3(1) cannot be sustained.\n<\/p>\n
That  takes  us to the next question as to whether  the\t im-
\npugned notified orders are invalid, because they contravene
\n468<\/span>
\nthe provisions of Art. 19(1)(f) and (g) of the Constitution.
\nThe  impugned  orders have been notified by  virtue  of\t the
\nfore, be treated as law for the purpose of Art. 19.  We\t may
\nalso  assume in favour of the appellants that the  right  to
\nreceive the supply of electricity at the rates specified  in
\nthe  agreements is a right which falls within Art.  19(1)(f)
\nor  (g). Even so, can it be said that the impugned  notified
\norders\tare  not  reasonable and in  the  interests  of\t the
\ngeneral\t public’?  That is the question which calls  for  an
\nanswer\tin dealing with the present contention.\t It is\ttrue
\nthat by issuing the impugned notified orders, the respondent
\nhas  successfully  altered  the\t rates\tagreed\tbetween\t the
\nparties\t for  their  respective contracts  and\tthat,  prima
\nfacie,\tdoes appear to be unreasonable.\t But, on  the  other
\nhand,  the  evidence shows that the tariff which  was  fixed
\nseveral\t years ago had become completely out of date and  he
\nreports\t made  by the Accountant-General from time  to\ttime
\nclearly\t  indicate   that  the\trespondent   was   supplying
\nelectricity  to\t the  appellants at the\t agreed\t rates\teven
\nthough it was incurring loss from year to year.\t  Therefore,
\nit cannot be said that the impugned notified orders were not
\njustified on the merits.  The prices of all commodities\t and
\nlabour charges having very much increased meanwhile, a\tcase
\nhad.  certainly been made out for increasing the tariff\t for
\nthe  supply  of\t electrical energy.  But  it  could  not  be
\npossible  to  hold  that  the  restriction  imposed  on\t the
\nappellants’  right  by\tthe increase made in  the  rates  is
\nreasonable and in the interests of the general public solely
\nbecause\t the impugned orders have saved the  recurring\tloss
\nincurred  by the respondent under the contracts.  If such  a
\nbroad  and general. argument were accepted, it may  lead  to
\nunreasonable and even anomalous consequences in some  cases.
\nThis question, however, has to be considered from the  point
\nof view of the community at large; and thus considered,\t the
\npoint which appears to support the validity of the  impugned
\norders is that these orders were passed solely for the\tpur-
\npose  of assuring the supply of electrical energy  and\tthat
\nwould  clearly\tbe for the good of the community  at  large.
\nUnless prices were increased, there was risk that the supply
\nof electrical energy may itself have come to an end.  If the
\nrespondent thought that the agreements made with the  appel-
\nlants were resulting in a heavy loss to the public  treasury
\nfrom  year to year, it may have had to consider whether\t the
\nsupply should not be cut down or completely stopped.  It may
\nwell be that the respondent recognised its obligation to the
\npublic at large and thought that supplying electrical energy
\nto  the\t consumers  who\t were  using  it  for  profit-making
\npurposes,  at  a loss to the public exchequer would  not  be
\nreasonable  and\t legitimate,  and it  apprehended  that\t the
\nlegislature  may  well question the propriety or  wisdom  of
\nsuch
\n469<\/span>
\na course; and so, instead of terminating the contracts,\t de-
\ncided  to assure the supply of electrical energy at  a\tfair
\nprice  and  that is why the impugned  notified\torders\twere
\nissued.\t  We ought to make it clear that there has  been  no
\nsuggestion  before us that the prices fixed by the  impugned
\nnotified   orders  are,\t in  any  sense,   unreasonable\t  or
\nexcessive,  and\t it  is significant that  even\tthe  revised
\ntariff\thas  to come into operation  prospectively  and\t not
\nretrospectively.   Therefore,(\thaving\tregard\tto  all\t the
\ncircumstances in this case, we are disposed to hold that the
\nchange\tmade  in the tariff by the notified orders  must  be
\nheld  to be reasonable and in the interests of\tthe  general
\npublic.\n<\/p>\n
Mr. Setalvad also attempted to challenge the validity of the
\nimpugned  orders on the ground that they contravene Art.  14
\nof  the\t Constitution.\tIn support of  this  contention,  he
\ninvited\t our  attention\t to  the  allegation  made  in\tWrit
\nPetition No. 923 of 1956.  In that writ petition, one of the
\npetitioners stated that the rate prescribed under the agree-
\nments had not changed and had remained stationary as far  as
\nconsumers  under  the  State  Government’s  licensees\twere
\nconcerned.   The affidavit appears to concede  that  certain
\n,other\tlicensees  had\tincreased  their  rates,  but\tthat
\nincrease, it is claimed, was negligible or nominal; and\t so,
\nthe  argument was that the rates which are widely  divergent
\nbetween consumer and consumer constitute a contravention  of
\nArt. 14. Mr. Setalvad fairly conceded that these allegations
\nare vague and indefinite and no other material has been pro-
\nduced either by the petitioner who has made this  affidavit,
\nor by any of the other petitioners who moved the High  Court
\nfor  challenging  the validity of the impugned\torders.\t  In
\nfact,  we  do  not  know what the  rates  charged  by  other
\nlicensees  are and have been, and how they compare with\t the
\nrates  prescribed by the original contracts as well  as\t the
\nrates enhanced by the impugned notified orders.\t We ought to
\nadd that the Division Bench of the High Court appears to  be
\nin  error when it assumed that the respondent was  the\tsole
\nsupplier of electrical energy in the State of Andhra.  It is
\ntrue that the bulk of the energy is supplied by the  respon-
\ndent;  but there are some other private licensees which\t are
\nlicensed to supply electrical energy to the consumers and in
\nthat  sense, at the relevant time the respondent was  not  a
\nmonopolist  in\tthe matter of supply of\t electricity.\tThis
\nCourt  has repeatedly pointed out that when a citizen  wants
\nto challenge the validity of any statute on the ground\tthat
\nit contravenes Art. 14, specific, clear and unambiguous alle
\ngations\t must  be made in that behalf and it must  be  shown
\nthat  the  impugned statute is based on\t discrimination\t and
\nthat   such   discrimination  is  not\treferable   to\t any
\nclassification
\n470<\/span>
\nwhich  is rational and which has nexus with the\t object\t in-
\ntended to be achieved by the said statute.  Judged from that
\npoint of view, there is absolulety no material on the record
\nof  any of the appeals forming the present group on which  a
\nplea under Art. 14 can even be raised.\tTherefore, we do not
\nthink it is necessary to pursue this point any further.
\nThe result is the appeals fail and are dismissed with costs.
\nOne set of hearing fees.\n<\/p>\n
Appeals dismissed.\n<\/p>\n
471<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Sri Venkata Seetaramanjaneya … vs State Of Andhra Pradesh Etc on 25 March, 1964 Equivalent citations: 1964 AIR 1781, 1964 SCR (7) 456 Author: P Gajendragadkar Bench: Gajendragadkar, P.B. (Cj), Wanchoo, K.N., Shah, J.C., Ayyangar, N. Rajagopala, Sikri, S.M. PETITIONER: SRI VENKATA SEETARAMANJANEYA RICE ANDOIL MILLS AND ORS. Vs. RESPONDENT: STATE […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-109507","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nSri Venkata Seetaramanjaneya ... vs State Of Andhra Pradesh Etc on 25 March, 1964 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/sri-venkata-seetaramanjaneya-vs-state-of-andhra-pradesh-etc-on-25-march-1964\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Sri Venkata Seetaramanjaneya ... vs State Of Andhra Pradesh Etc on 25 March, 1964 - 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