{"id":825,"date":"1954-03-12T00:00:00","date_gmt":"1954-03-11T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/the-state-of-rajasthan-vs-nath-mal-and-mitha-mal-on-12-march-1954"},"modified":"2016-08-13T02:04:42","modified_gmt":"2016-08-12T20:34:42","slug":"the-state-of-rajasthan-vs-nath-mal-and-mitha-mal-on-12-march-1954","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/the-state-of-rajasthan-vs-nath-mal-and-mitha-mal-on-12-march-1954","title":{"rendered":"The State Of Rajasthan vs Nath Mal And Mitha Mal on 12 March, 1954"},"content":{"rendered":"<div class=\"docsource_main\">Supreme Court of India<\/div>\n<div class=\"doc_title\">The State Of Rajasthan vs Nath Mal And Mitha Mal on 12 March, 1954<\/div>\n<div class=\"doc_citations\">Equivalent citations: 1954 AIR  307, \t\t  1954 SCR  982<\/div>\n<div class=\"doc_author\">Author: G Hasan<\/div>\n<div class=\"doc_bench\">Bench: Mahajan, Mehar Chand (Cj), Mukherjea, B.K., Das, Sudhi Ranjan, Bose, Vivian, Hasan, Ghulam<\/div>\n<pre>           PETITIONER:\nTHE STATE OF RAJASTHAN\n\n\tVs.\n\nRESPONDENT:\nNATH MAL AND MITHA MAL.\n\nDATE OF JUDGMENT:\n12\/03\/1954\n\nBENCH:\nHASAN, GHULAM\nBENCH:\nHASAN, GHULAM\nMAHAJAN, MEHAR CHAND (CJ)\nMUKHERJEA, B.K.\nDAS, SUDHI RANJAN\nBOSE, VIVIAN\n\nCITATION:\n 1954 AIR  307\t\t  1954 SCR  982\n CITATOR INFO :\n E&amp;D\t    1960 SC 475\t (9,12)\n R\t    1967 SC 829\t (6)\n R\t    1974 SC 366\t (58)\n RF\t    1981 SC 873\t (18,27)\n R\t    1987 SC1802\t (9)\n\n\nACT:\n Constitution  of India, arts. 19(1)(f) and 31(2)  -Rajasthan\n Foodgrains  Control Order, 1949, cl. 25-Whether ultra\tvires\n the constitution.\n\n\n\nHEADNOTE:\nHeld,  that  the first portion of cl. 25  of  the  Rajasthan\nFoodgrains Control Order, 1949, relating to the freezing  of\nstocks of foodgrains is not void under art. 19(1)(f) of\t the\nConstitution  because such freezing of stocks of  foodgrains\nis reasonably related\n983\nto the object which the Act was intended to achieve,  namely\nto  secure  the equitable distribution and  availability  at\nfair   prices  and  to\tregulate  transport,   distribution,\ndisposal  and acquisition of an essential commodity such  as\nfoodgrains.\nHold,  that the last portion of cl. 25 to the effect that  \"\nsuch  stocks  shall also be liable to  be  requisitioned  or\ndisposed  of under orders of the said authority at the\trate\nfixed for purposes of Government procurement \", is void both\nunder art. 19(1)(f) and art. 31(2) of the Constitution:-\n(i)because  the\t clause places an  unreasonable\t restriction\nupon  the  carrying on of trade or business and is  thus  an\ninfringement  of the respondents' right under art.  19(1)(f)\nof the Constitution;\n(ii)because the clause by vesting the power in the authority\nto  acquire the stocks at any price fails to fix the  amount\nof compensation or specify the principles on which it is  to\nbe  determined and leaves it entirely to the  discretion  of\nthe executive authority to fix any compensation it likes and\nis thus hit by art. 31(2) of the Constitution.\n\n\n\nJUDGMENT:\n<\/pre>\n<p>CIVIL APPELLATE JURISDICTION: Civil Appeal No. 136 of 1952.<br \/>\nAppeal\t under\t articles  132(1)  and\t133(1)(c)   of\t the<br \/>\nConstitution of India from the Judgment and Order dated\t the<br \/>\n19th  October,\t1951, of the High Court\t of  Judicature\t for<br \/>\nRajasthan  at Jodhpur in D. B. Miscellaneous  Writ  Petition<br \/>\nNo. 3\/1951.\n<\/p>\n<p>K.   S.\t Hajela,  Advocate-General  of\tRajasthan,  for\t the<br \/>\nappellant.\n<\/p>\n<p>K.   N. Aggarwal and P. C. Agarwal for the respondents.<br \/>\nM.   C. Setalvad, Attorney-General for India (Porus A. Mehta,<br \/>\nwith him) for the intervener (the Union of India).<br \/>\n1954.  March 12.  The Judgment of the Court was delivered by<br \/>\nGHULAM HASAN J.-The question involved in this appeal relates<br \/>\nto the constitutional validity of clause 25 of the Rajasthan<br \/>\nFoodgrains  Control  Order,  1949,  hereinafter\t called\t the<br \/>\nControl Order, and arises in the following circumstances :-<br \/>\nThe  respondents,  who are grain merchants  at\tRaniwara  in<br \/>\nJodhpur Division, Rajasthan State, held<br \/>\n<span class=\"hidden_text\">984<\/span><br \/>\nlicences for dealing in foodgrains.  They held\tconsiderable<br \/>\nstocks\tof bajra in the ordinary course of business  but  on<br \/>\nOctober\t 7,  1950, their stocks were frozen  by\t the  Deputy<br \/>\nCommissioner,  Civil  Supplies, Jodhpur,  through  the\tSub-<br \/>\nDivisional  Officer.   It is not disputed  that\t the  market<br \/>\nprice  then  prevailing\t was about Rs. 18  per\tmaund.\t The<br \/>\nState,\thowever, requisitioned the stocks  at the  rate.  of<br \/>\nRs. 9 per maund and sold them at Rs. 13-5-4 per maund.\t The<br \/>\nrespondents claimed that they had purchased the bajra at the<br \/>\nprevailing market rate of Rs. 17 to Rs. 18 per maund.\tThey<br \/>\nfiled  a  petition on January 23, 1951, for the issue  of  a<br \/>\nwrit  under article 226 of the Constitution before the\tHigh<br \/>\nCourt of Rajasthan, contending that clause 25 of the Control<br \/>\nOrder  was void under articles 14, 19 (1) (g) and 31 (2)  of<br \/>\nthe  Constitution.  The High Court held that clause  25\t was<br \/>\nvoid  inasmuch as it is a restriction upon  the\t fundamental<br \/>\nright of the respondents to carry on business under  article<br \/>\n19  (1)(g) of the Constitution, that the restriction is\t not<br \/>\nreasonable  and\t is not saved by clause (6) of\tarticle\t 19.<br \/>\nThe  High Court further held that clause 25 was also hit  by<br \/>\narticle\t 31 (2) as fair compensation had not been  fixed  by<br \/>\nthe  law  for  the acquisition of the  foodgrains.   As\t the<br \/>\ngrains\thad already been disposed of by the Government,\t the<br \/>\nHigh Court holding that Rs. 17 a maund was fair compensation<br \/>\ndirected that the State of Rajasthan shall pay\tcompensation<br \/>\nat that rate.  The State has preferred.the present appeal on<br \/>\na certificate granted by the High Court.\n<\/p>\n<p>The impugned clause 25 is as follows:-\n<\/p>\n<p>&#8221; 25.  Notwithstanding anything contained in this Order, the<br \/>\nCommissioner,  the  Director, the Deputy  Commissioner,\t the<br \/>\nNazim,\t the  Assistant\t Commissioner,\tthe   Sub-Divisional<br \/>\nOfficer, the Senior Officer of a jurisdictional Thikana, the<br \/>\nenforcement  officer  &#8216;or  such\t other\tofficer\t as  may  be<br \/>\nauthorized  by the Commissioner in this behalf,\t may  freeze<br \/>\nany stocks of foodgrains held by any person, whether in\t his<br \/>\nown behalf or not, and such person shall not dispose of\t any<br \/>\nfoodgrains  out\t of  the stock so freezed  except  with\t the<br \/>\npermission of the said authority.  Such stocks shall<br \/>\n<span class=\"hidden_text\">985<\/span><br \/>\nalso  be  liable to be requisitioned or\t disposed  of  under<br \/>\norders of the said authority at the rate fixed for  purposes<br \/>\nof Government procurement.  &#8221;\n<\/p>\n<p>It  is\tnot disputed that bajra is  an\tessential  commodity<br \/>\nwithin the meaning of the Essential Supplies Act (No.\tXXIV<br \/>\nof 1946).  The question that arises for consideration is how<br \/>\nfar and in what respects clause 25 can be said to be void as<br \/>\nviolating   Part  III  of  the\tConstitution.\tThe   clause<br \/>\nauthorises  the Commissioner and various  other\t authorities<br \/>\nmentioned  therein  and\t such  other  officers\tas  may\t  be<br \/>\nauthorised  by\tthe  Commissioner to  freeze  any  stock  of<br \/>\nfoodgrains held by a person.  It is true that the  authority<br \/>\nof  the\t Commissioner to delegate his powers  to  any  other<br \/>\nofficer\t at  his discretion is expressed  in  somewhat\twide<br \/>\nterms but we need not decide that per se would be sufficient<br \/>\nto  invalidate the clause.  Admittedly that :power  has\t not<br \/>\nbeen  exercised in the. present case.  Nor do we think\tthat<br \/>\nthe power to freeze the stocks of foodgrains is arbitrary or<br \/>\nbased  on no reasonable basis.\tIt is not disputed that\t the<br \/>\nclause does not state in express terms the circumstances  in<br \/>\nor  the\t grounds on which the stocks may be freezed  but  it<br \/>\nshould\tbe  read  along\t with section  3  of  the  Essential<br \/>\nSupplies Act which lays down the policy for controlling\t the<br \/>\nproduction,,   supply\tand   distribution   of\t   essential<br \/>\ncommodities.  Section 3 in so far as it is material says:-<br \/>\n&#8221;  The Central Government, so far as it appears to it to  be<br \/>\nnecessary   or\texpedient  for\tmaintaining  or\t  increasing<br \/>\nsupplies  of any essential commodity, or for securing  their<br \/>\nequitable distribution and availability at fair prices,\t may<br \/>\nby   order  provide  for  regulating  or   prohibiting\t the<br \/>\nproduction, supply and distribution<br \/>\nthereof<br \/>\nSub-section (2) lays down:-\n<\/p>\n<p>&#8221;  Without  prejudice  to  the\tgenerality  of\tthe   powers<br \/>\nconferred  by sub-section (1) an order made  thereunder\t may<br \/>\nprovide&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;.\n<\/p>\n<p>(a)&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..\n<\/p>\n<p>(b)&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..\n<\/p>\n<p>(c)&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;&#8230;..\n<\/p>\n<p><span class=\"hidden_text\">986<\/span><\/p>\n<p>(d)  for  regulating by licences, permits or  otherwise\t the<br \/>\nstorage, transport, distribution, disposal, acquisition, use<br \/>\nor consumption of any essential commodity;\n<\/p>\n<p>(e)  for  prohibiting  the  withholding\t from  sale  of\t any<br \/>\nessential commodity ordinarily kept for sale;<br \/>\nWe  are\t clear, therefore, that the freezing  of  stocks  of<br \/>\nfoodgrains is reasonably related to the object which the Act<br \/>\nwas  intended  to achieve, namely, to secure  the  equitable<br \/>\ndistribution and availability at fair prices and to regulate<br \/>\ntransport,  distribution,  disposal and\t acquisition  of  an<br \/>\nessential  commodity  such as foodgrains.  We do  not  agree<br \/>\nwith  the High Court that the first portion of clause 25  is<br \/>\nvoid under article 19 (1) (g).\n<\/p>\n<p>The last portion of clause 25 to the effect that such stocks<br \/>\nshall  also  be liable to be requisitioned  or\tdisposed  of<br \/>\nunder  orders  of the said authority at the rate  fixed\t for<br \/>\npurposes  of Government procurement &#8220;, however stands  on  a<br \/>\ndifferent  footing.  The clause, as it is worded, leaves  it<br \/>\nentirely to the Government to requisition the stocks at\t any<br \/>\nrate  fixed by it and to dispose of such stocks at any\trate<br \/>\nin  its\t discretion.  This obviously vests  an\tunrestrained<br \/>\nauthority  to  requisition the stocks of  foodgrains  at  an<br \/>\narbitrary  price.   In contrast with this provision  we\t may<br \/>\nrefer  to clauses 23 and 24 of the Control Order.  They\t are<br \/>\nas<br \/>\nfollows:-\n<\/p>\n<p>&#8221;  23.\t The Commissioner or the Director,  and\t the  Deputy<br \/>\nCommissioner  or  the  Senior Officer  of  a  jurisdictional<br \/>\nThikana\t with  the  approval of the Director,  may  fix\t the<br \/>\nceiling prices at which foodgrains in any area to which this<br \/>\norder applies shall be sold, and may from time to time\tvary<br \/>\nsuch prices.&#8221;\n<\/p>\n<p>&#8220;24.\tThe   Commissioner,   the   Director,\tthe   Deputy<br \/>\nCommissioner,  the  Nazim, the Assistant  Commissioner,\t the<br \/>\nSub-Divisional\tOfficer,  or  the  Senior  Officer  of\t the<br \/>\njurisdictional\tThikana as the case may be, may\t direct\t any<br \/>\nperson\tor persons in possession, whether on his own  behalf<br \/>\nor  not\t of any foodgrains to sell such foodgrains  or\tpart<br \/>\nthereof to any person or persons at any<br \/>\n<span class=\"hidden_text\">987<\/span><br \/>\nspecified  place  and at such price as may  be\tfixed  under<br \/>\nclause 23.&#8221;\n<\/p>\n<p>It appears from these clauses that while the authorities may<br \/>\nfix the ceiling price at which foodgrains should be sold  in<br \/>\nthe  market  by\t the dealers and may direct  any  person  in<br \/>\npossession of foodgrains to sell them to any other person at<br \/>\nthe price fixed under clause 23, there is no such limitation<br \/>\nupon the power of the Government to acquire the stocks.\t  In<br \/>\nother  words, it will be open to the Government to  requisi-<br \/>\ntion the stocks at a price lower than the ceiling price thus<br \/>\ncausing\t loss to the persons whose stocks are freezed  while<br \/>\nat  the\t same time the Government is free to sell  the\tsame<br \/>\nstocks\tat a higher price and make a profit.  It is  obvious<br \/>\nthat the dealer whose stocks are thus freezed will stand  to<br \/>\nlose  considerably and will be unable to carry on his  trade<br \/>\nor business at the prevailing market price.  No dealer\twill<br \/>\nbe  prepared to buy foodgrains at the market price  when  he<br \/>\nknows  that  he is exposed to the risk of his  stocks  being<br \/>\nfreezed\t any moment and the same being requisitioned at\t the<br \/>\nprocurement  rate.   The  present is a\ttypical\t case  which<br \/>\nillustrates  how  the  business of a  grain  dealer  can  be<br \/>\nparalyzed,  for\t it is admitted that  while  the  Government<br \/>\nprocurement rate was Rs. 9 a maund, the market rate was\t Rs.<br \/>\n17  or\tRs.  18 per maund, with the result  that  the  stock<br \/>\nholder\tsuffered  nearly  cent. per cent.  lose,  while\t the<br \/>\nGovernment made a profit of Rs. 4-5-4 per maund on the stock<br \/>\nrequisitioned.\tWe hold, therefore, that the last portion of<br \/>\nclause\t25  places  an\tunreasonable  restriction  upon\t the<br \/>\ncarrying on of trade or business and is thus an infringement<br \/>\nof  the\t respondent&#8217;s right under article  19(1)(g)  of\t the<br \/>\nConstitution  and is, therefore, to that extent\t void.\t The<br \/>\nsame  result follows if the impugned clause is\texamined  in<br \/>\nthe light of article 31(2).  The clause by vesting the power<br \/>\nin the authority to acquire the stocks at any price fails to<br \/>\nfix   the  amount  of  the  compensation  or  ,specify\t the<br \/>\nprinciples  on which the compensation is to  be\t determined.<br \/>\nThe  clause  leaves  it entirely to the\t discretion  of\t the<br \/>\nexecutive  authority to fix any compensation it likes.\t The<br \/>\nHigh Court<br \/>\n<span class=\"hidden_text\">988<\/span><br \/>\nrightly held that the clause offended against article 31(2).<br \/>\nFor  the foregoing reasons we hold that the last portion  of<br \/>\nclause 25 is void and dismiss the appeal with costs.\n<\/p>\n<p>\t\t     Appeal dismissed.\n<\/p>\n<p>Agent for the appellant and for the intervener: R.     H.<br \/>\nDhebar.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Supreme Court of India The State Of Rajasthan vs Nath Mal And Mitha Mal on 12 March, 1954 Equivalent citations: 1954 AIR 307, 1954 SCR 982 Author: G Hasan Bench: Mahajan, Mehar Chand (Cj), Mukherjea, B.K., Das, Sudhi Ranjan, Bose, Vivian, Hasan, Ghulam PETITIONER: THE STATE OF RAJASTHAN Vs. RESPONDENT: NATH MAL AND MITHA MAL. [&hellip;]<\/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-825","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.3 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>The State Of Rajasthan vs Nath Mal And Mitha Mal on 12 March, 1954 - Free Judgements of Supreme Court &amp; 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\/the-state-of-rajasthan-vs-nath-mal-and-mitha-mal-on-12-march-1954\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The State Of Rajasthan vs Nath Mal And Mitha Mal on 12 March, 1954 - Free Judgements of Supreme Court &amp; 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