Kesrilal Kedia and Another vs Emperor

Agarwala, J.—This is a reference u/s 438, Criminal P.C., by the Sessions Judge of Darbhanga. The facts were as follows : On 24th September 1939, the accused sold for Section 2-6-0 a pair of dhotis similar to a pair which they had sold on 5th September for Re. 1-13-6. The police submitted a Namokamal charge-sheet alleging the commission of an offence under Rule 34(h)/38, Ordinance Act of 1939. The accused persons were sent in custody to the Sub-Divisional Magistrate who remanded them to hajat until 27th September 1939. The learned Sessions Judge recommends the setting aside of this order taking cognizance of the offence on the ground that no offence has been made out by the facts alleged. The Sections referred to in the charge-sheet are presumably rules embodied in the Defence of India Rules framed by the Central Government, u/s 2, Defence of India Ordinance, 1939. There is no Rule 34(h) but there is a Rule 34(6), which defines what is meant by "a prejudicial act" and Sub-rule (h) includes within the definition of "prejudicial act" any act which is intended or is likely to impede, delay or restrict the distribution of any essential commodity. Essential commodity is defined in Rule 34(3) as food, water, fuel, light, power or any other thing essential for the existence of the community which is notified in this behalf by Government.

There is no evidence before me that the Government has notified clothing to be an essential commodity within the meaning of this Rule. Under Sub-rule (g) of Rule 34(6) it is also a prejudicial act to cause fear or alarm to the public or to any section of the public. An increase of roughly 10 per cent, in the price of a pair of dhotis can hardly be said to be an act likely to cause fear or alarm to the public or to any section of it, whatever other consequences it may have on the public mind. It has also been suggested that the act complained of falls within Sub-rule (p) of Rule 34(6). This Sub-rule refers to acts intended or likely to prejudice the efficient prosecution of the war and the defence of British India or the public safety or interest. The increase in the price of this pair of dhotis is not likely to have any bearing on the efficient prosecution of the war and the defence of India or the public safety; nor, in my opinion, can it be said to prejudice the public interest that a shopkeeper increased the price of a pair of dhotis by 10 per cent.

I am confirmed in my view that this rule is not aimed at profiteering by a comparison of Rule 38(5) and 81(4). Rule 38(1)(a) prohibits the doing of any "prejudicial act" as defined in Rule 34(6), and Rule 38(5) provides that any person who contravenes the provisions of Rule 38 shall be punishable with imprisonment for a term which may extend to five years and shall also be liable to fine. It is apparently sought to punish the accused u/s 38(5) and if that Sub-rule applies the accused is liable to imprisonment for five years for what is popularly known as profiteering.

Now, Rule 81(2) authorises the Central Government for the purpose, inter alia, of maintaining supplies and services essential to the life of the community, to provide for the control of prices at which articles or things of any description whatsoever may be sold, and Sub-rule (4) provides that any person who contravenes the provisions of this rule shall be punishable with imprisonment for a term that may extend to three years and shall also be liable to fine. It will be observed, therefore, that in the rule which specifically refers to the control of prices the punishment is limited to three years whereas the punishment for doing a ''prejudicial act" may extend to five years. This distinction, I think, supports the view that profiteering was not intended to be included in the definition of "prejudicial act" in Rule 34(6). The next question to be considered is whether the accused is liable by reason of Rule 81(4).

For this purpose it is necessary to enquire whether in fact there has been any order controlling the price of cloth. Section 2(4)(b), Defence of India Ordinance, 1939, empowers a Local Government, to direct that any of the powers conferred upon it by Sub-rule (1) shall be exercised by any Provincial Government or by any officer or authority subordinate to such Government. Rule 2(1) authorizes the Central Government to make rules for maintaining supplies and services essential to the life of the community. In exercise of the powers conferred by Sub-rule (4) of Rule 2, the Central Government has directed that the powers conferred on it by Sub-rule (2) of Rule 81, Defence of India Rules, to provide for controlling prices shall also be exercisable by any Provincial Government : see Notification of the Department of Commerce No. 20 dated 8th September 1939. The notification provides that the powers thus conferred on the Provincial Government shall only be exercised, inter alia, in respect of the cheaper qualities of cotton cloth and that the orders issued by the Local Government shall not subject the prices to a minimum lower than 10 per cent, above the ruling price on 1st September 1939.

Now in the first place, the learned Subordinate Judge pointed out that no scale of prices for cloth in the Darbhanga District had been promulgated before 21st September 1939; nor has any order fixing the price of cloth in that district been brought to my notice. Furthermore, even if the Local Government has fixed or does fix the price of cloth it is bound to allow 10 per cent, above the price ruling on 1st September last. Assuming that the price of the dhotis with which I am concerned was Re. 1-13-6 on 1st September 1939, the Local Government was bound by any order which it issued to permit the dealer to charge up to Rs. 2 and some odd pies. In the present instance it has exceeded that price by less than six pies; but it has not been shown that the Local Government or the Central Government has in fact fixed the price of cloth in exercise of the powers conferred on them. In the absence of any order fixing the price of cloth in the Darbhanga District it cannot foe held that the accused has committed any offence under the Defence of India Rules. The reference is therefore accepted and the order of the Sub-Divisional Magistrate taking cognizance of the case is set aside.

It may be observed that the Defence of India Ordinance, 1939, has been repealed and replaced by the Defence of India Act 1939, which received the assent of the Governor-General on 29th September 1939. Rule 21 of the Act provides that rules made under the Ordinance shall be deemed to have been made in exercise of powers conferred by or under the Act as if the Act has come into operation on 3rd September 1939. It has not been shown that any fresh rules have been issued under this Act relevant to the present question.