Veeraraghava Reddy vs Civil Supplies C.I.D. Madras, etc.

Padmini Jesudurai, J.—This appeal by the Accused in C.C. No. 30 of 1988 on the file of the Special Judge for Essential Commodities Act

cases, Madras, challenges his convictions under Clauses 3(1) and 3(2) of the Tamil Nadu Essential Commodities (Display of Stocks and Prices

and Maintenance of Accounts) Order, 1977 read with S. 7(1)(a)(ii) of the Essential Commodities Act, 1955 and the sentence of fine of Rs. 200/-

and imprisonment till the rising of the Court for each offence. The Appellant was acquitted of the charge under Order 5(1) and 5(2) of the above

Order.

The gravemen of the charge against the Appellant was that on 2.4.1983 at 3:00 P.M. when P.W.4, the Inspector of Police, Civil Supplies

C.I.D., Madras inspected his shop ""Rangad-hanam"" in Mosque Building, Shanmugam Road, Tambaram, there was a stock of 67 bags of boiled

rice, 189 bags of raw rice kept for wholesale business and 5 bags of boiled rice and 189 kilograms of raw rice and 753 1/2 kilograms of boiled

rice in an open gunny bag kept for retail sale, which had not been shown in the stock book maintained in the shop. The price list for the

commodities had not been displayed in a conspicuous place in the shop and accounts showing the stock and sale of wholesale and retail business

for rice, were not produced before the Inspector. On the Appellant denying the charges, the prosecution examined P. Ws.1 to 4 and marked

Exs.P1 to P.8 on behalf of the Appellant, Ex.P.1 was marked.

The Appellant, when questioned u/s 281 Code of Criminal Procedure stated that he had displayed conspicuously in his business premises a list

of prices showing the cost price and sale price of the essential commodities and had also maintained proper accounts and had showed them to

P.W.4. The trial court found that the charge relating to the violation of Cls. 5(1) and 5(2) of the Order had not been proved and the remaining

charges proved and consequently convicted and sentenced the Appellant as stated above. Challenging the same, the appeal has been filed.

Thiru K.V. Sankaran, learned Counsel for the Appellant submitted that though even on facts the trial court ought not to have held the offence

proved, yet, in view of the legal contentions that he put forward, the conviction had to be set aside. According to the learned Counsel, the Tamil

Nadu Essential Commodities (Display of Stocks and Prices and Maintenance of Accounts) Order, 1977, (hereinafter referred to as ""the Order'') is

outside the scope of the Essential Commodities Act, 1955 (hereinafter referred to as ""the Act""), since the Central Government itself u/s 3(1) of the

Act, had no power to pass any Order on a subject, as is covered by the Tamil Nadu Order under challenge, that when the Central Government

itself had no such power, there was no question of delegating the powers to the State Government u/s 5 of the Act, and as such the Order had to

be struck down. The learned Counsel also urged that even if it could be assumed that such power could be traced to S. 3(2) of the Act, the scope

of the authority delegated, should be spelt out clearly and cogently, by suitable Notification u/s 5 of the Act and in the instant case G.S.R. 316 (E)

dated 30.6.1972 mentioned in the Order, would require prior concurrence of the Central Government, which in the instant case has not been

obtained. The Order therefore, had been issued by the State of Tamil Nadu without jurisdiction and the conviction had to be set aside.

Per contra, the learned Advocate General appearing for the Respondent, contended that a mere reading of the object of the Order as

mentioned in the Order itself, would bring the Order under the subjects mentioned in S. 3(2) and S. 3(2)(h)(i) and (ii) of the Act and the wide

language of the opening words of S. 3(2) would also bring the Order within S. 3 and that, therefore, the Central Government was empowered to

issue Orders touching the matters found in the Order and also delegate to the State, Governments, the power to issue such Orders. In the instant

case, under G.S.R. 316(E) dated 20.6.1972 mentioned in the Order itself, there has been a proper delegation and for the above subjects no prior

concurrence of the Central Government was necessary and that, therefore, since the prosecution had proved violation of Cl.3(1) and 3(2) of the

Order, the conviction had to be sustained.

As far as the facts are concerned, though the Appellant when questioned u/s 281, Code of Criminal Procedure had stated that he had

maintained a price list and also proper accounts and had shown them to P.W.4, yet we have the evidence of P.W.4 himself, who has absolutely no

motive against the Appellant, to give false evidence. It is true that P. Ws.1 and 2 have turned hostile. This is nothing uncommon, they being

witnesses of the locality, whose sympathy and support would always be with the accused. There is no legal bar to accepting the evidence of a

Police Officer, without corroboration, if his evidence is otherwise found trustworthy. In the instant case, nothing has been elicited from him, which

would discredit his testimony. I, therefore, accept the evidence of P.W.4 that there has been violation of Cls. 3(1) and 3(2) of the Order.

Regarding the legal contentions, the first contention of the learned Counsel for the Appellant is that, the Central Government itself has no power

to issue any Order touching the matters covered by the Tamil Nadu Order. According to the learned Counsel, the scope of Section 3(2) is limited

and unless, the subjects covered by the Order are traceable to any one of the sub-Clauses in Section 3(2), the Central Government would have no

power to issue any Order much less to delegate any power to the State Governments u/s 5 of the Act. A mere reading of the Order as well as

Section 3 of the Act would show that this contention of the learned Counsel is untenable. The Preamble to the Order is as follows:

Whereas the State Government are of opinion that it is necessary to maintain to increase of supplies and services of certain articles essential to the

life of the community;

And Whereas, the State Government are of opinion that it is necessary to secure the equitable distribution and availability of certain articles

essential to the life of the community at fair prices;

And Whereas the State Government are also of opinion that it is necessary to provide and regulate that the stocks and prices of such articles shall

be displayed and accounts relating to the purchase and sale of such articles shall be maintained by the dealers.

It has to be seen, whether the aspects mentioned above, could be traced to Section 3 of the Act.

S.3(1) and the Preamble portion of Sub-clause (2) of the Act are as follows:

(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential

commodity or for securing their equitable distribution and availability at fair prices, (or for securing any essential commodity for the Defence of

India or the efficient conduct of military operations) it may, by Order, provide for regulating or prohibiting the production, supply and distribution

thereof and trade and commerce therein.

(2) without prejudice to the generality of the powers conferred by Sub-section (1), an Order made thereunder may provide....

8-A. A reading of the above provision would show that its scope is very wide. While Sub-clause (1) deals with the matters on which Orders could

be issued under the Act, the opening words of sub-Clause(2) viz., ""without prejudice to the generality of the powers conferred by Sub-section (1),

an Order made thereunder may provide"" show, that the Orders that could be passed u/s 3 are not limited to the various sub-Clauses found in S.

3(2), but would extend to any matter that could be brought u/s 3(1). When an Order is passed by the Central Government or a delegation is made

u/s 5 to a State Government, all that has to be seen is whether the Order could be traced to any of the matters mentioned in S. 3(1) or any of the

clauses in Sub-section (2).

According to the learned Advocate General the matters covered by the Order passed by the State of Tamil Nadu fall within S. 3(2)(c) and S.

3(2)(h)(i)(ii) of the Act. They are as follows:

S. 3(3)(3) for prohibition or withholding from sate of any essential commodity ordinarily kept for sale; or

(h) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters.

(i) for requiring persons engaged in the production, supply or distribution of, or trade and commerce in, any essential commodity, to maintain and

produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto, as may be

specified in the Order.

(ii) for the grant or issue of licences, permits or other documents, the charging of fees therefor, the deposit of such sum, if any, as may be specified

in the Order as security, for the due performance of the conditions of any such licence permit or other document, the forfeiture of the sum so

deposited or any part therefor contravention of any such condition, and the adjudication of such forfeiture by such authority as may be specified in

the Order.

The stock of essential commodity is required to be displayed prominently at or near the entrance place of the business premises and when a list

of price showing the cost price and sale price are required to be displayed, they are intended to put the public on notice, as to whether or not the

essential commodities are available in that shop and if so, in what quantities and at what price. When this information is made available to the

public, it would prevent withholding from sale or any essential commodity and hoarding with the object of sale at higher price. This would squarely

come u/s 3(2)(e) of the Act, S. 4 of the Order prohibits sale for higher price and prohibits refusal to sell and required information to be furnished

when demanded by a Collector, Commissioner or other authorities mentioned in the Order, S. 5 requires every dealer to keep a true and correct

account of any essential commodity, acquired, held or sold by him and also requires him to keep purchase bills. These provisions in the Order,

would enable the authorities to collect informations and statistics to regulate or prohibit sales relating to essential commodities. This information

would also be needed to issue licences permits and so on. These matters would come u/s 3(2)(b)(i)(ii) of the Act. It cannot therefore, be urged

that the Central Government has no power to pass an Order on matters covered by the Tamil Nadu Order and the Central Government has no

power to delegate such powers u/s 5 of the Act to the State Government.

S. 5 permits the Central Government to delegate by Notification to the State Government or to other authorities mentioned therein, to make

Orders or issues notifications u/s 3, subject to such conditions as the Central Government might specify in the notification. We find that C.S.R. 316

(E) dated 30.6.1972 has been issued by the Central Government published in the Gazette of India, whereby the Central Government in exercise of

the powers conferred by S. 5 of the Act, has directed that the powers conferred on it by S. 3(1) of the Act, be exercised by the State

Governments on matters specified in Cls. (a), (b), (c), (d), (e), (f), (h) (i) (ii), and (j) of Sub-section(B) of Section 3. In respect of Orders relating

to matters specified in Clauses (a), (c) and (f) and regarding distribution or disposal of food-stuffs to places outside the State, prior concurrence of

the Central Government was necessary. It is seen that for passing Orders relating to matters specified in Cls. (2)(a) and (b) (i) (ii) of Sub-section

(2) of Section 3, no prior concurrence is necessary. The State of Tamil Nadu, therefore, did not require prior concurrence of the Central

Government to issue the Order, C.S.R. 316(G) dated 30.6.1972 mentioned in the preamble portion of the Order under which the delegation had

been made makes that position clear. I am unable to accept any of the legal submissions made by the learned Counsel for the Appellant. No other

point was urged before us.

In the result, the appeal is dismissed.