# ATLAS CYCLE INDUSTRIES LTD. AND ORS v. STATE OF HARYANA

- **Citation:** [1979] 1 S.C.R. 1070
- **Court:** Supreme Court of India
- **Decided:** 1978-10-04
- **Bench:** S. Murtaza Fazal Ali, Jaswant Singh, P. S. Kailasam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/atlas-cycle-industries-ltd-and-ors-v-state-of-haryana-7494
- **Pages:** 19

## Headnote

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Essential Commodities
Act 1955 (Act 10 of 1955)-Smion 3(6)-Requirement as to laying before both Iiouses of Parlia1nent-Dirrctory not
niandatory-Non-lying of notification fixing the maxitnum selling prices of
variousi categories of controlfr:d commodities before both Houses of Parliament-Whether results in nullification of the notification.
Delegated Legislation-Provisions relating to laying of delegafl':'d legislation of subordinate law making authorities and orders passed by subordinate
executive
instrumentalities
before
both
Tfouses
of
Parlian1ent-"Layi11g
clause~"-Examined and discussed.
The appellants were prosecut.ed for the offence of acquiring a controlled
commodity at a rate higher than the maximum statutory price fixed for such
commodity by the Iron & Steel Controller under Cl. 15 ( 1 ) of the Iron
&
Steel Control Order, 1956.
In the course of proceedings
before the
trial
court the appellants made an application u/s 251A & 288 Cr.P.C. raising
various objections to their prosecution including, that the notification
fixing
maximum selling prices of various categories of Iron & Steel including the
commodity in question was not placed before the Pnrliament and as
such
was not valid.
Observing that the laying of the notification before the Parliament could be proved by contemporaneous record and
that
it
was
not
possible to hold that congnizance of the offence was taken on
an invalid
report and the order framing the charge was a nullity the trial Court dismissed
the application.
In its writ petition filed under Arts. 226 and 227 of the Constitution, the
appellants challenged their prosecution on the ground that the control order and
the notification did not have the force of law as they had not been laid before
the Houses of Parlian1ent '"'ithin a reasonable time as required by the Essential
Commodities Act. The High Court dismissed the "\Vrit petition.
On the question, whether the notification fixing the maximum selling price
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of the commodity was void, for not having been laid before both Houses of
Parliament.
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Dismissing the appeal. the Court
HELD : 1. Non-laying of the notification fixing the maximum
selling
prices of various categories of iron and steel including the commcxlity in
question before both Houses of Parliament cannot result in nullification o.f
the notification. The legislature never intended that non-compliance with the
requirement of laying as envisaged by section 3(6) of the Act should render
the order void.
[1088 C, Bl
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ATLAS CYCLE LTD. V. HARYANA
1071
·2. Though section 3 ( 6) of the Act provides that every order made by
A
the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as
may
be
after it is made, the important point to be c.onsidered in the absence of a
provision prescribing the conditions, the period and the legal effect
of the
laying of the order before the Parliament is whether the provision is
directory or mandatory. The use of the word 'shall' is 11ot conclusive and decisive
of the matter and the Court has to ascertain the true intention of the legislaB
ture, which is the determining factor, and that must be
done
by looking
,carefully to the whole scope~ nature and design of the statute. 11078 C-EJ
State of U.P. v. Monbodhan Lal Srfrastava, [1958] S.C.R. 533, The State
<>f Uttar Pradesh and Ors. v. Baba Ram Upadhya, [1961] 2 S.C.R. 679 re-
:ferred to.
Craies Statute Law 5th Edn. p. 242.
3. Two considerations for regarding a prov1s1on as directory are : ( 1)
absence of any provision for the contingency of a particular provision not
been complied with or followed and (2) serious general inconvenience and
prejudice that would result to the general public if the act of the government
or an instrumentality is declared invnlid for non-compliance with the
particuJar provision. [1079 CJ
4. The policy and object underlying the prov1s1ons
relating to
laying
the de1ega·ted legislation made by

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1070
A
ATLAS CYCLE INDUSTRIES LTD. AND ORS.
v.
STATE OF HARYANA
October 4, 1978
B
[S. MURTAZA FAZAL ALI, JASWANT SINGH AND P. S. KAILASAM, JJ.]
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Essential Commodities
Act 1955 (Act 10 of 1955)-Smion 3(6)-Requirement as to laying before both Iiouses of Parlia1nent-Dirrctory not
niandatory-Non-lying of notification fixing the maxitnum selling prices of
variousi categories of controlfr:d commodities before both Houses of Parliament-Whether results in nullification of the notification.
Delegated Legislation-Provisions relating to laying of delegafl':'d legislation of subordinate law making authorities and orders passed by subordinate
executive
instrumentalities
before
both
Tfouses
of
Parlian1ent-"Layi11g
clause~"-Examined and discussed.
The appellants were prosecut.ed for the offence of acquiring a controlled
commodity at a rate higher than the maximum statutory price fixed for such
commodity by the Iron & Steel Controller under Cl. 15 ( 1 ) of the Iron
&
Steel Control Order, 1956.
In the course of proceedings
before the
trial
court the appellants made an application u/s 251A & 288 Cr.P.C. raising
various objections to their prosecution including, that the notification
fixing
maximum selling prices of various categories of Iron & Steel including the
commodity in question was not placed before the Pnrliament and as
such
was not valid.
Observing that the laying of the notification before the Parliament could be proved by contemporaneous record and
that
it
was
not
possible to hold that congnizance of the offence was taken on
an invalid
report and the order framing the charge was a nullity the trial Court dismissed
the application.
In its writ petition filed under Arts. 226 and 227 of the Constitution, the
appellants challenged their prosecution on the ground that the control order and
the notification did not have the force of law as they had not been laid before
the Houses of Parlian1ent '"'ithin a reasonable time as required by the Essential
Commodities Act. The High Court dismissed the "\Vrit petition.
On the question, whether the notification fixing the maximum selling price
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of the commodity was void, for not having been laid before both Houses of
Parliament.
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Dismissing the appeal. the Court
HELD : 1. Non-laying of the notification fixing the maximum
selling
prices of various categories of iron and steel including the commcxlity in
question before both Houses of Parliament cannot result in nullification o.f
the notification. The legislature never intended that non-compliance with the
requirement of laying as envisaged by section 3(6) of the Act should render
the order void.
[1088 C, Bl
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ATLAS CYCLE LTD. V. HARYANA
1071
·2. Though section 3 ( 6) of the Act provides that every order made by
A
the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament as soon as
may
be
after it is made, the important point to be c.onsidered in the absence of a
provision prescribing the conditions, the period and the legal effect
of the
laying of the order before the Parliament is whether the provision is
directory or mandatory. The use of the word 'shall' is 11ot conclusive and decisive
of the matter and the Court has to ascertain the true intention of the legislaB
ture, which is the determining factor, and that must be
done
by looking
,carefully to the whole scope~ nature and design of the statute. 11078 C-EJ
State of U.P. v. Monbodhan Lal Srfrastava, [1958] S.C.R. 533, The State
<>f Uttar Pradesh and Ors. v. Baba Ram Upadhya, [1961] 2 S.C.R. 679 re-
:ferred to.
Craies Statute Law 5th Edn. p. 242.
3. Two considerations for regarding a prov1s1on as directory are : ( 1)
absence of any provision for the contingency of a particular provision not
been complied with or followed and (2) serious general inconvenience and
prejudice that would result to the general public if the act of the government
or an instrumentality is declared invnlid for non-compliance with the
particuJar provision. [1079 CJ
4. The policy and object underlying the prov1s1ons
relating to
laying
the de1ega·ted legislation made by the subordinate law making authorities or
orders ·passed by subordinate executive instrumentalities before both Houses
of Parliament, being to keep supervision and control' over
the
aforesaid
authorities and instrumentalities, the "laying clauses" assume different forms
depending on the degree of control which the. Legislature may like to exercise.
The three kinds of laying which are generally used by the Legislature
are
{i) laying without fu1ther procedure (ii) laying subject to negative resolution, (iii) laying subject to affirmative resolution. Each case must depend
.on its own circumstances or the wording of the :.;tatute under which the
rules are made.
r1079 D, E; 1081 Dr
Hukam Chand etc. v. Union of !ndia ond ()rs. [1973] J S.C.R. 986 referred
Craies Statute Law 7th Ectn. pp. 305~307.
5. In the instant case, section 3 ( 6) of the Act merely provides that every
·order made under section 3 by the Central Government or by any
officer
or authority of the Central Government', shall be laid before both Houses
.of Parliament, as soon as may be, after it is made.
It does not provide that
it shall be subject to the negative or the affirmative
resolution
by either
House of Parliament. It also does not provide that it shall be open to the
Parliament, to approve or disapprove the order made under section 3 of
the Act.
It does not even say that it shall be subject to any modification
which either House of Parliament may in its wisdom think it necessary to
provide. It does not even specify the period for which the order is to be
laid before both Houses of Parliament nor does it provide any penalty for
non-observance of or non-complioo.ce with the direction as to the laying of
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SUPREME COURT REPORTS
[1979] 1 s.c.R.
A • the order before both Houses of Parliament. The requirement as
to the
laying of the order before both Houses of Parliament is not a condition pre~
cedent but subsequent to the making of the order. In other words, there
is no prohibition to the making of the orders without the approval of both
Houses of Parliament. Therefore the requirement as to laying contained in
section 3(6) of the Act falls within the first category i.e. "simple laying" and
B
'' directory and not mand&tory.
[1081 E-1082 Al
Jan Moham1ned Noor Molia111111ed Bauban v. The State .of Gujarat and'
Anr., • [1966] 1 S.C.R. 505; relied on.
D. K. Krishnan v. Secrerary, Regional Transport Authority Chittor, A.I.R.
1956 AP. 129. State v. Karna (1973) 24 RLW 487.
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Mathura Prasad Yada11a v. Inspector General, Railway Protection Force,
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Railway Board, New Delhi and Or·.v. (1974) 19 MPLJ. 373, Krishna Khanna
and Anr. v. State of Punjab, A.I.R. 1958, Punjab 32; approved.
'f\i'arendra Kun1ar and Ors. v. The Union of India and Ors., [1960J 2 S.C.R.
375; distinguished.
Express Newspapers (P) Ltd. and Anr. v. The Union of India and Ors.,
[1959] S.C.R. 12; In re. Kerala Education Bill 1957, 1959 S.C.R. 995; not applicable.
Bailey v. Williamson 1873 LR VIII Q.B. 118. Storey v. Graham (1899)
Q.B. 406 refer!"'ed to.
CRIMINAL APPELLATE JlJRISDICT!ON : Criminal Appeal 24 of
I 976.
From the Judgment and .Order dated 31-9-1974 of the Punjab
and Haryana High Court in Criminal Writ No. 32 of 1970.
B. Sen. (for appellant No. 1), A. K. Sen (for Appellant No. 2),
J. C. Bhatt (for appellant No. 3), F. S. Nariman (for appellant No.
4), A. B. Diwan (for appellant No. 4), I. N. Shroff and H. S. Parihar
for the Appellants.
D. Mukherjee, E. C. Agrawala and R. N. Sachthey for the Resy
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pondent.
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The Judgment of the Court was delivered by
JASWANT SINGH, J .-During the course of on spot check carried out
by him on December 29, 1964 of B.P. sheets lying in ap.pellant No. rs
factory at Sonepat, the Development Officer (LMB-1) of the Directorate
General of Technical Development, New Delhi, discovered from
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examination of the said appellant's account books that it had during
the period intervening between January 1, 1964 and January 12,
1965, acquirt;d black plain iron sheets of prime quality weighing.
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ATLAS CYCLE LTD. v. HARYANA (Jaswant Singh,!.)
1073
'60.03 metric tons from various parties at a rate higher than the maximum statutory price fixed for such sheets by the Iron and Steel
Controller · (hereinafter reCerred to as 'the Controller') in exercise
of the powers vested in him under clause 15 ( 1) of the Iron and
Steel (Control) Order, 1956 (here•nafter referred to as 'the Control
Order.
After the Special Magistrate had framed the charges and
secuted in the Court of the Special Magistrate, Ambala Cant!. for
an offence under section 120-B of the Indian Penal Code 'read with
section 7 of the Essential Commodities Act, 1955 (Act No. 10 of
1955) (hereinafter referred to as ·'the Act') as also for an offence
under section 7 of the Act read with clause 15 (3) of the Control
Order. After the Special Magistrate had framed the charges and
examined sixteen prosecution witnesses, the appellants made an application before him on February 12, 1970 under section 251A (11)·
and 288 (I) of the Code of Criminal Procedure, 1898 praying that
in view of the submissions made therein, the case against them be
not proceeded with and they be acquitted.
The trial Magistrate
dismissed the application vide his order dated June 4, 1970,
relevant portion whereof is extracted below for facility of reference :--
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"lln the light of the above observations, I am
prevented
from determining the case otherwise than by making an
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order of acquittal or conviction which I can pass only after
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recording further
evidence both of prosecution and
in
defence.
Regarding various objections raised
by the
learned
counsel for the accused on the points that the notifications
were not placed before the Parliament and within a reasonable time and also on the points of formation of opinion
and delegation of powers I may submit that the prosecution cannot be prevented from adducing evidence regarding the formation of opinion and laying of the notifications
before the Parliament which can be proved by the contemporaneous record.
Regarding the non-pTosecution of
the sellers of the black iron sheets it does not lie in the
mouth of the accused to ~ay that such and such person has
not been prosecuted.
I need not to give my observations
on merits on the points regarding subsequent exemption
of control mens-rea, formation of opinion and delegation
of powers in laying notifications before the Parliament and
also need not discuss the citations as I will have to consider
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SUPREME COURT REPORTS
[1979] 1 s.c.R.
all these points at the time of final arguments and any
order given now will not be proper.
I dismiss the application of the accused on the short
ground that it is not possible for this Court to hold that the
cognizance was taken on an invalid report and the order of
the Court ordering framing of charge is a nullity on the
ground that on record no offence is committed and no cognizance could be taken."
Aggrieved by the aforesaid crdcr of the Special Magistrate,
the
appellants moved the High ~:ourc of Pu11jab and Horyona under Articles 226 and 227 of the Constitutl0n and section 561-A of the Code
of Criminal Procedure, 1898 challenging their prosecution
inter alia
on the grounds that the Control Order and the notification which
formed the basis of their prosecution did not have the force of law as
they had not been laid before the Houses of Parliament
within a
reasonable time as required under section 3 ( 6) of the Act; that the
Control Order and the Notification fixing the maximum selling price
of the commodity in question for the contravention of which the appellants had been hauled up were invalid as the same did not appear to
be preceded by the formation of the requisite opinion under section
3(1) of the Act which was a 'sine quu 11011 for issue of any order by
the Central Government or by the Controller;
that none of the 18
concerns which, according to the prosecution sold the aforesaid B.P.
sheets to the appellants and who were equally guilty of the
offence
under section 7 of the Act having been proceeded against, in the Court
of the competent jurisdiction, the prosecution of the appellants was
violative of Article 14 of the Constitution and that the purchases of
the aforesaid B.P. sheets having been openly made and entered in the
account books of appellant No. I, the mens rea which was a necessary
ingredient of the offence under section 7 of the Act was totally lacking in
the case.
In the return filed by it in opposition to the writ petition, the respondent while denying that the Control Order had not been placed
before both Houses of Parliament. as required by sub-section ( 6) of
section 3 of the Act or that the i'Ssue of the Control Order or the Notification fixing maximum selling prices of various categories of iron and1
steel including the commodity i'n question was not based on the formation of the opinion envisaged by sub-section 1 of s
1zction 3 of the
Act conceded that the notification fixing the maximum selling prices
B
of the cat:egories of iron and steel including the commodity in question had not been placed before both Houses of Parliament but
contended that ·the provisions of sub-section ( 6) of section 3 of the
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ATLAS CYCLE LTD. v. HARYANA (Jaswant Singh,!.)
1075
Act requiring the placing of the order contained in the aforesaid
notification before both Houses of Parliament were directory and
not mandatory and the omission to comply with that requirement
did not have the effect of invalidating the notification. The respondent further contended that the notification fixing
the maximum
selling prices of various categories of iron and steel including the
black plain iron sheets being a part of the Control Order and a piece
of delegated legislation, it was not necessary to lay it
before
the
Houses of Parliament. It was also pleaded by the respondent that
the mens rea of the accused was manifest from various manipulations
res~ted to by t~m as also from the fact that they wanted to
increase theic production and earn more profits. The respondent
also averred that launching of prosecution against any person depended on the availability of sufficient evidence and that non-prosecution
of the sellers of the iron sheets in question did not involve any
discrimination as envisaged by Article 14 of the Constitution but
was due to non-availability of adequate and reliable evidence against
them.
After careful consideration of the rival contentions of the parties,
the High Court by its elaborate judgment and order dated May 31,
1974 dismissed the petition overruling the contentions of the appellants.
One of the learned Judges of the High Court constituting the
Bench which dealt with the writ peti'tion also observed that the Notification in question had not in reality been issued under section 3 of
tire Act which required it to be laid before both Houses of Parliame'nt
but was issued in exercise of the power conferred by section 4 of the
Act which plainly related to issue of incidental orders arising out of
the nature of the powers conferred and duties imposed thereunder and
the purpose whereof was to enable the various authoriti'es mentioned
therein to provide the details to fill up gaps in 'the Control Orders
issued under section 3 of the Act so as to ensure the harmonious and
rational working of the orders.
The High Court, however, being of
the opinion that the case involved a substantial question of law relat~
ing to the vires of the notification fixing the maximum selling prices
of various categories of iron and steel including the commodity in
question certified the case a.S eminently fit for appeal to this Court.
This is how the case is before us.
At the hearing of the appeal though the learned counsel for the
appellants have reiterated all the contentions raised by them in the
aforesaid writ petition, the only substantial question of law with which
we are concerned at the present stage is whether the aforesaid notification fixing the maximum selling price of the commodity in question
is void for not having b_een laid before both Houses of Parliament.
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SUPREME COURT REPORTS
[1979] 1 s.c.R.
For a proper determinati'<m of the aforesaid question, it is necessary to notice a few provisions of the Act which are relevant for the
purpose of the appeal.
Section 2 is a glossary of the Act.
According to clause (")(vi)
of the said section, iron and steel and manufactured products thereof
fall within the ambit of the expression "essential commodity".
Sub-section ( 1) of section 3 of the Act confers on the Central
Government the general power of making and issuing orders providing for regulating or prohibiting the producti<on, supply and distribution
of an essential commodity and trade and commerce therein if it is of
opinion that it is necessary or expedient so to do for m&•ntaining or
increasing supplies of any essential commodity or for securing its
equitable distribution and availability at fair prices oc "or securing any
essential commodity for the defence of India or the efficient conduct
of military operations.
Sub-section (2) of section 3 of the Act specifies the orders which
without prejudice to the generality of the powers conferred by subsection t 1) of section 3 can be issued thereunder.
Clause (c) of sub-section (2) of section ·3 of the Act authorises
the issue of an order for controlling the price at which any essential
commodity may be bought or sold.
Su~section ( 6) of section 3 of the Act ordains that every order
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made under this section by the Central or by any officer or authority
of the Central Government shall be laid before both Houses of ParF
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liament as soon as may be, after it is made.
section 4 of the Act lays down that an order made under section
3 may confer powers and impose duties upon the Central Government
or the State Government or officers and authorities of the
Central
Government or State Government and may contain directions to any
State Government or to officers
and authorities thereof as to the
exercise of any such powers or the discharge of any such duties.
Section 5 of the Act deals with delegation of powers. It provides
that tho Central Government may, by notified order, direct that the
power to make orders or issue notifications unJer section 3 shall, in
relation to such matters and subject to such conditions, if any, as may
be specified ~n the direction, be exercisable also by (a) such officer
or auhtority subordinate to the Central Government, or (b) such State
Government or such officer or authority subordinate to a State Government, as may be specified in the direction.
Section 6 of the Act which embodies the non-obstante clause 'lays
down that any order made under section 3 shall have effect notwithstanding anything i'nconslstent therewith contained in any enactment
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ATLAS CYCLE LTD. v. HARYANA (Jaswant Singh,!.)
1077
«her than this Act or any instrument having effect by virtue of any
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enactment other than this Act.
Section 7 of the Act lays down the penalties which any person
,;;
contravening any ord~r made under section 3 shall entail.
Section 10 of the Act which c!eals with offences by the companies
provides as follows:-
" l 0. ( 1) If Uie person
oontravening an order made
under section 3 is a company, every person who, at the time
the contravention was committed, was in charge of, and was
responsible to, the company for the conduct of the business
of the company as well as the company, shall be deemed to
be guilty of the contravention and shall be liable to be proceeded against and punished accordingly :
Provided that nothing contained in this sub-section shall
:render any such person liable to any punishment if he proves
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that the contravention took place without his knowledge or
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that he exercised all due diligence to prevent such contra·
vention.
(2) Notw;'thstanding anything contained in sub-section
( 1) , where an offence under this Act has been committed
by a company and it is proved that the offence has been
committed with the consent or connivance of, or is attributable to any neglect on the part of, any director, manager,
secretary or other officer of the company,
such director,
manager, secretary or other officer shall also be deemed to
be guilty of that offence and shall be liable to be proceeded
against and punished accordingly.
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Explanation. - For the purposes of this section, •
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(a) "company" means any body corporate, and includes a firm or other association of individuals; and
(b) "director" in relation to a firm means a partner in
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the firm."
We may also at this' stage advert to the Control Order which was
issued by the Central Government vide S.R.O. 1109/ESS. COMM/
liRON AND STEEL dated May, 8, 1956 in exercise of the powers
conferred on it by section 3 of the Act. Sub-clause (1) of clause 15
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of this Order authorises the Co~tro\ler to fix by notification in the
Gazette of India the maximum prices at which any iron and steel may
l 6-699 SCI/78
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SUPREME COURT REPORTS
[1979] 1 S.C.R'-
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be sold (a) by a producer, (b) by a stockholder including ~ controlled stockholder and ( c) by any person or class of persons.
Subclause (3) of clause 15 of the Control Order which is material for
the purpose of the case provides:
"15. (3) No producer or stockholder or other person
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shall sell or offer to sell, and no person shall acquire, any
iron or steel at a price exceeding the maximum prices fixed
under sub-clause (1) or (2) ."
It was under sub-clause ( 1) of clause 15 of the Control Order
that the notification in question was issued.
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Though sub-section (6) of section 3 of the Act provides that
every order made by the Central Government or by any officer oc·
authority of the Central Government shall be laid before both Houses of Parliament as soon as may be after it is made, tha important
point to be considered in the absence of analogous statutes like the
Statutory Instruments Act, 1946 and the Laying of Documents before
D Parliament (Interpretation) Act, 1948 prescribing the conditions, the
period and the legal effect of the laying of order before the Parliament
is whether the provision is directory or mandatory.
It is well to
remember at the outset that the use of the word 'shall' is not conclusive
and decisive of the matter' and the Court has to ascertain the true
intention of the legislatnre, which
is the determining factor, and:
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that must be done by looking carefully to the whole scope, nature
and design of the statute. Reference in this connection may be made
to the decision of this Court in State of U.P.
v.
Manbodlum Lal
Srivastava('). 'Reference in this behalf may also be made with advantage to another decision of this Court in The State of Utfar Pradesh & Ors. v. Babu Ram Upadhya(') where Subba Rao, J. (as he
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then was) after quoting with approval the passage occurring at page
516 in Crawford "On the Construction of Statutes" as well as the
passage. occurring at page 242 in 'Craies on Statute Law', 5th Edition,.
observed as follows :-
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"The relevant rules of interpretation may be briefly stated
thus:
When a statute uses the word "shall'', prima facie,
it is mandatory, but the Court may ascertain the real intention of the legislature by carefully attending to the whole
scope of the statnte. For ascertaining the real intention of
the Legislature, the Court may consider, inter alia, the
nature and the design of the statute, and the consequences
which would follow from construing it one way or the other,.
(I) [1958] S.C.R. 533
(2) [1961] 2 S.C.R. 679
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ATLAS CYCLE LTD. v. HARYANA (Jaswant Singh, J.)
I 079
the impact of other provisions whereby the
necessity of
comply;•ng with the provisions in question is
avoided, the
circumstances, namely, that the statute provides for a contingency of the non-compliance with the provisions, the fact
that the non-compliance with the provisions is or is not
visited by some penalty, the serious or trivial consequences
that fiow therefrom, and, above all, whether the object of
the legislation will be defeated or furthered."
Thus two considerations for regarding a provision as
directory
are : ( 1) absence of any provision for the contingency of a particular
provi~ion not being complied with or followed and (2) serious general inconvenience and prejudice that would result to the general public if the act of the Government or an instrumentality is
declared
invalid for non-compliance with the particular provision.
Now the policy and object underlying the provisions relating to
laying the delegated legislation made by the subordinate law making
authorities or orders passed by
subordinate executive
instrumentalities before both Houses of Parliament being to keep supervision
and control over the aforesaid authorities and instrumentalities, the
"laying clauses" assume different forms depending on the degree of
control which the legislature may like to exercise.
As evident from
the observations made at pages 305 to 307 of the 7th Edition of
Craies on Statute Law and noticed with approval in Hukam Chand
etc.
v.
Union of India & Ors.(')
there are three kinds of laying
which are generally used by the Legislature.
These three kinds of
laying are described and dealt with in Craies on Statute Law (Supra)
as under.-
(i) Laying without further procedure,
(ii) Laying subject to negative resolution,
(iii) Laying subject to affirmative resolution.
(i) Simple laying. The most obvious example is in secti'on lil(2) of the 1946 Act.
In earlier days, before
the idea of laying in draft had been introduced, there
was a provision for laying rules etc., for a period
during which time they were not in operation and
could be thrown out without ever having come into
operation (compare Merchant Shipping Act, 1894,
s. 417; Inebriates Act 1898, s. 21) but this is not
used now.
(I) [1973] I S.C,R. 896-A.l.R. 1972 S.C. 2427
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(ii) Negative
resolution.-
Instruments -so-laid- -have
~
immediate operative effeet bu. are subject to annulment within forty days without prejudice to a new
instrument being made. The phraseology generally ·
'used is "subject. to annulment tn pursuance of a
resolution of either House of Parliament." This is
by far
the commonest
form of laying. It acts
;;--mostly_ as a
deterrent and sometimes
forces a
-- '
Minister (in Sir Cecil
Carr's phrase) to "buy off
-~ oppositio_n''_ by_ proposing some modification.
(iii) Affirmative
resolution. The phraseology here is
normally "no order shall be made unless a draft has
been laid before Parliament and has been approved
by a resolution of each House of Parliament. Nor-
:_ mally, no time limit is fixed for obtaining approval
' none is necessary because the Government will naturally t'ake the earliest opportunity of bringing it up
for approval _:_but section 16(3) of.the Housing
•(Fmancial and Miscellaneous Provisions) Act, -1946 -
did impose a limit of forty days.
An old form
(not much used nowadays) provided for an order to
be made but not to become cperative'until a resolution of both Houses of Parliament had been obtained. This form was used in section 10 ( 4)
of the
Road Traffic Act, 1930 (cf. Road Traffic Act, 1960,
s.19(3) ... The
affirmative
resolution
procedure
necessitates a debate
in every case. This
mean3
. that one object of delegation of legislation
(vi'z.
saving the time of Parliament) iS to some extent
defeated. The procedure therefore is sparingly used
and is more or less reserved to cases where the
order almost amounts .to an Act, by effecting changes
which -- approxiniate to true legislation (e.g. where
the order is the meat of the matter, the enabling Act
merely. outlining the general purpose) or where_ the
order replaces local 'Acts or provisional orders and,
most important of all, where the spending, etc. of
-public mone>: is affected.
- Somet;mes where speedy or secret action is -r~quired
(e.g. the imposition of import duties), the order is
· laid with immediate oneration but has to be confirmed
within a certain peridd of Import Duties_ Act, 1958,
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1081
s.13 ( 4). This process of acting first and
getting
approval after has also been adopted in the Emergency Powers Act, 1920 nnder which a state of
emergency can be proclaimed and regnlations made.
The proclamation must be immediately
comm11.nicated to Parliament and does not have effect "l'or
longer than a month: but it can be replaced by another proclamation.
Any regulations made
under
the proclamation are to be laid before
ParL•ament
immediately and do not continue in force after the
expiration of seven days from the time when they
are so laid unless a resolution is passed by
both
Houses providing for their continuance."
'
Now at page 317 of the aforesaid Edition of Craies on Statute
Law, the questions. whether the direction to lay the rules before Parliament is mandatory or merely directory and whether laying is a
condition precedent to their operation or may be neglected without prejudice to the effect of the rules are answered by saying that "each
case must depend on its own circumstances or the wording of the
statute under which the rules are made." In the instant case, it would
be noticed! that sub-section(6) of section 3 of the Act merely provides
that every order made under,section 3 by the Central Government or
by any officer or anthority of the Central Government shall be laid
before both Houses of Parliament, as soon
as may be, after it
is
made. It does not provide that it shall be subject to the negative or
the affirmative resolution by either House of Parliament. It also does
not provide that it shall be open 'to the Parliament to approve or di•-·
approve the order made under section 3 of the Act.
It does not
even say that it shall be subject to any modification which either
House of Parliament may in its wisdom think it necessary to provide.
It does not even specify the period for which the order is to be laid
before both Houses of Parliament nor does it provide any penalty for
non-observance of or non-compliance with the direction as to the laying of the order before both Houses of Parliament.
'1t would also be
noticed that the requirement as to the laying of the order before both
Houses of Parlirunent is not a condition precedent but subsequent to
the making of the order. In other words, there is no prohibition to
the making of the orders without the approval of both Houses of
Parliament. In these circumstances, we are clearly of the view that
the requirement as to laying contained in sub-section (6) of section
3 of the Act falls within the first category i.e. "simple laying'" and
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is directory not mandatory.
We are fortified in this view by a carena
of decisions, both English and Indian. In Bailey v. Williamson(•)
whereby section 9 of the Parks Regulations Act, 1872 passed on
June 27, 1872 '.'to protect the royal parks from injury, and to protect
the pu!jic in the enjoyment of those royal parks and other royal possessions for the purpose uf innocent recreation and exercise" it was
provided that any rules made in pursuance of the first schedule to the
Act shall be forthwith laid before both Houses of Parliament, if Parliament be sitting, or if not, then within three weeks after the beg;nning of the then next ensuing session of Parliament; and if any such
rules shall be disapproved by either House of Parliament within one
month of the laying, such rules, or such parts thereof as shall be di<sapproved shall not be enforced and Rules for Hyde Park were made
and published on September 30, 1872 when Parliament was not sitting- and in November 18, 1872, the appellant was convicted under
fl:ction 4 of the Act for that he did unlawfully act in contravention of
Regulation 8 contained in the first schedule annexed thereto by
delivering a public address not in accordance with the rules of the
said Park but contrary to the statute, and it was inter alia contended
on his behalf that in the absence of distinct words in the statute stating that the rules would be operative in the interval from the time they
were made to the ti<me when ·Parliament shonld meet next or if Parliament
was
sitting then
during the month
during which
Parliament had an opportunity of expressing its opinion npon them, no
rule made as supplementing the schedule could be operative so as to
render a person liable to be convicted for infraction thereof unless the
same had been laid before the Parliament, it was held overruling the
contention
that
the Rules
became
effective
from the
time
they were made and it could not be the intention of the Legislature
that the layi•ng of the rules before Parliament should be made a condition precedent to their acquiring validity and that they should not
take effect until they are laid before and approved by Parliament. If
the Legislature had intended the same thing as in section 4, that the
rules shonld not take effect until they had the sanction of the Parl~a
ment, it would have expressly said so by employing negative language.
In Starey v. Graham(') where it was contended that the Register
of Patent Agents Rules, 1889 which had been repealed by Rules of
1890 could not be re-enacted by mere reference without complying
with the provisions of section 101, sub-s. 4 of 46 and 47 Viet. c. 57
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according to which, a copy of the Rules of 1889 should also have been
(I) [18731 L.R. VIII Q.B. 118
(2) [1899] l Q.B. 406
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'laid before both Houses of Parliament in order to make them valid,
<Channell, J. said :
"I somewhat doubt whether the provisions of section 101
are more than directory and whether it is necess~ in any
particular case where reliance is placed on such rules to
prove that in fact its provisions had been complied with."
In Jan Mohammad Noor Mohammad Bagban v. The State of
·Guiarat & Am-. C) where it was urged by the petitioner that the toles
framed by the Provincial Government in 1941 in exercise of the
powers conferred on it under section 26(1) of the Bombay AgriculA
B
·turaI Produce Markets Act (22 of 1939) had no legal validity as they c ,
were not laid before each of the Houses of the Provincial Legislature
at the session thereof next following as provided by sub-seCtion (5)
of section 26 of the Act, this Court rejected the contention and upheld the validity of the said rules.
The following observatious made
in that case by Shah, J. (as he then was) on behalf of the Constitutron Bench are apposite:-
D
"The rules under Act 22 of 1939 were framed by the Provincial Government of Bombay in 1941. At that time there
was no Legislature in session, the Legislature having been suspended during the emergency arising out of World War II. The
session of the Bombay Legislative Assembly was convened for
the first time after 1941 on May 20, 1946 and that session was
prorogued on May 24, 1946. The second session of the
Bombay Legislative A~sembly was convened on Jnly 15, 1946
and that of the Bombay Legislative Council on September 3,
1946 and the rules were placed on the Assembly Table in the
second session before the Legislative Assembly on September
1, 1946 and before the Legislative Counci\ on September 13,
1946.
Section 26(5) of Bombay Act 22 of 1939 does not
prescribe that the rules acquired validity only from the date
on which they were placed before the Houses of Legislature.
The rules are valid from the date on which they are made
under s. 26(1). It is true that the Legislature has prescribed
that the rules shall be placed before the Houses of Legislature,
but failure to place the rules before Houses of Legislature does
affect the validity of the rules, merely because they have not
been plac;ed before the Houses of the Legislature.
Granting
that the provisions of sub-s. (5) of S. 26'by reason of the
failure to place the rules before the Houses of Legislature were
(I) [1966] 1 $.C.R. 505-A.I.R. 1966 S.C. 385.
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(1979] l S.C.Rvivloted, we are of the view that Sub-s. (5) of S. 26 having
regard to the purposes for which it is nuute, and in the context
in which it occurs, cannot be regarded as mandatory.
(Emphasis supplied). "The rules have beeu in operation since
the year 1941 and by virtue of s. 64 of the Gujarat Act 20 of
1964 they continue to remain in operation.
In D. K. Krishnan v. Secretary, Regional Transport Authority,
Chi!tor(') where the validity of Ruic 13-A of the Madras Motor Vehicles Rules, 1940, made under the Motor Vehicles Act, 1939 empowering
the Regional Transport Authority to delegate its functions to the Secretary was challenged on the ground that it was not laid before the Legislature of the.Madras State as required by section 133(3) of the Act
which provided that the rules shall be laid for not less than fourteen
days before the Legislature as soon as possible after they are made and
shall be subject to such modification as Parliament or such Legislature
may make during the session in which they arc so laid, Subba Rao, J.
(as he then was) after an exhaustive review of the case law and the text
books on constitutional law by eminent jurists repelled the mntention
observing as follows :-
"The aforesaid discussion in the text books and the case
law indicate the various methods adopted by the Parliament
or legislature to control delegated legislation. That control is
sought to be effected by directing the rules or regulations
made by the delegated authority to be laid before the Parliament.
Where the statute makes the laying of the rules before
Parliament a condition precedent or the resolution of the
Parliament a condition subsequent, there is no difficulty as in
the former case, the rule has no legal force at all till the condition precedent is complied with and in the latter case, it
ceases to have force from the date of non-compliance with the
condition subsequent.
Nor can there be any difficulty in a case where the Parliament or the Legislature, as the case may be, specifically prescribes the legal effect of non-compliance with that condition.
But more important question arises when the Parliament
directs the laying of the rules before the Parliament without
providing for the consequences of non-compliance with the
rule.
(1) A.J.R. 1956 Andhra 129.
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In th" case of a statute di~ecting rules to be laid before
the P,arliament or the Legislature ·without any condition
attached, the rule is only directory.
Though the statute says
that the rules shall be laid before the Parliament as the provision in the statute is conceived in public interests, the dereliction of the duty by the Minister or other officer concerned in
not following the procedure should not be made to affect the
members of the public governed by the rules.
It may be asked and legitimately too that when the Parliament to keep its control over delegated legislation directs that
the rules shall be laid before the Parliament and if that rule is
constrned as directory, the object itself would be defeated.
But the. Parliament or the Legislature, as the case may be if
they intended to make that rule mandatory, they would have
clearly mentioned the legal consequences of its
non~coru- ·
pliance as they have done in other cases.
This rule (i.e. the one· contained in Section 133(3)
therefore, is not made either a condition precedent or a condition subsequent to the coming into force of the rules. lt
does not provide for any aJ!irmative resolution.