# BHAGWATI SARAN AND ANOTHER v. THE STATE OF UTTAR PRADESH

- **Citation:** [1961] 3 S.C.R. 563
- **Court:** Supreme Court of India
- **Decided:** 1958-11-18
- **Case number:** Criminal Appeal No. 16 of 1959
- **Bench:** B. P. Sinha, s. K. DAS, A. K. Sarkar, N. Rajagopala Ayyangar, J. R. Mudholkar
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/bhagwati-saran-and-another-v-the-state-of-uttar-pradesh-2048
- **Pages:** 16

## Headnote

Iron a~d Steel Control-Notification fixing maximum pricesW hether ultra vires-If notification discriminates between "controlled
stockholders" and" registered stockholders "-Report to MagistrateFacts constituting the offence, meaning of-New Point-Iron and
Steel (Control of Production and Distribution) Order, r94I, Cl. II·B
-Essential Supplies (Temporary Powers) Acl, r946 (XXIX of
r9~). s. II-Constitution of India, Art. r4.
A police officer made a report under s. II of the Essential
Supplies (Temporary Powers) Act, 1946, regarding a contravention of cl. .n-B(III), Iron and Steel (Control of Production and
Distribution) Order, 1941, read with s. 8 of the Essential Commodities Ordinance, 1955· to the Magistrate against the appellants
who were registered stockholders that they had sold iron bars at
prices higher than the controlled rate. After enquiry the Magistrate framed a charge against the appellant under s. 7, Essential
Supplies (Temporary Powers) Act •. 1946, read with cl. ll-B(III)
of the Control Order. The appellants contended that the charge
ought to be quashed on the grounds, (i) that the notification of
the Controller fixing the maximum sale price of the several categories of iron and steel was ultra vj1es the rule-making power in
cl. n-B(i) of the Control Order, (ii) that the notification was
discriminatory and violated Art. 14, and (iii) that the complaint
could not be taken cognisance of by the Magistrate because the
report of the police officer did not set out the facts constituting
the offence as required by s. II of the Act. The first two grounds
were raised for the first time before the Supreme Court.
Held, that the notification fixing the rates was intra vires
cl. n-B(i) of the Control Order. The notification did not omit
any class mentioned in cl. n-B(i) from its purview; it included
I96I
January io.
I96I
Bhagwati Sara'lt
v.
Stale of
Uttar Praiesh
564
SUPREME COURT REPORTS
[1961]
"registered producers" and it was not shown that there were
any "producers" other than " registered producers" enumerated
in the notification. The notification governed "registered stockholders"' also as they were included in the residuary category of
persons other than " registered producers " and " controlled
stockholders ".
The notification was not discriminatory and did not offend
Art. 14 of the Constitution. The notification no doubt permitted
the grant of credit facilities and the right to charge for cutting
and wastage in sales to "controlled stockholders'" but not
to "registered stockholders" in regard to sales by them. Differentiation was not per se discrimination. There was no material
to show that there was any unfair or irrational discrimination
which could attract Art. 14.
H ela, further, that the police report on which the prosecution was launched satisfied the requirements of s. rr of the Act.
The purpose of s. rr was to eliminate private persons from initiating prosecutions and to confine it to public servants. The
requirement of the section that the report should be in writing
and should set out the fact's constituting the offer.ce was to
ensure that there was a record that the public servant was satisfied that a contravention of the law had taken place. If the
contravention was sufficiently designated in the report the
requirements of the section were satisfied. Section II did not
require the mention in the report of details which would be
necessary to be proved to bring home the guilt to the accused.
Dr. N. G. Chatterji v. Emperor (1946) 47 Cr. L.J. 876 and
Rachpal Singh v. Rex (1947) 50 Cr. L.J. 469, not applicable.
Additional grounds, other than those urged before the High
Court, would not lJe permitted to be raised before the Supreme
Court as a matter of course, but only, in exceptional circumstances like cas<!s of subsequent legislation or where questions of
fundamental and general importance were raised.

## Text

3 S.C.R.
SUPREME COURT REPORTS
563
tribunal has considered all the relevant factors and
has come "to the conclusion that five months' bonus Standa:.i-;,., •• ,.
would meet the ends of justice.
We do not see any
Refining co. of
reason to interfere with this award.
India
In the result both the appeals fail and are disv.
b h
Its Worknten
missed. There will be no order as to costs in
ot
the appeals.
Gajendragadkar ].
Appeals dismissed.
BHAGWATI SARAN AND ANOTHER
v.
THE STATE OF UTTAR PRADESH.
(B. P. SINHA, C.J., s. K. DAS, A. K. SARKAR,
N. RAJAGOPALA AYYANGAR AND
J. R. MUDHOLKAR, JJ.)
Iron a~d Steel Control-Notification fixing maximum pricesW hether ultra vires-If notification discriminates between "controlled
stockholders" and" registered stockholders "-Report to MagistrateFacts constituting the offence, meaning of-New Point-Iron and
Steel (Control of Production and Distribution) Order, r94I, Cl. II·B
-Essential Supplies (Temporary Powers) Acl, r946 (XXIX of
r9~). s. II-Constitution of India, Art. r4.
A police officer made a report under s. II of the Essential
Supplies (Temporary Powers) Act, 1946, regarding a contravention of cl. .n-B(III), Iron and Steel (Control of Production and
Distribution) Order, 1941, read with s. 8 of the Essential Commodities Ordinance, 1955· to the Magistrate against the appellants
who were registered stockholders that they had sold iron bars at
prices higher than the controlled rate. After enquiry the Magistrate framed a charge against the appellant under s. 7, Essential
Supplies (Temporary Powers) Act •. 1946, read with cl. ll-B(III)
of the Control Order. The appellants contended that the charge
ought to be quashed on the grounds, (i) that the notification of
the Controller fixing the maximum sale price of the several categories of iron and steel was ultra vj1es the rule-making power in
cl. n-B(i) of the Control Order, (ii) that the notification was
discriminatory and violated Art. 14, and (iii) that the complaint
could not be taken cognisance of by the Magistrate because the
report of the police officer did not set out the facts constituting
the offence as required by s. II of the Act. The first two grounds
were raised for the first time before the Supreme Court.
Held, that the notification fixing the rates was intra vires
cl. n-B(i) of the Control Order. The notification did not omit
any class mentioned in cl. n-B(i) from its purview; it included
I96I
January io.
I96I
Bhagwati Sara'lt
v.
Stale of
Uttar Praiesh
564
SUPREME COURT REPORTS
[1961]
"registered producers" and it was not shown that there were
any "producers" other than " registered producers" enumerated
in the notification. The notification governed "registered stockholders"' also as they were included in the residuary category of
persons other than " registered producers " and " controlled
stockholders ".
The notification was not discriminatory and did not offend
Art. 14 of the Constitution. The notification no doubt permitted
the grant of credit facilities and the right to charge for cutting
and wastage in sales to "controlled stockholders'" but not
to "registered stockholders" in regard to sales by them. Differentiation was not per se discrimination. There was no material
to show that there was any unfair or irrational discrimination
which could attract Art. 14.
H ela, further, that the police report on which the prosecution was launched satisfied the requirements of s. rr of the Act.
The purpose of s. rr was to eliminate private persons from initiating prosecutions and to confine it to public servants. The
requirement of the section that the report should be in writing
and should set out the fact's constituting the offer.ce was to
ensure that there was a record that the public servant was satisfied that a contravention of the law had taken place. If the
contravention was sufficiently designated in the report the
requirements of the section were satisfied. Section II did not
require the mention in the report of details which would be
necessary to be proved to bring home the guilt to the accused.
Dr. N. G. Chatterji v. Emperor (1946) 47 Cr. L.J. 876 and
Rachpal Singh v. Rex (1947) 50 Cr. L.J. 469, not applicable.
Additional grounds, other than those urged before the High
Court, would not lJe permitted to be raised before the Supreme
Court as a matter of course, but only, in exceptional circumstances like cas<!s of subsequent legislation or where questions of
fundamental and general importance were raised.
CRIMINAL APPELLATE JURISDICTION: Criminal Appeal
No. 16 of 1959.
Appeal from the judgment and order dated November 18, 1958, of the Allahabad High Court in Criminal
Reference No. 452 of 1956.
R. V. S. Mani, for the appellants.
G. 0. Mathur and 0. P. Lal, for the respondent.
1961. January 20. The Judgment of the Court was
delivered by
Ayyangar ].
AYYANGAR, J.-Having heard the learned Counsel
for the appellants in full we did not consider it necessary to call on the respondent since, we were clearly
I
I
3 S.C.R.
SUPREME COURT REPORTS
565
of the opinion that the contentions raised in the
· appeal possessed no merit.
The legality of a prosecution for contravention of the
notification fixing the maximum prices at which
certain categories of iron & steel could be sold is the
subject.matter of this appeal. The appellants are two
in number, related to each other as husband and wife.
The second appellant-Sushila Devi-is" a Registered
tstockholder " and is state.d to be the proprietor of the
firm "Balwanta Devi · Sushila Devi" situated in
Sultanpur in Uttar Pradesh and the first appellant-.
Bhagwati Saran, her husband, the. manager of the
said firm.
There has been some previous history before the
present prosecution was in.itiated but it is sufficient for
the purposes of this appeal to start with the report to
the Judicial Magistrate, Amathi, by the officer incharge
of the Police station, Sultanpμr, dated A.ugust 20, 1955.
It was headed "Offence-Section 11-B Iron & Steel
Control Order, 1941" and set out the following facts:
" Bhagwati Saran used to work as a Karinda in
the firm of Balwanta Devi Sushila Devi and had all
along been doing sales and purchases at the shop,
and also issued receipts .under his signatures. Shrimati Sushila Devi is the wife of accused Bhagwati
Saran and she was the proprietor. Balwanta Devi
has died. Hence she alone is the proprietor. In
the course of investigat.ion it was also revealed that
Bhagwati Suran had from time to time sold some
iron-b11.rs on behalf of this firm after receiving price
more than the control rate, which he had all along
been getting printed, and had been getting some
other receipts checked fictitiously under the Control
Act from the office of the Supply Officer. An information relating to it was given to Shri P. N.
Kapoor, the then D. M., Sultanpur by his munim
Kalapnath and on it a case was registered at t:his
police station and the investigation was made ..... .
.................. On the report of the P.P"'the S.P.
ordered another charge-shuet to be submitted under
section 8 of Essential Commodities Ordinance of
1955. Hence this charge-sheet under sectiqn 11-B
Bhaiwati Saran
v
Stale of
Uttar Pradesh
Ayyangar J.
Bhagwati Saran
v.
State of
Vilar Pradesh
Avyangar ].
566
SUPREME COURT REPORTS
[1961]
(III) Iron and Steel Control of Production and
Distribution Order, 1941, read with s. 8 of Essential
Commodities Ordinance of 1955 is sent against both
the accused. The accused persons after being
arrested were releaMed on bail.
It is, therefore,
prayed that the accused persons after being summoned may be punished."
The report further stated that 4 volumes of cash
memos, and 5 volumes of register of Permits were·
deposited in the Malkhana and would be produced in
evidence and followed it with a list of 13 prosecution
witnesses.
The Judicial Magistrate registered the
case and issued summons to the accused on September 16, 1955, the {lase being directed to be called on
September 30, 1955.
The accused were thereafter
examined before the Magistrate under s. 364 of the
Criminal Procedure Code on March 23, 1956, and on
the next day the Magistrate framed a charge against
them which read as follows:
"That you between 10th January 1952 and 27th
February 1952 in Sultanpur sold 11 Cwt. 12 lb. iron
bars on 11th January 1952 and 3 Cwt. iron bars on
18-2-52 and 6 Cwt. iron bars on 26th February 1952
at the rate of Rs. 21-13-9 per Cwt. though the
controlled rate as notified in Government of India
Gazette dated 1st July 1952 for the commodity was
Rs. 21-2-4 per Cwt. and thus you charged Rs. 1-15-0,
Rs. 2.-2-3 and Rs. 4-4-6 respectively excess and more
than the controlled price and thereby committed
an offence punishable under s. 7 E. S. Temp. P. Act
1946 read with s. 11-B (iii) of Iron and Steel Control
of Production and Distribution Order of 1941 and I
hereby direct that you be tried by the said Court on
the said charge."
The two appellants thereupon moved the Court of the
Sessions Judge, Sultanpur, to revise the order of the
Magistrate dated March 24, 1956: framing charges
against them under s. 7 of the. Essential Supplies
(Temporary Powers) Act, 1946-Act XXIV of 1946
(referred to hereafter as the Act).
The points urged at that stage were mainly two :
(1) That the notification by the Controller under
I
I
I
3 s.c.R. SUPREME COURT REPORTS
567
cl. 11-B(I) fixing the maximum prices which were
stated to have been contravened not having been filed
before the Court, the Magistrate erred in framing a
charge, and (2) that the report of the police was not
in conformity with the provisions of s. 11 of the Act.
The learned Sessions Judge upheld the second of the
above contentions which was, that the report made
by the police officer did not set out " the facts constituting the offence" as required by s. 11 of the Act.
He rejected the other point put forward by the appellants but in view of his conclusion that there was a
defect in the report which went to the root of the
jurisdiction of the Magistrate to take cognizance of
the case, he made a reference to the High Court with
a recommendation that the charge framed against the
appellants be quashed. This reference was heard by
a Single Judge of the High Court, who disagreed with
the learned Sessions Judge in his view that the report
did not satisfy the requirements of s. 11 of the Act.
Before the learned Judge, however, a further point
was urged, that s. 11-B of the Iron & Steel Control of
Production and Distribution Order, 1941 (which will
be referred to hereafter as the Control Order) was
itself ultra. vires. This further objection was referred
to a Division Bench .for decision. The point urged
before the learned Judges' of the Division Bench was
that the power to fix prices vested in the Steel Controller by cl. 11-B of the Control Order was unconstitutional, as violative of the right to carry on business
guaranteed by Art. 19(l)(g) of the Constitution .. The
learned Judges answered this point against the appella.nts and the case thereafter ca.me back before the
learned Single Judge for final disposal of the reference
by the Sessions Judge. The learned Counsel for the
appella.nts once again made a. submission to the learned
Judge regarding the report of the police officer dated
August 20, 1955, not satisfying the requirements of
s. 11 of the Act and pressed before him the view
which found favour with the learned Sessions Judge.
In a more detailed judgment, the learned Judge again
rejected this contention and dismissed the reference
and directed the prosecution to continue. It is this
73
r96r
B/Jagwati Sa,.an
v.
State of
Utta1 P1adesl~
Ayyangar ].
Bhagwati Saran
v.
State of
Uttar Pradesh
Ayyangar ].
568
SUPHEME COURT REPORTS
[1961]
order of the High Court of Allahabad that is the
subject-matter of appeal now before us, on a certificate granted by that Court.
It would be seen that the only two points in controversy before the High Court were: (1) whether the
report of the police offioer dated August 20, 1955, contained " the facts constituting the offence " with
which the appellants were charged, as to satisfy the
requirements of s. 11 of the Act, and (2) whether
cl. 11-B of the Control Order, violated the fundamental right to carry on business guaranteed by
Art. 19(1)(g). In the grounds of appeal to this Court
and in the statement of case, however, the appellants
have raised various other grounds and have also filed
a petition for leave to urge these.additional grounds.
We desire to make it clear that grounds additional to
those urged before the High Court would not be permitteJ to be raised before this Court as a matter of course
and that petitions for such purpose would. not be
granted save in exceptional cases; It has to be noticed
that in hearing and dealing with such additional·
grounds the Court is handicapped in·not having the
advantage of the opinions .of the High. Court on the
points urged. It is the correctness of the decisions of
High Courts that are sought to be challenged in appeals
and it is but proper that the correctness of these judgments should, save in exceptional cases . like for
instance subsequent legislation or questions of fundamental and genera.I importance etc., be assailed only on
grounds urged before such Courts. Besides, when
among the grounds thus urged as in this case is included a violation of Art. 14, the handicap is accentuated,
since the material facts on which the classification
might rest could not be properly investigated or
evaluated on the basis of the affidavits· filed in this
Court without a careful sifting of the facts which a
consideration by the High Court would afford. If
in the appeal now before us, we have depr•rted from
this rule and permitted the appellants to urge the
additional grounds it was because of the circumstance
that the prosecution was pending and learned Couns<·l
sabmitted that he woald seek to sustain his contention
l
1
:.~
3 S.C.It.
SUPREME COURT REPORTS
569
regarding the violation of fundamental rights on the
materials already on record.
The ground regarding the constitutionality of
cl. L:. -B of tne. Control Order has been the subject of
elaborate consideration by this Court in Union of India
v. Messrs. Bhrtna Mal Gulzari Mal (1) and is, therefore,
no longer open to argument. Learned Counsel for the
appeJlant therefore die not challenge the correctness
of the judgment of the High Court upon this point.
Besides the ground based on a non-compliance with
s. 11 of the Act which we shall consider later, learned
Counsel urged before us two points with reference to
the notification issued by the Steel Controller fixing
the maximum prices· at whjch the sevoral categories
of iron and steel could be sold by producers and stockholders. These were: (1) that the notification of the
Controller dated July 1, 1952, for the contravention of
which the appellants were being prosecuted, was ultra
vires the rule-,naking puwer conferred upon him by
cl. 11-B(l) of the Control Order, (2) if, however, the
notification was held to b~ within his pow'3r, the same
was unconstitutional in that it was discriminatory and
violated Art. 14 of the Constitution. As we have
indicated earlier, these gronnds of challenge to the
validity of the notification were not made in any of
the Courts below including the High Court, but for the
reasons indicated we permitted learned Counsel to
argue them before us.
In order to appreciate the contention presented in
the two forms, it is necessary to set out the terms of
cl. 11-B(l) which conferred power upon the Controller
to fix the maximum base-prices at which the several
varieties of iron and steel could be sold.
Clause
11-B(l) runs:
"11-B. Power to fix prices.-(!) The Controller
may from time to.time by notification in the Gazette
of India fix the maximum prices at which any iron
or steel may be sold (a) by a Producer, (b) by stockholder including a Controlled Stockholder and (c) by
any other person or class of persons. Such price or
prices may differ for iron and steel obtainable from
{1) (1960] 2 S.C.R. 627.
B hagwati Saran
v.
State of
Uttar Pt<adtsh
Ayyangar f·
Bhagwati Sa1. ·
v.
.. Slatecoj
· ···:·.-·iu."a~: Prades
Ayyanga~ J.
570
SUPREME COURT REPORTS
(1961]
different sources and may include allowances for
contri~uti!\n to and payment from any equalization
furid' established by the Controller for equalising
· freight, the concession rates payable to each producer or class of producers under agreements entered
into by the Controller with the producers from time
to time, and any other disadvantages."
Clause (2) of the Control Order defines "producer "
as " a person carrying on the business of manufacturing iron or steel", and "registered producer" as "a
producer who is registered as such hy the Controller ".
The same clause defines "stockholder" as " a person
holding stocks of iron or steel for sale who is registered as a stockholder by Controller·" and "Controlled
stockholder" as "a stockholder appointed by the Controller to hold stocks of iron or steel under such terms
and conditions as he may prescribe from time to
time". The notification of the Controller dated
July 1, 1952, impugned in these proceedings runs in
these terms, quoting only the material words:
"Under Ministry of Commerce and Industry
Notification ............ the prices of all items of steel
under columns I, II and III in the schedule of Base
Prices of the attached price circular No. 1 of 1951
have been increaGed by Rs. 50/- per ton with effect
from 1st July, 1952, except item 19(b), i.e., Billets
·which has been increa.sed by Rs. 45/- per ton ........ .
The other General and Special Conditions of sale.
mentioned in the attached Price circular remain the
same."
'
.··,
'
--f
.,
3 &.C.R.
SVPREME COURT REPORTS
571
The price circular dated July I, 1951, referred to here
consisted .of eight columns which ran thus:
·
Base
Materials
Price
Item
No.
A-Bars, Structural
and plates etc.
I
Bars and Rods
{Rounds and squares
below 3" and flats
up to and including
s" wide)
(Price. in rupees per ton)
Maximum Base Prices at Calcutta., Bombay and
Madras
Column..! I
Column II_ I
Column III
For sales by
For sales by
For sales by
Registered
controlled
all persons
Producers.
stockholders.
~er than
Registered
Producers and
controlled
stockboldera,
.,;
I
I
.,;
.,;
.,;
..;
1i
$
•
•
•
•
~
~
ii
~
1;;
•
•
•
•
•
•
•
•
•
d
f.<
~
f.<
~
!-<
=
=
·~
~
~
Rs. I
Rs. I
Rs.
Rs.
Rs. I
Rs.
303
333
2 to '42
............................................................................................ .
This was followed by General Conditions ·and Specie.I
Conditions which inter alia made provision for the
purpose of rounding off inequalities in freight caused
by places being situated at varying distances from the
place of production etc. It was the operation of sorue
of these conditions that was urged as giving rise to
the discrimination complained of, but it will, however,
be convenient to deal wi~h them la~er, B:fter disposing
of the argument regardmg the not1ficat10n not being
within the powers of the Controller under cl. U.B (1).
The ground urged in support of the contention tha.t
the notification Ly the Cont-roller was not in conformity
Bhagwa1i Saran ·
v.
Staj1 of
U llar PrU..sh
Ayyangar f.
Blwgu:ati Sara1t
v.
.state 1Jf
[Tttar Pradesh
572
SUPREME COURT REPORTS
[1961]
with cl. 11-B (1) was this: Whereas under cl. 11-B(l)
the·Controller was directed to fix the maximum prices
\vhieh could be charged by three different classes, viz.,
(a) Producers, (b) Stockholders including Controlled
stockholders, and (c) Other persons, the impugned
notification
departed from
this scheme
in
two
respects: (1) The clause contemplated that the notification should apply to all " producers" whereas
"producers" other than "Registered producers"
were wholly left out by the Controller with the result
that no limitation was placed upon the price they
could charge, (2) Whereas the clause directed the Controller to include both the types of stockholders-
" Registered " as well as "Controlled "-within the
same class and make the same limit of prices applic-
. able to both, the notification had included only "Controlled stockholders " as the second category of dealers
and "registered stockholders" had not been specified
eo nomine by him. This meant either that "Hegistered
stockholders" were wholly outside the class of dealers
governed by the notification or that they were intended to be included in the residuary class in column III.
On these premises learned Counsel urged that if
"registered stockhoklers" like the second appellant
were not within the notification, the prosecution must
fail because the maximum 'prices chargeable by her
had not been fixed. lf on the other hand such dealers
had been separated from " •Controlled stockholders"
and included in the residual category, such a classification was not countenaμced by cl. 11-B(l) and was
therefore ultra vires.
We consider that these submissions are wholly
without any .substance. Before the argument that
" producers '' other than '"registered producers" had
not been included in the notification ca;n be accepted,
it has to be established that there is any such producer.
There is a list of "registered producers" appended to
the notification and learned Counsel admitted that he
could not say that thore were any besides these, who
wore "producers" of iron and steel within the meaning
of the Control Order. If therefore every "producer''
was regi"tered, ther~ io< no scope for the argument that
f
.-.,i
3 S.C.R.
SUPREME COURT REPORTS
573
any persons had been left out and permitted to sell at
prices of their choice.
The other part of learned Counsel's argument that
" registered stockholders " were not governed by the
notitication because they were not included in column
II thereof and that dealings by them were not subjected·
to the maxima of prices fixed by it, has only to be stated
to be rejected.
The heading of the last column shows
that all categories of dealers other than "registered producers?' and "controlled stockholders" were included
in the residuary category. The related contention that
the Controller acted outside his powers in differentiating between "contro!led stockholders" and "registered·
stockholders " and in fixing different ma,xima of prices
that could be charged by the two categories of dealers;
does not deserve serious consideration either. If we
understand the classification a.right, it is like one between wholesale dealers and retailers and it is on this
basis that the maximum price that could be charged ·
by the "Registered Stockholders" who fall under
column III is fixed at Rs. 20/- per ton above that permissible to "Controlled Stockholders" iP respect of
the category of steel which we have extracted earlier.
The classification which gives persons in the category
of the appellants this advantage is certainly not one
regarding which a complaint could be made. Even
when this advantage conferred on regfotered stockholders by the classification by the Controller was
pointed out to learned Counsel for the appellant he
persisted in his argument that "registered stockholders" should have been put in column II along with
" controlled stockholders " and should have been permitted to sell only at the same maximum prices. 'l'his
is sufficient to show that the argument regarding the
classification was frivolous and could not have been
urged with any seriousness. This apart, we consider
that even on the terms of cl. 11-B (1), the Controlleds
not prevented from drawing a distinction within the
three classes which are specified in it. The purpose
and policy of the enactment is to ensure that an essential commodity like iron and steel is made available to
r96I
Bhagwati Saran
v.
State of
Uttar Pradesh
Ayyangar j.
Bhagwati Saran
v.
State of
Uttar Pradesh
Ayyangar ].
574
SUPREME COURT REPORTS
(1961]
the consumer at reasonable prices and in the achievement of this objective classification of producers or of
other stockholders based upon rational grounds would
obviously be within the power of the Con_troller.
Ta.king for instance the la.st class (c) "any other
person or class of persons," it cannot be that this group
could not be sub-classified, if there was any reason or
necessity to do so. If head ( c) is susceptible of this
interpretation, as it obviously must, we see no reason
why head {b) should not be similarly construed. We
have therefore no hesitation in rejecting the contention of learned Counsel, that the notification of the
Controller fixing maximum prices is beyond his power,
as not warranted by the terms of cl. 11-B (1) of the
Control Order.
The argument next advanced in challenge of the validity of the notification was, that some of the General
Conditions appended to the notification were discriminatory of the class of"registered stockholders" as compared
with the "controlled stockholders " invoking for this
purpose Art.14 ofth.e Constitution. Learned Counsel did
not challenge the legality of the creation of the equalisation ,fund by the allowances for what is termed as
" place extra ''.. Learned Counsel, however, urged two
matters wherein facilities had been afforded or price
increases permitted, to " controlled stockholders"
which were denied to " registered stockholders " and
that these had been done without any rational basis.
These were: (1) The 3rd of the special conditions for
sale .by "controlled stockholders" read: "The· question
of credit faoi.lities will be a matter for negotiation between the customers and the controlled stockholders."
(2) Similarly, Condition 5 also relating to "controlled
stockholders" read : "The base-prices are for sizes
and length available in size. · Customers requiring
mat«iria.l cut to length or size not available in stock
will be required to pay cutting and wastage charges
a.greed between the customers and the stockholders."
Coming now to the special conditions for sale " by
persons ot!ier than producers ana controlled stockholders," i.e., the conditions which governed sales like
those by the second appellant, special condition I
\ ..
t
j
\
3 S.C.R.
SUPREME COURT REPORTS
575
read: "The base-rates given in column III above are
ex.site and apply to sales by all persons other than
Producers and Controlled Stockholders ............ and are
not subject to additional charges for cutting or for
credit facilities. " Neither of these points-cutting
charges or credit facilities-could be held to be
discriminatory without a full investigation of the facts
and circ.umstances which led to the imposition of these
special conditions. Differentiation could never per se
be discrimination, nor is there -any presumption that
the adoption of different rules for groups differently
situated is unequal treatment violative of Art. 14. On
the other hand, the presumption is the other way and
the party that alleges unjustifiable discrimination
should establish it to the satisfaction of the Court.
We consider that there is no material on the basis of
which an argument could be sustained that the specialconditions to which lea.med Counsel adverted contained any element of unfair or irrational discrimination to attract Art. l4.
There was a slight and subsidiary point raised in
regard to the allowance of credit facilities and cutting
charges. It was said that these charges were indeterminate and that the Cpntroller having been directed
by cl. 11-B (1) to fix definite maximum prices had
departed therefrom by permitting increases of
undefined a.mounts. This argument again has no
substance. The base-price for the commodity having
been fixed, there are incidentals which by their very
nature were incapable of definite quantification, since
they were dependent on ea.ch individual case. This
contention also we therefore reject. In passing, we
might observe that the matter before this Court in
Union of India v. MesMs. Bhana Mal Gulzari Mal(•)
related to e. prosecution for a. contravention of a. notification of an earlier date, but in terms identical with
the present, except as to the prices, wherein the dealers
in the commodity were classified in -the so.me manner
e.a he.a been done in the notification now before us and
with the so.me general and specie.I conditions. The
respondent then before this Court we.a '' a. registered
(•) (1g6o] a S.C.R. 627.
74
Bhagwati Saran
v.
State of
Uttar Pradesh
Ayyangar ].
1961
Bltagwati Saran
v.
Slat1 of
Uttar Pradesh
Ayyangar J.
576
SUPREME COURT REPORTS
[1961]
stockholder" who was being prosecuted for effecting
sales in excess of the maximum prices fixed.
The fact
that on that occasion no contention was urged challenging the validity of the notification as beyond the
powers of the Controller, on the grounds now put
forward clearly indicates, that the matters now urged
never appeared then, as a possible source of grievance
to a party situated similarly as the second appellant.
We hold th'l.t the notification fixing the prices together
with the conditions appended thereto a.re valid and
enforceable.
The last point that remains to be dealt with, is
the contention that the initiation of the pr<'secution
against the appellants waR invalid for non.compliance
with the requirements of s. 11 of the Act. This
Section runs :
"11. · Cognizance of offences.-No Court shall
take cogniza.nce of any offence punishable under this
Act except on report in writing of the facts constituting such offence ma.de by a person who is a public
servant as defined in section 21 of the Indian Penal
Code (XLV of 1860)."
Learned Counsel for
the appellants urged that
though two of the conditions specified by the statute,
viz., (I) a report in writing, (2) by a public servant
were satisfied, the third requisite, viz., that the report
should set out the " facts constituting such offence "
was lacking and that by reason of this defect the
Magistrate could not lawfully take cognizance of the
case against the appellants. In elaboration of this
point learned Counsel pointed out that the report did
not specify: (a) the date when the alleged sales took
place, (b) the quantity sold, (c) the person in question
who was the buyer and who pa.id the excess over the
controlled price, (d) the cJa.3s or category of iron and
steel which was the subject of the sale by the appellants, (e) the precise maximum price which had been
fixed for such variety, (f) the a.mount which the
appellants were alleged to have received in excess.
The learned. Judge of t},le High Court rejected this
contention and, in our opinion, correctly. · In the
report which we have alrea.dr extracted the provision
·--;-, ',...---:- .,.,. .\
.3 S.C.R.
SUPREME-COURT REPORTS.·
577
of the la.w which the appellants were atated .. to have
contravened wa.s set out, and it was there stated that
being "registered stockholders" they. had sold the
goods above the price notified and that they- had
. further,_in order to conceal their crime, fabricated
evidence. It is to be noticed that the report is required
to contain only "a. statement of facts constituting the
offence" a.nd its function is not to s·erve as a. chargesheet a.ga.i!lst the accused: The function or purpose ·
of the second of the a.hove three requirements of s. 11
is to eliminate private individual~·. such as rivaF
traders or the general public from initiating a. prosecutfon and for this purpose before cognizance is ta.ken ·
· the complaint is required to emanate from " a. public ·
servant"-
The two further requirements, viz., that
the report should be in writing and regarding the
contents of the report, are to ensure that there- shall
be a.record that the public servant is satisfied that a.
contravention· of the Ja.w has'. ta.ken· place. If the·
contravention in question is sufficiently designated in
· the report, a.nd in the present case that cannot be
disputed, since besides a. reference to the notification
stated to have· been contravened, the report states
tha.t .the accused had effected sales .a.hove the maximum prices specified in the notification, the requirements of'the section are satisfied. '£he details which
would be necessary to be proved to bring home the
guilt to the accused and which comprised the several
matters enumerated by learned Counsel which we have
set out, will be details which would emerge at a later
stage, when after notice to the accused a charge is
framed against them. and of c;Q_urse at the stage of the
trial.· They would all be matters of evidence and s. 11
does not require the report to be or to contain either
the charge-sheet or the evidence in. support of the
charge, its function being merely to afford a basis for·
enabling the magistrate to take cognizance of the
case. .
· · In support of his submission regarding the construe- ·
· tion of s. 11 reliance was placed on two · deCisions :
Dr. N. G. Ohallerji v'. Emperor(') ~nd Rachpal Sirigh v.
\•l (1946) 47 Cr. LJ •. 876.
Bhagwati SMatf
v.
State of
Uttar P1a]e$lt
.Ayyangar ].
.
'
Bhagwati Saran
v.
State of
Ullar Pradesh
Ayyanga• ].
578
SUPREME COURT REPORTS
[1961)
. Rex('). Both these were cited before the learned
Judge and we agree with the manner in which he has
dealt with and distinguished them. No doubt, in
both these cases it was held that the requirement of
r. 130 (1) of the Defence of India Rules (whose language was similar to s. 11 of the Act) as to the Statement
of "facts constituting the contravention" was not
complied with, but the " reports " dealt with in them,
bear no resemblance to the report in the case before
us. In the first of these decisions, the recital in the
report was that the accused was guilty of a " prejudicial act to the interest of the public" and "had prejudiced the success of financial measures with a view
to the efficient prosecution of the war". These words
were held to be absolutely vague, even the particular
rule or provision of law which was said to have been
contravened, not even being mentioned in the report.
The other decision in 50 Criminal Law Journal does ·
not bear any.analogy to·the present case either. The
report there in question ran :
"On the statement of the informant an offence
under s. 81(2), Defence of India.Rules, has been committed for which the charge-sheet is being submitted."
On this it was held that the facts alleged to constitute
the contravention were not set out in the report and
that the Magistrate had therefore no jurisdiction to
take cognizance of the case. Obviously this case
could not assist the learned Counsel to sustain a
contention that the report in the present case was
defective. We consider that the report on which the
prosecution was launched satisfied the requirements of
s. 11 of the Act.
·
In the result the appeal fails and is dismissed.
Appeal di8mi8sed.
(1) (1947) $0 Cr. L.J. 469.
I