# SRI KRISHNA RICE MILLS ETC v. JOINT DIRECTOR (FOOD) GOVT. OF INDIA, VJJAYAWADA

- **Citation:** [1974] 1 S.C.R. 418
- **Court:** Supreme Court of India
- **Decided:** 1974
- **Bench:** K. N. Wanchoo, M. Hjdayatullah, J. C. Shah, J. R. MUDHOLKl\R A, S. M. S!Kri
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/sri-krishna-rice-mills-etc-v-joint-director-food-govt-of-india-vjjayawada-5989
- **Pages:** 12

## Headnote

B
Essentt'al Conunodities Act (10 of 1955) s. 3-Scope of-'Published figureJ·',
nJeanint? of.-Fixation of price by Ce1Jtral Government-If violatiYe of Arts. 14,
19 and 31-Cominodity procured by appellant at prevalent price-Government
.fixing lower price for requisition-Validity.
Constit1'tion oj Jndht, 1950, A rt. 226-Act providing orders Jo be finallifject.
In exercise of the pov;rers conferre<l by riotifications issued under s. 3 of
the E.ssential Commodities \ct, 1955, the concerned officer directed, on August
20, 1957. various appellants in TadcpaJligudem in Andhra
Pradesh, to sell
to the Government of India certain quantities and kinds of rice at price
calculated by him. The officer took into account the rates published in Vija~
yawada, about 80 miles from Tadepalligudem, which was the nearest locality
'Where published figures were available. and made such adjustments as were
necessitated by considering transport charges and the quality of rice procured
which was inferiqr to the rice for which the published price was available
in Vijayawada.
On September 14, 1957 the Central Government under s. 3(2)(c), fixed
the maximum price, and the officer made requisitions between September 14.
, and December 29, 1957 at that price.
On December 30. 1957, after the new rice crop had come into the market,
c
D
ihe Central Government refixed the maximum price at less than the maximum
E
price fixed on September 14. 1957, and Government requfsitioned rice there~
after at that price, from the appellants.
The appellants filed writ petitions in the High Court, contending Iha~ (1)
for the period before September 14. 1957, the price had not been properly
fixed according to the provisions of the Act; (2) the prices fixed by the
Central Government on September 14, 1957. and December 30, were hit by
Arts. 14. 19 and 31 of the Constitution; and (3) the lesser price fixed on
F
December 30, 1957, should not have been' applied to the rice purchased Dy the
appellants before that date at the higher rate fixed on September 141 1957,
and requisitioned fron1 them after December
30. The writ pctitiom wtre
dismissed.
Dismissing the appeals to this Court,
/
HELD: (1 )(a) Under s. 3(3A)(iii) there are 3 ways in which the price
has to be fixed as indicated in sub-els, (a), (b) and (c). Sub-clauses (a)
G
and (b) apply only to those situations where a controlled price has ~
fixed
by the Central Government. Since there was no · controtled price before Sep·
tember 14, 1957 in the present case. sub-cl. (c) applied.
Hence, the officer
bad to fix the price under s. 3(3A)(iii)(~, and the contention that be should
"have first tried to come to an agreen1ent
ith the appellants under sub-cl. (a)
~ .. no force. [426A-EJ
(bl Under s. 3(3A)(iii)(C) and cl. (iv), the price had to be calculated
with reference to the average market rate prevailing in the locality, on the
H
basis of published figures available in the locality or a neighbouring locality.
<luring the periop of 3 months immediately preceding the dates cf not1rica-
-•ion of the pri"!', W16F]
J
A
B
c
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E
SRI KRISHNA RICE MILLS I'. JT. DIR. FOOD (Wa11clwo, J.)
419
(c) The words 'published figures' mean that figures should be publicised in
some way as in newspapers or on the radio or in any other manner which
makes them known to the general public. The prices entered in i.he accounts
books of the appellants, cannot. in any circumstances be called 'published
figu.te$' even if they were shown to the tax-authorities.
[4270-F]
(d) Admittedly the rice procured was inferior in quality to the rice for
which the published price was available in Vijayawada. Hence, merely because in 1964. Central Government issued a :K>tification, that the difference
between the two qualities is slight, would not mean that the officer was wrong
in treating, in 1957 the rice procured by him as inferior. [42Bf~HJ
Therefore, it cannot be said that the officer was wrong in taking the figures
published in Vijayawada and making_ the necessary adjustmen

## Text

418
SRI KRISHNA RICE MILLS ETC.
v.
JOINT DIRECTOR (FOOD) GOVT. OF INDIA, VJJAYAWADA
January 27, 1965
[K. N. WANCHOO, M. HJDAYATULLAH, J. C. SHAH, J. R. MUDHOLKl\R
A
AND S. M. S!KRI, JJ.]
B
Essentt'al Conunodities Act (10 of 1955) s. 3-Scope of-'Published figureJ·',
nJeanint? of.-Fixation of price by Ce1Jtral Government-If violatiYe of Arts. 14,
19 and 31-Cominodity procured by appellant at prevalent price-Government
.fixing lower price for requisition-Validity.
Constit1'tion oj Jndht, 1950, A rt. 226-Act providing orders Jo be finallifject.
In exercise of the pov;rers conferre<l by riotifications issued under s. 3 of
the E.ssential Commodities \ct, 1955, the concerned officer directed, on August
20, 1957. various appellants in TadcpaJligudem in Andhra
Pradesh, to sell
to the Government of India certain quantities and kinds of rice at price
calculated by him. The officer took into account the rates published in Vija~
yawada, about 80 miles from Tadepalligudem, which was the nearest locality
'Where published figures were available. and made such adjustments as were
necessitated by considering transport charges and the quality of rice procured
which was inferiqr to the rice for which the published price was available
in Vijayawada.
On September 14, 1957 the Central Government under s. 3(2)(c), fixed
the maximum price, and the officer made requisitions between September 14.
, and December 29, 1957 at that price.
On December 30. 1957, after the new rice crop had come into the market,
c
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ihe Central Government refixed the maximum price at less than the maximum
E
price fixed on September 14. 1957, and Government requfsitioned rice there~
after at that price, from the appellants.
The appellants filed writ petitions in the High Court, contending Iha~ (1)
for the period before September 14. 1957, the price had not been properly
fixed according to the provisions of the Act; (2) the prices fixed by the
Central Government on September 14, 1957. and December 30, were hit by
Arts. 14. 19 and 31 of the Constitution; and (3) the lesser price fixed on
F
December 30, 1957, should not have been' applied to the rice purchased Dy the
appellants before that date at the higher rate fixed on September 141 1957,
and requisitioned fron1 them after December
30. The writ pctitiom wtre
dismissed.
Dismissing the appeals to this Court,
/
HELD: (1 )(a) Under s. 3(3A)(iii) there are 3 ways in which the price
has to be fixed as indicated in sub-els, (a), (b) and (c). Sub-clauses (a)
G
and (b) apply only to those situations where a controlled price has ~
fixed
by the Central Government. Since there was no · controtled price before Sep·
tember 14, 1957 in the present case. sub-cl. (c) applied.
Hence, the officer
bad to fix the price under s. 3(3A)(iii)(~, and the contention that be should
"have first tried to come to an agreen1ent
ith the appellants under sub-cl. (a)
~ .. no force. [426A-EJ
(bl Under s. 3(3A)(iii)(C) and cl. (iv), the price had to be calculated
with reference to the average market rate prevailing in the locality, on the
H
basis of published figures available in the locality or a neighbouring locality.
<luring the periop of 3 months immediately preceding the dates cf not1rica-
-•ion of the pri"!', W16F]
J
A
B
c
D
E
SRI KRISHNA RICE MILLS I'. JT. DIR. FOOD (Wa11clwo, J.)
419
(c) The words 'published figures' mean that figures should be publicised in
some way as in newspapers or on the radio or in any other manner which
makes them known to the general public. The prices entered in i.he accounts
books of the appellants, cannot. in any circumstances be called 'published
figu.te$' even if they were shown to the tax-authorities.
[4270-F]
(d) Admittedly the rice procured was inferior in quality to the rice for
which the published price was available in Vijayawada. Hence, merely because in 1964. Central Government issued a :K>tification, that the difference
between the two qualities is slight, would not mean that the officer was wrong
in treating, in 1957 the rice procured by him as inferior. [42Bf~HJ
Therefore, it cannot be said that the officer was wrong in taking the figures
published in Vijayawada and making_ the necessary adjustments.
(429B]
(2) (a) The orders passed by the Central Government fixing the price
relate only to certain districts of Andhra Pradesh.
But these districls are sur~
plus rice producing districts and form a class by themselves; and fixation of
maximum price therein would subserve the purpose of s. 3 ( I) of the Act of
stabilising the prices. Hence there is no violation of Art. 14. [4230-E]
(b) Sections 3 and 4 of the Essential Supplies (Temporary Powen\ Act,
1946, were in terms similar to ss. 3 and 4 of the Act, and were upheld by this
Court in (Harishankar Bagla's Case [1955] 1 S .C.R. 380). Therefore, for
the reas<Jns given in that case, which were accepted in (Bhana"ial G11/ra1i/al's
case [1960] 2 S.C,R. 627), Ss. 3 and 4 of the Act are not hit by Art. 19(1)
(f) and (g). [4230-C] ·
(c) The Act does not fix the amount of compensation, but the principles
on which and the manner in which the competl5ation is to be determined are
found in s. 3, which provides that the price should be fair, and that involves
in it all factors which have to be taken •nto account in fixing a fair price.
As the Act was dealing with a large number of commodities of different types
in which different factors would enter in fixing fair prices, the legislature left
it to the Central Government to determine the fair price in a just and proper
manner, after indicating in sub-ss. (3) and (3A) the manner in which it should
bo fixed.· Therefore, there is no violation of Art. 31(2). [423G-424B]
(l) lbe contention that the rice procured between
Septemb~r 14 and
·Dc,cembcr 29 by the appellants should have been requisitioned at the
price
. fu~ on September 14 and not the price fixed on December 30 must also fail.
·
[425AJ
.
(a) The reason for reduction of prices on December 30 was that new
crop came into market from Novmeber 1957, and it is a well-known economic
· • fact that prices fall whenever the new crop comes into market and traders.
F
who had purchased at higher prices, would have to sell at the reduced
rate1.
G
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Therefore, what would have happened in a free market was all that happened
IVhen the prices were reduced. [4240:-FJ
(b) The reduction- of price was not unfair and it could not be said that
the loss to the appellants would not have happened even in the normal course
of business. , [4241']
(c) if the contention of the appellants is accepted. (i) the Central Government can never reduce ,prices when once it had fixed them, and (ii) there
would be two sets of maximum prices. But that wouJd be against the very
purpose of s. 3(1) of fixing a fair price. [424F-GJ
( d) If the prices were raised by a subsequent notiljca~ion, th~ appellant would
not have contended that the old price should prevail in relation to the stocks
purchased by them earlier. [424G-IIJ
(4) Section 3(3A)(iv) provides that tho rates determined 'shall be final
and shall ·not be called in question in any court'. These wor~s do not .take
away the jurisdidion of the High Court under Art. 226 to give relief . m a
proper Cll30. but they <iertainly indicate that the rates fixed shall "!'t be; !•sh~ly
interfered '!ith unless the High Court finds that there has been senous lDJUI sbce
in the fixat10n of rates. (428C-E]
1
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-420
SUPREME COURT REPORTS
( 1974 J 1 S.C.R.
C1v1L APPELLATE JuR1so1cTioN :-Civil Appeals No. 1026 to
1031, 902 to 905 of 1963. '
Appeals. from the judgment and order dated 21st August, 1959
.of the Andhra Pradesh High Court in Writ Petitions Nos. '.'09, 710,
721 of 1957, 466, 1160 and 1426 of 1958, 1244, 1250 and 1257
of 1957 and 1205 ;lf 1957.
A. V. Viswanatha SastrA, K. Rajendra CiuuJdhuri C. Narasimhacharya, C. Subba Rao and K. R. Chaudhuri', for the appellants (in
C.A. Nos.J026 to 1031 of 1963).
K. Rajendra Chaudhuri and K. R. Chaudhuri for the appellants
(in C.A. No. 902 to 904 and 90~ of 1963).
A
B
N. C. Chatterjee, N. S. Bindra, Yogeshwar Prasad and B. R. G. K.
C
A char, for the respondent (in all the appeals.)
The Judgment of the Court was delivered !Jy
WAN CHOO, J .-These ten appeals on certificates granted by the
Andhra Pradesh High Court raise common questions and will be dealt ·
wjth together.
The brief facts necessary for present purposes are
D
these. On June 6, 1957, a notification was issued by the Central
Government under s. 3(3A) of the Essential Commodities Act, No. 10
of 1955, (hereinafter referred to as the Act). The notification said
lhat 'in the opinion of the Central Government it was necessary to
. control the rise in prices and prevent the hoarding of rice and paddy
in the States and Union territories. Consequently the Central Gov- ..
ernment directed by the notification that the price at which rice or
E
paddy shall be sold in any locality in the said States and Union territories in compliance with an order made with reference to cl. (f) of
sub-s. (2) of the said s. 3 shall be regulated in accordance with. the
provisions of sub-s. (3A). This order applied amon&st other. States
to the State of Andhra Pradesh· and was to be in force for a period of
three. months. On July 31, 1957, the Central Government made
another notification directing tha• the pm:vers conferred on it by s. 3
F
·of the Act to make orders providing for\ the matters specified in cl.
(f) and for the matters specified in els. (h), (i) and (j), insofar as
·they relate to cl. (f) of sub-s. (2) of s. 3 in relation to stocks of
rice and paddy held in any locality in the ·state .of Andhra Prad~sh
shall be exercisable also by Shri K. S. Krishnan:, Deputy Director
' (Food), Government of India, Vijayawada. This order was also to
be in force for three months.
Further on the same day the <:entral
G
Government issued another notiiication by which in pursuance of cl.
-(iv) of sub=-s. (3A) of s. 3 of the Act, the Central Government authorised the said Shri Krishnan to determine the average market rate of
rice and paddy prevailing in any locality fa the State of Andhra
Pradesh.
On August 20, 1957, Shri Krishnan in exercise of the powers
H
<:onferred upon him by the notifications mentioned above directed a
number of rice millers in Tadepalligudem to sell to the Assistant Direc-
· tor (Food), Government of India, certain quantities and kinds of rice
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i.·,,
SRI KRISHNA RICE MILLS"· JT, DIR. FOOD (Wanchoo, J.)
421
at die price calculated in aceordauee with els. (iii) and (iv) of sub-s.
(3A) of s. 3 of the Act. In consequence of this order, such quan1;ties of rice as were ordered to be sold were delivered to the Assistant
Director (Food) on vanous dates upto September 13, 1957. It may
be mentioned that there was no control of price upto September 13,
1957 and in consequence the •price to be paid to the rice millers had
to be determined under s. 3 (3A)(iii)(c) read withs. 3(3A) (iv) of
the Act.
This is the first period with which we are concerned in the
present appeals.
It may be ~entioned that prices are claimed to have
been fixed by Shri Krishnan for the rice procured under the orders
passed on August 20, 1957 and on subsequent dates in accordance
with the provisions of the Act in September 1957. The appellants ..
dispute that the prices have been properly fixed under the provisiorui'
of the Act and that is the first matter to be considered in these appeals,
the details of which we shall refer to later.
On September 14, 1957, the Central Government issued a notification fixing the maximum price at which rice and paddy of various ·
kinds was to be sold in any one transaction of more than ten maunds
in the districts of Krishna, West Godavari and East Godavari in th~
State of Andhra Pradesh under cJ. (c) of sub-s. (2) of s. 3 of the
Act.
Following this fixation the Deputy Director made requisitions
between September 14, 1957 and December 29, 1957 of different
va~ieties of rice from various appellants under the powers vested in
him by the notifications already referred to under cl. (f) of sub-s. (2)
of s. 3 of the Act and fixed prices therefor.
He claims to have fixed
price therefor in accordance withs. 3 (3A) of the Act, though actually the maximum prices fixed by the Central Government were paid.
The contention of the ll)>pellants with respect to this period is that
the notification fixing price and the action taken thereunder is hit by
Art. 14, Art. 19(1) (f} and (g) and Art. 31(2) of the Constitu•ion
and therefore they are entitled to the rates prevailing in the market at
the time.
On December 30, 1957, after the new rice crop had come into the
market, the Central Government issued another notification by which
maximum prices were re-fixed in the districts of Krishna, West Godavari, East Godavari and Guntur in the State of Andhra Pradesh under
s. 3 (2)( c) of the Act. These prices were less than the maximum
prices fixed on September 14, 1957. Thereafter there was more procurement of rice by the Deputy Director (food)
from . the various
apoellants and he claims to have fixed prices therefor in accordance
with the provisions of s. 3(3A) of the Act, though actually he p~id
the maximum price fixed in the notification of December 30, 1957.
The contention of the appellants with respect to this period also is
that the prices fixed by the Central Government are hit by Art. 14,
~· ~9<1)(f) and (g}~ Art. 31(2) o~ the Constitution. In addition, 1t 1s contended that the reduced pnces fixed on December 30,
1957 could not and should not have applied to rice purcha•ed by the
appellants between September 14, 1957 and December 29,
1957,
when higher market prices were prevailing unner the notification of
the Central Government dated September 14, 1957.
422
SUPREME COURT REPORTS
[ 1974] 1 s:c.R.
The appellants therefore along with a large number of other rice
millers filed writ petitions before the High Court. With respect to the
first penod, the appellants prayed that the Deputy Director be directed
to fix the price of rice requisitioned from them at the rate calculated
with reference to the average of the market rate prevailing at Tadep'ailegudem during the period of three months immediately preceding the
date of the notification after giving notice and opportunity
to the
appellants to make their representation regarding the price to be fixed,
as it was contended that the Deputy Director had fixed the price for
this period arbitrarily and without regard to the provisions of the Act.
As to the subsequent two periods alter the Central Government had
fixed the maximum price, the appellants prayed
that the
Deputy
Director be directed to fix fair prices having regard to the prevaJing
market rates on the relevant dates on which the stocks of paddy and
rice were requisitioned and that this should be done after giving opportunity to the appellants to make their representation in the matter. The
notifications issued by the Central Government fixing maximum prices
were attacked on the ground that the power vested by the Act in the
Central Government to impose controls was. an arbitrary power without limitation and was therefore an unreasonable restriction and hit
by Art. 19(1). It was also contended that the price.fixation was bit
by Art. 14 as the order of the Central Government applied to certain
di,stricts in the State of Andhra Pradesh and not to others. Reliance
was also placed on Art. 31 (2) of the Constitution which, it was said,
was not complied with.
Lastly with respect to the period after
December 30, 1957, it was urged that at any rate procurement should
have been at prices fixed in the notification of September 14, 1957
with respect to the ~tocks purchased by the appellants between that
date and December 29, 1957 and not at the rate fixed by the notification dated December 30, 1957.
These contentions were controverted on behalf of the Deputy
Director (Food), Vijayawada and it was claimed that the prices were
fixed in accordance with the provisions of the Act. It was also contended that neither the act nor the orders passed thereunder for procurement of rice in these particular cases were hit by Art. 14, Art.
19(1)(£) and (g) and Art. 31(2). Lastly it was contended that the
entire procurement during the period after December 2'J, 1957 was
rightly made at prices fixed in the notification dated December 30,
1957.
The High Court rejected all the contentions raised on behalf of the
appellants and dismissed the writ petitions with costs. The appellants
then applied for and obtained certificates from the :f!igh Court; and
that is how the matter has come up before us.
We shall first take up the contention based on els. (f) ·and (g) of
Art. 19 ( 1) . It is said that the provisions of the Act imp<ll!!C unrelllOllable restrictions on the right to acquire, hold and dispoSC of property,
and to practise any profession, or to carry on any oceupation. trade
· or business. We are of opinion that there is no force in this contention. It is unnecessary for us to give elaborate reasons for this conclusion, as the Act and its pre<!ecessors, namely, the Essential Supplies
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SRI KRISHNA RiCE MILLS v. H. DIR. FOOD·(Wanchoo, 1.)
423
(Temporary Powers) Act, 1946 have already been upheld
by
this
Court. The Essential Supplies (Temporary Powers) Act was upheld
in Harishankar Bag/a v. The State of Madhya Pradesh(1) while the
A.ct was upheld in Union of India v. M/s. Bhanamal Gu/zarimal.(')
As a matter of fact in Bhanamal Gulzarimal's case(') ss. 3 and 4 of
the Act were not specifically challenged on account of the earlier decision in Harishanker Bag/a's case.(1) It is therefore too late in the day
for the appellants to challenge the validity of ss. 3 and 4 of the Act
on the ground that they violate the fundamental rights guaranteed
under Art. 19 ( 1 )(f) and (g). As already indicated, ss. 3 and 4 of
the Esential Supplies (Temporary Powers) Act, 1946 were in terms
similar to ss. 3 and 4 of the Act and were upheld by thi3 Court in
Harishankar Bagla's case.(')
Therefore, for the reasons
given in
Harishanker Bagla's case,(1) which were accepted in Bhanamal Gulzari/al's case,(') we hold that ss. 3 and 4 of the Act are not hit by
Art. 19(1) (f) and (g) of the Constitution.
The next attack on the orders passed under the Act is that they
violate Art. 14 of the Constitution inasmuch as they relate only to
certain districts in the State of Andhra Pradesh and not to others. The
short answer to this contention is that the districts to which the orders
applied are surplus rice producing districts in the State of Andhra Pra·
desh and that is why the orders were confined to those districts. It
wa~ unnecessary to apply the orders to other districts for the control
of price in these districts would economically result in stabilising prices
in other districts of the State also. These districts therefore obviously
form a class by themselves and fixation of maximum price in these
districts would subscrve the purpose of s. 3 ( 1) of the Act. The argn·
ment based on Art. 14 therefore must be repelled.
The next contention is based on Art. 31(2). That article provides
that no property shall be compulsorily acquired or requisitioned save
for a public purpose and save by authority of a law which provides
for compensation for the property so acquired or requisitioned and
either fixes the amount of the compensation or specifies the principles
on which, and the manner in which, the compensation is to be determined and given. It is urged that the Act does not fix the amount of
compensation or specify the principles on which, and the manner in
which, the compensation is to be determined, and therefore the ·requisitioning and acquiring of rice of the appellants under the Act was bad.
It is no doubt true that the Act does not fix the amount of compensation, but the principles on which and the manner in which the compensation is to be determined, are in our opinion to be found in s. 3
of the Act.
Section 3 ( 1) provides for availability of essential commodities at fair prices.
So the first principle which the Act provides
is that the price fixed should be fair, and that involves in it all factors
which have to be taken into account in fixing a fair price. As the Act
was dealing with a large number of commodities of different types in
which different factors would enter in fixing fair prices it was left to the
Central Government to determine the fair price in a just and proper
(!) [1955] 1 S.C.R. 380.
(2) [1960] 2 S.C.R. 627.
424
5Ul'REMB COURt REPORT5
[ 1974] l s.c.R.
manner.
The legislature having enacted that the price fixed should
be fair, there is in our opinion sufficient indication of the principle on
which the price should be fixed.
Further the manner in which the
price should be fixed has also been indicated in sub-ss. (3) and (3A)
of s. 3 of the Act. We are therefore of opinion that the argument based
on Art. 31 (2) must also fail.
Then we come to the contention that the procurement which was
made after December 29, 1957, when the price was reduced by the notification of December 30, 1957, as compared with the price fixed in the
notification dated September 14, 1957, should have been in accordance
with the notification of September 14, 1957 at any rate insofar as the
rice purchased by the appellants between September 14 and December
29, 1957 was concerned. The argument is that in view of the maximum
prices fixed in the notification of September 14, the appellants had to
pay those prices which in such circumstances really became minimum
prices for paddy and rice purchased by them during that period. The
result of the notification of December 30 was that even though the
appellants had purchased rice and paddy between September 14 and
December 29 at higher prices in terms of the notification of September
14, they had to sell it to the Government at lower rates. That may in
certain cases be so. But unless it can be shown that the reduction of
price on December 30, 1957, was not fair, it cannot be said that procurement after December 30 based on the prices fixed in the notification of
that date was in any manner against the provisions of the Act or was
hit by Art. 19(1) (f). Now the reason for reduction of prices on
December 30 was that the new crop came into the market from November 1957. It is a well-known economic fact that prices fall whenever
the new crop comes into the market. There can also be no doubt that
when prices fall, traders who had made purchases at higher prices have
to sell at the reduced rates which are prevalent after the fall of the prices.
Therefore, what would have happened if there had been a frne market
is all that happened wh~n prices were reduced by the notificatio:i of
December 30. It cannot therefore be said that there was any such loss
to the appellants as would not have happened even in the normal course
of business. Further if the argument for the appellants were to lie
accepted, it would mean that it would not be possible for Central Government to reduce prices once it ha~ fixed them and that would in
our opinion be against the very purpose for which s. 3 (1) of the Act
was enacted, namely, fixation of fair prices. Again the result of tcceptance of this argument would be that there would be two sets of maximum prices prevalent whenever there is a reduction in the price by a
subsequent notification, even though the higher price may not be a fair
price. This is in our opinion against the very purpose to be found in
s. 3 ( 1) of the Act.
Lastly we may refer to the converse case where
prices are raised by a subsequent notification. We have· no doubt that
if that is so, the appellants would not come forward and say that the
earlier stocks purchased by them should be sold at old prices. The present is a case completely analogous to the case of rise and fall of prices
due to economic factors in a· free market. As the appellants could not
possibly complain against rise and fall of prices due to economic factors
in an open market they cannot complain of the increase or reduction of
prices by notification under s. 3 ( 1), because that increase or reduction
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SRI KRISHNA RICE MILLS v. JT. DIR, FOOD (Wanchoo, /.)
425
is also based on economi.: faewn;· We are therefore of opinion that
the contention of the appellants that riee procured bf them between
September 14 and December 29 should have been reqwsitioned at least
at prices fixed by the notification of September 14 must fail. '
. Jn thi• view of the mattCr the case of the appellants for relief in
respect of the !ast two periods, namely, (i) from September 14 to
. December 29, and (ii) from December 30 onwards wlien the procure- .
men: was made at the maximum rates fiA-':d by the notification of the
Central Government must· fail.
.. .
We now come to the main argument on behalf of the appellant!,
namely, that the prices fixed for the procurement between August 20
· and September 13, 19-57 was not in accordance with the provision of
the Act. ·Now the provision which applies is sub-s. (3A) of s. 3 of the
Act, which runs as follows :-
.
• . · ·.
·
~(3·A)(i). If the Central Government is "of the opinion
. that it is necessary so to· do for controlling the rise in prices,
or preventix:g the hoarding, of any foodstuff in any locality, it
may, by notification in the Official Gazette, direct that notwithstanding anything contained in sub-section (3), the price
.at which the foodstuff shall be sold in the locality in comi>liance with an order made with reference to clause · (f) of
sub-section (2) shall be regulated in accordance with the provisltins of this sub-section.
,
·
.
. .
(ii) Any notification issued under this sub-section shall
remain in force for such period not exceeding three months as
may be specified in the notification ..
(iii) Where, after the issue of a notification under this
sub-section, any·person sells foodstuff of the kind specified
therein and in the locality so specified,· in compliance with an
order made with reference to clause (f) of sulH;ection (2),
there shall be paid to the seller .as the price therefor-·
.
· ·(a) where the price can. consistently with the coiltrolled
price of the foodstuff. if any. fixed unaer this section, be agreed
upon. the agreed price;
·
(b) where no such agreement can be reached, the price
calculated wiih teferei:cc "to the controlled price, if any;
.
(c) where neither clause (a) nor clause. (b) aw1ies, the
· price calculated with reference· to the average market rate
Prevailing in the localitv during the period of three months ·
immediately preceding tile date of the application.
(iv) For the purposeS of sub-clause (c) of clause (iii),
the avera!!e market rate prevailing in the locality shall be
determined bv an officer aut!1orised by the Central Government in this behalf. with reference to the prevaifmg market · ·.
rates for which published figures are available in respC1.t of
that locality or of a nei~hbouring locality: and the 11verage
market rate so determined shall be final and shall not be called
in question in any Court...
. ,
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SUPl\EME COURT REPORTS
[ 1974) 1 S.C.ll.
It is not in dispute that the notification as required by cl. (i) of·sub-~.
(3A) was issued on Jtine 6, 1957 and under cL (ii) the notification
wa• to remain in force for three month;. Clause (iii) provides for the
manner of fixing the p"rice after the notification under cl. (i) has been
issued. There are three ways in which the price" has to be .fixed, whlclt
are indicated i.n :Sub-els. (a); (b) and (c) of cl. (iii). The first con-
. tention of the appellanf> is that th". Deputy Director should first have
.. acted under cl. (a)- and tried to come to an agreement with the appelhints and that his acting under cl. (c) without first trying to oome to
an aZ!"eement wit!J tw l\!Jpellant:. was agai?st the provisions of the Act.
we· are of opinion·that this contention has no force: Sub-clauses (a)
;and (b) of cJ, (iii) aJ'Ply only to those situation where a controlled
·flriee·has be.00 fixecfby the Central. Government ... Sub-clause (a)
·· -'.:l!Yi~ that the officer concerned may try by agreement to fix a price
· which may be even less than the maximum price notified. Sub-chiuse
(b). hiys down that'where agreement cannot be reached, the price has
to befixed with referenc!" to the controlled P!'<:e· It cannot be dispu!M
that sub-clause (b) apphes only where there. ts a· controlled or maxunum ·
price. ·sub-clause (a) .also in our.opinion applies only where there is
a controlled or maximwi:i. pti,ce, ~or_, the two sub-chi uses are !=<>llll'lementary to each· other and· must be·reacHo apPIY to .the same s1tuat10n .
Thu. as sub clause (b) utU!oubtedly applies only to a case where there
is a contiolle~ price, sub-cl. (a) a®.applies to a case where there is a
controlled price.
The use of the words "if any" in both sub-clauses
. must have the same sense and that is that these two sub-clauses apply
only when there is a co.ntrolled or maximum price fixed in fact .. There-.
fore we are of opinion that this is a· case \\'here _sub-cl. ( c) applied as
there was no controlled price during the relevant period. Th-:. argument
that the Deputy Director in this case should have first tried to come to
an a_greement with. the appellants;and a• he did not do ro his fixation
of price under sub-cl. ( c) was against the provisions of the Act, must,
therefore, fail.
·
·
The Deputy Director had thus to fix the price under sulrcl. ( c) of cl.
(iii). sub-s. (3A). That price had to be calCulated with reference to the
avem~e market rate prevailing in the localitv durinl! the period of three
months immediately preceding the date of the notification. The 11otification was is:>ued in this case on June 6, 1957 and therefore the Deputy
Director had to take inio account the marli:ei rates prevailing in the
locality between March 6 to June-'5, 1.957 and arrive at an. average
therefrom. Further cl. (iv) of sub-s. (3A) Indicates how sub-cl. (c) of
cl. Oiil . had to be applied for working out the average marki:t ~
. in the locality. ·rt !av• down that these rates shall be deierniined by an,
offirer authorised by the Central Government in this behalf. and it is not
in di•oute. that lhe Deonty Director wa• so authorised. Further •nch
rat". ba•· -10 he fixed With refcre'!Ce tn the' prevaiJi"'! mafk~t ·rates for
which published fi211res are available in re.pect of that locality or of a
nei2hbourini: locality. Finallv it is orov~· that. the .;verage market
rates 'o determined shall be final and sh'11·.ll'ot b~ called in question in
any court.
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·
'·
Now what the T>eputY Director did was to take into· a·ccount the
rates published in Vijayawada, which· it is said is at a 'distance of 80.
c•.
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SRI KRISHNA RICE MILLS v. JT. DIR. FOOD (Wanchoo, J.)
427
miles from Tadepellagudem. It is however not disputed that there is
no nearer locality where published figures are available; Therefore, if
the Deputy Director took into account the nearest available published
figures, i.e., prices prevailing at Vijayawada, it cannot be said that he
acted against the provisions of cl. (iv) of sub-s. (3A). What he did
was to take into account the published figures of Vijayawada and then
make adjustments taking into acc.ount the transport charges and the
quality of rice procured, for in two cases the rice procured by him was
not quoted in the figures available in Vijayawada. It, however, appears
that these two varieties of rice procured are slightly inferior to the rice
for which the prices were availai>le in Vijayawada and what the Deputy
Director did was to· make adjustments in the prices after taking these
factors into consideration. The result qf that was that the prices be
fixed for these two kinds of rice were lower by Rs. l.~O or so than the
Vijayawada prices for the slightly superior kind of rice which were
available.
I
It is however urged that the words "published figures" in cl. (iv)
would include even the prices in the accounts books of the appellant~,
for tliese prices must be taken to be published prices inasmuch as thu
accounts hooks used to be shown to sales tax and income-tax authorities
and the entries therein were therefore published. So the argument runs
.that the prices entered in che accounts books of the appellants being
"published figures" .of the prevailing market. rates for the very locality
from which procurement was being made, the Deputy Director should
have looked at their bahi Khatas and calculated the prevailing averagt'
market rate for their locality from their bah is. We are of opinion that
this argument has no force.
The words "published figures" must be
~iven their ordinary meaning. That is that the figures should be publicised in some way, s~y. for example, in newspapers, or on the Radio
or in any other manner, so that they are made known to the general
public. The prices entered in the accounts books of the appellants
cannot in any circumstances be called "published figures" even if the
accounts books are shown to·sales-tax or income-tax authorities. Publication of figures requires that figures get generally known to the public
by such means as publication in newspapers, or announcement on the
Radio or such other manner as would make figures generally available
to the public. The figures of price in the accounts books of the appellants cannot be said to be generaay available to the nublic; nor can the
nublic insist on looking into the accounts books of the apoellants to
find out the prices at which they had procured the rice themselves.
Therefore . .the Denutv Director would not have carried out the provisions of cl. (iv) of sub-s. (3A) if he had deoended upon the prices in
the accounts books of the apoellants.
As alreadv stated Vijayawada
aooears ·to be the nearest locality where published figures were available. Jn th~se circumstances it c;.nnot be said that the- Deputy Direc!or
was· wrong m taking the figures published in Viiayawada and makin~
.snch adjustments as were prooer and necessarv in view of the distance
of. Vijayawada from Tadepalle2urlem. He was al~o entitlccl to make
adjustments with reference to the kinrl of rice for which published fiirures
were available and the kind which he was nroctiring. The resultant
action taken by him by whidJ.. the prices at Vijayawada were reduced
l
428
SUPREME COURT REPORTS
[ 1974] 1 S.C.R.
by about Rs. 1.50 cannot therefore be said to be against the provisions
of the Act. We may also here refer to the rates compiled by the State
Marketing Officer, Andhra Pradesh which were placed before the High
Court on behalf of the respondents. These rates were compiled before
the notification of June 6, 1957 in a fiee market and show that there is
a difference in price between Tadepallegudem and Vijayawada and
prices at Tadepallcgudem are generally lower than the prices at Vijava·
wada and on an average, the price at Tadepallegudem is about Rs. 1.20
less than at Vijayawada for the same quality of rice. If one remembers
that the quality of rice procured from the appellants was a little inferior
to the quality of rice at Vijayawada the difference of Rs. 1.50 or so in
the price at Tadepallcgudem cannot be said to have been arrived at
without due regard fo the provisions of sub-s. (3A).
We may also 'refer to the last part of cl. (iv) of sub-s. (3A) which
says that "the average market rate so determined shall he final and
shall not be called in question in any Court.'' The intention of the
Legislature by using tliese words was clearly that these rates should not
he open to question. It is true that these words do not take away the
jurisdiction of the High Court under Art. 226 to give relief in a proper
case; but the High 'Court must keep in view these words which certainly
indicate that the rates fixed should not be lightly inferfered with unless .
the High Court finds that there has been serious injustice in the fixation
of rates due to the manner in which the officer concerned bas acted
without due regard to the provisions of cl. (iv). In the present case
we are not prepared to say that the officer concerned has acted without
due regard to the provisions of cl. (iv), when he arrived· at the conclusion that the prices at Tadepallagudem should be fixed a little lower
than the prices at Vijayawada. The contention that the prices fixed by
the Deputy Director were not in accordance with the provisions of the
law must therefore be rejected.
Finally our attention is drawn to a recent notification by the Central
A
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. Government dated July 31, 1964. In this notification, Nallarlu and
Garikulu rice which were procured from the appellants and Akkulu rice
F
which is the basis of price fixation by the Deputy Director have been
treated as of the same quality and defined as coarse· rice. The Depntv
Director however fixed prices in 1957 on the basis of Akkulu rice for
which oublished figures were available at Vijavawada and Akkulu rice
was a little superior to Nallarlu and Garikulu rice, which were procured
from the appellants and therefore he reduced the price taking that factor
into account. It is urged that in view of ibis notification the Deputy
G
Director was certainly wrong in taking that factor into account in fixing
the price. It apoears however from the evidence that it is really not in
clispute that Nallarlu ancl Gariku1u rice is slightly inferior to Akkulu
rice. It mav be that In 1964 the Central Government may !1ave come
to the conclusion that the difference between these three varieties of rice
was so slight that thev shnnlcl be treated as of the same kind: but that
cloes no( mean th•t in 1957 the Deouty Director was necessarily wrong
II
in treatin~ Nallarlu and Garikulu rice as slightlv inferior to Akkulu. for
that is what the evidence ori record· shows. Resides it may be adJled
that clause 4 of the Order of 1964 leaves it to the discretion of the State
i •. .,,
.,
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SRI KRISHNA RICE MILLS v. JT, DIR. FOOD (Wanchoo, J.)
429.
A
Government to fix different prices for different kinds of coarse rice
within the range prescribed by the Central Government and so the order
also recognises that there may be different prices for different kinds of
coarse rice. We are therefore not prepared to hold on the basis of the
notification of 1964 that the Deputy Director was wrong in making the
adjustments he did in arriving at the price of Nallarlu and Garikub:. -'ce
procured from the appellants as compared to tile price of Akkulu .ice _,.
B
in Vijayawada.
·
c
In this view of the matter, all the appeals fail and are hereby dismissed. We, however, direct in the circumstances lhat the parties will
bear their own costs of this Court.
V.P.S.
Appeals dismissed.
2- LJ82SupremeCourtl74