# Suleman Issa v. The Stak of Bombay. Ghulam Hasan J

- **Citation:** [1954] 1 S.C.R. 982
- **Court:** Supreme Court of India
- **Decided:** 1951-01-23
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/suleman-issa-v-the-stak-of-bombay-ghulam-hasan-j-289
- **Pages:** 7

## Headnote

1954
Suleman Issa
v.
The Stak of
Bombay.
Ghulam Hasan J,
1954
March 12
982
SUPREME COURT REPORTS
[1954}
inappropriate in a case where the accused is prosecuted
for an offence punishable with a maximum sentence of
3 months and a fine of Rs.
100.
It was
certainly
open to the court to order the property to be delivered
to the person claiming to be entitled to its possession.
Here the gold was found from the possession of the
appellant, and the court was not called upon
to consider any rival claims about its possession. Admittedly
there was no evidence to prove that it was stolen, or
that
it was
fraudulently obtained
and
all that was
found was that there was reason to believe that it was
stolen or fraudulently obtained and that the appellant
failed to account
for its possession to
the satisfaction
of
the court.
The High Court thought that the gold
was smuggled from Africa into India but assuming this
to be so its confiscation
under section 517 upon the
existence of a mere belief required to sustain a conviction
under
section
61E
was palpably harsh and
unreasonable.
We hold, therefore,
that the order of
confiscation of gold cannot be supported.
We according! y set aside the order of confiscation
and direct that the gold seized from the appellant's
possession shall be restored to him.
Appeal allowed.
Agent for the respondent : R. H. Dhebar.
THE STATE OF RAJASTHAN
v.
NATH MAL AND MITHA MAL.
lMam CHAND MAHAJAN. C. J., MUKHERJEA, S. R. DAs,
VIVIAN BosE and GHuLAM HASAN JJ.]
Constitution of India,
arts. 19(1)(1) and 31(2)-Raiasthan
Foodgrains Control Order, 1949, cl. 25-Whether ultra vires th<
Constitution.
Held, that the
first
portion of cl. 25 of the Rajasthan
Foodgrains Control Order, 1949, relating to the freezing of stocks
of foodgrains is not void under art. 19(l)(f) of the Constitution
because such freezing of stocks of foodgrains is reasonably related
S.C.R.
SUPREME COURT REPORTS
983
to the object which the Act was intended to achieve, nan1ely _to
secure the equitable distribution and availability at fair prices and
to regulate transport, distribution, disposal and acquisition of
an
.essential commodity such as foodgrains.
Held, that the last portion of cl. 25 to the effect that "such
stocks shall also be liable to be requisitioned or dispos~d of under
orders of the said authority at the
rate fixed
for purposes of
GoYernment procurement", is void both under art. 19(1)(f) and
art. 31(2) of the Constitution:-
(i) because
the
clause
places
an
unreasonable
restriction
upon the carrying on of trade or business and is thus an infringement of the respondents' right under art. 19(1)(f) of the Constitution ;
(ii) because the clause by vesting the power in the authority
to acquire the stocks at any price fails to fix the an1ount of co1npensation or specify the principles on which it is to be determined
and leaves it entirely to the discretion of the executive authority
to fix any compensation it likes and is thus hit by art. 31(2) of the
Constitution.
CIVIL APPELLATE
TuRISDICTION :
Civil Appeal No.
136 of 1952.
Appeal under articles 132 ( 1)
and
133 (I) ( c) of the
Constitution of India from
the Judgment and Order
dated the 19th October, 1951, of the High Court of
Judicature for
Rajasthan at fodhpur in D. B. Miscellaneous Writ Petition No. 3/1951.
K. S. Haje/a, Advocate-General of Rajasthan, for the
appellant.
K. N. Aggart11al an<l P. C. Agarwal for the respondents.
M. C. Setalvad, Attornev-General for
India (Porus
A. Mehta, with him) for the intervener (the Union of
India).
1954.
March 12.
The Judgment of the Court was
delivered by
GHuLAM HASAN J.-The question
involved
in this
appeal relates to the constitutional validity of clause 25
of
the
Rajasthan
Foodgrains Control Order, 1949,
hereinafter called the Control Order. and arises in the
following circumstances:-
The respondents, who are grain merchants at · Raniwarain
Jodhpur
Division, Rajasthan State, hdd
1954
The State of
Rajas than
v.
Nath Mal and
Mitha Mal.
1954
Th< Sta11 of
Rajasth

## Text

1954
Suleman Issa
v.
The Stak of
Bombay.
Ghulam Hasan J,
1954
March 12
982
SUPREME COURT REPORTS
[1954}
inappropriate in a case where the accused is prosecuted
for an offence punishable with a maximum sentence of
3 months and a fine of Rs.
100.
It was
certainly
open to the court to order the property to be delivered
to the person claiming to be entitled to its possession.
Here the gold was found from the possession of the
appellant, and the court was not called upon
to consider any rival claims about its possession. Admittedly
there was no evidence to prove that it was stolen, or
that
it was
fraudulently obtained
and
all that was
found was that there was reason to believe that it was
stolen or fraudulently obtained and that the appellant
failed to account
for its possession to
the satisfaction
of
the court.
The High Court thought that the gold
was smuggled from Africa into India but assuming this
to be so its confiscation
under section 517 upon the
existence of a mere belief required to sustain a conviction
under
section
61E
was palpably harsh and
unreasonable.
We hold, therefore,
that the order of
confiscation of gold cannot be supported.
We according! y set aside the order of confiscation
and direct that the gold seized from the appellant's
possession shall be restored to him.
Appeal allowed.
Agent for the respondent : R. H. Dhebar.
THE STATE OF RAJASTHAN
v.
NATH MAL AND MITHA MAL.
lMam CHAND MAHAJAN. C. J., MUKHERJEA, S. R. DAs,
VIVIAN BosE and GHuLAM HASAN JJ.]
Constitution of India,
arts. 19(1)(1) and 31(2)-Raiasthan
Foodgrains Control Order, 1949, cl. 25-Whether ultra vires th<
Constitution.
Held, that the
first
portion of cl. 25 of the Rajasthan
Foodgrains Control Order, 1949, relating to the freezing of stocks
of foodgrains is not void under art. 19(l)(f) of the Constitution
because such freezing of stocks of foodgrains is reasonably related
S.C.R.
SUPREME COURT REPORTS
983
to the object which the Act was intended to achieve, nan1ely _to
secure the equitable distribution and availability at fair prices and
to regulate transport, distribution, disposal and acquisition of
an
.essential commodity such as foodgrains.
Held, that the last portion of cl. 25 to the effect that "such
stocks shall also be liable to be requisitioned or dispos~d of under
orders of the said authority at the
rate fixed
for purposes of
GoYernment procurement", is void both under art. 19(1)(f) and
art. 31(2) of the Constitution:-
(i) because
the
clause
places
an
unreasonable
restriction
upon the carrying on of trade or business and is thus an infringement of the respondents' right under art. 19(1)(f) of the Constitution ;
(ii) because the clause by vesting the power in the authority
to acquire the stocks at any price fails to fix the an1ount of co1npensation or specify the principles on which it is to be determined
and leaves it entirely to the discretion of the executive authority
to fix any compensation it likes and is thus hit by art. 31(2) of the
Constitution.
CIVIL APPELLATE
TuRISDICTION :
Civil Appeal No.
136 of 1952.
Appeal under articles 132 ( 1)
and
133 (I) ( c) of the
Constitution of India from
the Judgment and Order
dated the 19th October, 1951, of the High Court of
Judicature for
Rajasthan at fodhpur in D. B. Miscellaneous Writ Petition No. 3/1951.
K. S. Haje/a, Advocate-General of Rajasthan, for the
appellant.
K. N. Aggart11al an<l P. C. Agarwal for the respondents.
M. C. Setalvad, Attornev-General for
India (Porus
A. Mehta, with him) for the intervener (the Union of
India).
1954.
March 12.
The Judgment of the Court was
delivered by
GHuLAM HASAN J.-The question
involved
in this
appeal relates to the constitutional validity of clause 25
of
the
Rajasthan
Foodgrains Control Order, 1949,
hereinafter called the Control Order. and arises in the
following circumstances:-
The respondents, who are grain merchants at · Raniwarain
Jodhpur
Division, Rajasthan State, hdd
1954
The State of
Rajas than
v.
Nath Mal and
Mitha Mal.
1954
Th< Sta11 of
RajasthtJ.n
v.
Nath Mal and -
Muha Mal.
Ghulam Hasan J.
984
SUPREME COURT REPORTS
[1954]
licences for dealing in foodgrains.
They held considerable
stocks of bajra in the ordinary course of business
but on October 7, 1950, their stocks were frozen by the
Deputy Commissioner, Civil Supplies, Jodhpur, through
the Sub-Divisional Officer.
It is not disputed that the
market
price then prevailing was about Rs. 18 per
maund.
The State, however, requisitioned
the stocks
at
the
rate
of Rs.
9
per maund and sold them at
Rs.
13-5-4 per maund.
The respondents claimed that
they had purchased the bajra at the prevailing market
rate of Rs. 17 to Rs. 18 per maund.
They filed a petition on January 23, 1951, for the issue of a writ under
article 226 of the Constitution before the High Court
of Rajasthan, contending that clause 25 of the Control
Order was void under articles 14, 19(1) (g) and 31(2)
of
the
Constitution.
The High
Court held that
clause 25 was void inasmuch as it is a restriction upon
the fundamental
right of the respondents to carry on
business under article 19 ( 1) (g) of the Constitution, that
the restriction is not reasonable and is not saved by
clause (6) of article 19. The High Court further held
that clause 25 was also hit by article 31 (2) as fair
compensation
had
not
been fixed by the law for the
acquisition
of
the foodgrains.
As the grains had
already been disposed of by the Government, the High
Court holding that Rs. 17 a maund was fair compensation
directed .that the State of Rajasthan shall pay
compensation
at that
rate.
The State has preferred
the present appeal on a certificate granted hy the High
Court.
The impugned clause 25 is as follows:-
"25.
Notwithstanding
anything
contained
in
this Order,
the Commissioner, the Director, the Deputy
Commissioner, the Nazim, the Assistant Commissioner,
the Suh-Divisional Officer, the Senior Officer of a jurisdictional Thikana, the enforcement officer
or
such
other officer as may be authorised
by the Commissioner in
this behalf,
may freeze any stocks of foodgrai ns held by any person, whether in his own behalf
or not, and such person shall not dispose of any foodgrains out of
the stock so freezed
except with the
permission of the said authority.
Such stocks shall
S.C.R.
SUPREME COURT REPORTS
985
also be liable to be requisitioned
or disposed of under
orders of the said authority at the rate fixed for purposes of Government procurement."
It is not disputed that bajra is an essential commodity within the meaning of the Essential Supplies
Act (No. XXIV of 1946).
The question
that
arises
for
consideration
is how
far and in what respects
clause
25
can be said
to be void as violating Part III
of the Constitution.
The clause authorises the Comm1ss10ner
and
yarious
other authorities mentioned
therein and such other officers as may be authorised by
the Commissioner to freeze
any stock of foodgrains
held by a person.
It is true that the authority of the
Commissioner to delegate
his
powers to any
other
officer at his discretion is expressed in somewhat wide
terms but
we need not decide that that per se would
be sufficient
to invalidate the clause.
Admittedly that
power has not been exercised in the present case. Nor
do we think that the power
to freeze
the stocks of
foodgrains is arbitrary or based on no reasonable basis.
It is not disputed that the clause does not state in
express terms the circumstances in or the grounds on
which the stocks may be freezed but it should be read
along with
section 3 of the Essential Supplies Act
which lays down the policy for controlling the production, supply and distribution of essential commodities.
Section 3 in so far as, it is material says:-
"The Central Government, so far as it appears to
it to he necessary
or expedient for
maintaining or
increasing supplies
of any essential commodity, or for
securing their
equitable
distribution and availability
at fair prices, may by order provide for regulating or
prohibiting
the production, supply and distribution
thereof. . , ............. "
Sub-section (2) lays down:-
"Without
prejudice
to
the generality
of
the
powers conferred by
sub-section ( l), an order made
thereunder may provide ......... .
(a) ............... .
(b) ............... .
(c) ............... .
1954
The State of
Rajt1sthan'
v.
}lath Mal and
Mitha Mal.
Ghufom Hasan J.
1954
-.-
The State of
· Rajasthan
v.
Nath~Afal ani
Mitha Afal. ~
Ghulam~Hasan ].
986
SUPREME COURT REPORTS
[19541
( d) for regulating by licences. permits or otherwise
the
storage,
transport,
distribution,
disposal,
acqms1tion, use or consumption of
any essential commocfoy;
( e) for prohibiting the withholding from sale
of
any
essential
commodity ordinarily kept for
sa1e;
"
We are clear, therefore, that the freezing of stocks
of foodgrains is reasonably related
to the object which
the Act was intended to achieve, namely, to secure rhe
equitable
distribution
and availability
at fair
prices
and to regulate transport, ,:istribution, disposal and
acquisition
of an essential commodity such
as
foodgraim.
We do not agree wit]' the High Court
'hat
the
fiN
portion of clause 25 is void under article 19
(1)
(g).
The
last
portion
of clause 25 to the effect that
"such stocks shall also be liable to be requisitioned or
disposed
of
under orders of the said authority at tile
rate fixed for purposes . of Government procure1,..,ent'',
however stands on a different footing. The clause, es it
is
worded, leaves it
entirely to the Government ro
requisition the stocks at any rate fixed by it and to ,\i,.
pose of such stocks at any rate in its discretion·
This
obviously
vests
an unrestrained authority
to requtsttion the stocks of foodgrains at an arbitrary price. In
contrast with this provision we may refer
to clau,es
23 and
24
of
the Control
Order. They are as
follows:-
"2.). The Commissioner or the Director, and the
Deputy Commissioner or the Senior Officer of a jurisdictional Thikana with the approval of the Director,
may fix the ceiling prices at which foodgrains in any
area to which this-0rder applies shall be sold, and may
from time to time vary such prices."
"24. The Commissioner, the Director, the Deputy
Commissioner, the Nazim, the Assistant Commissioner,
the Sub-Divisional Officer, or the Senior Officer of the
jurisdictional Thikana as the case may be, may direct
any person
or persons
in possession, whether on his
own behalf or not of any foodgrains to sell such foodgrains or part thereof to any person or persons at any
S.C.R.
SUPREME COURT REPORTS
987
specified place and at such price as may be fixed under
clause 23."
It appears from these clauses that while the authorities may fix the ceiling price at· which foodgrains
should be sold in the market by the dealers and may
direct any person in possession of foodgrains to sell
them
to any other person at
the price fixed under
clause 23, there is no such limitation upon the power
of the Government to acquire the stocks.
In other
words,
it will be open to the Government to requisition the stocks at a price lower than the ceiling price
thus causing loss to the persons whose stocks are freezed
while at the same time the Government is free to
sell the same stocks at a higher price and make a profit.
It is obvious
that
the dealer whose stocks are thus
freezed will
stand
to lose
considerably and will be
unable to carry on his trade or business at the prevailing market price.
No dealer
will be prepared to buy
foodgrains at the market price when he knows that he
is exposed to the risk of his stocks being freezed any
moment and the same being requisitioned at the procurement rate.
The present is a typical
case which
illustrates how the business of a grain dealer can be
paralvsed, for it is admitted that while the Government
procurement rate
was Rs. 9 a maund, the market rate
was Rs. 17 or Rs. 18 per maund, with the result that
the stock holder suffered nearly
cent. per cent.
loss,
while the Government made a profit of Rs. 4-5-4 per
maund on the stock requisitioned.
We hold, therefore.
that
the last portion of clause
25
places an
unreasonable restriction upon the carrying on of trade
or business and is thus an infringement of the respondent's right under article 19(1) (g) of the Constitution
and
is, therefore, to that extent
void. The same
result follows if the impugned clause
is examined in
the light
of article 31 (2).
The clause by vesting the
power in the authority to acquire the stocks at any
price fails
to fix
the amount of the compensation or
specify the principles on which the compensation is to
be
determined.
The
clause
leaves
it
entirely
to
the
discretion
of
the executive
authority to
fix
any compensation it
likes.
The High Court
1954
The State of
Rajastlum
v.
Nath Mal and
Mitha Mal.
Ghu!am Hasan).
1954
The State of
Rajasthan
v.
Nath Mal and
Mitha Mal.
1954
March 12.
988
SUPREME COURT REPORTS
[1954]
rightly
held
article 31(2).
that
the
clause
offended
against
For the foregoing reasons
portion
of clause 25 is void
with costs.
we
hold
that the last
and dismiss the appeal
Appeal dismissed.
Agent for the appellant and for the intervener:
R. H. D!tebar.
SRIMA TI ORAMBA SUND ARI DASI
ti.
SRI SRI ISWAR GOPAL JIEU.
[MuKHERJEA,
VrvIAN
BosE
and
VENKATARAMA AYYAR JJ.)
Bengal Money-Lenders Act, 1940 (Bengal Act X of 1940), s. 36
-Scope of-Court whether competent to make an enquiry that
decree-holder on record is benamidar for another person.
Held,
that
in a
proceeding under s. 36 of the Bengal
Money-Lenders Act, 1940, it is not competent to the court to go
behind the decree and embark on an enquiry as to whether the
decree-holders on record were in fact benamidars
for another
person.
Scope oi s. 36 of the Act discussed.
Renual v. Manmatha (72 I.A. 156) and Bank of Commel'C6
Ltd. v. Amulya Krishna Basu Roy Chowdhury ( [ 1944 ]F.C.R. 126)
referred to.
C1v1L
APPELLATE
JuR1smcTION :
Civil
Appeals
Nos. 130 and 131 of 1951.
Appeals from the Judgment and Decrees, dated the
12th August, 1948, of the High Court of Judicature at
Calcutta in Appeals from Original Decrees Nos. 214 of
1942 and 231 of 1943 arising from the Decrees, dated
the 16th June, 1942, of the Court of the Subordinate
Judge, Burdwan, in Money
Suit No. 261 of 1932/
Miscellaneous
Case No. 132 of
1941 and Money Suit
No. 262 of 1932/Miscellaneous Case No. 131 of 1941.
N. C. Chatterjee (A. K. Dutt and Sukumar Ghose,
with him) for the appellant.
Manmo!tan Mukherjee and P. K. Chatterjee for respondent No. I.