Atlas Cycle Industries Ltd. v. State of Haryana(1979): Non-compliance with section 3(6) of the Essential Commodities Act, would not render the order or notification void.

Case Atlas Cycle Industries Ltd. v. State of Haryana (AIR 1979 SC 1149)
CourtBefore the Supreme Court of India.
BenchJustice Jaswant Singh, Justice Syed Murtaza Fazalali and Justice P. S. Kailasam.
Author of the judgmentJustice Jaswant Singh
Date of the Judgment4/10/1978
Advocates for the appellantsB. Sen, A.K. Sen, J.C. Bhatt, F.S. Nariman, A.B. Diwan, I.N. Shroff and H.S. Parihar.
Advocates for the respondentD. Mukherjee, E.C. Agarwala and R.N. Sachthey.
Relevant Act/SectionsEssential Commodities Act 1955 – Section 3(6).
Author of the BriefHarshil Patel, Student at Gujarat National Law University.
KeywordsIron and Steel Control Order, Indian Penal Code, Maximum selling price, Constitution of India, Essential Commodities Act, Parliament,

Facts of the case:

Development officer of the Directorate General of Technical Development, New Delhi on December 29, 1964, carried an on spot check of the Balance Sheet. It was discovered from an examination of the said appellant’s books of accounts that from the period January 1, 1964 to January 12, 1965, the company had acquired 60.03 metric tons of plain iron sheets from various parties at a higher rate than the maximum statutory price fixed for such sheets by the Iron and Steel Controller, by the power vested by the Iron and Steel Control Order, 1956.

Before Trial Court: Special Magistrate framed charges under Section 120B of the Indian Penal Code r/w Section 7 of the Essential Commodities Act and Section 7 r/w clause 15(3) of the Control Order. As the charges were already framed before the trial court, the appellants made application u/s 251 & 288 of the Code of Criminal Procedure. They objected their prosecution contending that:

  1. The government notification that fixed the maximum selling prices of various categories of Iron & Steel including the commodity that was in question in the present case, was not placed before the parliament and so it was not valid.
  2. It was also contended that the order framing the charge was a nullity.

The trial court, however, dismissed the application vide its order dated June 4, 1970. The relevant portion of the order is as follows:

“Regarding various objections raised by the learned counsel for the accused on the points that the notifications were not placed before the Parliament and within a reasonable time and also on the points of formation of opinion and delegation of powers I may submit that the prosecution cannot be prevented from adducing evidence regarding the formation of opinion and laying of the notifications before the Parliament which can be proved by the contemporaneous record. Regarding the non-prosecution of the sellers of the black iron sheets, it does not lie in the mouth of the accused to say that such and such person has not been prosecuted. I need not to give my observations on merits on the points regarding subsequent exemption of control mens-rea, formation of opinion and delegation of powers in laying notifications before the Parliament and also need not discuss the citations as I will have to consider all these points at the time of final arguments and any order given now will not be proper.

I dismiss the application of the accused on the short ground that it is not possible for this Court to hold that the cognizance was taken on an invalid report and the order of the Court ordering framing of charge is a nullity on the ground that on record no offence is committed and no cognizance could be taken.”

Before High Court: Aggrieved by the aforesaid order of the Special Magistrate, the appellant moved the High Court of Punjab and Haryana, by filing a writ petition, under Article 226 and 227 of the Constitution. They challenged their prosecution on the grounds of:

  1. The control order and notification did not have the force of law as they were not presented before the House of Parliament within a reasonable time as required by the Essential Commodities Act.

On the other hand, the respondents contended that:

  1. The provisions of sub-section (6) of section 3 of the act requiring the placing of the order before the Houses of Parliament is directory and not mandatory and the omission to comply with that requirement did not have the effect of invalidating the notification.
  2. The men’s rea of the accused was manifest from various manipulation reported by them as also from the fact that they wanted to increase their production and earn more profits.

The High Court dismissing the appeal and held,

  1. Non-laying of the notification before both the Houses of Parliament cannot be the reason for nullification of the notification as the legislature never intended that non-compliance of Section 3(6) of the Essential Commodities Act should render the order void.
  2. Even though Section 3(6) of the Act, prescribes that every order made by the central government or by any officer it shall be presented to both the Houses of Parliament. It is important to understand whether the said provision is a directory or mandatory. The use of word “shall” is not conclusive and the court has to interpret the intention of the legislature.
  • The high court mentioned two considerations on which it can be concluded that the provision is a directory:
    1. The absence of any provision stating the contingency, if the provision is not complied with.
    2. The inconvenience and prejudice would affect the general public if the act or any instrumentality is declared invalid for non-compliance with a particular provision.
  • That there was no prohibition to the making of the orders without the approval of both the Houses and Section 3(6) of the Act is directory and not mandatory.

Before Supreme Court: Aggrieved by the decision of the Punjab and Haryana High Court, appellants approached Supreme Court under its Criminal Appellant Jurisdiction: Criminal Appeal 24 of 1976. Counsels of both the parties reiterated all the contentions raised by them in the writ petition before High Court of Punjab and Haryana.

Held: From the cases and provisions cited it can be clearly concluded that the intention of the legislature was never that the non-compliance with section 3(6) of the Essential Commodities Act, would render the order or notification void. Therefore, not presenting the order or notification before both the Houses of Parliament cannot result in the nullification of the notification. Because of this reason, it becomes unnecessary for the court to deal with the other contention raised by the respondent to the effect that the aforesaid notification being of a subsidiary character, it was not necessary to lay it before both the Houses of Parliament to make it valid. As a result, the appeal fails and is dismissed.

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