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If the prices of yarn or cloth were fixed in such a way to enable the manufacturer or producer recover his cost of production and secure a reasonable margin of profit, no aspect of infringement of any fundamental right could be said to arise PRE |
It was to be remembered that the mere fact that some of those were engaged in the industry, trade or commerce alleged'that they were incurring loss would not render the law stipulating the price unreasonable PRE |
It was observed, "The control of prices may have effect either on maintaining or ,increasing supply of commodity or securing equitable distribution and availability at fair prices PRE |
The controlled price has to retain this equilibrium in the supply and demand of the commodity PRE |
The cost of production, a reasonable return to the producer of the commodity are to be taken into account PRE |
The producer must have an incentive to produce PRE |
The fair price must be fair not only from the point of view of the consumer but also from the point of view of the producer PRE |
In fixing the prices, a price line has to be held in order to give preference or pre-dominant consideration to the interest of the consumer or the general public over that of the producers in respect of essential commodities PRE |
The aspect of ensuring availability of the essential commodities to the consumer equitably and at fair price is the most important consideration PRE |
The producer should not be driven out of his producing business PRE |
He may have to bear loss in the same way as he does when he suffers losses on account of economic forces operating in the business PRE |
If an essential commodity is in short supply or there is hoarding, concerning or there is unusual demand, there is abnormal increase in price PRE |
If price increases, it becomes injurious to the consumer PRE |
There is no justification that the producer should be given the benefit of price increase attributable to hoarding or cornering or artificial short supply PRE |
In such a case, if an "escalation" in price is contemplated at intervals, the object of controlled price may be stultified PRE |
The controlled price will enable both the consumer and the producer to tide over difficulties PRE |
therefore, any restriction in excess of what would be necessary in the interest of general public or to remedy the evil has to be very carefully considered so that the producer does not perish and the consumer is not crippled PRE |
The cases of Panipat Sugar Mills and Anakapalle Co-operative Agricultural Society were distinguished on the ground that they were governed by sub-section (3C) of sec PRE |
3 of the Essential Commodities Act and therefore, had no relevance to the case before the Constitution Bench PRE |
The case of Premier Automobiles was distinguished on the ground that the decision was rendered by invitation and on the agreement of the parties irrespective of technical and legal questions PRE |
The Court quoted with approval a passage from Secretary of Agriculture v. Central Reig Refining Company, 330 US 604, stating: "Suffice it to say that since Congress fixed the quotas on a historical basis it is not for this Court to reweigh the relevant factors and, per chance, substitute its notion of expediency and fa... |
This is so even though the quota thus fixed may demonstrably be disadvantageous to certain areas or persons PRE |
This Court is not a tribunal for relief from the crudities and inequities of complicated experimental economic legislation PRE |
In Saraswati Industrial Syndicate Ltd. v. Union of India, [1974] 2 SCC 630 1974 Indlaw SC 134; the Court observed, "Price-fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material PRE |
It could not, therefore, give rise to a complaint that a rule of natural justice has not been followed in fixing the price PRE |
Nevertheless, the criterion adopted must be reasonable PRE |
Reasonableness, for purposes of judging whether there was an "excess of power" or an "arbitrary" exercise of it, is really the demonstration of a reasonable nexus between the matters which are taken into account in exercising a power and the purposes of exercise of that power PRE |
It was also reiterated that the decision in Shree Meenakshi Mills' case was based on a special agreement between the parties and therefore, had no relevance to the question before them PRE |
In Prag Ice & Oil Mills v. Union of India, [1978] 3 SCC 459 1978 Indlaw SC 472 a Constitution Bench of seven judges of this court had to consider the validity of the Mustard Oil (Price Control PRE |
Order, 1977, an Order made in exercise of the powers conferred upon Central Government by the Essential Commodities Act PRE |
Chandrachud, J. speaking for the court approved the observation of Beg, CJ PRE |
in Saraswati Industrial Syndicate PRE |
that it was enough compliance with the Constitutional mandate if the basis adopted for price fixation was not shown to be so patently unreasonable as to be in excess of the power to fix the price PRE |
He observed: "In the ultimate analysis the mechanics of price fixation has necessarily to be left to the judgment of the Executive and unless it is patent that there is hostiled discrimination against a class of operators, the processual basis of price fixation has to be accepted in the generality of cases as valid PRE |
Referring to Shri Meenakshi Mills, the learned CJ. reaffirmed the approval accorded to the statement in Secretary of Agriculture v. Central Reig Refining Company (supra) that Courts of Law could not be converted into tribunals for relief from the crudities and inequities of complicated experimental economic legislation... |
Panipat Sugar and Anakappalle Society were again referred to and it was pointed out that those cases turned on the language of s. 3(3C) of the Essential Commodities Act PRE |
Premier Automobiles was considered and it was affirmed that the judgment in that case could not be treated as precedent and could not afford any appreciable assistance in the decision of price fixation cases as it proceeded partly on agreement between the parties and partly on concessions made at the bar PRE |
Beg, CJ. who delivered a separate opinion for himself and for Desai, J. agreed that the judgment in Premier Automobiles was not to provide a precedent in price fixation case PRE |
He also reaffirmed the proposition that price fixation was in the nature of a legislative measure and could not give rise to a complaint that natural justice was not observed PRE |
He indicated the indicia which led him to the conclusion that price fixation was a legislative measure PRE |
He observed: "We think that unless, by the terms of a 'particular statute, or order, price fixation is made a quasi-judicial function for specified purposes or cases, it is really legislative in character in the type of control order which is now before us because it satisfies the tests of legislation PRE |
A legislative measure does not concern itself with the facts of an individual case PRE |
It is meant to lay down a general rule applicable to all persons or objects or transactions of a particular kind or class PRE |
In the case before us, the Control Order applies to sales of mustard oil anywhere in India by any dealer PRE |
Its validity does not depend on the observance of any procedure to be complied with or particular types of evidence to be taken on any specified matters as conditions precedent to its validity PRE |
The test of validity is constituted by the nexus shown between the order passed and the purposes for which it can be passed, or in other words by reasonableness judged by possible or probable consequences PRE |
In New India Sugar Works v. State of Uttar Pradesh, [1981] 2 SCC 293 1981 Indlaw SC 217 there was an indication though it was not expressly so stated that the question of observing natural justice did not arise in cases of price fixation PRE |
In Laxmi Khandsari v. State of Uttar Pradesh, [1981] 2 SCC 600 1981 Indlaw SC 558 it was held that the Sugar Cane Control Order, 1966 was a legislative measure and therefore, rules of natural justice were not attracted PRE |
In Rameshchandra Kachardas Porwal v. State of Maharashtra, [1981] 2 SCC 722 1981 Indlaw SC 423 it was observed that legislative activity did not invite natural justice and that making of a declaration that a certain place shall be a principal market yard for a market area under the relevant Agricultural Produce Markets... |
The observation of Magarry, J. in Bates v. Lord Hailsha, of St. Marylebone [1972 PRE |
1 WLR 1973 that the rules of natural justice do not run in the sphere of legislation, primary or delegated, was cited with approval and two well known text books writers Paul Kackson and Wades H.W.R. were also quoted PRE |
The former had said, "There is no doubt that a minister, or any other body, in making legislation, for example, by statutory instrument or by law, is not subject to the rules of natural justice--Bates v. Lord Hailsham of St. Marylebone (supra)--any more than is Parliament itself; Edinburgh and Dalkeith Rv PRE |
v. Wauchope per Lord Brougham, [1842] 8 CL & F 700, 720; British Railways Board v. Pickin, [1974] 1 PRE |
All ER 609 PRE |
The latter had said, "There is no right to be heard before the making of legislation, whether primary or delegated, unless it is provided by statutes PRE |
In Sarkari Sasta Anaj Vikreta Sangh v. State of Madhya Pradesh, [1981] 4 SCC 471 1981 Indlaw SC 607; it was pointed out that the amendment of the Madhya Pradesh Food Stuffs Distribution Control Order was a legislative function and there was, therefore, no question of affording an opportunity to those who were to be aff... |
In Welcom Hotel v. State of Andhra Pradesh, [1983] 4 SCC 575 1983 Indlaw SC 128 the observations of Chandrachud, CJ PRE |
in Prag Ice and Oil Mills were quoted with approval in connection with the fixation of prices of food stuffs served in restaurants PRE |
In Tharoe Mal v. Puranchand, [1978] 1 SCC 102 1977 Indlaw SC 122 one of the questions was regarding the nature of the hearing to be given before imposing municipal taxes under the Uttar Pradesh Municipalities Act, 1916 PRE |
It was held, PRE |
the procedure for the imposition of the tax is legislative and not quasijudicial PRE |
The right to object, however, seems to be given at the stage of proposals of the tax only as a concession to requirements of fairness even though the procedure is legislative and not quasi-judicial PRE |
We mentioned that the Panipat and the Anakapalle eases were distinguished in Shree Meenakshi, and Prag Ice Ratio |
Panipat and Anakapalle were both cases where the question was regarding the price payable to a person who was required to sell to the Government a certain percentage of the quantity of sugar produced in his mill Ratio |
The Order requiring him to sell the sugar to the Government was made under s. 3(2)(f) of the Essential Commodities Act under which the Central Government was enabled to make an order requiring any person engaged in the production of any essential commodity to sell the whole or specified part of the quantity produced by... |
It will straight-away be seen that an order under s. 3(2)(f) if a specific order directed to a particular individual for the purpose of enabling the Central Government to purchase a certain quantity of the commodity from the person holding it Ratio |
It is an order for a compulsory sale Ratio |
When such a compulsory sale is required to be made under s. 3(2)(f), the question naturally arises what is the price to be paid for the commodity purchased Ratio |
S. 3(3C) provides for the ascertainment of the price STA |
It provides that in calculating the amount to be paid for the commodity required to be sold regard is to be had to--(a) the minimum price, if any, fixed for sugarcane by the Central Government under this section; (b) the manufacturing cost of sugar; (c) the duty or tax, if any, paid or payable thereon; and (d) the secu... |
It is further prescribed that different prices may be determined, from time to time, for different areas or for different factories or for different kinds of sugar Ratio |
It is to be noticed here that the payment to be made under s. 3(3C) is not necessarily the same as the controlled price which may be fixed under s. 3(2)(c) of the Act Ratio |
S. 3(2)(c) of the Act, we have already seen, enables the Central Government to make an order controlling the price at which any essential commodity may be bought or sold, if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity ... |
S. 3(3C) provides for the determination of the price to be paid to a person who has been directed by the Central Government by an Order made under s. 3(2)(c) to sell a certain quantity of an essential commodity to the Government or its nominee STA |
While s. 3(2)(c) contemplates an Order of a general nature, s. 3(3C) contemplates a specific transaction Ratio |
If the provisions of s. 3(2)(c) under which the price of an essential commodity may be controlled are contrasted with s. 3(3C) under which payment is to be made for a commodity require to be sold by an individual to the Government, the distinction between a legislative act and a non-legislative act will at once become ... |
The Order made under s. 3(2c), which is not in respect of a single transaction, nor directed to particular individual is clearly a legislative act, while an Order made under s. 3(3C) which is in respect of a particular transaction of compulsory sale from a specific individual is a non-legislative act Ratio |
The Order made under s. 3(2)(c) controlling the price of an essential commodity may itself prescribe the manner in which price is to be fixed but that will not make the fixation of price a non-legislative activity, when the activity is not directed towards a single individual or transaction but is of a general nature, ... |
The legislative character of the activity is not shed and an administrative or quasi-judicial character acquired merely because guidelines prescribed by the statutory order have to be taken into account Ratio |
We may refer at this juncture to some illuminating passages from Schwrtz's book on 'Administrative Law Ratio |
He said: "If a particular function is termed "legislative" or "rulemaking" rather than "judicial" or "adjudication," it may have substantial effects upon the parties concerned Ratio |
If the function is treated as legislative in nature, there is no right to notice and hearing, unless a statute expressly requires them Ratio |
If a hearing is held in accordance with a statutory requirement, it normally need not be a formal one, governed by the requirements discussed in Chapters 6 and 7 Ratio |
The characterization of an administrative act as legislative instead of judicial is thus of great significance Ratio |
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX X Ratio |
As a federal court has recently pointed out, there is no "bright line" between rule-making and adjudication Ratio |
The most famous pre-APA attempt to explain the difference between legislative and judicial functions was made by Justice Holmes in Prentis v. Atlantic Coast Line Co Ratio |
A judicial inquiry," said he, "investigates, declares and enforces liabilities as they stand on present or past facts and under laws supposed already to exist Ratio |
That is its purpose and end Ratio |
Legislation on the other hand looks to the future and changes existing conditions by making a new rule to be applied thereafter to all or some part of those subject to its power Ratio |
The key factor in the Holmes analysis is time: a rule prescribes future patterns of conduct; a decision determines liabilities upon the basis of present or past facts Ratio |
The element of applicability has been emphasized by others as the key in differentiating legislative from judicial functions Ratio |
According to Chief Justice Burger, "Rulemaking is normally directed toward the formulation of requirements having a general application to all members of a broadly identifiable class Ratio |
An adjudication, on the other hand, applies to specific individuals or situations Ratio |
Rulemaking affects the rights of individuals in the abstract and must be applied in a further proceeding before the legal position of any particular individual will be definitely affected; adjudication operates conceretly upon individuals in their individual X X capacity Ratio |
We may now turn our attention to the two Drugs (prices Control) Order of 1970 and 1979, both of which were made by the Central Government in exercise of its powers under s. 3 of the Essential Commodities Act Ratio |
The Drugs (prices Control) Order, 1970 defined 'Bulk Drugs' as follows: "Bulk drugs" means "any unprecessed phamaceutical, chemical, biological and plant product or medicinal gas conforming to pharmacopocial or other standards accepted which is used as such or after being processed into formulations and includes an ess... |
Bulk drugs were divided into essential bulk drugs which were included in the schedule and bulk drugs which were not so included Ratio |
In the case of essential bulk drugs, paragraph 4 of the order enabled the Central Government to fix the maximum price at which such essential bulk drugs should be sold Ratio |
In the case of bulk drugs, which were not included in the schedule, a manufacturer was entitled to continue to market the product at the same price at which he was marketing the products at the time of the commencement of the order Ratio |
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