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ATLAS CYCLE INDUSTRIES LTD. V. STATE OF HARYANA, AIR 1979 SC 1149

 ATLAS CYCLE INDUSTRIES LTD. V. STATE OF HARYANA, AIR 1979 SC 1149

 

FACTS

  1. On December 29, 1964 the Development Officer of the Directorate General of Technical Development, New Delhi, discovered from an examination of the said appellant’s account books that it had, during the period intervening between January 1, 1964 and January 12, 1965, acquired black plain iron sheets of prime quality weighing 60-03 metric tens from various parties at a rate higher than the maximum statutory price fixed for such sheets by the Iron and Steel Controller (the ‘Controller’) in exercise of the powers vested in him under Clause 15(1) of the Iron and Steel (Control) Order, 1956 (the ‘Control Order’).
  2. On the basis of this discovery, the appellants were prosecuted in the Court of the Special Magistrate, Ambala Cantonment for an offence under Section 120B of the Indian Penal Code read with Section 7 of the Essential Commodities Act, 1955 read with Clause 15(3) of the Control Order. The trial Magistrate dismissed the application vide his order dated June 4, 1970.
  3. The appellants moved the High Court of Punjab and Haryana under Articles 226 and 227 of the Constitution and Section 561A of the Code of Criminal Procedure, 1898 challenging their prosecution. The High Court dismissed the petition overruling the contentions of the appellants.
  4. The High Court, however, being of the opinion that the case involved a substantial question of law relating to the vires of the notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question certified the case as eminently fit for appeal to this Court.

 

 

ISSUE

Whether the notification fixing the maximum selling price of the commodity in question is void for not having been laid before both Houses of Parliament?

 

APPELLANT’S CONTENTIONS

  1. The Control Order and the Notification which formed the basis of their prosecution did not have the force of law as they had not been laid before the Houses of Parliament within a reasonable time as required under Section 3(6) of the Act; that the Control Order;
  2. The Notification fixing the maximum selling price of the commodity in question was invalid as the same did not appear to be preceded by the formation of the requisite opinion under Section 3(1) of the Act which was a sine qua non for issue of any order by the Central Government or by the Controller;
  3. None of the 18 concerns which, according to the prosecution, sold the aforesaid B.P. sheets to the appellants and who were equally guilty of the offence under Section 7 of the Act having been proceeded against in the Court of the competent jurisdiction, the prosecution of the appellants was violative of Article 14 of the Constitution and that the purchase of the aforesaid B.P. sheets having been openly made and entered in the account books of Appellant 1, the mens rea which was a necessary ingredient of the offence under Section 7 of the Act was totally lacking in the case.books of Appellant 1, the mens rea which was a necessary ingredient of the offence under Section 7 of the Act was totally lacking in the case.

 

RESPONDENT’S CONTENTIONS

  1. The respondent while denying that the Control Order had not been placed before both Houses of Parliament, as required by sub-section (6) of Section 3 of the Act or that the issue of the Control Order or the Notification fixing maximum selling prices of various categories of iron and steel including the commodity in question was not based on the formation of the opinion envisaged by subsection (1) of Section 3 of the Act conceded that the notification fixing the maximum selling prices of the categories of iron and steel including the commodity in question had not placed before both Houses of Parliament but contended that the provisions of sub-section (6) of Section 3 of the Act requiring the placing of the order contained in the aforesaid notification before both Houses of Parliament were directory and not mandatory and the omission to comply with that requirement did not have the effect of invalidating the notification.
  2. The respondent further contended that the notification fixing the maximum selling prices of various categories of iron and steel including the black plain iron sheets being a part of the Control Order and a piece of delegated legislation, it was not necessary to lay it before the Houses of Parliament. It was also pleaded by the respondent that the mens rea of the accused was manifested from various manipulation resorted to by them as also from the fact that they wanted to increase their production and earn more profits.
  3. The respondent also averred that launching of prosecution against any person depended on the availability of sufficient guidance and that non-prosecution of the sellers of the iron sheets in question did not involve any discrimination as envisaged by Article 14 of the Constitution but was due to non-availability of adequate and reliable evidence against them.

 

RATIONALE

  1. Sub-section (6) of Section 3 of the Act provides that every order made under Section 3 by the Central Government or by any officer or authority of the Central Government shall be laid before both Houses of Parliament, as soon as may be, after it is made. The Court also observed the following with respect to the provision that:
  • It does not provide that it shall be subject to the negative or the affirmative resolution by either House of Parliament.
  • It also does not provide that it shall be open to the Parliament to approve or disapprove the order made under Section 3 of the Act.
  • It does not even say that it shall be subject to any modification which either House of Parliament may in its wisdom think it necessary to provide.
  • It does not even specify the period for which the order is to be laid before both Houses of Parliament nor does it provide any penalty for nonobservance of or non-compliance with the direction as to the laying of the order before both Houses of Parliament.
  • It would also be noticed that the requirement as to the laying of the order before both Houses of Parliament is not a condition precedent but subsequent to the making of the order. In other words, there is no prohibition to the making of the orders without the approval of both Houses of Parliament.

 

  1. It is important to note that laying the Order before both the Houses of Parliament is not a condition precedent for bringing into force the Order , all that sub-section (6) provides is that every Order made under Section 3 of the Essential Commodities Act by the Central Government or by any officer or authority of the Central Government shall be laid before both the Houses of Parliament, as soon as may be, after it is made. It is significant that the Order is valid and effective from the date it is duly promulgated.  It is, therefore, not possible to hold that sub-section (6) of Section 3 of the Essential Commodities Act is mandatory.

 

HELD

The Legislature never intended that non-compliance with the requirement of laying as envisaged by sub-section (6) of Section 3 of the Act should render the order void. In these circumstances, the Court was clearly of the view that the requirement as to laying contained in sub-section (6) of Section 3 of the Act falls within the first category, i.e. “simple laying” and is directory not mandatory.  

Consequently non-laying of the aforesaid notification fixing the maximum selling prices of various categories of iron and steel including the commodity in question before both Houses of Parliament cannot result in nullification of the notification. Accordingly, the Court answered the aforesaid question in the negative. In the result, the appeal failed and was dismissed.

 

COMMENTARY

A provision as to “laying” may be directory or mandatory. It will depend upon the scheme of the Act, the language used, consequences enumerated in the relevant law and other considerations.

In Atlas Cycle Industries Ltd. v. State of Haryana, the Supreme Court considered this aspect in detail and observed that the use of the word shall is not conclusive or decisive of the matter and the court has to ascertain the intent of the legislature which is the determining factor. Two considerations, according to the court, are relevant:

  1. Absence of a provision for contingency of a particular provision not being complied with.
  2. Serious general inconvenience and prejudice likely to result to the general public if the act is declared invalid for non-compliance with the provision.