HARISHCHANDRA v. STATE OF MADHYA PRADESH

Appeals by special leave from the judgment and order dated May, 5, 1962; of the Madhya Pradesh High Court (Indore Bench) at Indore, in Criminal Appeals Nos. 216, 222 and 227 to 231 of 1961. C. B. Agarwala and Rameshwar Nath, for the appellant. B. Sen and /. N. Shroff, for the respondent. The Judgment of the Court was delivered by Ayyaopr J. These ~eve.1 appeals are connected as they relate to the same appcl11nt rnd the point involved .in each is identical. They are befo:<: us by virtue of special leave granted· by this Court and are dire.:ted against the common judgment of the Indore Bench of the High Court of Madhya Pradesh conv .. ct ing the appellant of a cmlravention of the Indian Iron & .ileel (Scrap Control) Orolcr, '.943. The accused, the appellant before us, was the President oZ lhe Scrai; Dealers Association at Indore and he was prosecuted bcf»re the learned Additional City Magistrate, Endore City in seven iets of criminal cases filed by the State of Madhya Pradesh alleg; ng contravention of s. 8(4) of the Iron & Steel (Scrap Control) Order, 1943 by selling ;,r causing to be sold scrap iron to differ.~nt customers on different dates at a rate higher than was authorhed by notification dated ~:ept1imber 30, 1952 issued by the Steel Controller under the said order. He was acquitted by the Addi tional City Magistrate but on appeals preferred ty the State Government, th~ learned Judges set aside.the acquittal and con victed him of the offences and sentenced him to pay a fin~ of B c D E F G H HARISHCHANDRA v. STATE (Ayyangar J.) 325 A Rs. 100 in each case with imprisonment in default of payment of It is the correctness of this judgment of the High Court fine. that is canvassed before us by the appellant in these appeals. To appreciate the points raised by the appellant it is necessary to narrate briefly the history of the legislation on the topic of B control over the price at which scrap was permitted to be sold by dealers. The Defence of India Act, 1939 enabled the Central "for maintaining Government to frame rules, among others, supplies and services essential to the life of the community ( vide In pursuance thereof Rule 81I2) of the Defence of s. 2)." India Rules empowered the Central Government "so far c appea" :o them to be necessary or expedient for . maintaining supplies and services essential to th~ life of the com munity" to provide by order, inter alia, (a) for controlling the prices or rates at which articles or. things of any description what ever may be sold . . and for relaxi.ng any such prices or rates". By virtue of this power, the Central Government pro- D mulgated the Iron & Steel (Scrap Control) Order, 1943 (herein after referred to as the Indian Scrap Order) on February 25, 1943. This Order to whose provisions we shall have to make some reference later would normally have lapsed on the expiry of six months after the revocation of the proclamation of emer gency because of the provisions of s. 102(3) (a) of the Gov- E ernment of India Act, 1935.·· In order to avoid this result, the Emergency Provisions Continuance Ordinance, 1?46 was promulgated on September 25, J 946 which continued several orders in relation to the control of production, distribution etc. of essential commodities, and Indian Scrap Order among them, and this ordinance was replaced by a permanent legislation-the F Essential Supplies (Temporary Powers) Act, 1946 (Act 24 of 1946) which also contained a provision for the continuance of the Control Orders in force [i•ide s. 17(2)]. Section 8(4) of the Indian Scrap Order prohibited the sale of scrap in excess of the prices fixed therefor by the Controller. It is not disputed that the sales in regard to which the appellant has been prosecuted were in excess of the maximum there specified. G Several defences were raised but of these those which now survive are only two: ( 1) The legal effect of the parallel pro visions on the same subject viz control over the sale price of 1 scrap which were in force in the Part B State of Madhya Bharat H which comprised Indore. and (2) Whether the appellant p·s the President of the Scrap Dealers Association which was an unin corporated body could be held liable for a sale in excess of the L2Sup./64-8 326 SUPREME COURT llEPOllTS (1965) I S.C.R. authorised maximum price effected by a Munim or Munims of A the Association. terms made applicable in that State and We shall now proceed to narrate in brief outline the history relative to control over the sale price of the parallel provisions of Scrap in the Part B State of Madhya Bharat. These provisions undoubtedly continued in force in the State till September 12, B Indian Scrap Control Order, 1943 was 1950 when the principal point raised by Mr. Agarwala was whether a certain notification which had been issued under the State law and was in force on that date continued in force even thereafter. The State legislation on this topic started on October 9, 1948 with the promulgation C of the Madhya Bharat Essential Supplies (Temporary Powers) Ordinance, 1948, which was a reproduction of the Indian Essen- (Temporary Powers) Ordinance, 1946. When tial Supplies this Ordinance was replaced in India by the Essential Supplies 1 Temporary Powers) Act, 1946, the same process was repeated in Madhya Bharat by the enactment of the Essential Supplies D 1 Temporary Powers) Act (Sam vat 2005) (Madhya Bharat Act 111 of 1948). Among the "essential commodities" dealt with by the State enactment were iron and steel [vide s. 2(3)(7)). Sc·ction 4 of the Act read: "4. Pc111·ers to control production, supply, distri bution etc .. of essential commodities. (I) The Govern ment so for as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodities, or for securing their equitable distribution and availability at fair prices may by an Order notified in the Official Gazette provide for regulating or prohibiting and movement the production, supply, distribution thereof, and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1 ) , an order made under may provide : ( c) For controlling the prices at which any essential commodity may be bought or sold; In exercise of the powers to quote only the material words. thus conferred the Director of Civil Supplies, Madhya Bharat, to whom the powers in that behalf were delegated by the State Government. promulgated on June 4, 1949 the Madhya Bharat Iron, Steel and Scrap (Production, Procurement and Distribution) E F G H •J- HARISHCHANDRA v. STATE (Ayyangar J.) 327 A Control Order, 1949. Clause 5 of this Order empowered the Director of Civil Supplies, Madhya Bharat to specify from time to time the maximum prices--wholesale and retail-at which "iron and steel, scrap or specified articles made thereof" may be sold (a) by a producer, (b) by a controlled stockholder, (c) by a registered stockholder ( d) by a controlled dealer and ( e) by B a scrap merchant. The several categories of persons whose sales were thus regulated were definc:d in the Order. Acting under this provision, the Director Civil Supplies issued a notification. on the same dato-June 4, 1949-which read: c D E F "In exercise of the powers conferred on the Director under clause 5 ( 1) of the Madhya Bharat Iron, Steel and Scrap (Production, Procurement and Distribution) Control Order, 1949, l hereby specify that the Price Schedules as may be in force for the time being under ...... Iron and Steel Scrap Control Order in Indian Union in respect of sales by producers, con- trolled and Registered Stockholders and Scrap Mer .chants shall apply mutatis mutandis to sales by the afore said persons in Madhya Bharat; provided however, that the Registered Stockholders shall sell to Controlled Dealers at II column rates of the Government of India Price SChedule for the time being in force, that Iron and Steel which they receive at column I rate from the producers and at column III rate, that Iron and Steel which they receive from the Controlled Stockholders at column II rates : provided also that controlled Dealers in Madhya Bharat shall sell to consumers at a profit margin of not exceeding Rs. 30 per ton; subject however, in all cases to such local extra ch1rges as may be fixed by me or the officers authorised by me in this behalf." It is only necessary to add that there were similar Order~ passed under the Indian Scrap Ord\:r, 1943 in which also the classification of dealers etc., proceeded on the same lines. The G form of the notification by the Steel Controller to the Govern ment of India, referred to in this notification was on the follow ing lines: prices and it was divided There was a schedule to the notification fixing the maximum H number of the item, the second was the description or classifica tion of the material and the next three which were headed columns I, II and III dealt with specified maximum basic prices per ton for sale at Calcutta. Bombay and Madras. There were adjustments into five columns. First was 328 , SUPREME COURT REPORTS _ .. , . [1965] I S.C.R. in columns for arriving at the prices chargeable at other indicated centres. Column I specified the prices for sales by Controlled sources other than those mentioned in column II. · The second colwnn was' headed "specified prices fixed for salc;s by scrap merchants who have been declared controlled' sources" and .the last or. third column specified the maximum for sales by persons other than these mentioned I · and II. Different maxima were fixed for sale by . persons falling under the· tliree columns, the first column. price being the lowest, the second a little higher and the last which included sales by retail dealers to the Consuming public being the highest. It is com mon ground that the Scrap Dealers Association, Indore of which the appellant was the President had· been declared "a Controlled Source" so that the maximum prices at which members of the Association which was an unincorp0ratoo ·body cou Id sell, were those specified ·in column II of the schedule. It is .not neces-' sary to set out the prices at which the actual sales which were stated to be in violation of the law, took place, but it is sufficient ·to state that admittedly the servants of the Association sold scrap iron at prices higher than those fixed in column II and at prices fixed for column m. ' '' The, first submission of Mr. Agarwala learned Coun..~el for the appellant was that the sale by the Association at the column III price was authorised and legal because ·of a notification issued by the· Government of Madhya Bharat dated August 26, 1949. The principal point argued before us iri respect of this notification is as to whether this notification wa5 alive and in force on the date of the sales in 1956 which were the subject of the several prosecutions and whether. it has survived subsequent Indian legislation extenoed to the State to which we shall advert ·presently.. But before proi:eedmg to do so, it would be con venient to consider the nature of that notification. A B c D E F , ,The Scrap Dealers Association of Madhya Bharat appear to have made a representation to the State Government. that though the dealers in Scrap as constituent units of the Association were · G ·-treated as a Controlled Source and secured advantages thereby and were bound to sell at prices fixed in column II, still Association should :be accorded special privilege and be per mitted to sell at prices fixed for the residuary class o[ dc;a!ers in column III. This representation was considered by an Advisory Conimittee appointed by the State Government and a direction was given that "a change be made to the extent that at present . for the goods which is sold to consumers by the Scrap Association H HARISHCHANDRA l'. STATE (Ayyangar !.) 329 A at the regional headquarters they will be allowed to charge column lII rates on the goods instead of column II rates." It is stated that the Association bas been selling at these rates ever since. There is no doubt that if this direction stood, and we need only add that the validity of this direction was not challenged by the respondent as beyond the powers of the State Govern- ·n ment, the appellant could not have been guilty of the offence with which he was charged. But the question is whether this direction or this modification of the prices fixed under s. 5 ( 1) of the Madhya Bharat Scrap Control Order by incorporating the notification by the Steel c Controller of the Government of India in its text, subsisted in 1956 when the sales which are stated as being in contravention of the Indian Scrap Order, took place. We have already seen that the notification dated June 4, 1949 which we have extracted earlier, was issued under tb.e Madhya Bharat Iron and Steel etc., Control Ordl'.!, 1949 pro- D mulgated under the Madhya Bharat ~ntiaI Supplies (Tem porary Powers) Act, 1948. The Madhya Bharat Act, however, stood repealed by virtne of the provisions of the Essential Supplies (Temporary Powers) Amendment Act, 1950 (Act 52 of 1950) under which the Essential Supplies (Temporary Powers) Act, 1946 was extended to the Part B States as and from such dates E ~s might be specified by the Central Government. By a notifi cation issued by the Central Government the Essential Supplies Act, 1946 was made applicable to the Part B State of Madhya Bharat from August 17, 1950. The effect of this extension was provided for by s. 10 of Act 52 of 1950 which enacted : F G H "10. Amendment of section 17, Act XXIV of 1946. After sub-section ( 3 ) of section 1 7 of the said Act, the following sub-section shall be inserted, namely : - ( 4) If immediately before the day on which this Act comes into force in a Part B State, there is in force in that State any law which corresponds to this Act, such corresponding Jaw shall on that day stand repealed in so far as it relates to any of the essential commoditieii gov- erned by this Act: Provided that any Order made and in force imme diately before that day )n the said State shall continue in force and be deemed to be an Order made under this Act, and all appointments made, licences or permits granted, and directions issued, under any such Order and in force immediately before that day shall likewise continue in 330 SUPREME COURT REPORTS [ 1965] I S.C.R. force and be deemed to be made, granted or issued in pursuance of this Act." A If the main part of sub-s. ( 4) stood alone without the proviso, the effect would have been not merely a repeal of the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948 which was "a corresponding law" which was in force in that B State, but with that repeal, all the subordinate legislation enacted thereunder including the Control Orders as well as the Orders of the Director fixing prices would also have stood repealed. By virtue of the proviso, however, notwithstanding the repeal of the parent enactment, the Orders made under it were continued and were to be deemed to have been made under the Indian Act. C Mr. Agarwala laid considerable stress on the proviso and urged that by reason of its language it continued in force not merely the Madhya Bharat Scrap Order of June 4, 1949 and the price fintion by the Director under s. 5 (I) of that Order on the same date, but also the variation in the prices to be charged D by the Association effected by the Government Order dated August 26, 1949 which enabled that body, notwithstanding its being a dealer specified in column II to sell at prices fixed for persons falling under column III. We need not pause to consider whether the direction or !he notification dated August 26, 1949 is "a direc tion issued under any such order" within the proviso to s. 17 ( 4) E but shall proceed on the basis that it is, accepting the construction suggested by learned Counsel. But the replacement of the Madhya Bharat law on this topic by the law in force in India did not stop with that effected by Act 52 of 1950. By a notification of the Government of India dated September 12, 1950. Indian Scrap Order, 1943 was extended to Madhya Bharat. It i5 really F the legal effect of this extension that calls for scrutiny in these appeals. The notification by which the Indian Scrap Order was extend ed to Madhya Bharat, no doubt, did not expressly provide for the repeal of the "Madhya Bharat Scrap Iron & Steel etc., Order, G 1949", but if the tv.-o Control Orders cannot operate simultane ously, it would be obvious that the Indian Scrap Order would In the first place, have repealed and replaced the State law. even if the provi~ions contained in the two· sets of Orders were in identical tenns, it might be proper to hold that the Indian Scrap Order replaced the State law in order to give some mean ing and effect to the extension of the Indian Scrap Order Madhya Bharat. But that is not the position here. There are II HAR!SHCHANDRA v. STATE (Ayyangar !.) 331 B A marked differences between the provisions of the two Orders such that it would not be possible for the two to stand together. For instance, Rule 3 of the Indian Scrap Order prohibits producers from acquiring or agreeing to acquire scrap except and in accord ance with a written order of the Controller etc. There is no rule corresponding to this in the Madhya Bharat Scrap Order. In line with this, in Rule 6 of the Madhya Bharat Order which corresponds to Rule 8 ( 4) of the Indian Scrap Order, there is no prohibition against acquisition for a higher price than the maxi mum fixed, such as is to be found in Indian Order. Again, Rule 7 of the Madhya Bharat Order relating to the restrictions on the movement of scrap has no corresponding provisions in the Indian Illustrations of this type of variation may be multi plied, but this is unnecessary as it was conceded that the pro visions contained in the two orders were not identical. What we desire to emphasise is that the .two orders, though achieving substantially the same object, are not identical in their provi- Madhya Bharat of the Indian Scrap Order, the Madhya Bharat Scrap Order would stand rep~aled and be replaced by the Indiart law. If that is so, it is obvious that on the extension c Scrap Order. D sions. Mr. Agarwala, however, submitted that this would not follow E because according to him the Madhya Bharat Scrap Order had some sort of higher efficacy or stood on a footing superior to the Indian Scrap Order by reason of its having been continued by the proviso to s. 17 ( 4) to Act 24 of 1946, the argument being that the notification etc., should be deemed to be ope under the F Essential Supplies (Temporary Powers) Act itself. This argu ment, even if sound, does not really help the appellant, for the Indian Scrap Order itself was preserved by a saving of the same type and couched in exactly the same language in the Essential Supplies (Temporary Powers) Ordinance, 1946 and the Act of the same name of 1946 [vide s. 17(2) & (3) of Act 24 of 1946]. G Besides, just as an order made or notification issued under the Essential Supplies (Temporary Powers) Act, 1946 could amended, modified or cancelled, even if the Madhya Bharat Scrap Control Order and the notifications issued thereunder are deemed to have been passed under the Act of 1946 which what learned Counsel contends, they could surely be modified, H amended or replaced by other subordinate legislation originating from the same parent Act The Indian Scrap Order, 1943 was one such, because it is deemed to have been made under that ·332 SUPREME COURT REPORTS [1965] I S.C.R. Act. When the Indian Scrap Order wa~ extended to Madhya · A Bharat, the. result was that it effectively replaced the Madhya Bharat Order on the same topic. it carried with Indian Scrap_ Order was · extended . Even granting that the Madhya Bharat Scrap Order of June 4, 1949 was repealed on the extension to that territory of the B Indian Scrap Order, Mr. Agarwala urged that the direction con tained in the notification of the State Government dated August 26, 1949 was a special law which stood unaffected by the exten sion of the Indian Scrap Order to Madhya Bharat. That when the notifications issued by the Controller from time to time and c that after the extension of the Scrap Order to Madhya Bharat, all sales of scrap would have· to be effected only in conformity ~th the prices fixed by the notifications issued under the Scrap Order was not contested. · Nor was it disputed that on the terms of the notifications issued fixing the prices at which several classes ,of dealers might effect sales under the Indian Scrap Order, the D .Association of which the appellant was the President would have fallen under column II and would have been bound to sell scrap only at the prices fixed in that column. But it was submitted · that the fact that even before the extension of the Indian Scrap Order to Madhya Bharat in September, 1950 under the very pro visions of the notification dated June 4, 1949 itself the maximum E prices fixed in Madhya Bharat were only those prescribed by the Controller in India and that the deviation in regard to these prices permitted to the Association was thus in effect a local modifica tion of the Indian Order and that consequently the direction issued by the State Government on August 26, 1949 and which F was continued _even after the repeal of the Madhya Bharat Tem porary Powers Act, 1948 by reason of the proviso to s. 17 ( 4) of the Act 24 of 1946 was not affected by the extension of the Indian Scrap Order to Madhya Bharat. We find ourselves un able let accept this argument .. Th~ concession allowed to the Association by the notification dated August 26, 1949 could be G looked at from one of two alternative positions. The direction could be viewed as in effect a modification of the priCes fixed under s. 5 ( 1) of the Madhya Bharat Order by the Director so that in law it should be deemed to have been incorporated in that price fixation and · became, as it were, the price fixed by the Controller. The effect of this would be that in Madhya Bharat H before the extension of the Indian Scrap Order, the maximum type of dealer falling under prices chargeable by the specified • T HAR!SHC!L\NDRX. v. STATE. (Ayyangar J.) 333 A c~lumn II would be those applicable to dealers in column III. If this were the true position, the· result would be that when the Indian Scrap Order was made applicable to Madhya Bharat with out a saving or special provision as regards sales by the Associa tion, it would supersede that law and the. special classification effected by the Madhya Bharat law would cease to be in force. D Jn this respect the fact that the prices fixed in Madhya Bharat for sales by dealers etc., specified in the three columns corresponded io thO'\e fi"ted by the Controller in India, would be wholly irrele vant, for the authority by which the fixation was effected would be traceable to Madhya Bharat and not the'Indian law. c • D E • ·F The other alternative would be that the notification dated August 26, 1949 was an independent piece of subordinate law making under the Essential Commodities Act and the Madhya Bharat Scrap Order, and it was this aspect that was stressed by Mr. Agarwala. Even if that be so, the appellant would derive no advantage from this, because ·there has been a repeal not merely cf the Madhya Bharat Essential Supplies Act no doubt with a saving but of the Madhya Bharat Scrap Order without a saving and on the repeal of the Scrap Order under which subordinate· rule or regulation was effected the latter would also stand repealed. As explained by Lord Reading C.J. in Watson v. Winch ( 1 ): "It has been long established that, when 'an Act of Parliament is repealed, it must be considered (except as to transactions passed and closed) as if it had never existed, . . . . . . . . It would follow that any bye-law made under a repealed statute cea~es to have any vali-. dity unless the repealing Act contains some· provision preserving the validity of the bye-law notwithstanding the repeal." · · Admittedly, there is no saving clause either in the notification of the Central Governrrient by which the Indian Scrap Order was· G extended to Madhya Bharat nor, of course, in the Scrap Order itself. As , the parent order under which the notification was made has been repealed without a saving, the effect must be that the notification dated August 26, 1949 must, if i.t were held to be an independent subordinate legislation, be held also to have H been repealed. Mr. Agarwala next referred us to s. 24 of the . General Clauses Act No. X of 1897 and urged that the notifica- '). (l) [1916] I K.B. 688, 69?. 334 SUPREME COURT REPORTS [1965] I S.C.R. lion would be a bye-Jaw that would have continued notwithstand- A ing the repeal of the Madhya Bharat Scrap Order. Section 24 of the General Clauses Act runs thus: appointment, "24. Where any Central Act or Regulation, is after the commencement of this Act, repealed anel re-enacted with or without modification, then, unless it is otherwise expressly provided, notification, order, scheme, rule form or bye-law, made or issued under the repealed Act 01 Regulation, shall, so far as it is not inconsistent with the provisions re-enacted, continue in force and be deemed to have been made or issued under the provisions so re-enacted, unless and until it is superseded by any appointment, notification, order scheme, rule form or bye-law, made or issued under the provisions so re-enacted and when any Cen- tral Act or Regulation, which, by a notification undar s. 5 or 5A of the Scheduled Districts Act, 1874, or any like law, has been extended to any local area, has, by a subsequent notification, been withdrawn from and re extended to such area or any part thereof, the provisions of such Act or Regulation shall be deemed to have been repealed and re-enacted in such area or part within the meaning of this section." B c D We consider that this submission is entirely without force. Mr. Agarwala fairly conceded that the language of s. 24 would not cover a repeal of the Madhya Bharat Scrap Order by the introduc tion into the Madhya Bharat territory of the Indian Scrap Order, 1943, but he suggested that even though the section was in terms F inapplicable, he could invoke the principle underlying il But this argument, however, proceeds on assuming thats. 24 was declaratory of the common rule of interpretation and that even in the absence of s. 24 the same principle of law would apply. The position apart from a statutory provision such as is found in s. 24 of the General Clauses Act, is thus summarised in Craici; on Statute Law G 6th Edn. 334: "If the statute under which bye-laws are made is repealed, those bye-Jaws are impliedly repealed and cease to have any validity unless the repealing statute contains some provision preserving the validity of the bye-law uotwithstanding rule .... when an Act of Parliament is repealed it must the repeal. This follows from H HARISHCHANDRA v. STATE (Ayyangar J.) 335 A be considered (except to transactions passed and closed) as if it had never existed." This submission has, therefore, no merit and must be rejected. The.second of the points urged by Mr. Agarwala was that the Scrap Dealers Association was an unincorporated body co11Sisting B wholly of retail dealers and that as each of them individually was · a dealer who could himself have sold at the column m rate, the Association could not be penalised for selling at that rate. As an unincorporated body, he submitted, it was merely the aggregate of its members and so would have the rights of its constituent units, There is no force in this pc&int either. · Apart from the C definition of "person" in the General Clauses Act as including an unincorporated body of persons, what we are concerned with is not sales by individual dealers who composed the Association, but · It was the Association that sales by and through the Association. was given the facility of obtaining scrap at more favourable prices than dealers and it was that body which was subjected to control in the shape of having contrQlled sources at the prices specified in column II. to sell what it had purchased D Lastly, it was faintly urged by Mr. Agarwala that the appel lant was merely the President of the Association and could not be held liable for the sales effected by its employees. There was no E dispute that ,the sales were by the Association and at prices fixed by that body.. It was also admitted that these prices were in excess of the prices specified for sales fixed for the Association. Under s. 8 of the Essential Supplies (Temporary Powers) Act, 1946, "Any person who abets the contravention of any order .... ·shall be deemed to have contravened that order." In the circum stances, we do not see how this affords any defence to the appel~ )ant. F The result is that these appeals fail and are dismissed. Appeals dismissed . . - .. -----