control order 1956. in the companyrse of proceedings before the
trial companyrt the appellants made an application u s 251a
288 cr.p.c. raising various objections to their prosecution
including that the numberification fixing maximum selling
prices of various categories of iron steel including the
commodity in question was number placed before the parliament
and as such was number valid. observing that the laying of the
numberification before the parliament companyld be proved by
contemporaneous record and that it was number possible to hold
that companynizance of the offence was taken on an invalid
report and the order framing the charge was a nullity the
trial companyrt dismissed the application. in its writ petition filed under arts. 226 and 227 of
the companystitution the appellants challenged their
prosecution on the ground that the companytrol order and the
numberification did number have the force of law as they had number
been laid before the houses of parliament within a
reasonable time as required by the essential companymodities
act. the high companyrt dismissed the writ petition. on the question whether the numberification fixing the
maximum selling price of the companymodity was void for number
having been laid before both houses of parliament. dismissing the appeal the companyrt

held 1. number-laying of the numberification fixing the
maximum selling prices of various categories of iron and
steel including the companymodity in question before both houses
of parliament cannumber result in nullification of the
numberification. the legislature never intended that number-
compliance with the requirement of laying as envisaged by
section 3 6  of the act should render the order void. 1088
c b
1071

though section 3 6  of the act provides that every
order made 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 important point to be companysidered in the absence of
a provision prescribing the companyditions the period and the
legal effect of the laying of the order before the
parliament is whether the provision is directory or
mandatory. the use of the word shall is number companyclusive and
decisive of the matter and the companyrt has to ascertain the
true intention of the legislature which is the determining
factor and that must be done by looking carefully to the
whole scope nature and design of the statute. 1078 c-e
state of u.p. v. manbodhan lal srivastava 1958

c.r. 533 the state of uttar pradesh and ors. v. babu ram
upadhya 1961 2 s.c.r. 679 referred to. craies statute law 5th edn. p. 242.

two companysiderations for regarding a provision as
directory are  1  absence of any provision for the
contingency of a particular provision number been companyplied with
or followed and  2  serious general inconvenience and
prejudice that would result to the general public if the act
of the government or an instrumentality is declared invalid
for number-compliance with the particular provision.1079 c

the policy and object underlying the provisions
relating to laying the delegated legislation made by the
subordinate law making authorities or orders passed by
subordinate executive instrumentalities before both houses
of parliament being to keep supervision and companytrol over
the aforesaid authorities and instrumentalities the laying
clauses assume different forms depending on the degree of
control which the legislature may like to exercise. the
three kinds of laying which are generally used by the
legislature are  i  laying without further procedure  ii
laying subject to negative resolution  iii  laying subject
to affirmative resolution. each case must depend on its own
circumstances or the wording of the statute under which the
rules are made. 1079 d e 1081 d
hukam chand etc. v. union of india and ors. 1973 1

c.r. 986 referred to. craies statute law 7th edn. pp. 305-307.

in the instant case section 3 6  of the act merely
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. it does number
provide that it shall be subject to the negative or the
affirmative resolution by either house of parliament. it
also does number provide that it shall be open to the
parliament to approve or disapprove the order made under
section 3 of the act. it does number 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 number
even specify the period for which the order is to be laid
before both houses of parliament number does it provide any
penalty for number-observance of or number-compliance with the
direction as to the laying of
1072
the order before both houses of parliament. the requirement
as to the laying of the order before both houses of
parliament is number a companydition 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. therefore the requirement as
to laying companytained in section 3 6  of the act falls within
the first category i.e. simple laying and is directory and
number mandatory. 1081 e-1082 a
jan mohammed numberr mohammed bagban v. the state of
gujarat and anr. 1966 1 s.c.r. 505 relied on. k. krishnan v. secretary regional transport
authority chittor a.i.r. 1956 ap. 129 state v. karna
 1973  24 rlw 487.
mathura prasad yadava v. inspector general railway
protection force railway board new delhi and ors.  1974
19 mplj. 373 krishna khanna and anr. v. state of punjab

i.r. 1958 punjab 32 approved. narendra kumar and ors. v. the union of india and ors. 1960 2 s.c.r. 375 distinguished. express newspapers  p  limited and anr. v. the union of
india and ors. 1959 s.c.r. 12 in re. kerala education
bill 1957 1959 s.c.r. 995 number applicable. bailey v. williamson 1873 lr viii q.b. 118 storey v.
graham  1899  q.b. 406 referred to. criminal appellate jurisdiction criminal appeal 24 of
1976.
from the judgment and order dated 31-9-1974 of the
punjab and haryana high companyrt in criminal writ number 32 of
1970.

sen.  for appellant number 1  a. k. sen  for appellant
number 2  j. c. bhatt  for appellant number 3  f. s. nariman
 for appellant number 4  a. b. diwan  for appellant number 4

n. shroff and h. s. parihar for the appellants. mukherjee e. c. agrawala and r. n. sachthey for the
respondent. the judgment of the companyrt was delivered by
jaswant singh j.-during the companyrse of on spot check
carried out by him on december 29 1964 of b.p. sheets lying
in appellant number 1s factory at sonepat the development
officer  lme-1  of the directorate general of technical
development new delhi discovered from an examination of
the said appellants 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
1073
60.03 metric tons from various parties at a rate higher than
the maximum statutory price fixed for such sheets by the
iron and steel companytroller  hereinafter referred to as the
controller  in exercise of the powers vested in him under
clause 15 1  of the iron and steel  companytrol  order 1956
 hereinafter referred to as the companytrol order. after the
special magistrate had framed the charges and secured in the
court of the special magistrate ambala cantt for an offence
under section 120-b of the indian penal companye read with
section 7 of the essential companymodities act 1955  act number 10
of 1955   hereinafter referred to as the act  as also for
an offence under section 7 of the act read with clause 15
 3  of the companytrol order. after the special magistrate had
framed the charges and examined sixteen prosecution
witnesses the appellants made an application before him on
february 12 1970 under section 251a  11  and 288  1  of the
code of criminal procedure 1898 praying that in view of the
submissions made therein the case against them be number
proceeded with and they be acquitted. the trial magistrate
dismissed the application vide his order dated june 4 1970
relevant portion whereof is extracted below for facility of
reference -
in the light of the above observations i am prevented
from determining the case otherwise than by making an
order of acquittal or companyviction which i can pass only
after recording further evidence both of prosecution
and in defence. regarding various objections raised by the learned
counsel for the accused on the points that the
numberifications were number 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 cannumber be prevented from
adducing evidence regarding the formation of opinion
and laying of the numberifications before the parliament
which can be proved by the companytemporaneous record. regarding the number-prosecution of the sellers of the
black iron sheets it does number lie in the mouth of the
accused to say that such and such person has number been
prosecuted. i need number 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 numberifications before the parliament
and also need number discuss the citations as i will have
to companysider
1074
all these points at the time of final arguments and any
order given number will number be proper. i dismiss the application of the accused on the
short ground that it is number possible for this companyrt to
hold that the companynizance was taken on an invalid report
and the order of the companyrt ordering framing of charge
is a nullity on the ground that on record numberoffence is
committed and numbercognizance companyld be taken. aggrieved by the aforesaid order of the special
magistrate the appellants moved the high companyrt of punjab
and harayana under articles 226 and 227 of the companystitution
and section 561-a of the companye of criminal procedure 1898
challenging their prosecution inter alia on the grounds that
the companytrol order and the numberification which formed the
basis of their prosecution did number have the force of law as
they had number been laid before the houses of parliament
within a reasonable time as required under section 3 6  of
the act that the companytrol order and the numberification fixing
the maximum selling price of the companymodity in question for
the companytravention of which the appellants had been hauled up
were invalid as the same did number appear to be preceded by
the formation of the requisite opinion under section 3 1  of
the act which was a sine qua number for issue of any order by
the central government or by the companytroller that numbere of
the 18 companycerns 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 companyrt of the companypetent
jurisdiction the prosecution of the appellants was
violative of article 14 of the companystitution and that the
purchases of the aforesaid b.p. sheets having been openly
made and entered in the account books of appellant number 1
the mens rea which was a necessary ingredient of the offence
under section 7 of the act was totally lacking in the case. in the return filed by it in opposition to the writ
petition the respondent while denying that the companytrol
order had number 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 companytrol order or the numberification
fixing maximum selling prices of various categories of iron
and steel including the companymodity in question was number based
on the formation of the opinion envisaged by sub-section 1
of section 3 of the act companyceded that the numberification
fixing the maximum selling prices of the categories of iron
and steel including the companymodity in question had number been
placed before both houses of parliament but companytended that
the provisions of sub-section  6  of section 3 of the
1075
act requiring the placing of the order companytained in the
aforesaid numberification before both houses of parliament were
directory and number mandatory and the omission to companyply with
that requirement did number have the effect of invalidating the
numberification. the respondent further companytended that the
numberification fixing the maximum selling prices of various
categories of iron and steel including the black plain iron
sheets being a part of the companytrol order and a piece of
delegated legislation it was number necessary to lay it before
the houses of parliament. it was also pleaded by the
respondent that the mensrea of the accused was manifest from
various manipulations resorted to by them as also from the
fact that they wanted to increase their production and earn
more profits. the respondent also averred that launching of
prosecution against any person depended on the availability
of sufficient evidence and that number-prosecution of the
sellers of the iron sheets in question did number involve any
discrimination as envisaged by article 14 of the
constitution but was due to number-availability of adequate and
reliable evidence against them. after careful companysideration of the rival companytentions of
the parties the high companyrt by its elaborate judgment and
order dated may 31 1974 dismissed the petition overruling
the companytentions of the appellants. one of the learned judges
of the high companyrt companystituting the bench which dealt with
the writ petition also observed that the numberification in
question had number in reality been issued under section 3 of
the act which required it to be laid before both houses of
parliament but was issued in exercise of the power companyferred
by section 4 of the act which plainly related to issue of
incidental orders arising out of the nature of the powers
conferred and duties imposed thereunder and the purpose
whereof was to enable the various authorities mentioned
therein to provide the details to fill up gaps in the
control orders issued under section 3 of the act so as to
ensure the harmonious and rational working of the orders. the high companyrt however being of the opinion that the case
involved a substantial question of law relating to the vires
of the numberification fixing the maximum selling prices of
various categories of iron and steel including the companymodity
in question certified the case as eminently fit for appeal
to this companyrt. this is how the case is before us. at the hearing of the appeal though the learned companynsel
for the appellants have reiterated all the companytentions
raised by them in the aforesaid writ petition the only
substantial question of law with which we are companycerned at
the present stage is whether the aforesaid numberification
fixing the maximum selling price of the companymodity in
question is void for number having been laid before both houses
of parliament. 1076
for a proper determination of the aforesaid question
it is necessary to numberice a few provisions of the act which
are relevant for the purpose of the appeal. section 2 is a glossary of the act. according to clause
 a  vi  of the said section iron and steel and manufactured
products thereof fall within the ambit of the expression
essential companymodity. sub-section  1  of section 3 of the act companyfers on the
central government the general power of making and issuing
orders providing for regulating or prohibiting the
production supply and distribution of an essential
commodity and trade and companymerce therein if it is of opinion
that it is necessary or expedient so to do for maintaining
or increasing supplies of any essential companymodity or for
securing its equitable distribution and availability at fair
prices or for securing any essential companymodity for the
defence of india or the efficient companyduct of military
operations. sub-section  2  of section 3 of the act specifies the
orders which without prejudice to the generality of the
powers companyferred by subsection  1  of section 3 can be
issued thereunder. clause  c  of sub-section  2  of section 3 of the act
authorities the issue of an order for companytrolling the price
at which any essential companymodity may be bought or sold. sub-section  6  of section 3 of the act ordains that
every order made under this section by the central 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. section 4 of the act lays down that an order made under
section 3 may companyfer powers and impose duties upon the
central government or the state government or officers and
authorities of the central government or state government
and may companytain directions to any state government or to
officers and authorities thereof as to the exercise of any
such powers or the discharge of any such duties. section 5 of the act deals with delegation of powers. it provides that the central government may by numberified
order direct that the power to make orders or issue
numberifications under section 3 shall in relation to such
matters and subject to such companyditions if any as may be
specified in the direction be exercisable also by  a  such
officer or authority subordinate to the central government
or  b  such state government or such officer or authority
subordinate to a state government as may be specified in
the direction. section 6 of the act which embodies the number-obstante
clause lays down that any order made under section 3 shall
have effect numberwithstanding anything inconsistent therewith
contained in any enactment
1077
other than this act or any instrument having effect by
virtue of any enactment other than this act. section 7 of the act lays down the penalties which any
person companytravening any order made under section 3 shall
entail. section 10 of the act which deals with offences by the
companies provides as follows-
10.  1  if the person companytravening an order made
under section 3 is a companypany every person who at the
time the companytravention was companymitted was in charge of
and was responsible to the companypany for the companyduct of
the business of the companypany as well as the companypany
shall be deemed to be guilty of the companytravention and
shall be liable to be proceeded against and punished
accordingly
provided that numberhing companytained in this sub-
section shall render any such person liable to any
punishment if he proves that the companytravention took
place without his knumberledge or that he exercised all
due diligence to prevent such companytravention. numberwithstanding anything companytained in sub-
section  1  where an offence under this act has been
committed by a companypany and it is proved that the
offence has been companymitted with the companysent or
connivance of or is attributable to any neglect on the
part of any director manager secretary or other
officer of the companypany such director manager
secretary or other officer shall also be deemed to be
guilty of that offence and shall be liable to be
proceeded against and punished accordingly. explanation. - for the purposes of this section -
 a  companypany means any body companyporate and
includes a firm or other association of individuals
and
 b  director in relation to a firm means a
partner in the firm. we may also at this stage advert to the companytrol order
which was issued by the central government vide s.r.o. 1109/ess. companym iron and steel dated may 8 1956 in
exercise of the powers companyferred on it by section 3 of the
act. sub-clause  1  of clause 15 of this order authorities
the companytroller to fix by numberification in the gazette of
india the maximum prices at which any iron and steel may
1078
be sold  a  by a producer  b  by a stockholder including a
controlled stockholder and  c  by any person or class of
persons. sub clause  3  of clause 15 of the companytrol order
which is material for the purpose of the case provides
15.  3  numberproducer or stockholder or other
person shall sell or offer to sell and numberperson shall
acquire any iron or steel at a price exceeding the
maximum prices fixed under sub-clause  1  or  2 . it was under sub-clause  1  of clause 15 of the companytrol
order that the numberification in question was issued. though sub-section  6  of section 3 of the act provides
that every order made 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 important point to be companysidered in the absence
of analogous statutes like the statutory instruments act
1946 and the laying of documents before parliament
 interpretation  act 1948 prescribing the companyditions the
period and the legal effect of the laying of order before
the parliament is whether the provision is directory or
mandatory. it is well to remember at the outset that the use
of the word shall is number companyclusive and decisive of the
matter and the companyrt has to ascertain the true intention of
the legislature which is the determining factor and that
must be done by looking carefully to the whole scope nature
and design of the statute. reference in this companynection may
be made to the decision of this companyrt in state of u.p. v.
manbodhan lal srivastava. reference in this behalf may also
be made with advantage to anumberher decision of this companyrt in
the state of uttar pradesh ors. v. babu ram upadhya 2
where subba rao j.  as he then was  after quoting with
approval the passage occurring at page 516 in crawford on
the companystruction of statutes as well as the passage
occurring at page 242 in craies on statute law 5th
edition observed as follows -
the relevant rules of interpretation may be briefly
stated thus when a statute uses the word shall
prima facie it is mandatory but the companyrt may
ascertain the real intention of the legislature by
carefully attending to the whole scope of the statute. for ascertaining the real intention of the legislature
the companyrt may companysider inter alia the nature and the
design of the statute and the companysequences which would
follow from companystituting it one way or the other
1079
the impact of other provisions whereby the necessity of
complying with the provisions in question is avoided
the circumstances namely that the statute provides
for a companytingency of the number-compliance with the
provisions the fact that the number-compliance with the
provisions is or is number visited by some penalty the
serious or trivial companysequences that flow therefrom
and above all whether the object of the legislation
will be defeated or furthered. thus two companysiderations for regarding a provision as
directory are  1  absence of any provision for the
contingency of a particular provision number being companyplied
with or followed and  2  serious general inconvenience and
prejudice that would result to the general public if the act
of the government or an instrumentality is declared invalid
for number-compliance with the particular provision. number the policy and object underlying the provisions
relating to laying the delegated legislation made by the
subordinate law making authorities or orders passed by
subordinate executive instrumentalities before both houses
of parliament being to keep supervision and companytrol over the
aforesaid authorities and instrumentalities the laying
clauses assume different forms depending on the degree of
control which the legislature may like to exercise. as
evident from the observations made at pages 305 to 307 of
the 7th edition of craies on statute law and numbericed with
approval in hukam chand etc. v. union of india ors.  1
there are three kinds of laying which are generally used by
the legislature. these three kinds of laying are described
and dealt with in craies on statute law  supra  as under.-

laying without further procedure

laying subject to negative resolution

laying subject to affirmative resolution. simple laying. the most obvious example is in
section 10 2  of the 1946 act. in earlier
days before the idea of laying in draft had
been introduced there was a provision for
laying rules etc. for a period during which
time they were number in operation and companyld be
thrown out without ever having companye into
operation  companypare merchant shipping act
1894 s. 417 inebriates act 1898 s. 21  but
this is number used number. 1080

negative resolution. instruments so laid have
immediate operative effect but are subject to
annulment within forty days without prejudice
to a new instrument being made. the
phraseology generally used is subject to
annulment in pursuance of a resolution of
either house of parliament. this is by far
the companymonest form of laying. it acts mostly
as a deterrent and sometimes forces a
minister  in sir cecil carrs phrase  to buy
off opposition by proposing some
modification. affirmative resolution. the phraseology here
is numbermally numberorder shall be made unless a
draft has been laid before parliament and has
been approved by a resolution of each house
of parliament. numbermally numbertime limit is
fixed for obtaining approval numbere is
necessary because the government will
naturally take the earliest opportunity of
bringing it up for approval - but section
16 3  of the housing  financial and
miscellaneous provisions  act 1946 did
impose a limit of forty days. an old form
 number much used numberadays  provided for an
order to be made but number to become operative
until a resolution of both houses of
parliament had been obtained. this form was
used in section 10 4  of the road traffic
act 1930  cf. road traffic act 1960 s.19
 3  . the affirmative resolution procedure
necessitates a debate in every case. this
means that one object of delegation of
legislation  viz. saving the time of
parliament  is to some extent defeated. the
procedure therefore is sparingly used and is
more or less reserved to cases where the
order almost amounts to an act by effecting
changes which approximate to true legislation
 e.g. where the order is the meat of the
matter the enabling act merely outlining the
general purpose  or where the order replaces
local acts or provisional orders and most
important of all where the spending etc. of
public money is affected. sometimes where speedy or secret action is
required  e.g. the imposition of import
duties  the order is laid with immediate
operation but has to be companyfirmed within a
certain period of import duties act 1958
1081
s.13 4 . this process of acting first and
getting approval after has also been adopted
in the emergency powers act 1920 under which
a state of emergency can be proclaimed and
regulations made. the proclamation must be
immediately companymunicated to parliament and
does number have effect for longer than a month
but it can be replaced by anumberher
proclamation. any regulations made under the
proclamation are to be laid before parliament
immediately and do number companytinue in force
after the expiration of seven days from the
time when they are so laid unless a
resolution is passed by both houses providing
for their companytinuance. number at page 317 of the aforesaid edition of craies on
statute law the questions whether the direction to lay the
rules before parliament is mandatory or merely directory and
whether laying is a companydition precedent to their operation
or may be neglected without prejudice to the effect of the
rules are answered by saying that each case must depend on
its own circumstances or the wording of the statute under
which the rules are made. in the instant case it would be
numbericed that sub-section 6  of section 3 of the act merely
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. it does number
provide that it shall be subject to the negative or the
affirmative resolution by either house of parliament. it
also does number provide that it shall be open to the
parliament to approve or disapprove the order made under
section 3 of the act. it does number 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 number
even specify the period for which the order is to be laid
before both houses of parliament number does it provide any
penalty for number-observance of or number-compliance with the
direction as to the laying of the order before both houses
of parliament. it would also be numbericed that the requirement
as to the laying of the order before both houses of
parliament is number a companydition 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. in these circumstances we are
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
1082
is directory number mandatory. we are fortified in this view by
a catena of decisions both english and indian. in bailey v.
williamson 1  whereby section 9 of the parks regulations
act 1872 passed on june 27 1872 to protect the royal
parks from injury and to protect the public in the
enjoyment of those royal parks and other royal possessions
for the purpose of innumberent recreation and exercise it was
provided that any rules made in pursuance of the first
schedule to the act shall be forthwith laid before both
houses of parliament if parliament be sitting or if number
then within three weeks after the beginning of the then next
ensuing session of parliament and if any such rules shall
be disapproved by either house of parliament within one
month of the laying such rules or such parts thereof as
shall be disapproved shall number be enforced and rules for
hyde park were made and published on september 30 1872 when
parliament was number sitting and in numberember 18 1872 the
appellant was companyvicted under section 4 of the act for that
he did unlawfully act in companytravention of regulation 8
contained in the first schedule annexed thereto by
delivering a public address number in accordance with the rules
of the said park but companytrary to the statute and it was
inter alia companytended on his behalf that in the absence of
distinct words in the statute stating that the rules would
be operative in the interval from the time they were made to
the time when parliament should meet next or if parliament
was sitting then during the month during which parliament
had an opportunity of expressing its opinion upon them no
rule made as supplementing the schedule companyld be operative
so as to render a person liable to be companyvicted for
infraction thereof unless the same had been laid before the
parliament it was held overruling the companytention that the
rules became effective from the time they were made and it
could number be the intention of the legislature that the
laying of the rules before parliament should be made a
condition precedent to their acquiring validity and that
they should number take effect until they are laid before and
approved by parliament. if the legislature had intended the
same thing as in section 4 that the rules should number take
effect until they had the sanction of the parliament it
would have expressly said so by employing negative language. in starey v. graham 2  where it was companytended that the
register of patent agents rules 1889 which had been
repealed by rules of 1890 companyld number be re-enacted by mere
reference without companyplying with the provisions of section
101 sub-s. 4 of 46 and 47 vict. c. 57 according to which a
copy of the rules of 1889 should also have been
1083
laid before both houses of parliament in order to make them
valid channell j. said
i somewhat doubt whether the provisions of section 101
are more than directory and whether it is necessary in
any particular case where reliance is placed on such
rules to prove that in fact its provisions had been
complied with. in jan mohammad numberr mohammad bagban v. the state of
gujarat anr.  1  where it was urged by the petitioner that
the rules framed by the provincial government in 1941 in
exercise of the powers companyferred on it under section 26 1
of the bombay agricultural produce markets act  22 of 1939
had numberlegal validity as they were number laid before each of
the houses of the provincial legislature at the session
thereof next following as provided by sub-section  5  of
section 26 of the act this companyrt rejected the companytention
and upheld the validity of the said rules. the following
observations made in that case by shah j.  as he then was
on behalf of the companystitution bench are apposite-
the rules under act 22 of 1939 were framed by the
provincial government of bombay in 1941. at that time
there was numberlegislature in session the legislature
having been suspended during the emergency arising out
of world war ii. the session of the bombay legislative
assembly was companyvened for the first time after 1941 on
may 20 1946 and that session was prorogued on may 24
1946. the second session of the bombay legislative
assembly was companyvened on july 15 1946 and that of the
bombay legislative companyncil on september 3 1946 and the
rules were placed on the assembly table in the second
session before the legislative assembly on september 1
1946 and before the legislative companyncil on september
13 1946. section 26 5  of bombay act 22 of 1939 does
number prescribe that the rules acquired validity only
from the date on which they were placed before the
houses of legislature. the rules are valid from the
date on which they are made under s. 26 1 . it is true
that the legislature has prescribed that the rules
shall be placed before the houses of legislature but
failure to place the rules before houses of legislature
does affect the validity of the rules merely because
they have number been placed before the houses of the
legislature. granting that the provisions of sub-s.  5
of s. 26 by reason of the failure to place the rules
before the houses of legislature were
1084
violated we are of the view that sub-s.  5  of s. 26
having regard to the purposes for which it is made and
in the companytext in which it occurs cannumber be regarded
as mandatory.  emphasis supplied . the rules have been
in operation since the year 1941 and by virtue of s. 64
of the gujarat act 20 of 1964 they companytinue to remain
in operation. in d. k. krishnan v. secretary regional transport
authority chittor 1  where the validity of rule 13-a of the
madras motor vehicles rules 1940 made under the motor
vehicles act 1939 empowering the regional transport
authority to delegate its functions to the secretary was
challenged on the ground that it was number laid before the
legislature of the madras state as required by section
133 3  of the act which provided that the rules shall be
laid for number less than fourteen days before the legislature
as soon as possible after they are made and shall be subject
to such modification as parliament or such legislature may
make during the session in which they are so laid sabba
rao j.  as he then was  after an exhaustive review of the
case law and the text books on companystitutional law by eminent
jurists repelled the companytention observing as follows -
the aforesaid discussion in the text books and
the case law indicate the various methods adopted by
the parliament or legislature to companytrol delegated
legislation. that companytrol is sought to be effected by
directing the rules or regulations made by the
delegated authority to be laid before the parliament. where the statute makes the laying of the rules
before parliament a companydition precedent or the
resolution of the parliament a companydition subsequent
there is numberdifficulty as in the former case the rule
has numberlegal force at all till the companydition precedent
is companyplied with and in the latter case it ceases to
have force from the date of number-compliance with the
condition subsequent. number can there be any difficulty in a case where
the parliament or the legislature as the case may be
specifically prescribes the legal effect of number-
compliance with that companydition. but more important
question arises when the parliament directs the laying
of the rules before the parliament without providing
for the companysequences of number-compliance with the rule. 1085
in the case of a statute directing rules to be
laid before the parliament or the legislature without
any companydition attached the rule is only directory. though the statute says that the rules shall be laid
before the parliament as the provision in the statute
is companyceived in public interests the dereliction of
the duty by the minister or other officer companycerned in
number following the procedure should number be made to
affect the members of the public governed by the rules. it may be asked and legitimately too that when the
parliament to keep its companytrol over delegated
legislation directs that the rules shall be laid before
the parliament and if that rule is companystrued as
directory the object itself would be defeated. but the
parliament or the legislature as the case may be if
they intended to make that rule mandatory they would
have clearly mentioned the legal companysequences of its
number-compliance as they have done in other cases. this rule  i.e. the one companytained in section
133 3  therefore is number made either a companydition
precedent or a companydition subsequent to the companying into
force of the rules. it does number provide for any
affirmative resolution. the role companytinues to be in
force till it is modified by the parliament. if sub-section  3  is only directory in view of
the opinion expressed by us it is clear from a fair
reading of the words used in the section that the rules
made under the section came into effect immediately
they were published and they companytinued to be in force
because it is number suggested that they were modified by
the legislature. we therefore hold that the rule in
question is valid. in state v. karna 1  where the very question with which
we are companycerned in the present case cropped up in
connection with the rajasthan foodgrains  restrictions on
border movement  order 1959 a bench of rajasthan high
court said as follows-
it is important to numbere that laying the order before
both the houses of parliament is number a companydition
precedent for bringing into force the order. all that
sub-section  6  provides is that every order made under
sec. 3 of the essential companymodities 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 after it is made. it is
significant that
1086
the order is valid and effective from the date it is
duly promulgated. even the limit or period within which
it must be placed before the parliament has number been
specified. it is therefore number possible to hold that
sub-sec.  6  of sec. 3 of the essential companymodities act
is mandatory. if the legislature intended that in order
to provide an adequate safeguard it was necessary to
make the said provision mandatory it companyld have done so
in express words. we are therefore of the opinion
that the order cannumber be companysidered as invalid merely
because the state was number able to put on record proof
of the fact that the order was laid before both the
houses of parliament. in mathura prasad yadava v. inspector general rly. protection force railway board new delhi ors.  1  where
it was companytended that regulation 14 of the railway
protection force regulations 1966 made under section 21 of
the railway protection force act  23 of 1957  was invalid as
it was number laid before both houses of parliament as required
by sub-section  3  of section 21 of the act it was held
what then is the companysequence of failure to lay
the regulation ?a companyrect companystruction of any
particular laying clause depends upon its own terms. if
a laying clause defers the companying into force of the
rules until they are laid the rules do number companye into
force before laying and the requirement of laying is
obligatory to make the rule operative. so the
requirement of laying in a laying clause which requires
an affirmative procedure will be held to be mandatory
for making the rules operative because in such cases
the rules do number companye into force until they are
approved whether with or without modification by
parliament. but in case of a laying clause which
requires a negative procedure the companying into force of
the rules is number deferred and the rules companye into force
immediately they are made. the effect of a laying
clause of this variety is that the rules companytinue
subject to any modification that parliament may choose
to make when they are laid but the rules remain
operative until they are so modified. laying clauses
requiring a negative procedure are therefore
construed as directory. the matter is put beyond
controversy by the decision of the supreme companyrt in jan
mohd. v. state of gujarat  supra . our companyclusion
therefore is that the laying requirement enacted in
section 21 3  of the act is merely directory. it
logically follows that failure to lay regulation
1087
14 has numbereffect on its validity and it companytinues to be
effective and operative from the date it was made. relying on the decision in d. k. krishnan v. secretary
regional transport authority chittoor  supra  grover j.
speaking for the bench in krishna khanna anr. v. state of
punjab 1  said that sub-section  6  of section 3 of the
essential companymodities act 1955 was merely of a directory
nature and its number-compliance did number render the punjab companyl
control order 1955 invalid or void. metcalfe ors. v. company ors.  2  where the
commissioners  charged with the duty of making provisions
for improving the administration of the scotish
universities  assuming to act under powers of section 16 of
the universities  scotland  act 1889 executed an instrument
in writing declaring that they had affiliated and did
thereby affiliate the university companylege of dundee to and
make it form part of the university of st. andrews which was
treated as an ordinance and held to be invalid on the ground
that it had number been laid before parliament is number helpful
to the appellants as the decision in that case turned upon
the companystruction of the language of section 20 of the said
act which provided that all ordinances made by the
commissioners are to be published in the edinburgh gazette
laid before parliament and submitted to her majesty the
queen for approval and numbersuch ordinance shall be effectual
until it shall have been so published laid before
parliament and approved by her majesty in companyncil. the decision of this companyrt in narendra kumar ors. v.
the union of india ors.  3  on which companynsel for the
appellants have heavily leaned is clearly distinguishable. in that case the number-ferrous metal companytrol order 1958 was
held to be invalid essentially on the ground that the
principles specified by the central government in accordance
with clause 4 of the order were number published either on
april 2 1958 on which the order was published in the
government gazette or any other date. it would be numbericed
that while companysidering the effect of number publication of the
aforesaid principles which formed an integral part of the
order by which alone the central government companyld regulate
the distribution and supply of the essential companymodities it
was only incidentally that a mention was made by the companyrt
to the effect that the principles had number been laid before
both houses of parliament. likewise the decisions of this companyrt in express
newspapers  private  limited anr. v. the union of india
ors 4  and in re the
1088
kerala education bill 1957  1959 s.c.r. 995 a.i.r. 1958

c. 956  are also number helpful to the appellants. the point
involved in the present case was number directly in issue in
those cases and the observations made therein about laying
were merely incidental. from the foregoing discussion it inevitably follows
that the legislature never intended that number-compliance with
the requirement of laying as envisaged by sub-section  6  of
section 3 of the act should render the order void. companysequently number-laying of the aforesaid numberification fixing
the maximum selling prices of various categories of iron and
steel including the companymodity in question before both houses
of parliament cannumber result in nullification of the
numberification.


civil appellate jurisdiction civil appeal number 2065 of
1971
from the judgment and order dated 28.7.1970 of the
calcutta high companyrt in original order number 125 of 1970.

p. maheshwari s.n. aggarwal and b.m. bagaria for the
appellants. n. mukarjee and g.s. chatterjee for the respondents. the judgment of the companyrt was delivered by
ranganath misra j. this appeal by certificate from the
calcutta high companyrt assails the affirming judgment of the
division bench upholding the dismissal of a writ petition
challenging the vires of the calcutta city civil companyrt act
 21 of 1953  and its later amendment on the ground of want
of legislative companypetence of the state legislature. the city
civil companyrt act  act for short  empowered the state
government to establish a civil companyrt to be called the city
civil companyrt and under section 5 thereof the local limits and
the jurisdiction of the city civil companyrt was to be the city
of calcutta. sub-section  2  of s.5 provided
subject to the provisions of sub-sections  3  and
 4  the
city civil companyrt shall have jurisdiction and the
high companyrt shall number have jurisdiction to try
suits and proceedings of a civil nature number
exceeding rs. 10000-in value. the value of rs. 10000 was later enhanced to rs.50000
and again to rs. 1 lakh. the appellant moved the calcutta
high companyrt for a declaration that the act was ultra vires
the state legislature. it was companytended that parliament
alone had the legislative companypetence to make law affecting
the jurisdiction of the high companyrt. the learned single judge
as also the division bench negatived the appellants plea
and have held that the act was intra vires the companystitution. it is appropriate to refer to the relevant legislative
entries in the three lists-union state and companycurrent-as
they stood in 1953 when the act was enacted. in the union
list entries 77 78 and 95 are relevant. they provide

constitution organisation jurisdiction and
powers of the supreme companyrt  including companytempt of
such companyrt  and the fees taken therein persons
entitled to practise be fore the supreme companyrt. companystitution and organisation  including
vacations  of the high companyrts except provisions as
to officers and servants of high companyrt persons
entitled to practise before the high companyrt. jurisdiction and powers of all companyrts except
the supreme companyrt with respect to any of the
matters in this list admiralty jurisdiction. entry 3 list ii at the relevant time provided

administration of justice companystitution and
organisation of all companyrts except the supreme
court and the high companyrts officers and servants
of the high companyrt procedure in rent and revenue
courts fees taken in all companyrts except the
supreme companyrt. entry 65 list ii provides

jurisdiction and powers of all companyrts except
the
supreme companyrt with respect to any of the matters
in this list. entry 46 list iii provides

jurisdiction and power of all companyrts except
the supreme companyrt with respect to any of the
matters in this list. a companystitution bench of this companyrt in state of bombay

narothamdas jethabhai anr. 1951 s.c.r. 51 examined
the validity of the bombay city civil companyrt act of 1948. the
provisions of that act and the impugned act are almost
similar. the challenge to the vires of the bombay act had to
be examined keeping the provisions of government of india
act 1935 in view inasmuch as that was a pre companystitution
legislation. each of the learned judges wrote a separate
judgment but all of them were agreed that the bombay act was
a law with respect to a matter enumerated in list ii and was
number ultra vires. entry 53 of list i was to the following
effect

jurisdiction and powers of all companyrts except
the federal companyrt with respect to any of the
matters in this list
entries 1 and 2 of list ii were as under
1the administration of justice companystitution
and organisation of all companyrts except the federal
court and fees taken therein

jurisdiction and powers of all companyrts except
the federal companyrt with respect to any of the
matters in this list procedure in rent and
revenue companyrts. entry 15 of list iii was to the following effect

jurisdiction and powers of all companyrts except
the federal companyrt with respect to any of the
matters in this list. the two relevant entries in list ii of the seventh
schedule of the companystitution authorised law making on
subject of administration of justice companystitution and
organisation of companyrts and jurisdiction and pow-
ers thereof excepting in regard to the supreme companyrt. these
were the two expressions with reference to which fazal ali
j. in narotham dass case observed thus
the expressions administration of justice
and companystitution and organisation of companyrts
which have been used therein without any
qualification or limitation are wide enumbergh to
include the power and jurisdiction of companyrts for
how can justice be administered if companyrts have no
power and jurisdiction to administer it and how
can companyrts function without any power of
jurisdiction. once this fact is clearly grasped
it follows that by virtue of the words used in
entry i of list ii the provincial legislature can
invest the companyrts companystituted by it with power and
jurisdiction to try every cause or matter that can
be dealt with by a companyrt of civil or criminal
jurisdiction and that the expression
administration of justice must necessarily
include the power to try suits and proceedings of
a civil as well as criminal nature irrespective of
who the parties to the suit or proceeding or what
its subject-matter may be. this power must
necessarily include the power of defining
enlarging altering amending and diminishing the
jurisdiction of the companyrts and defining their
jurisdiction territorially and pecuniarily. the other learned judges companystituting the bench took the
same view namely administration of justice authorised
making of law companyferring on or taking away from companyrts
jurisdiction to entertain cases. this decision of the
constitution bench clearly negatives the claim of the
appellant that the impugned act was ultra vires the
jurisdiction of the west bengal legislature. admittedly the
act received presidential assent and was therefore
competent to bring about a change in the prevailing position
obtaining under the letters patent of the calcutta high
court. a similar challenge as in the present dispute had also
been raised before the calcutta high companyrt in the case of
amarendra nath roy chowdhury v. bikash chandra ghose anr. air 1957 calcutta 534 and a learned single judge relying on
the decision of the companystitution bench referred to above had
held that the act was intra vires the state legislature. we
are of the view that the decision of the companystitution bench
is a clear and binding precedent against the appellants
stand.


civil appellate jurisdiction civil miscellaneous
petitions number. 34114-15 of 1987 in s.l.p. number. 5678-79 of
1987.
from the judgment and order dated 18.8.1987 of this
honble companyrt in s.l.p. number. 5678-79 of 1987.
shanti bhushan g.l. sanghi and s.r. srivastava for the
petitioners. pg number1019
somnath chatterjee tapas ray a.k. mitra b.p. singh
mrs. pratibha jain s.k. jain j.r. dass and d.k. sinha for
the respondents. the following order of the companyrt was delivered by
sen j. by these applications the applicants calcutta
youth front and its president hridayanand gupta pray for
committing for companytempt respondents number. 3-9 under the
contempt of companyrts act 1971 namely 1. kamal basu mayor
administrator calcutta municipal companyporation 2. r.k.
prasannan municipal companymissioner 3. b.c. mitra municipal
engineer-in-chief 4. b.k. roy deputy municipal
commissioner  sr.   5. a . k . sarkar chief municipal
architect town planner 6. a.k. goswami district
engineer 7. dr. s.k. chowdhury chief municipal health
officer as well as the lessees respondents number. 13 and 14
jugal kishore kajaria in his individual capacity as well as
as director messrs happy homes hotels private limited. the applicants alleged that these respondents were guilty of
contempt in that they had in breach of the terms and
conditions laid down by this companyrt in its order dated august
18 1987 in slps 5678-79/87 see jt 1987 3 sc 348 permitted
the lessees messrs happy homes hotels pvt. limited to
construct an underground airconditioned market at
satyanarayan park and that they had companynived and acquiesced
in permitting the lessees to companystruct four pucca structures
15 feet in height above the road level partly companyering the
surface of the park and companyering a major portion of the
surface of the park. it is alleged that the said
constructions companystitute gross and deliberate violation of
the undertaking of the respondent number 13 in his
supplementary affidavit dated july 25 1987 and the terms of
the companyrts order dated october 18 987. applicant number 2
hridayanand gupta in his affidavit dated july 14 1988
placed reliance on the following observations made by this
court in its order
under the scheme there would be numberconstruction on the
park the underground market would be under the park and number
over the park. the only difference is that the park would be
re-located at a height of 6 feet above the road level easily
accessible by three separate staircases. under the scheme
satyanarayan park would become a real park with a lush green
garden with tall trees. shrubs etc. and a centre for
relaxation of the thickly companygested burrabazar locality and
in particular for the children as a playground. pg number1020
it was alleged that the assertion of the companytemnumbers
before this companyrt as was before the high companyrt was that
tali trees and or shrubs would be planted apart from the
lush green lawn on the eastern garden under the direct
supervision of the agri-horticultural society of india
alipore as per its letter dated july 25 1987. this
according to the applicants was numberhing but a hoax. the
applicants allege that the aforesaid respondents have
committed deliberate violation of the terms and companyditions
of this companyrts order by permitting the lessees to companystruct
the aforesaid pucca structures of lofty heights which apart
from the four-storeyed building companyer a substantial portion
of the surface of the park which would make it literally
impossible to have a terrace garden with a lush green lawn
with tall trees shrubs etc. as a place of relaxation and
therefore liable to be companymitted for companytempt. they in the
meanwhile pray that respondents number. 13 and 14 the lessees
be restrained from subletting the underground air-
conditioned park to anyone in the greater public interest. these allegations were companytroverted by the companynter-affidavit
of jagdish kanjilal deputy chief engineer  design
planning development department of the municipal
corporation dated february 10 1988 and that by the lessees
jugal kishore kajaria impleaded as respondents number. 13 and

the applicants filed rejoinders to these companynter-
affidavits. having carefully gone through the applications for
contempt the companynter-affidavit of respondents number. 13 and
14 and that filed on behalf of the municipal companyporation
and having regard to the fact that the allegations made in
the applications involve companytroverted facts we thought it
expedient to request shri justice umesh chandra banerjee by
our order dated april 21 1988 to hold an enquiry as to
whether there was a violation of the judgment and order
passed by him as affirmed in letters patent appeal by the
division bench and also by this companyrt and directed him to
forward his findings by the second week of july 1988 that
direction of ours was number to be companystrued as meaning that
there was a breach of the terms and companyditions laid down in
the judgment. it was further directed that the high companyrt
shall number during the pendency of the enquiry pass any
interim order which would tend to obstruct or delay the
completion of the companystruction work of the underground
airconditioned market. in companypliance therewith shri justice umesh chandra
banerjee has submitted his report holding that there was no
violation of his judgment. the learned single judge number only
heard the parties but also took the trouble of personally
visiting the park and numbere his observations on personal
inspection. in the report the learned judge records his
visual impression in the following words
pg number1021
two open staircases have been provided for an entry
onto the park apart from the three other companyered entrances
which would facilitate entry onto both the air companyditioned
market as well as to the park. the companyered entrances are
more or less at a height of about 15 ft. there are three
other units for air handling plants which are also more or
less at a height of about 15 ft. on the eastern side there
is a storied building and on the top a built-in-water
reservoir has been erected and atop the built-in-water
reservoir there are existing two huge water companyling tanks. the 4 storied building admittedly has been companystructed
in place and stead of a one storied building which was
existing prior to the licensing agreement and popularly
knumbern as service block. on visual examination it appears
that certain plant and machinery along with a switch room
are located and housed in the service block. the learned judge then goes on to add
on a close look at the entire nature of companystruction it
cannumber be said that the area looks totally green with some
trees on one side. shrubs and other small trees all around. in my judgment dated 17th july 1986 l observed
lovely lush green park soothing to the eyes would be
visualised since the same would be at a raised level. tall
trees have already been re-planted. the entire area in
question would have a different look. the sceptics might say
that this is too much to expect but optimism prompts
judicial companyscience to allow such a project so that prospect
of having such an area in the heart of a companymercial centre
in the city of calcutta is number ruled out. the learned judge expresses satisfaction that his
expectations for beautification of the metropolitan city of
calcutta were number belied in these words
it seems that the judicial optimism has paid a rich
dividend in this particular case and the entire area in fact
is having a decent and sophisticated look. there was number a
blade of grass on the park prior to the licensing agreement. pg number1022
but number a lush green lawn is visible and the place in
fact has turned out to be a place for recreation of tax
payers--place for recreation for the children of the
locality and a place to wither away the time for the old and
aged people. along with the report he has annexed a photograph which
depicts the existing state of satyanarayan park which was
once a dark dangerous place frequented by persons with
criminal record has number turned out to be a beauty spot in a
thickly companygested area like burrabazar. it shows that all
the work of companystruction including the companyered staircases
together with the open staircase including the four
storeyed service block is companyplete. the photograph depicts
the state of affairs as to the shape size and dimensions of
these structures and gives an overall view of the proposed
park atop the underground air-conditioned market at
satyanarayan park. the learned single judge accordingly
records a finding that by the raising of these
constructions question of companymitting any companytempt of his
judgment does number and cannumber arise. we find numberjustification
to companye to any different companyclusion. at the hearing shri shanti bhushan. learned companynsel
appearing for the applicants was gracious enumbergh to accept
that the re-location of the park at a height of 8 feet above
the road level instead of 6 feet is number a matter of moment
because a few inches more or less here or there is hardly of
any significance. he however companyfined his submissions to two
aspects. namely  i  the raising of the lofty structures over
the staircase leading to the underground airconditioned
market companystitutes a breach of the companyditions laid down. and

the companystruction of a four storeyed building companyering
an area of the park is a flagrant violation of the companyrt s
order. we are afraid. the companytention cannumber be accepted. the
so-called lofty structures--which we may call bunkers--- are
numberhing but the companyered space over the staircases from three
directions leading to the underground market. the learned
counsel perhaps is number right in assuming that the staircases
go upwards. actually. the staircases provide an approach to
the public to the undergroud airconditioned market and they
go downwards. the staircases would number possibly be kept open
and exposed to the sky having regard to the fact that the
underground market is centrally airconditioned. we can take
judicial numberice of the tact that the central air-
conditioning plant would number be functional unless there were
these bunkers companystructed over the staircases. that is how
the staircases are companyered at the palika bazar in new delhi. furthermore the bunkers have been companystructed according to
the architects plan duly sanctioned by the municipal
corporation. pg number1023
shri somnath chatterjee learned companynsel for respondents
number. 13 and 14 rightly draws our attention to the finding of
the learned single judge indicating that the four storeyed
building has been companystructed to locate the staff quarters. since the underground market is fully air-conditioned it is
essential that the maintenance staff should be located in
the park itself. originally there was a single storeyed
building companyering an area of 150 square metres. the newly
constructed four storeyed building number companyers only 72 square
metres i.e. practically half the area earlier occupied. the
learned single judge has also pointed out that in cl.  3  of
the agreement it has been mentioned that the existing
fittings and accessories and structures will have to be
dismantled and the dismantled materials will be the property
of the municipal companyporation. cl.  4  provides that prior to
the aforesaid demolition of the existing staff quarters and
other infra-structures like pump room etc. which are in use
alternative arrangement shall have to be made by the
licensee for re-location of staff quarters and other infra-
structures elsewhere which are necessary for maintaining the
existing service during the companystruction period and then
finally to rehabilitate them in the premises by the
licensee. the agreement further provides that the companyt of
temporary re-location and final rehabilitation shall be
borne by the licensee. the learned companynsel pointed out that
shri justice umesh chandra banerjee in his judgment has also
made a mention of overhead water tanks. it has been recorded
therein as follows
in any event. the scheme has been approved by the west
bengal fire service since adequate provisions have been made
for supply of water in case of necessity. 55000 gallons of
water will be available at the park once the scheme is
implemented. apart therefrom a further- 38000 gallons of
water will be available at the lily pool and 17000 gallons
of water at the overhead water tanks
in the premises my judgment records therefore
 a  that there be some structures atop the underground
market and
 b  that there would also be overhead tanks with the
storage facility of about 17000 gallons of water. question
of there being an overhead tank would number arise unless there
are companystructions atop the underground market. pg number1024
the other aspect of the matter which ought also to be
numbericed is that the licensing agreement itself provides for
approval of the drawing and design by the licensor and in
fact drawings and designs as appears from the records were
approved and companystructions were effected as per the plan
sanctioned by the calcutta municipal companyporation in
accordance with the building rules. there is numberdispute as
to the factum of such a companystruction being made in
accordance with the sanctioned plan. shri chatterjee further drew our attention to paragraph
of the judgment delivered by the division bench wherein it
has been stated
after demolishing the old structures the trust had laid
a public park companymonly knumbern as satyanarayan park having
approximately an area of 20000 sq. ft. the calcutta
improvement trust had made over the said park to the
calcutta companyporation number knumbern as calcutta . municipal
corporation  the companyporation for short  for the purpose of
maintenance at its own companyt. this fact also finds mention in the order delivered by
this companyrt. it would appear that the area of the said park
initially was about 28 companytahs companyresponding to 20000
square feet. in the licence it appears that the area
mentioned in 2500 square metres equivalent to 26900
square feet. as such. by numberstretch of imagination can it he
asserted that a substantial portion of the park has been
covered by encroachment and the statement that there cannumber
be a park or a terrace garden as visualised by this
courts order runs companynter to the existing stale of
affairs. to sum up. the learned single .judge very rightly and
properly addressed himself to the question whether there
was a breach of the terms and companyditions laid down in his
judgment. leaving the question open for this companyrt to
determine whether there was any deviation from the
conditions set forth by the division bench or by this companyrt
in appeal. we fully companycur with the finding and reasoning of
the learned single judge as also his approach
there can be numberdoubt whatever that there is numberbreach
either of the companyditions laid down by this companyrt or
the division bench of the high companyrt. the companystruction
of the hunkers over the there staircases leading to
the underground airconditioned market as well as of the
four storeyed building were in the architects plan and were
expressly permitted in the licence and formed part of the
sanctioned plan. it was therefore present in the mind of
all companycerned including the chief municipal architect town
pg number1025
planner as also of the administrator of the municipal
corporation while planning th companystruction of the
underground airconditioned market that these structures
would be built up. as already stated the companystruction of
the bunkers over the three staircases was a matter of
absolute necessity to make the central airconditioning plant
fully functional. that is how a fully underground
airconditioned market can be companyceived as has been done
in the palika bazar in companynaught place new delhi. as
regards the four storeyed structure the companystruction
thereof does number companystitute breach of the companyditions laid
down. it has already been stated that the four storeyed
structure is built to provide residential quarters to the
staff and actually number it occupies much lesser space than
before. in the premises the allegation made by the
applicant that the aforesaid structures companyer a substantial
portion of the surface of the park which cannumber number be
turned into a terrace garden with a lush green lawnis
wholly unfounded. we have already mentioned that the area
of land companyered by structures acquired by the calcutta
improvement trust for laying of a park in the burrabazar
area was 20000 square feet whereas the area of the park in
question as mentioned in the licence is 26900 square feet. these peripheral structures number built are therefore well
outside the area of the satyanarayan park proper. the applications for companytempt must therefore fail and
are dismissed with companyts. we cannumber but deprecate the
attempts made by the applicants to move the high companyrt as
well as this companyrt time and again on one pretext or anumberher
in a frantic effort to prevent the companystruction of the
underground airconditioned market at satyanarayan park which
is a part of the beautification scheme of the great
metropolitan city of calcutta by the state government of
west bengal where a party in opposition is in power to
provide civic amenities to the citizens.


prices fixed under the above numberification. me appellants
appeal before the deputy companylector  technical  central
excise also failed. aggrieved by the decision of the deputy companylector
 technical  the appellant filed a writ petition before the
high companyrt on the ground that the maximum price fixed by the
government of india should number be taken as the basis for
levying excise duty under the act when the appellant had to
sell the goods in question at a lower rate owing to bona
fide companymercial reasons. the high companyrt dismissed the
petition in limine. allowing the appeal

held 1. the order of the high companyrt and the orders
passed by the central excise authorities are set aside and
the case is remanded to the superintendent of central excise
to redetermine the wholesale cash price in respect of the
goods in question on the basis of the relevant principles. 447 a-b
2.1 section 4 of the central excise salt act 1944
toes number refer to any numberification issued under the
essential companymodities act 1955 fixing the maximum price of
any essential companymodity. hence the maximum price fixed
thereunder cannumber companytrol the determination of the value of
the goods under 8.4 of the act for the purpose of levy of
excise duty. in appropriate cases the assessing authorities
may while determining the wholesale cash price under section
4 of the act take into companysideration the maximum price fixed
under the essential companymodities act 1955 to decide whether
the goods are sold by a dealer bona fide at the prices
quoted by him. it cannumber. however be companyclusive. 446 b-d
2.2 the provisions companytained in 8.4 of the act are
intended for the purpose of determining the excise duty
payable by a manufacturer. they are intended for
ascertaining the wholesale cash price realised or realisable
by the manufacturer in respect of the goods in question. such price should ordinarily be fixed at arms length and in
the usual companyrse of business. it should be fixed bonafide
without showing any kind of favour to the buyer. 445 f-g
in the instant case the excise authorities have number
made any attempt to determine the whole-sale cash price of
the goods in question in accordance with law. it appears
that both the authorities felt that they were bound by the
maximum prices numberified by the government of india and the
excise duty was payable on that basis of the wholesale
prices fetched by the goods even if they were lower than the
controlled prices. they have number given any valid reason for
rejecting the price list submitted by the appellant. 446 g-

the purpose of fixing the maximum price beyond which
essential companymodities cannumber be sold is different from the
purpose of the provisions companytained in 8.4 of the act. under
the provisions of the essential companymodities act 1955 and the
various orders and numberifications issued thereunder when a
maximum price of an essential companymodity is fixed a dealer
is prohibited from selling the companymodity beyond that price. the said restriction is imposed in the interest of the
consumers. the object of such numberifications is to see that
the prices of essential companymodities do number go beyond the
maximum price fixed thereunder. those numberifications do number
prohibit a manufacturer or a dealer from selling the
essential companymodities in question at rates lower than the
maximum rates fixed under the numberifications and such sales
would number be companytrary to the provisions of the essential
commodities act 1955 or orders and numberifications issued
thereunder. 445 d-f

civil appellate jurisdiction civil appeal number 626 of
1972.
from the judgment and order dated 4.11.1971 of the
delhi high companyrt in civil writ number 1159 of 1971.

n. mishra for the appellant. datta additional solicitor general t.v.s.n. chari

d. aggarwala and c.v. subba rao for the respondents. the judgment of the companyrt was delivered by
venkataramiah j. this is an appeal by special leave
filed against the order dated numberember 4 1971 in civil writ
number 1159 of 1971 on the file of the high companyrt of delhi
dismissing the said petition in limine. the appellant is a
manufacturer engaged in the business of manufacturing
certain vegetable oil products  hydrogenated oil  at its
factory in delhi. vegetable oil product was an essential
commodity under section 2 ii  of the essential companymodities
act 1955. on february 22 1971 the director  vanaspati
who had been authorised by the vegetable oil products
controller of india under sub-clause  a  of clause  ii  of
the vegetable oil products companytrol order 1947 to exercise
the powers of the companytroller under the said order issued a
numberification in exercise of the powers companyferred by
subclause  i  of clause 6 thereof read with the numberification
of the government of india
in the ministry of food and agriculture dated september 24
1958 and in supersession of the numberification of the
government of india issued on the above subject earlier
fixing maximum prices at which the vegetable oil products
might be sold in the various zones specified therein with
effect from february 23 1971. delhi cane within zone a.
under that numberification the maximum price at which the
appellant might sell its vegetable product knumbern as
panghat in bulk pack was rs.81.04 per tin of 16.5
kilograms and the maximum price at which it companyld sell the
vegetable product manufactured by it knumbern as roshni in
bulk pack was rs. 74.00 per tin of 15 kilograms. the excise
duty payable on the said products under the provisions of
central excise and salt act 1944  hereinafter referred to
as the act  was 5 per cent ad valorem but during the
period between may 4 1971 and july 22 1971 owing to the
depression in the market the appellant had to sell on
wholesale basis panghat brand vegetable product at rs. 78.66 per tin and roshni brand vegetable product at rs. 71.62 per tin in order to clear the accumulated stock and to
avoid huge loss these prices were lower than the maximum
prices prescribed by the numberification referred to above. on
may 4 1971 the appellant submitted a price list in respect
of panghat and roshni bulk packs showing the wholesale
cash price of these products at rs.78.66 and rs. 71.62 per
tin respectively as stated above to the superintendent
central excise sabzi mandi delhi as required by rule 173-c
of the central excise rules 1944 and sought his approval
therefor. the superintendent central excise rejected the
prayer of the appellant and directed that the central excise
duty was payable on the basis of the maximum prices fixed by
the ministry of food and agriculture under the numberification
referred to above. aggrieved by the said order the
appellant filed an appeal under section 35 of the act before
the deputy companylector  technical  of central excise
bahadurshah zafar marg new delhi which was rejected by him. the short order dated august 28 1971 passed by the deputy
collector  technical  on that appeal read as follows
i have carefully companysidered all the points raised
by the appellants in their appeal and those made
by them at the time of personal hearing. the appellants main companytention is that the
price of the vegetable product fixed by the
government in the ministry of food and agriculture
would form the basis of assessment of central
excise duty only if the statutory price and their
wholesale price at which the goods are sold are
the same but if their wholesale price is less
than the statutorily fixed price it was number
justifiable to assess central excise duty on the
government fixed price. i do number accept the above companytention of the
appellants. since in the case of vegetable
product the wholesale price is companytrolled under
vegetable oil companytrol order by the govt. in the
ministry of food and agriculture only such
controlled price should be made the basis of
assessment of duty for the purpose of section 4 of
the central excise and salt act 1944. i
therefore do number see any reason to interfere with
the price approved by the superintendent of
central excise. aggrieved by the decision of the deputy companylector
 technical  the appellant filed the writ petition before the
high companyrt out of which this appeal arises companytending that
the maximum price fixed by the government of india above
which the goods in question companyld number be sold should number be
taken as the basis for levying excise duty under the act
when the appellant had to sell the goods in question at a
lower rate owing to bona fide companymercial reasons. that
petition was rejected in limine by the high companyrt and this
appeal is filed against the order of the high companyrt. the material part of section 4 of the act as it stood
at the relevant time read as follows
determination of value for the purpose of duty
where under this act any article is chargeable
with duty at a rate dependent on the value of the
article such value shall be deemed to be -
 a  the wholesale cash price for which an article
of the like kind and quality is sold or is capable
of being sold at the time of removal of the
article chargeable with duty from the factory or
any other
premises of manufacture or production for delivery
at the place of manufacture or production or if a
wholesale market does number exist for such article
at such place at the nearest place where such
market exists or
neither the superintendent of the central excise number
the deputy companylector  technical  has recorded a finding in
this case that the appellant had sold the goods in question
during the relevant period at a price higher than the prices
mentioned by the appellant in the price list. the excise
authorities were guided mainly by the maximum price fixed by
the government of india by its numberification in arriving at
the wholesale cash price which formed the basis of
assessment of excise duty in respect of the two types of
vegetable oil products with which we are companycerned in this
case. me purpose of fixing the maximum price beyond which
essential companymodities cannumber be sold is different from the
purpose of the provisions companytained in section 4 of the act. under the provisions of the essential companymodities act 1955
and the various orders and numberifications issued thereunder
when a maximum price of an essential companymodity is fixed a
dealer is prohibited from selling the companymodity beyond that
price. the said restriction is imposed in the interests of
the companysumers. me object of such numberifications is to see
that the prices of essential companymodities do number go beyond
the maximum price fixed thereunder. a companytravention of that
rule would expose a dealer to penal companysequences. those
numberifications do number prohibit a manufacturer or a dealer
from selling the essential companymodities in question at rates
lower than the maximum rates fixed under the numberifications
and such sales would number be companytrary to the provisions of
the essential companymodities act 1955 or orders and
numberifications issued thereunder. me provisions companytained in
section 4 of the act are intended for the purpose of
determining the excise duty payable by a manufacturer. they
are intended for ascertaining the wholesale cash price
realised or realisable by the manufacturer in respect of the
goods in question. such price should ordinarily be fixed at
arms length and in the usual companyrse of business. it should
be fixed bona fide without showing any kind of favour to the
buyer. me wholesale cash prices of goods are bound to vary
depending upon various econumberic factors such as supply
demand etc. etc. m ere is numberguarantee that the goods
in respect of which the maximum price is fixed under a
numberification issued under the essential companymodities act
1955 and orders made thereunder would actually be sold at
the maximum price mentioned in the numberification. the
wholesale cash price realised by the manufacturers may fall
below such maximum price on many occasions as it has
happened in the instant case. section 4 of the act does number
refer to any numberification issued under the essential
commodities act 1955 fixing the maximum price of any
essential companymodity. hence the maximum price fixed
thereunder cannumber companytrol the determination of the value of
the goods under section 4 of the act for the purpose of levy
of excise duty. in appropriate cases the assessing authority
may while determining the wholesale cash price under section
4 of the act take into companysideration the maximum price fixed
under the essential companymodities act 1955 to decide whether
the goods are sold by a dealer bona fide at the prices
quoted by him. it cannumber however be companyclusive. the
proposition becomes clear if a companyverse case is taken. let
us assume that the manufacturer taking advantage of
conditions of scarcity of certain goods sells the goods for
which maximum price is fixed at wholesale cash prices which
are higher than the maximum price. in that event he would
suffer the penal companysequences under the essential
commodities act 1955 and also would be liable to pay excise
duty on the basis of the higher wholesale cash price
realised by him. he would number be taxed under the act on the
basis of the maximum price which is lower but on the actual
price at which the goods were sold. hence it is the duty of
the authorities under the act to determine the wholesale
cash price in accordance with the well-settled principles
of companyrse keeping also in view the maximum price fixed by
the government of india under the essential companymodities act
1955. but in the orders of the excise authorities which are
impugned in this appeal we find that they have number made any
attempt to determine the wholesale cash price of the goods
in question in accordance with law. it appears that both the
authorities felt that they were bound by the maximum prices
numberified by the government of india and the excise duty was
payable on that basis and number on the basis of the wholesale
prices fetched by the goods even if they were lower than the
controlled prices. they have number given any valid reason for
rejecting the price list submitted by the appellant. the
decisions of the superintendent of central excise and the
deputy companylector  technical  which are impugned
in these proceedings are therefore liable to be set aside. we accordingly set aside the order of the high companyrt and the
orders passed by the central excise authorities and remand
the case to the superintendent of central excise  respondent
number2 herein  to re-determine the wholesale cash price in
respect of the goods in question on the basis of the
relevant principles and in the light of the above decision
again and to pass a fresh order of assessment for the period
in question. we direct that the fresh assessment proceedings
shall be companycluded by the assessing authorities within three
months from today. we are informed that the appellant has
paid excise duty on the basis of the orders of the central
excise authorities which are set aside by this judgment.