Florence Manasseh v. A S Bam — 1962 DIGILAW 39 (CAL)

JUDGMENT 1. THE petitioner carries on business, as the proprietress of F. Manasseh and Company, in iron, steel, steel cuttings, scraps and defectives etc. Since 1953 until termination, she was a "controlled stock-holder" as well as a "controlled source", within the meaning of the Iron and Steel (Control) Order. 2. IN the year 1957, the petitioner was prosecuted under the Essential Commodities Act, 1955, for alleged violation of certain provisions of the Iron and Steel (Control) Order, 1956. The prosecution, however, ended on January 31, 1959, in the acquittal of the petitioner. During the pendency of the prosecution, the respondent Iron and Steel Controller, called upon the petitioner to submit to him explanation in respect of the identical charges. He also suspended further supplies of iron and steel to the petitioner, until the disposal of the criminal case or until satisfactory explanation was given. The petitioner alleges that she gave explanation to the charges but in-spite of that the order suspending supplies to her was not lifted. After her acquittal in the criminal case, the petitioner wrote repeated letters to the respondent Controller requesting him to withdraw the order suspending supplies to her. Excepting that she received routine replies thereto to the effect that the matter was "receiving attention" or that the "decision would be conveyed shortly", nothing further happened. 3. AT last, in desperation, the petitioner made a formal demand for justice to the respondent Controller, by a letter dated December 12, 1959, and thereafter moved this court under Article 226 of the Constitution for the issue of appropriate writs to compel the respondent Controller to come to a decision and restore supplies to her. This Court issued a Rule, on December 17, 1959, which was numbered as Matter No. 192 of 1959. 4. ON the same day, the Deputy Iron and Steel Controller issued a notice calling upon the petitioner to show cause why her appointment as a registered stock-holder as well as a Controlled scrap merchant should not be cancelled for contravention of certain provisions of the Iron and Steel (Control) Order 1956. A relevant extract from the said notice is here in below set out :- "it has been brought to the notice of this office that you have alleged to have committed following irregularities which are in contravention of the Iron and Steel (Control) Order, 1956. A relevant extract from the said notice is here in below set out :- "it has been brought to the notice of this office that you have alleged to have committed following irregularities which are in contravention of the Iron and Steel (Control) Order, 1956. That between February, 1957 and June 1957, you have acquired near about 160 tons of Rounds and Flats under sale orders Nos. I 6591 dt. 16. 2. 57, I/6599 dt. 26. 2. 57, I/6677 dt. 25. 4. 57 and I /6603 dt. 28. 2. 57 issued by M/s. National Iron and Steel Co. Ltd., Calcutta, and disposed of the same to different parties without reporting arrivals to the State Steel Licensing Authority or obtaining his permission. There was thus a clear contravention of clause 5 of the Iron and Steel (Control) Order, 1956. " The petitioner alleges that the above quoted charges were identical in nature and substance with the charges on which she had been previously prosecuted in crimes and of which she was acquitted. In showing cause against the charges the petitioner emphasized on this aspect of the matter and characterised the repetition of the old charges as mala fide, unfair and unjust. Further she disputed the charges on merits, and stated that the supplies had been acquired under specific written orders of the Additional Iron and Steel Controller and were as such authorised acquisitions. She also denied that she was responsible to report the arrival of the supplies, received by way of ad hoc allotment under "free sales" order granted by the Additional Controller. In disposing of those goods without reporting arrival, she alleged, she did not contravene the provision of clause 5 of the Iron and Steel (Control) Order 1956. The cause shown by the petitioner apparently did not satisfy the respondent Controller and after a formal hearing the Controller cancelled the appointment of the petitioner a registered stockiest for prime materials and also cancelled her declaration as a Controlled source for scraps and defectives. The cause shown by the petitioner apparently did not satisfy the respondent Controller and after a formal hearing the Controller cancelled the appointment of the petitioner a registered stockiest for prime materials and also cancelled her declaration as a Controlled source for scraps and defectives. Here-in-below, I set out from the order of the respondent Controller, canceling the appointment of the petitioner and also terminating her declaration, a few relevant extracts: (a) "although the charge-sheets given to the stockiest only related to contravention of clause 5 of the Iron and Steel (Control) Order for disposal of materials without valid permits, the enquiries have shown that she had not only contravened clause 5 of the Steel Control Order but also clause 4 of it. " (b) "being a stockholder M/s. F. Manasseh and Co. could acquire steel only under the authority of and in accordance with a permit issued by the Iron and Steel Controller. The stockiest has acquired iron and steel materials from the national Iron and Steel Co. Ltd., without any valid permit. Mrs. Manasseh has not been able to submit any list of special orders of acquisitions issued in her favor by the Iron and Steel Controller. She has only produced copies of indents which were submitted by her to the Ex-Addl. Iron and Steel Controller, on which the then Addl. Iron and Steel Controller, Shri R. N. Dutt, had initialled. Shri R. N. Dutt had not passed any order on those indents and, therefore, her contention that the mere signature of the then Addl. Iron and Steel Controller on the indents should be regarded as orders of acquisition is not acceptable to me. " (c) "even if it is assumed that she thought that the mere signatures of the then Addl. Iron and Steel Controller on the indents were sufficient for acquisition of Iron and Steel materials by her from the National Iron and Steel Co. Ltd., I and that the manner in which she disposed of the materials so acquired was not very satisfactory. In her letter dated 14th February. 1957 when she applied for permission of free sale for the first time, she clearly stated that the materials had been received by her from the National Iron and Steel Co. Ltd. During the enquiry she clearly admitted that it was a wrong statement. In her letter dated 14th February. 1957 when she applied for permission of free sale for the first time, she clearly stated that the materials had been received by her from the National Iron and Steel Co. Ltd. During the enquiry she clearly admitted that it was a wrong statement. I cannot, therefore, help feeling that she might have deliberately tried to mislead the then Addl. Iron and Steel Controller in giving her permission of free sale. I cannot imagine how a stockiest could apply for permission of free sale even before receipt of the materials, as permissions for free sale could normally be asked for only when the materials could not be disposed of within a reasonable period against regular permits. It pre-supposes, therefore, that materials must first be received by the stockiest and they should try to sell them against sale permits. Although Shri R. N. Dutt has not recorded the reasons for granting permission of free sale to the stockiest, I believe he was moved to grant this permission on the first occasion at least, on the understanding that the materials had already been received by the stockiest and that she was unable to dispose them of against regular permits. The action of the stockiest, therefore, in this matter has been highly irregular. Since the acquisition of the materials itself was irregular and was not in accordance with clause 4 of the Iron and Steel (Control) Order, disposal under clause 5 also becomes automatically irregular. " (d) "so-called free sale orders obtained by the stockiest from Shri R. N. Dutt were defective and irregular ; firstly, these were obtained before the arrival of goods ; secondly, Shri R. N. Dutt's notes on her applications for free sale stating "no objection" could at best be taken as his opinion which should have been followed up regular orders signed either by him or by his junior officer under proper seal and authority. In the originals of these free sale permissions which were produced before me by mrs. Manasseh, I find that neither any designation nor any official stamp of the Iron and Steel Controller's office, nor any reference number and date were given. Having been a stockiest fair a considerable period she should have been well conversant with the procedure of Government offices for issue of orders, etc. and she should not have taken these notes of Addl. Having been a stockiest fair a considerable period she should have been well conversant with the procedure of Government offices for issue of orders, etc. and she should not have taken these notes of Addl. Iron and Steel Controller as regular authorisations for free sale. I have no doubt that if her letters with the notes written on them by the Ex. Addl. Iron and Steel Controller had been sent down in to the office for putting up regular orders of free sale, the office would have gone into the matter in greater detail and pointed cut to Shri R. N. Dutt that the materials were not actually received by her at that time and that free sale was not called for. I am, therefore, definitely of the opinion that she has been guilty of at least misrepresenting the facts to the then Addl. Iron and Steel Controller for getting these so-called 'no-objection' notes recorded by him on her letters. " 5. THE Rule issued by this court, on December 17, 1959 (Matter No. 192 of 1959), was adjourned from time to time, pending disposal of enquiry, and when the enquiry ended adversely to the petitioner, she withdrew the application with liberty to make another application to meet the changed circumstances. The propriety of the order canceling the petitioner's appointment as also her declaration mentioned above is being disputed, at the instance of the petitioner, in this Rule. 6. MR. Sankar Ghosh, learned advocate for the petitioner, made a threefold contention in support of this Rule. He contended, in the first place, that clauses 4 and 5 of the Iron and Steel (Control) Order, 1956, relating to acquisition and disposal of iron and steel, depended on conditions to be prescribed by the Controller or conditions contained in quota certificates or permits or contained in the order of the Controller. The prescription of these conditions depended on the absolute and unfettered discretion of the Controller, without any direction given by the Central Government under Clause 17, and as such ran the peril of becoming naked and arbitrary in nature. The clauses, as such, were bad because of excessive delegation of authority. The prescription of these conditions depended on the absolute and unfettered discretion of the Controller, without any direction given by the Central Government under Clause 17, and as such ran the peril of becoming naked and arbitrary in nature. The clauses, as such, were bad because of excessive delegation of authority. He contended, in the next place, that there was no express power of termination of appointment either of a registered stockiest or of cancellation of declaration of a controlled source, under the Iron and Steel Control Order, and even if such power was implied, there was no reasonable restriction or reasonable procedure prescribed for exercise of such power and the implied power, if any affected the fundamental right of the petitioner, under Articles 19 (1) (f) and (g) of the Constitution and as such was ultra vires the Constitution. Thirdly, he contended, that the rules of natural justice were violated in the enquiry proceeding against the petitioner and although she had not been charged with violation of the provision of clause 4 of the Iron and Steel (Control) Order, yet then she was found guilty of the same, without being given any opportunity to meet such a charge. The arguments advanced by Mr. Ghosh raise questions of very great importance and require careful consideration. Since the days of the Defence of India Act, 1939, enacted to meet the emergency arising as a result of the Second World War, the Central Government framed various Rules for maintaining supplies and services and for controlling prices or rates of commodities considered as essential and for relaxing any maximum or minimum limits imposed on such prices or rates. The expiry of the Defence of India Act necessitated promulgation of the essential Supplies (Temporary Powers) Ordinance, 1946, which was an ordinance to provide for the continuance, during a limited period, of powers to control the productions, supplies and distributions of and trade and commerce in certain commodities. This Ordinance was followed by the Essential Supplies (Temporary Powers) Act, 1946, which was also passed as a temporary measure to control the production, supply and distribution of and trade and commerce in essential commodities. Life of this Act was extended from time to time until the Essential Commodities Act (Act X of 1955) was put in the Statute Book as a permanent measure. 7. Life of this Act was extended from time to time until the Essential Commodities Act (Act X of 1955) was put in the Statute Book as a permanent measure. 7. IT is evident that the emergency created by the Second World War continued even after the cessation of the hostilities. The economic problems of the country needed the assistance of similar measures of control as at the time of the war. This explains why measures evolved at the time of war had to be projected in peace time and continued as a permanent measure. It is significant that both under the scheme of the Essential Supplies (Temporary Powers) Act, 1946 and the Essential Commodities Act, 1955 the power to control production, supply and distribution of and to make available at fair prices essential commodities is exercised generally by way of orders known as "control Orders" and there is power in the Central Government to delegate its authority to officers or authorities subordinate either to the Central Government or to the State Government. It is necessary for me to set out material portions of sections 3, 4 and 5 of the Essential Commodities Act, 1955, in order to examine the first two branches of Mr. Ghosh's argument: -Section 3. Powers to control production, supply, distribution etc. of essential commodities- (1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made there under may provide- (a) for regulating by licenses, permits or otherwise the production or manufacture of any essential commodity; (b) (c) for controlling the price at which any essential commodity may be bought or sold; (d) for regulating by licenses, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity; (e) for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale; (f) to (j) (3)Section 4. Imposition of duties on State Governments, etc. Imposition of duties on State Governments, etc. An order made under section 3 may confer 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 contain 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, Delegation of powers-The Central Government may, by notified order, direct that the power to make orders under section 3 shall, in relation to such matters and subject to such conditions, 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. " 8. SECTIONS 3 and 4 of the Essential Commodities Act, 1955 substantially correspond to section 3 of the Essential Supplies (Temporary Powers) Act, 1946 and section 5 of the first mentioned Act is in pari materia with section 4 of the last mentioned Act. The constitutionality of Controls and the validity of sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946 as also the corresponding sections of the Essential Commodities Act, 1955 had repeatedly to be considered by Courts of Law. In the case of (1) Messrs. Dwarka Prosad Laxmi Narain v. State of Uttar Pradesh, (A. I. R. 1954 S. C. 224), the Supreme Court had to deal with clauses 3 and 4 of the Utter Pradesh Coal Control Order, 1953 made under section 3 (2) of the Essential Supplies (Temporary Powers) Act, and expressed the view that they imposed unreasonable restriction on the right guaranteed under Article 19 (1) (g) of the Constitution. The relevant observations by the Supreme Court in the context are set out below:- "the provision contained in clause 3 (1) of the Order that 'no person shall stock, sell, store for sale or otherwise utilise or dispose of coal except under a license granted under this Order, is quite unexceptional as a general provision; in fact, that is the primary object which the Control Order is intended to serve. There are two exceptions engrafted upon this general rule; the first is laid down in sub-clause (2) (a) and to that no objection has been or can be taken. The second exception, which is embodied in sub-clause (2) (b) has been objected to by the learned counsel appearing for the petitioners. This exception provides that nothing in clause 3 (1) shall apply to any person or class of persons exempted from any provision of the above sub-clause by the State Coal Controller, to the extent of such exemption. "it will be seen that the Control Order nowhere indicates what the grounds for exemption are nor have any rules been framed on this point. An unrestricted power has been given to the State Controller to make exemptions, and even if he acts arbitrarily or from improper motives, there is no check over it and no way of obtaining redress. Clause 3 (2) (b) of the Control Order seems to us, therefore, 'prima facie' to be unreasonable. We agree, however, with Mr. Umrigar that this portion of the Control Order, even though bad, is severable from the rest and we are not really concerned with the validity or otherwise of this provision in the present case as no action taken under it is the subject matter of any complaint before us. "the more formidable objection has been taken on behalf of the petitioners against Cl. 4 (3) of the Control Order which relates to the granting and refusing of licenses. The licensing authority has been given absolute power to grant or refuse to grant, renew or refuse to renew, suspend, revoke, cancel or modify any license under this Order and the only thing he has to do is to record reasons for the action he takes. Not only so, the power could be exercised by any person to whom the State Coal Controller may choose to delegate the same, and the choice can be made in favors of any and every person. It seems to us that such provision cannot be held to be reasonable. "no rules have been framed and no directions given on these matters to regulate or guide the discretion of the licensing Officer. It seems to us that such provision cannot be held to be reasonable. "no rules have been framed and no directions given on these matters to regulate or guide the discretion of the licensing Officer. Practically the Order commits to the unrestrained will of a single individual the power to grant, withhold or cancel licenses in any way he chooses and there is nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Mr. Umrigar contends that a sufficient safeguard has been provided against any abuse of power by reason of the fact that the licensing authority has got to record reasons for what he does. "this safeguard, in our opinion, is hardly effective; for there is no higher authority prescribed in the Order who could examine the propriety of these reasons and revise or review the decision of the Subordinate Officer. The reasons, therefore, which are required to be recorded are only for the personal or subjective satisfaction of the licensing authority and not for furnishing any remedy to the aggrieved person. "it was pointed out and with perfect propriety by Mr. Justice Matthews in the well-known American case of 'yick Wo v. Hopkins' (1886) 118 U. S. 356 at p. 373 that the action or non-action of officers placed in such position may proceed from enmity or prejudice, from partisan zeal or animosity, from favoritism and other improper influences and motives which are easy of concealment and difficult to be detected and exposed, and consequently the injustice capable of being wrought under cover of such unrestricted power becomes apparent to every man, without the necessity of detailed investigation. In our opinion, the provision of clause 4 (3) of the U. P. Coal Control Order must be held to be void as imposing an unreasonable restriction upon the freedom of trade and business guaranteed under Article 19 (1) (g) of the Constitution and not coming within the protection afforded by cl. (6) of the Article. "as this provision forms an integral part of the entire structure of the U. P. Coal Order, the order can not operate properly unless the provision of clause 4 (3) is brought in conformity with the Constitutional requirements indicated above. (6) of the Article. "as this provision forms an integral part of the entire structure of the U. P. Coal Order, the order can not operate properly unless the provision of clause 4 (3) is brought in conformity with the Constitutional requirements indicated above. The license of the petitioners having been cancelled in pursuance with the above clause of the Control Order, the cancellation itself should be held to be ineffective and it is not necessary for us to enquire further whether or not the grounds upon which the licensing authority purported to act were vague or indefinite or could constitute proper grounds for cancellation. " Again in the case of (2) Hari Sankar Bagla v. State of Madhya Pradesh (A. I. R. 1954 S. C. 465) the Supreme Court had occasion to deal with the Cotton Textiles (Control of Movement) Order, 1948 made under section 3 (2) of the Essential Supplies (Temporary Power) Act, 1946, and in that judgment reconsidered the law laid down in Dwarka Prosad's case (Supra) and also considered the validity of sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946 in the following language:-"it may also be pointed out that reference to the decision of this court in 'dwarka Prosad's case is not very apposite and has no bearing on the present case. Section 4 (3) of the U. P. Coal Control Order was declared void on the ground that it committed to the unrestrained will of a single individual to grant, withhold or cancel licenses in any way he chose and there was nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. Section 4 (3) of the U. P. Coal Control Order was in these terms:-'the licensing Authority may grant, refuse to grant, renew or refuse to renew a license and may suspend, cancel, revoke or modify any license or any terms thereof granted by him under the Order for reasons to be recorded provided that every power which is under this Order exercisable by the Licensing Authority shall also be exercisable by the State Coal Controller, or any person authorised by him in this behalf. ' "in the present Control Order there is no such provision as existed in the U. P. Coal Control Order. ' "in the present Control Order there is no such provision as existed in the U. P. Coal Control Order. Provisions of that Control Order bear no analogy to the provisions of the present Control Order. The policy underlying the Order is to regulate the transport of cotton textile in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion can not be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief. Presumably, as appears from the different forms published in the Manual, there are directions and rules laid down by the Central Government for the grant or refusal of permits. ''the next contention of Mr. Umrigar that section 3 of the Essential Supplies (Temporary Powers) Act, 1946 amounts to delegation of legislative power outside the permissible limits is again without any merit. It was settled by the majority judgment in the 'constitution of India and Delhi Laws Act, 1912 A. I. R. 1951 S. C. 332 that essential powers of legislation can not be delegated. In other words, the Legislature can not delegate its function of laying down legislative policy in respect of a measure and its formulation as a rule of conduct. The legislature must declare the policy of the law and the legal principles which are to control any given cases and must provide a standard to guide the officials or the body in power to execute the law. The essential legislative function consists in the determination or choice of the legislative policy and of formally enacting that policy into a binding rule of conduct. "in the present case the Legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to the Central Government in exercising its powers under section 3. "in the present case the Legislature has laid down such a principle and that principle is the maintenance or increase in supply of essential commodities and of securing equitable distribution and availability at fair prices. The principle is clear and offers sufficient guidance to the Central Government in exercising its powers under section 3. Delegation of the kind mentioned in section 3 was upheld before the Constitution in a number of decisions of their Lordships of the Privy Council, vide-Russel v. Reg., (1882) 7 A. C. 829-Hodge v. Reg. (1884) 9 A. C. 117 and Shannon v. Lower Mainland Dairy Products Record, 1938 A. C. 708 and since the coming into force of the Constitution delegation of this character has been upheld in a number of decisions of this Court on principles enunciated by the majority in A. I. R. 1951 S. C. 332: As already pointed out, the preamble and the body of the sections sufficiently formulate the legislative policy and the ambit and character of the act is such that the details of that policy can only be worked out by delegating them to a subordinate authority within the framework of that policy. Mr. Umrigar could not very seriously press the question of the invalidity of section 3 of the Act and it is unnecessary therefore to consider the question in greater detail. "section 4 of the Act was attacked on the ground that it empowers the Central Government to delegate its own power to make orders under section 3 to any officer or authority subordinate to it or the Provincial Government or to any officer or authority subordinate to the Provincial Government as specified in the direction given by the Central Government. In other words, the delegate has been authorised to further delegate its powers in respect of the exercise of the powers of section 3. Mr. Umrigar contended that it was for the Legislature itself to specify the particular authorities or officers who could exercise power under section 3 and it was not open to the Legislature to empower the Central Government to say what officer or authority could exercise the power. "reference in this connection was made to two decisions of the Supreme Court of the United States of America- 'panama Refining Co. v. Ruan' (1934) 293 U. S. 388 and-'schechtre v. United States' (1934) 295 U. S. 495. "reference in this connection was made to two decisions of the Supreme Court of the United States of America- 'panama Refining Co. v. Ruan' (1934) 293 U. S. 388 and-'schechtre v. United States' (1934) 295 U. S. 495. In both these cases it was held that so long as the policy is laid down and a standard established by a statute. No unconstitutional delegation of legislative power is involved in leaving to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared by the legislature is to apply. These decisions in our judgment do not help the contention of Mr. Umrigar as we think that section 4 enumerates the classes of persons to whom the power could be delegated or sub-delegated by the Central Government and it is not correct to say that the instrumentalities have not been selected by the Legislature itself. "the decision by their Lordship of the Privy Council in-'shannon's case completely negatives the contention raised regarding the invalidity of section 4. In that case the Lt. Governor in Council was given power to vest in a marketing board the powers conferred by section 4a (d) of the Natural Products Marketing (British Columbia) Act, 1936. The attack on the Act was that without constitutional authority it delegated legislative power to the Lt. Governor in Council. This contention was answered by their Lordships in these terms: "the third objection is that it is not within the powers of the Provincial Legislature to delegate so-called legislative powers to Lt. Governor in Council, or to give him powers of further delegation. This objection appears to their Lordship, subversive of the rights which the Provincial Legislature enjoys while dealing with matters falling within the classes of subjects in relation to which the Constitution was granted legislative powers. Within its appointed sphere the Provincial Legislature is as supreme as any other Parliament; and it is unnecessary to try to enumerate the innumerable occasions on which Legislatures, Provincial, Dominion and Imperial, have entrusted various persons and bodies with similar powers to those contained in this Act. " 9. Within its appointed sphere the Provincial Legislature is as supreme as any other Parliament; and it is unnecessary to try to enumerate the innumerable occasions on which Legislatures, Provincial, Dominion and Imperial, have entrusted various persons and bodies with similar powers to those contained in this Act. " 9. THE last decision of the Supreme Court which I need consider in this context is the case of the Union of India v. Bhanamal Gulzarimal Ltd., (3) (A. I. R. 1960 S. C. 475: (1960) 1 S. C. A, 438) in which the validity of Iron and Steel (Control of Production and Distribution) Order 1941, came up for consideration on the basis as to whether sections 3 and 4 of the Essential Supplies (Temporary Powers) Act 1946, suffered from the vice of excessive delegation. In negative the contention the Supreme Court observed as follows :- "the challenge to the vires of cl. 11b has, therefore, to be examined on the basis that secs. 3 and 4 of the Act are valid. It is relevant to set out the implications of this position. When it is assumed that secs. 3 and 4 are valid it necessarily means that they do not suffer from the vice of excessive delegation. When the legislature delegated its authority to the Central Government to provide by order for regulating or prohibiting the production, supply and distribution of steel and iron it had not surrendered its essential legislative function in favor of the Central Government. The preamble to the Act and the material words used in s. 3 (1) itself embody the decision of the legislature in the matter of the legislative policy, and their effect is to lay down a binding rule of conduct in the light of which the Central Government had to exercise its powers conferred on it by s. 3. The Legislature has declared its decision that the commodities in question are essential for the maintenance and progress of national economy, and it has also expressed its determination that in the interest of national economy it is expedient that the supply of the said commodities should be maintained or increased as circumstances may require and the commodities should be made available for equitable distribution at fair prices. The concept of fair prices which has been deliberately introduced by the Legislature in s. 3 gives sufficient guidance to the Central government in prescribing the price structure for the commodities from time to time. With the rise and fall of national demand for the said commodities or fluctuations in the supplies thereof, the chart of prices may, in the absence of well-planned regulation, prove erratic and prejudicial to national economy, and without national and well-planned regulation equitable distribution may be difficult to achieve; and so the legislature has empowered the Central Government to achieve the object of equitable distribution of the commodities in question by fixing fair prices for them. Thus, when it is said that the delegation to the Central Government by s. 3 is valid, it means that the central Government has been given sufficient and proper guidance for exercising its powers in effectuating the policy of the statute. "similarly the validity of sec. 4 postulates that the powers conferred on the sub-delegate do not suffer from the vice of excessive delegation. Sub-delegation authorised by sec. 4 is also justified because, like the delegate under sec. 3 the sub-delegate under sec. 4 has been given ample guidance to exercise his powers when he is authorised by the Central Government in that behalf. If the Central Government chooses to exercise its powers under sec. 3 itself it may pass appropriate orders to give effect to the policy of the Act in respect of matters covered by sec. 3 (1) and (2 ). When it adopts such a course the Central Government would have exercised its own authority under sec. 3; and the exercise of its power can not be challenged on the ground that it suffers from the vice of excessive delegation. Similarly, where by a notified order passed by the Central Government, under sec. 3, the controller is authorised to pass appropriate orders, the notified order can not be challenged on the ground that it suffers from the vice of excessive delegation. In our opinion, this position is implicit in the assumption that secs. 3 and 4 are valid. " 10. THE examination of the catena of cases on this point will not be complete without considering a judgment of this court, delivered by Sinha, J. in Messrs. In our opinion, this position is implicit in the assumption that secs. 3 and 4 are valid. " 10. THE examination of the catena of cases on this point will not be complete without considering a judgment of this court, delivered by Sinha, J. in Messrs. T. D. Kumar v. Iron and Steel Controller (4) (A. I. R. 1961 Calcutta 258, 65 C. W. N. 1142 ). In that case the validity of clause 8 of the Iron and Steel (Control) Order, 1956, relating to surrender of revoked authorities, came up for consideration. Holding that the power to revoke permits or authorisations was absolute and unfettered and in the absence of any direction given by the Central Government under clause 17 of the Order, naked and arbitrary his Lordship declared the clause 8 of the said Order invalid. I quote below a relevant extract from the above judgment, wherein his Lordship considered the two Supreme Court decisions, namely, dwarka Prosad's case and Hart Sankar Bagla's case (supra) and arrived at his conclusion:- "however, giving the most liberal construction to the two orders it can at best be said that they amounted to revocation of the permit or written order given by the Controller under cl. 4. The power of revocation has not been expressly granted anywhere in the Control Order. It is argued, however, that it is to be implied from the provisions of cl. 8. It is necessary, therefore, to consider the constitutionality of cl. 8. It is argued that in the absence of any direction given in that behalf under the powers conferred by cl. 17 upon the Central Government, the power to revoke given under clause 8 is naked and arbitrary and is an unreasonable restriction on the fundamental right of the petitioner to carry on business conferred by Art. 19 (1) (g) of the Constitution. It is admitted that no directions have been given by the Central Government under cl. 17. Therefore, there is no procedure laid down for the revocation of permits or orders, nor any condition imposed. There is no provision for giving notice or hearing stockholders whose authorisations are being cancelled or revoked. No circumstances are indicated to guide the Controller in making such orders of revocation. There is no provision for any appeal against such an order or for taking any proceeding to challenge the same. There is no provision for giving notice or hearing stockholders whose authorisations are being cancelled or revoked. No circumstances are indicated to guide the Controller in making such orders of revocation. There is no provision for any appeal against such an order or for taking any proceeding to challenge the same. The petitioner relies on the Supreme Court decision, Dwarka Prosad v. State of Uttar Pradesh, (1) A. I. R. 1954 S. C. 224. In that case, cl. 4 (3) of the Uttar Pradesh Coal Control Order (1953) was successfully challenged. Under that Control Order, the 'licensing Authority' meant the District magistrate or any other officer authorised by him to perform his function. No person could stock or sell coal except under a license granted by the Licensing Authority and the Licensing Authority was empowered to grant refuse to grant, renew or refuse to renew a license and was further authorised to suspend, cancel, revoke or modify any license for reasons to be recorded. This power was challenged as naked and arbitrary. Mukherjea, J., relied on a previous decision of the Supreme Court- Chintamanrao v. State of Madhya Pradesh A. I. R. 1951 S. C. 118 and held that the phrase 'reasonable restriction' connotes that the limitation imposed upon a person in enjoyment of a right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. Legislation, which arbitrarily or excessively invades the right, can not be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed under Art. 19 (1) (g) and the special control permitted by cl. 6 of Art. 19, it must be held to be wanting in reasonableness. " On behalf of the respondents, reliance has been placed on a subsequent decision of the Supreme Court, Harishankar Bagla v. State of Madhya Pradesh (2) (1955) 1 s. C. R. 380; (A. I. R. 1954 S. C. 465 ). In that case, the provisions of the Cotton Textile (Control of Movement) Order, 1948 passed by the State of Madhya Pradesh was considered. The petitioner there was prosecuted for contravention of section 7 of the Essential Supplies (Temporary Powers) Act, 1946 read with clause 3 of the Cotton Textile (Control of Movement) Order 1948 having been found in possession of 'new Cotton Cloth' weighing over 6 mds. without any permit. The petitioner there was prosecuted for contravention of section 7 of the Essential Supplies (Temporary Powers) Act, 1946 read with clause 3 of the Cotton Textile (Control of Movement) Order 1948 having been found in possession of 'new Cotton Cloth' weighing over 6 mds. without any permit. It was urged that sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946 and the Cloth Control Order, were ultra vires as contravening the fundamental rights of the petitioner to carry on business. This was negative. In that case, the previous decision of A. I. R. 1954 S. C. 224 (supra) was relied on. (It was however distinguished on several grounds ). The first ground was that unlike Dwarka Das's case, A. I. R. 1954 S. C. 224, the petitioner had never applied for a permit and made no efforts to obtain one and, therefore, there was no question of the exercise of any arbitrary and unregulated power by the Textile Commissioner. Secondly, there was no provision in the Textile Control Order equivalent to section 4 (3) of the Uttar Pradesh Coal Control Order. Mahajan, C. J., said as follows:- "in the present Control Order there is no such provision as existed in the Uttar Pradesh Coal Control Order. The provision of that Control Order bear no analogy to the provisions of the present Control Order. The policy underlying the order is to regulate the transport of cotton textile in a manner that will ensure an equal distribution of the commodity in all the countries and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile Commissioner is to be exercised in such a manner as to effectuate this policy. The conferment of such a discretion can not be called invalid and if there is an abuse of power there is ample power in the courts to undo the mischief. Presumably, as appears from the different forms published in the manual, there are directions and rules laid down by the Central Government for the grant or refusal of permit. The conferment of such a discretion can not be called invalid and if there is an abuse of power there is ample power in the courts to undo the mischief. Presumably, as appears from the different forms published in the manual, there are directions and rules laid down by the Central Government for the grant or refusal of permit. ' in my opinion, the facts and circumstances of this case are more like the case of (1) A. I. R 1954 S. C. 224 (supra) than that of (2) 1955-1 S. C. R. 380: (A. I. R. 1954 S. C. 465 ). " 11. HIS Lordship's attention was apparently not drawn to the case (3) of Union of India v. Bhanmal Guljarimal (supra) ; at least there is no reference to that decision in the aforementioned judgment. In trying to repel the first two branches of the argument advanced on behalf of the petitioner, Mr. R. C. Deb, learned advocate for the respondents contended that if sections 3, 4 and 5 of Essential Commodities Act 1955 were not bad for excessive delegation, as it must be on the basis of the decision of the Supreme Court in Union of India v. Bhanmal Guljarimal (3) (supra), then the Iron and Steel (Control) Order, 1956, made under section 3 of the Act, was incapable of challenge on the ground of arbitrariness or on the ground that it put unreasonable restriction on the rights guaranteed under Article 19 (1) (f) and (g) of the Constitution. The argument, in the form made, is not very well conceived. It is true that sections 3, 4 and 5 of the Essential Commodities Act can no longer be challenged on ground of excessive delegation but Control Orders made under the said sections can still be attacked, if they violate the rights guaranteed, under the Constitution. This is what the Supreme Court made clear in the following passage of its judgment in Union of India v. Bhanmal Guljarimal (3) (supra) at page 481 :- "it is of course true that though clause 11 (B) may not be unconstitutional on the ground of excessive delegation, its validity can still be attacked on the ground that it violates Article 19 (1) (f) and (g) of the Constitution. " 12. " 12. THE question therefore, boils down to whether clauses 3 and 4 of the Iron and Steel (Control) Order impose unresumable restrictions either on the rights of property or on the right to carry on trade and business guaranteed by the Constitution. It is true that in issuing the Iron and Steel (Control) Order, the Central Government intended to prescribe a self-sufficient scheme for regulating the acquisition, distribution and disposal of iron and steel by controlled sources, controlled stockholders and registered producers. The Controller is required to take an overall view of the needs of national economy and to issue appropriate direction or to prescribe appropriate conditions. But even though the Controller is vested with very large discretion under the Control Order, he has his limits and such limits are to be found in the Chapter on Fundamental Rights of the Constitution. In order to examine the argument as to the constitutionality of clauses 3, 4 and 5 of the Iron and Steel (Control) Order, 1956 it is necessary for me to examine the language of the said three clauses, which I set out below:- "3 (1) - Application of this Part.-The provisions of this Part shall apply to all iron and steel of the categories specified in the schedule to this Order: provided that the provisions of this part shall not apply to any fabricated iron or steel of the categories specified in the said schedule when such fabrication is done under the authority of or in accordance with the conditions contained or incorporated in a general or special written order of the Controller or under the authority of a quota certificate or permit issued under clause 4 or 5, as the case may be. (2)-A certificate signed by the Controller or by any officer authorised by him in this behalf, in respect of any category of iron or steel, shall be conclusive proof that it is an article to which this Part is applicable. (2)-A certificate signed by the Controller or by any officer authorised by him in this behalf, in respect of any category of iron or steel, shall be conclusive proof that it is an article to which this Part is applicable. 4.-Acquisition - No person shall acquire or agree to acquire any iron or steel from a producer, a stockholder or a person holding stocks of iron and steel except under the authority of and in accordance with the conditions contained in a quota certificate or permit issued by the Controller or under the authority of and in accordance with the conditions contained or incorporated in a general or special written order of the Controller. 5.-Disposals-No person, who acquires iron and steel under clause 4, or no producer shall dispose or agree to dispose of or export or agree to export from any place to which this order extends any iron or steel, except in accordance with the conditions contained or incorporated in a special or general order of the Controller. " 13. ON a plain reading of the clauses, acquisition and disposal of iron and steel certainly depend upon conditions to be prescribed by the Controller and there is no express limitation or restriction on the conditions to be prescribed by him. But even then two limitations or restrictions are implied, namely, (i) the conditions must not go beyond what is necessary for the object of the Essential Commodities Act and (ii) the conditions must respect the fundamental rights under the Constitutions. With these two limitations or restrictions implied in clauses 3, 4 and 5 of the Iron and Steel (Control) Older, they need not be considered as arbitrary or void under the Constitution. I, therefore, repel the contention advanced on behalf of the petitioner that the aforementioned clauses are bad either for arbitrariness or for violating the fundamental rights under the Constitution. 14. I now turn to the other branch of the argument, advanced on behalf of the petitioner, namely, that the controller had no express power of termination of appointment as a registered stockiest or cancellation of declaration of a controlled source. 14. I now turn to the other branch of the argument, advanced on behalf of the petitioner, namely, that the controller had no express power of termination of appointment as a registered stockiest or cancellation of declaration of a controlled source. A controlled source is defined in clause 2 (a) of the Order: "2 (a) Controlled source means: (i) a producer, (ii) a Railway Administration, (iii) any factory, local authority, scrap merchant or person declared by the Controller to be Controlled source," There is no definition of registered stockiest in the Order, but stockholder has been defined in clause 2 (i) of the Order: 2 (1) "stockholder" means a person holding stocks of iron or steel for sale who is registered as a stockholder by the Controller, under such terms and conditions as he may prescribe from time to time. " 15. I believe the Controller used the expression registered stockiest in the sense of stockholder. In the body of the order there is no other indication how the declaration of a Controlled Source is to be made or how a stockholder is to be appointed. Nor is there any indication how the declaration is to be cancelled or appointment to be terminated. But although that is so, the power of declaration of 'controlled Sourer' or of appointment as stockholder and of cancellation and termination respectively thereof must be implied. This on the principle that where an Act confers a jurisdiction, it impliedly also grants the power of doing such acts, or employing such means, as are essentially necessary to its execution. The view that I take, was also the view taken by Sinha, J. in the case Kamal Singh Rampuria v. Corporation of Calcutta (5) (64 C. W. N. 401 ). 16. THE power to cancel or to terminate being implied, I am of the further opinion, that a reasonable procedure for the cancellation or termination must also be implied. Similar is the view, expressed by Earl of Selbourne L. C., in the case of Spackman v. Plumstead Board of Works (6) (L. R. 10 Appeal Cases 229, 240) :- "no doubt, in the absence of special provisions as to how the person who is to decide is to proceed, the law will imply no more than that the substantial requirements of justice shall not be violated. He is not a Judge in the proper sense of the word; but he must give the parties an opportunity of being heard before him and stating their case and their view. He must give notice when he will proceed with the matter, and he must act honestly and impartially and not under the dictation of some other person or persons to whom the authority is not given by law. There must be no malversation of any kind. There would be no decision within the meaning of the statute if there were anything of that sort done contrary to the essence of justice. But it appears to me to be perfectly consistent with reason, that the statute may have intentionally omitted to provide for form, because this is a matter not of a kind requiring form, not of a kind requiring litigation at all but requiring only that the parties should have an opportunity of submitting to the person by whose decision they are to be bound such considerations as in their judgment ought to be brought before him. " The above decision in Spackman's case (supra) was also quoted with approval by the Supreme Court in the case of New Prokash Transport Co. Ltd. v. New Suwarna Transport Co., Ltd., (7) (1957 S. C. A. 178 ). That being the position in law, the Controller was required to conform to the minimum requirements of natural justice before he could find the petitioner guilty of contravention of clause 4 of the Control Order. In other words, he was required to (i) charge the petitioner with contravention of clause 4 of the Control Order and (ii) allow reasonable opportunity to the petitioner to show cause against the charge and also give her a proper hearing. It is not disputed that the petitioner was not charged with contravention of clause 1 of the Control Order. In paragraph 37 of the affidavit-in-opposition affirmed by the respondent No. 1, there is, however, a statement to the following effect :- "I state further that I gave the petitioner full opportunity to show cause against the said contravention". thereby meaning opportunity to show cause against contravention of clause 4 of the Control Order. The above-quoted statement is affirmed as 'based on information received from the records'. Mr. thereby meaning opportunity to show cause against contravention of clause 4 of the Control Order. The above-quoted statement is affirmed as 'based on information received from the records'. Mr. Deb, could not satisfy me that there was anything contained in the records, which would establish the above statement and ultimately did not himself rely on the said statement. I, therefore, hold that the petitioner was not given opportunity to show cause against alleged contravention of the provisions of clause 4 of the Control Order. 17. THEN again, the reasonings given in extracts (c) and (d) of the order of the respondent Controller, hereinbefore quoted, are not proper reasonings. They are mostly conjectural in nature and his reasoning based on the procedure of Government offices is particularly so. But I need not make much of the defective reasonings, because I have to condemn the order on a much more fundamental ground, namely, that in passing the order the respondent Controller did not conform to the rules of natural justice. The findings as to violation of clauses 4 and 5 of the Control Order are mixed up and are not severable in any manner. Therefore, the order can not be saved on the ground of violation of clause 5 of the Control Order if there was any at all. 18. BEFORE I close this judgment, I should notice another argument, somewhat faintly argued by Mr. Deb. He contended that the declaration as a Controlled Source, under clause 2 (a), or appointment as Controlled stockholder, under clause 2 (b), was not conferment of any property right on the petitioner and it was not necessary to conform to any particular procedure in the matter of canceling the declaration or terminating that appointment or to conform to the rules of natural justice. I repel this argument. The cancellation and termination do certainly affect the petitioner's right of property in stocks held by her in her business because after cancellation of her declaration as a Controlled Source and termination of her appointment as a stockholder, it may be impossible of her to dispose of her stocks of iron and steel, which are surely her property. The order of cancellation and termination also affect her right to carry on trade or business. The order of cancellation and termination also affect her right to carry on trade or business. If property right is to be in any way affected or if right to carry on trade or business is to be taken away, then the order to that effect should not be made without notice or without hearing the person affected. The law on this point is very well summarised by Sinha, J. in the case of Kamal Singh Rampuria v. Corporation of Calcutta (5) (64 C. W. N. 401) and I respectfully agree with the summarisation. For the reasons aforesaid, I hold that although clauses 4 and 5 of the Control Order are not ultra vires the Constitution and although the Controller has power to cancel appointments or declarations he must exercise his powers in a reasonable manner. I further hold that in exercising his powers he did not act reasonably, in that he violated the principles of natural justice, which principles he was bound to respect. I therefore, quash the orders or decisions dated June 10, 1960 and July 7, 1960 (Annexures G and H to the petition) and command the respondents not to enforce the order against the petitioner. Let writs in the nature of certiorari and mandamus accordingly issue. The Rule is made absolute with costs.