Bharat Barrel & Drum Manufacturing Company Private Ltd. v. Deputy Iron & Steel Controller
1977-01-18
GANENDRA NARAYAN RAY, SALIL KUMAR DATTA
body1977
DigiLaw.ai
JUDGMENT The judgment of the Court was as follows :–– Datta, J. : This appeal is against the judgment and order of Pradyot Kumar Banerjee, J. dated August 16, 1971 whereby the Rule obtained by the petitioner was discharged. The facts in brief are as follows :–– 2. At the material time CRCA Steel sheet (Cold Rolled close Annealed Steel Sheet) was an essential commodity under the Essential Commodities Act, 1955 and the supply and distribution of the said sheet was regulated under the provisions of Iron & Steel (Control) Order, 1956. On or about March 29, 1965 the petitioner was granted an Import Licence by the Deputy Iron and Steel Controller. The Iron and Steel Controller, Calcutta for import of 449.876 Metric tonnes of CRCA steel sheets against export of various scrap made by it under the Barter system. The sheets were meant for the use of opposite party No. 8 M/s. R. K. Saraf. The sheet was duly imported in terms of the said licence and after arrival, the Iron and Steel Controller under clause 10 of the said Control Order required the petitioner to sell 210 Metric tonnes of the sheets to the said respondent No.8 and in pursuance thereof the petitioner delivered the said quantum of sheets to the said respondent. In regard to the balance of 239.876 Metric tonnes of the said sheets no allotment was made in favour of the said respondent No.8 as it was stated it had no outstanding. Thereafter the Deputy Iron & Steel Controller wrote a letter to the Director of Industries of the Government of Maharashtra on 17.3.66 informing him of the Controller's decision to handover the said stock for his operation. The Director was thereby requested that the said quantity of CRCA sheets was to be allotted to deserving parties registered with him under intimation to the Controller's office.
The Director was thereby requested that the said quantity of CRCA sheets was to be allotted to deserving parties registered with him under intimation to the Controller's office. This letter was followed by another letter of March 26, 1966 whereby the Industries Commissioner of the said Government of Maharashtra informed the Secretary of the Maharashtra Small Scale Industries Development Corporation Limited to take delivery of 239 and odd tonnes of the said sheets in consultation with the petitioner, a copy of the letter was sent to the Iron & Steel Controller informing him that the State had appointed the above Corporation as a distributing Agency and the entire stock was being taken by the Corporation for distribution under this Directorate. The petitioner was further informed by the said letter to deliver or sell the said stock at full costs plus importer's remuneration to the nominees of the said Development Corporation. Thereafter the petitioner sent a proforma of cost in respect of the said stock charging to his remuneration permissible under the Control Order, interest from the date of the receipt of the materials in godown which was 29th August 1965 till April 30, 1966 as also godown charges for the said period. This was as it appears objected to by the Controller of Iron and Steel and the correspondence in connection thereof was in progress and the goods were not delivered. A public notice was issued by the Deputy Iron and Steel Controller thereafter which is to the following effect:–– "Government of India Ministry of Iron & Steel Iron & Steel Control (Department of Iron & Steel) 22, Netaji Subhas Road, Calcutta-I. No. L(III)/D/I/BR/2/65. Dt. 18th May, 1966. Public Notice In exercise of the powers under Clause 10 of the Iron & Steel (Control) Order, 1956, importers are hereby authorized to dispose of the stocks of CRCA Sheets, imported under barter deals and lying with them for more than 90 days from the date of arrival in the country, to the consumers of their own choice. The price chargeable by the importers should not exceed full landed cost, plus their remuneration as admissible vide Notification S. O. No 345/ESS. COMM/Iron & Steel-15(1) & 27 (i) published in the Gazette of India, Part II, Section 3(ii) dated 3.2.62, as amended from time to time. 2.
The price chargeable by the importers should not exceed full landed cost, plus their remuneration as admissible vide Notification S. O. No 345/ESS. COMM/Iron & Steel-15(1) & 27 (i) published in the Gazette of India, Part II, Section 3(ii) dated 3.2.62, as amended from time to time. 2. Importers will have to submit a statement to this office within 7 days from the date of such sales in the proforma prescribed below licence wise–– Name & address of the consumer to whom Date of Description Tonnes materials has been sold. sale. of materials. Sd/- (C. B. Mathur) Deputy Iron & Steel Controller 3. By this notice all it would appear the Controller permitted disposal of the stock of CRCA sheets imported under Barter deals lying with the Importer for more than 90 days from the date of arrival in the country to the consumers of their own choice. Further limitation was that the price chargeable could not be in excess of the landed cost and the importers will have to submit a statement to the Controller's office within seven days from such sates in the proforma prescribed in the licence. 4. The petitioner's case is that on the issue of this public notice he was free to dispose of the imported sheets to the consumers of his own choice. Notwithstanding the issue of the said notice, the Controller purported to issue an order on 8th June, 1966 through the Price and Accounts officer acting for him directing the petitioner to deliver the materials at full landed cost plus his authorized remuneration to the Maharastra Small Scale Industries Development Corporation Ltd., Bombay The petitioner thereafter also made correspondence with the Controller stating that the goods were lying in their god own since the date of arrival and had been incurring godown rent and bank interest for no fault of his. The attention of the authority was drawn to the fact that had the allotment been made in time to any other party by the Iron and Steel Controller such charges would not have been incurred. The petitioner accordingly suggested that the godown rent and bank charges should be given to him by the party who would be interested in taking delivery of the materials or in the alternative he should be allowed to appropriate the goods for his own consumption without the stock being adjusted against his outstandings.
The petitioner accordingly suggested that the godown rent and bank charges should be given to him by the party who would be interested in taking delivery of the materials or in the alternative he should be allowed to appropriate the goods for his own consumption without the stock being adjusted against his outstandings. This representation was made to the Controller as also the Secretary of the Government of India in the Ministry of Iron and Steel. By their letter again on 5th September, 1966 the petitioner informed the Iron and Steel Controller that as the public notice applied to the petitioner and the materials in question had been lying with the petitioner for more than 12 months, the Iron and Steel Controller was not entitled in law to make any allotment of the materials in favour of any party and he was accordingly proceeding to consume the materials himself. After some further correspondence on January 19, 1967 the Deputy Iron and Steel Controller in exercise of the powers under Clause 10 of the Iron and Steel (Control) Order 1956 directed the petitioner to supply the materials imported against the licence referred to above to M/s. R. K. Saraf. It was further directed that the materials were to be sold at full landed costs plus the petitioner's remuneration. The order further stated as fallows :–– "(f)...... In the event of your failure to comply with the directive for release of the materials allotted to M/s. R. K. Saraf......Nagpur, on or before 3.2.67 and to send report thereof within 10.2.67, it may please be noted that you will render yourself liable to action under the Essential Commodities Act. (g) It may please be noted that this Release order is issued in supersession of the one previously issued by the Industries Commissioner, Directorate of Industries, Bombay-32........." 5. The petitioner on demand of justice moved an application under Article 226 of the Constitution of India praying for a writ for quashing the orders referred to above, namely, orders dated March 17, 1966, March 26, 1966, June 8, 1966 and January 19, 1967 and for issue of appropriate writs forbearing the authorities from taking any step to enforce or giving effect to the same.
The Rule was opposed by the Iron and Steel Controller, Deputy Iron and Steel Controller and others and on hearing the parties, the learned Judge discharged the Rule on the ground that the grievance, if any, of the petitioner for interest or for bank charges could be made in a properly constituted suit and not by any proceeding under Article 226 of the Constitution. The Rule accordingly was discharged and the present appeal is against this decision. 6. Mr. Ginwalla, learned Advocate appearing for the petitioner, has submitted that under the provision of clause 10 of the said Control Order, the Controller or the persons duly authorized in that behalf by the Central Government can exercise the power of the release of the stock of steel but such power cannot be delegated to any other officer as was purported to be done by order dated March 17, 1966. It was further contended that the Industries Commissioner had no power or authority in law to direct the petitioner to deliver the balance quantity of sheet, in accordance with the allotment made by him in favour of the Secretary of the said Corporation. It was accordingly contended that these orders were invalid orders. It was further submitted that after the publication of the public notice, there was no scope for issuing any order or direction allotting such steel sheets in favour of the said Corporation as was done by the order dated June 8, 1966 or ultimately in favour of M/s. R. K. Saraf as was done by the order dated January 19, 1967. Accordingly, the petitioners were entitled to appropriate writs restraining the respondents from giving effect to or enforcing the said orders. 7. Mr. Roy Chowdhury, learned Advocate appearing for the respondents, submitted on the other hand that the Iron and Steel Controller or the Deputy Controller was fully authorized to issue such directions as was deemed proper on basis of the power conferred on him under Clause 10 of the said Control Order and, accordingly, the order of allotment issued by him in favour of the Commissioner of Industries was a valid order. He further submitted that the other orders issued by the Industries Commissioner were in pursuance of the allotment order made by the Controller and, as such, were valid. Mr.
He further submitted that the other orders issued by the Industries Commissioner were in pursuance of the allotment order made by the Controller and, as such, were valid. Mr. Roy Chowdhury further submitted that the final order of January 19, 1967 which was passed by the Deputy Iron and Steel Controller was in accordance with the provisions of Clause 10 of the said Control Order. This order, according to Mr. Roy Chowdhury, did not prohibit the Controller from passing appropriate order notwithstanding any order like the public notice that might have been placed by him earlier. He accordingly submitted that the challenge to the orders, in particular to the last order was without any substance and should be so held by the court. Clause 10 of Iron and Steel (Control) Order, 1956 is as follows :–– "10. Power to direct release or sale,–– Notwithstanding the provisions of this part of the conditions governing the acquisition of any categories of iron or steel, the Controller may, by a written order, require any producer, any stockholder, or any person in possession of iron or steel either to release by way of loan or sell the whole or any part of any iron or steel in the possession of such party to such person or class of persons on such terms and conditions as may be specified in the Order......" 8. An analysis of this order would indicate that it is the Controller (which means persons duly authorized also), who is to release the whole or any part of the iron or steel in the possession of any producer or stockholder to such person or class of persons and on such terms and conditions as may be specified in the Order. This provision clearly indicates that the allottees as also the terms and conditions of release to such allottees are to be specified in the order itself which the Controller or persons duly authorized are authorized to pass. In the instant case, in respect of order of March 17, 1966 it will appear that the Deputy Controller though he had specified the conditions, the parties to whom the allotment was to be made, had not been specified and the Director of Industries was given the option to make the allotment to deserving parties registered with him.
In the instant case, in respect of order of March 17, 1966 it will appear that the Deputy Controller though he had specified the conditions, the parties to whom the allotment was to be made, had not been specified and the Director of Industries was given the option to make the allotment to deserving parties registered with him. This order, in our opinion, is not in accordance with the provision of the said Clause as the allottees were not specified therein as we have noted above. Such allotments were to be made by the Controller himself or the person duly authorized in that behalf. 9. It further appears that by this order the Deputy Controller was purporting to delegate his power to the Director of Industries. No such power of delegation has been conferred on the Controller or the person authorized as will appear from the said clause. We are accordingly of opinion that this order suffered from fatal infirmities and was thus an invalid order. The action of the petitioner in agreeing to comply with the said provision of the Order does not and cannot validate such infirmities in the order itself and, in fact, this position possibly was realized by the subsequent supersession of this order as we shall presently see. If this order fails the other order of the Industries Commissioner dated March 26, 1966 also fails automatically in consequence. 10. We shall now come to the order passed by the Price and Accounts Officer on June 8, 1966. It has been stated by Mr. Roy Chowdhury and not seriously disputed by the petitioner that the Price and Accounts Officer was a person duly authorized to exercise the power of the Controller under Clause 10. Even so, this order referred to the previous order and directed the petitioner to deliver the stock to the said Development Corporation which admittedly was a distributing agency. This is also an order which is not in terms with the provision of Clause 10 for the reasons we have already indicated also particularly it has come after the public notice which also we shall presently consider. The last notice of January 29, 1967 was challenged by Mr. Ginwalla on the ground that it was not possible for the Deputy Iron and Steel Controller to issue a fresh allotment later in favour of M/s. R.K. Saraf after the promulgation of the public notice.
The last notice of January 29, 1967 was challenged by Mr. Ginwalla on the ground that it was not possible for the Deputy Iron and Steel Controller to issue a fresh allotment later in favour of M/s. R.K. Saraf after the promulgation of the public notice. It was contended that this notice was in full force and effect and the Controller had no authority to pass any order contrary to the provisions of the said public notice. It was stated that notice was not superseded and, accordingly, in absence of such supersession a subsequent order contrary to the previous order could not be passed. Mr. Roy Chowdhury contended that even though a public notice was issued releasing the stock for sale to customers of the choice of the importer in case the delivery of stock is not taken within 90 days, there was nothing in Clause 10 to preclude the Controller from passing an order like the impugned order. The Controller had always the power to pass order as would deem fit and the public notice could not stand on the way. It was further contended that the public notice was at least impliedly revoked when the impugned order was passed. Mr. Roy Chowdhury further submitted that, in any event, the Controller had always the power to issue such order, when the stock was actually in possession of the importer and had not been disposed of in pursuance of the said public notice. 11. As to the question of possession of stock it was pointed out to us by Mr. Bajoria learned counsel for the petitioner that as late as in September, 1966 the petitioner gave notice to the Iron and Steel Controller that in view of the public notice they were consuming the stock themselves as the Controller had no further authority to issue any allotment. We do not find any cogent evidence in affidavit or otherwise in support of the case of either party in respect of the goods being still in possession at the material time with the petitioner. We however proceed to consider the scope and effect of the public notice vis-a-vis the powers of the Controller with reference to Clause 10 of the said Order. The public notice was issued in pursuance of Clause 10 of the said Order as the preamble of the Order indicates.
We however proceed to consider the scope and effect of the public notice vis-a-vis the powers of the Controller with reference to Clause 10 of the said Order. The public notice was issued in pursuance of Clause 10 of the said Order as the preamble of the Order indicates. If it was possible for the Controller to issue such order it would also be possible for the Controller to revoke the said order in appropriate circumstances. The power to issue a public notice of the nature under consideration carries with it the power to revoke such order in the context of relevant circumstances. We are therefore, unable to accept the extreme contention of Mr. Ginwalla that once a public notice is issued by the Controller, he is incompetent to issue any notice superseding or revoking such public notice. 12. The next question that requires consideration is whether such public notice was revoked. There is no dispute that there was no such express revocation. It was contended that if the public notice is revoked only in respect of the petitioner, it would be discriminatory. Even if it were so, as at present advised, we are unable to consider this aspect of the question in view of the suspension of such right for the time being. The question now is whether the public notice could be taken to be impliedly revoked by the impugned order. The impugned order as we have already noticed contains a clause that earlier allotment was being thereby superseded. No such supersession of the public notice is to be found in the impugned order. It is well known that the steel sheets we are concerned with are essential commodities under the Essential Commodities Act and its supply and distribution is controlled by the Iron and Steel (Control) Order. It is also well known that in case of any breach of the order of appropriate authorities under the said Control Order, the person guilty of such breach would be liable to prosecution, penalty and imprisonment. In the context of this provision, the revocation of the order cannot be a matter of inference or implication and such revocation to be made must be made by an express order. We are therefore, unable to accept the contention of Mr.
In the context of this provision, the revocation of the order cannot be a matter of inference or implication and such revocation to be made must be made by an express order. We are therefore, unable to accept the contention of Mr. Roy Chowdhury that by the impugned order public notice was deemed to be impliedly revoked in so far as the petitioner is concerned. On the face of the public notice the impugned order cannot but be held to be an invalid order. For all these reasons we are unable to sustain the judgment under appeal. 13. The appeal accordingly is allowed and the connected Rule is made absolute. 14. Let appropriate writs issue on the respondents in terms of prayer (a) of the writ petition. There will be no order as to costs. Ray, J.: I agree.