Bhagwati Saran and Another v. The State of Uttar Pradesh.

Ayyangar J. never appeared then, as a possible source of grievance

to a party situated similarly as the second appellant. We hold th'l.t the notification fixing the prices together with the conditions appended thereto a.re valid and enforceable.

The last point that remains to be dealt with, is the contention that the initiation of the pr<'secution against the appellants waR invalid for non.compliance with the requirements of s. 11 of the Act. This Section runs :

"11. · Cognizance of offences.-No Court shall take cogniza.nce of any offence punishable under this Act except on report in writing of the facts constitut-ing such offence ma.de by a person who is a public servant as defined in section 21 of the Indian Penal Code (XLV of 1860)."

Learned Counsel for the appellants urged that though two of the conditions specified by the statute, viz., (I) a report in writing, (2) by a public servant were satisfied, the third requisite, viz., that the report should set out the " facts constituting such offence " was lacking and that by reason of this defect the Magistrate could not lawfully take cognizance of the case against the appellants. In elaboration of this point learned Counsel pointed out that the report did not specify: (a) the date when the alleged sales took place, (b) the quantity sold, (c) the person in question who was the buyer and who pa.id the excess over the controlled price, (d) the cJa.3s or category of iron and steel which was the subject of the sale by the appel-lants, (e) the precise maximum price which had been fixed for such variety, (f) the a.mount which the appellants were alleged to have received in excess. The learned. Judge of t},le High Court rejected this contention and, in our opinion, correctly. · In the report which we have alrea.dr extracted the provision ·--;-, ',...---:- .,.,. .\

.3 S.C.R. SUPREME-COURT REPORTS.· 577

of the la.w which the appellants were atated .. to have contravened wa.s set out, and it was there stated that being "registered stockholders" they. had sold the Bhagwati SMatf v. goods above the price notified and that they-had State of . further,_in order to conceal their crime, fabricated Uttar P1a]e$lt evidence. It is to be noticed that the report is required to contain only "a. statement of facts constituting the .Ayyangar offence" a.nd its function is not to s·erve as a. charge-sheet a.ga.i!lst the accused: The function or purpose · of the second of the a.hove three requirements of s. 11 is to eliminate private individual~·. such as rivaF traders or the general public from initiating a. prosecu-tfon and for this purpose before cognizance is ta.ken · · the complaint is required to emanate from " a. public · servant"- The two further requirements, viz., that the report should be in writing and regarding the contents of the report, are to ensure that there-shall be a.record that the public servant is satisfied that a.

contravention· of the Ja.w has'. ta.ken· place. If the· contravention in question is sufficiently designated in the report, a.nd in the present case that cannot be disputed, since besides a. reference to the notification stated to have· been contravened, the report states tha.t .the accused had effected sales .a.hove the maxi-mum prices specified in the notification, the require-ments of'the section are satisfied. '£he details which would be necessary to be proved to bring home the guilt to the accused and which comprised the several matters enumerated by learned Counsel which we have set out, will be details which would emerge at a later stage, when after notice to the accused a charge is framed against them. and of c;Q_urse at the stage of the trial.· They would all be matters of evidence and s. 11 does not require the report to be or to contain either the charge-sheet or the evidence in. support of the charge, its function being merely to afford a basis for· enabling the magistrate to take cognizance of the case. .

· · In support of his submission regarding the construe- · tion of s. 11 reliance v'. was placed on two · deCisions :

Dr. N. G. Ohallerji Emperor(') ~nd Rachpal Sirigh v.

\•l (1946) 47 Cr. LJ •. 876.

. Rex('). Both these were cited before the learned Judge and we agree with the manner in which he has Bhagwati Saran dealt with and distinguished them. No doubt, in

v. both these cases it was held that the requirement of State of Ullar Pradesh r. 130 (1) of the Defence of India Rules (whose langu-

age was similar to s. 11 of the Act) as to the Statement Ayyanga• ]. of "facts constituting the contravention" was not

complied with, but the " reports " dealt with in them, bear no resemblance to the report in the case before us. In the first of these decisions, the recital in the report was that the accused was guilty of a " prejudi-cial act to the interest of the public" and "had pre-judiced the success of financial measures with a view to the efficient prosecution of the war". These words were held to be absolutely vague, even the particular rule or provision of law which was said to have been contravened, not even being mentioned in the report. The other decision in 50 Criminal Law Journal does not bear any.analogy to·the present case either. The report there in question ran :

"On the statement of the informant an offence under s. 81(2), Defence of India.Rules, has been com-mitted for which the charge-sheet is being sub-mitted."

On this it was held that the facts alleged to constitute the contravention were not set out in the report and that the Magistrate had therefore no jurisdiction to I take cognizance of the case. Obviously this case could not assist the learned Counsel to sustain a contention that the report in the present case was defective. We consider that the report on which the prosecution was launched satisfied the requirements of s. 11 of the Act. ·

In the result the appeal fails and is dismissed.

Appeal di8mi8sed. (1) (1947) $0 Cr. L.J. 469.

CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 16 of 1959.

Appeal from the judgment and order dated Novem-ber 18, 1958, of the Allahabad High Court in Criminal Reference No. 452 of 1956.

R. V. S. Mani, for the appellants.

G. 0. Mathur and 0. P. Lal, for the respondent. 1961. January 20. The Judgment of the Court was delivered by Ayyangar ]. AYYANGAR, J.-Having heard the learned Counsel

for the appellants in full we did not consider it neces-sary to call on the respondent since, we were clearly of the opinion that the contentions raised in the appeal possessed no merit.

The legality of a prosecution for contravention of the Bhaiwati Saran v notification fixing the maximum prices at which Stale of certain categories of iron & steel could be sold is the Uttar Pradesh subject.matter of this appeal. The appellants are two J. in number, related to each other as husband and wife. Ayyangar The second appellant-Sushila Devi-is" a Registered tstockholder " and is state.d to be the proprietor of the firm "Balwanta Devi · Sushila Devi" situated in Sultanpur in Uttar Pradesh and the first appellant-.

Bhagwati Saran, her husband, the. manager of the said firm.

There has been some previous history before the present prosecution was in.itiated but it is sufficient for the purposes of this appeal to start with the report to the Judicial Magistrate, Amathi, by the officer incharge of the Police station, Sultanpµr, dated A.ugust 20, 1955.

It was headed "Offence-Section 11-B Iron & Steel Control Order, 1941" and set out the following facts:

" Bhagwati Saran used to work as a Karinda in the firm of Balwanta Devi Sushila Devi and had all along been doing sales and purchases at the shop, and also issued receipts .under his signatures. Shri-mati Sushila Devi is the wife of accused Bhagwati Saran and she was the proprietor. Balwanta Devi has died. Hence she alone is the proprietor. In the course of investigat.ion it was also revealed that Bhagwati Suran had from time to time sold some iron-b11.rs on behalf of this firm after receiving price more than the control rate, which he had all along I been getting printed, and had been getting some

other receipts checked fictitiously under the Control Act from the office of the Supply Officer. An infor-mation relating to it was given to Shri P. N.

Kapoor, the then D. M., Sultanpur by his munim Kalapnath and on it a case was registered at t:his police station and the investigation was made ..... .

.................. On the report of the P.P"'the S.P.

ordered another charge-shuet to be submitted under section 8 of Essential Commodities Ordinance of I 1955. Hence this charge-sheet under sectiqn 11-B

(III) Iron and Steel Control of Production and Distribution Order, 1941, read with s. 8 of Essential Bhagwati Saran Commodities Ordinance of 1955 is sent against both

v. the accused. The accused persons after being State of Vilar Pradesh arrested were releaMed on bail. It is, therefore,

prayed that the accused persons after being sum-Avyangar ]. moned may be punished."

The report further stated that 4 volumes of cash memos, and 5 volumes of register of Permits were· deposited in the Malkhana and would be produced in evidence and followed it with a list of 13 prosecution witnesses. The Judicial Magistrate registered the case and issued summons to the accused on Septem-ber 16, 1955, the {lase being directed to be called on September 30, 1955. The accused were thereafter examined before the Magistrate under s. 364 of the Criminal Procedure Code on March 23, 1956, and on the next day the Magistrate framed a charge against them which read as follows:

"That you between 10th January 1952 and 27th February 1952 in Sultanpur sold 11 Cwt. 12 lb. iron bars on 11th January 1952 and 3 Cwt. iron bars on 18-2-52 and 6 Cwt. iron bars on 26th February 1952 at the rate of Rs. 21-13-9 per Cwt. though the controlled rate as notified in Government of India Gazette dated 1st July 1952 for the commodity was Rs. 21-2-4 per Cwt. and thus you charged Rs. 1-15-0, Rs. 2.-2-3 and Rs. 4-4-6 respectively excess and more than the controlled price and thereby committed an offence punishable under s. 7 E. S. Temp. P. Act 1946 read with s. 11-B (iii) of Iron and Steel Control I of Production and Distribution Order of 1941 and I hereby direct that you be tried by the said Court on the said charge."

The two appellants thereupon moved the Court of the Sessions Judge, Sultanpur, to revise the order of the Magistrate dated March 24, 1956: framing charges against them under s. 7 of the. Essential Supplies (Temporary Powers) Act, 1946-Act XXIV of 1946 (referred to hereafter as the Act).

The points urged at that stage were mainly two : I (1) That the notification by the Controller under cl. 11-B(I) fixing the maximum prices which were r96r stated to have been contravened not having been filed before the Court, the Magistrate erred in framing a B/Jagwati Sa,.an v. charge, and (2) that the report of the police was not State of in conformity with the provisions of s. 11 of the Act. Utta1 P1adesl~ The learned Sessions Judge upheld the second of the above contentions which was, that the report made Ayyangar by the police officer did not set out " the facts consti-tuting the offence" as required by s. 11 of the Act.

He rejected the other point put forward by the appel-lants but in view of his conclusion that there was a defect in the report which went to the root of the jurisdiction of the Magistrate to take cognizance of the case, he made a reference to the High Court with a recommendation that the charge framed against the appellants be quashed. This reference was heard by a Single Judge of the High Court, who disagreed with the learned Sessions Judge in his view that the report did not satisfy the requirements of s. 11 of the Act.

Before the learned Judge, however, a further point was urged, that s. 11-B of the Iron & Steel Control of Production and Distribution Order, 1941 (which will be referred to hereafter as the Control Order) was itself ultra. vires. This further objection was referred to a Division Bench .for decision. The point urged before the learned Judges' of the Division Bench was that the power to fix prices vested in the Steel Con-troller by cl. 11-B of the Control Order was unconstitu-tional, as violative of the right to carry on business guaranteed by Art. 19(l)(g) of the Constitution .. The learned Judges answered this point against the appel-la.nts and the case thereafter ca.me back before the I learned Single Judge for final disposal of the reference

by the Sessions Judge. The learned Counsel for the appella.nts once again made a. submission to the learned Judge regarding the report of the police officer dated August 20, 1955, not satisfying the requirements of s. 11 of the Act and pressed before him the view which found favour with the learned Sessions Judge.

In a more detailed judgment, the learned Judge again rejected this contention and dismissed the reference and directed the prosecution to continue. It is this

568 SUPHEME COURT REPORTS [1961]

order of the High Court of Allahabad that is the l subject-matter of appeal now before us, on a certi-Bhagwati Saran ficate granted by that Court.

v. It would be seen that the only two points in contro-State of Uttar Pradesh versy before the High Court were: (1) whether the

report of the police offioer dated August 20, 1955, con-Ayyangar ]. tained " the facts constituting the offence " with

which the appellants were charged, as to satisfy the requirements of s. 11 of the Act, and (2) whether cl. 11-B of the Control Order, violated the funda-mental right to carry on business guaranteed by Art. 19(1)(g). In the grounds of appeal to this Court and in the statement of case, however, the appellants have raised various other grounds and have also filed a petition for leave to urge these.additional grounds. We desire to make it clear that grounds additional to those urged before the High Court would not be permit-teJ to be raised before this Court as a matter of course and that petitions for such purpose would. not be granted save in exceptional cases; It has to be noticed that in hearing and dealing with such additional· grounds the Court is handicapped in·not having the advantage of the opinions .of the High. Court on the points urged. It is the correctness of the decisions of High Courts that are sought to be challenged in appeals and it is but proper that the correctness of these judg-ments should, save in exceptional cases . like for instance subsequent legislation or questions of funda-mental and genera.I importance etc., be assailed only on grounds urged before such Courts. Besides, when among the grounds thus urged as in this case is includ-ed a violation of Art. 14, the handicap is accentuated, since the material facts on which the classification might rest could not be properly investigated or evaluated on the basis of the affidavits· filed in this Court without a careful sifting of the facts which a consideration by the High Court would afford. If in the appeal now before us, we have depr•rted from this rule and permitted the appellants to urge the additional grounds it was because of the circumstance that the prosecution was pending and learned Couns<·l sabmitted that he woald seek to sustain his contention regarding the violation of fundamental rights on the materials already on record.

The ground regarding the constitutionality of B hagwati Saran cl. L:. -B of tne. Control Order has been the subject of v. State of elaborate consideration by this Court in Union of India Uttar Pt<adtsh v. Messrs. Bhrtna Mal Gulzari Mal (1) and is, therefore, no longer open to argument. Learned Counsel for the Ayyangar f· appeJlant therefore die not challenge the correctness of the judgment of the High Court upon this point.

Besides the ground based on a non-compliance with s. 11 of the Act which we shall consider later, learned Counsel urged before us two points with reference to the notification issued by the Steel Controller fixing the maximum prices· at whjch the sevoral categories of iron and steel could be sold by producers and stock-holders. These were: (1) that the notification of the Controller dated July 1, 1952, for the contravention of which the appellants were being prosecuted, was ultra vires the rule-,naking puwer conferred upon him by cl. 11-B(l) of the Control Order, (2) if, however, the notification was held to b~ within his pow'3r, the same was unconstitutional in that it was discriminatory and violated Art. 14 of the Constitution. As we have indicated earlier, these gronnds of challenge to the validity of the notification were not made in any of the Courts below including the High Court, but for the reasons indicated we permitted learned Counsel to argue them before us.

In order to appreciate the contention presented in the two forms, it is necessary to set out the terms of cl. 11-B(l) which conferred power upon the Controller to fix the maximum base-prices at which the several varieties of iron and steel could be sold. Clause 11-B(l) runs:

"11-B. Power to fix prices.-(!) The Controller may from time to.time by notification in the Gazette of India fix the maximum prices at which any iron or steel may be sold (a) by a Producer, (b) by stock-holder including a Controlled Stockholder and (c) by any other person or class of persons. Such price or prices may differ for iron and steel obtainable from

different sources and may include allowances for · contri~uti!\n to and payment from any equalization Bhagwati Sa1. furid' established by the Controller for equalising

v.

Slatecoj · freight, the concession rates payable to each pro- ···:·.-·iu."a~: Prades ducer or class of producers under agreements entered

into by the Controller with the producers from time Ayyanga~ J. to time, and any other disadvantages."

Clause (2) of the Control Order defines "producer " as " a person carrying on the business of manufactur-ing iron or steel", and "registered producer" as "a producer who is registered as such hy the Controller ". The same clause defines "stockholder" as " a person holding stocks of iron or steel for sale who is register-ed as a stockholder by Controller·" and "Controlled stockholder" as "a stockholder appointed by the Con-troller to hold stocks of iron or steel under such terms and conditions as he may prescribe from time to time". The notification of the Controller dated July 1, 1952, impugned in these proceedings runs in these terms, quoting only the material words:

"Under Ministry of Commerce and Industry Notification ............ the prices of all items of steel under columns I, II and III in the schedule of Base Prices of the attached price circular No. 1 of 1951 have been increaGed by Rs. 50/- per ton with effect from 1st July, 1952, except item 19(b), i.e., Billets .··, ·which has been increa.sed by Rs. 45/- per ton ........ . The other General and Special Conditions of sale. mentioned in the attached Price circular remain the same."

3 &.C.R. SVPREME COURT REPORTS 571

The price circular dated July I, 1951, referred to here consisted .of eight columns which ran thus: · Bhagwa1i Saran (Price. in rupees per ton) v. Staj1 of U llar PrU..sh Maximum Base Prices at Calcutta., Bombay and Madras Ayyangar f. Base Materials Column..! I Column II_ Column III Price I Item For sales by For sales by For sales by No. Registered controlled all persons Producers. stockholders. ~er than Registered --f Producers and controlled stockboldera, I .,; .,; • .,; • ..; • I .,; • 1i $ ~ ~ ·~ ~ ~ Rs. I Rs. I Rs. Rs. Rs. I Rs.

A-Bars, Structural

and plates etc.

I Bars and Rods 303 333

{Rounds and squares below 3" and flats up to and including s" wide) 2 to '42 ............................................................................................ .

This was followed by General Conditions ·and Specie.I Conditions which inter alia made provision for the purpose of rounding off inequalities in freight caused by places being situated at varying distances from the place of production etc. It was the operation of sorue of these conditions that was urged as giving rise to the discrimination complained of, but it will, however, be convenient to deal wi~h them la~er, B:fter disposing of the argument regardmg the not1ficat10n not being within the powers of the Controller under cl. U.B (1).

The ground urged in support of the contention tha.t the notification Ly the Cont-roller was not in conformity

with cl. 11-B (1) was this: Whereas under cl. 11-B(l) the·Controller was directed to fix the maximum prices Blwgu:ati Sara1t \vhieh could be charged by three different classes, viz.,

v. (a) Producers, (b) Stockholders including Controlled .state 1Jf [Tttar Pradesh stockholders, and (c) Other persons, the impugned

notification departed from this scheme in two respects: (1) The clause contemplated that the noti-fication should apply to all " producers" whereas "producers" other than "Registered producers" were wholly left out by the Controller with the result that no limitation was placed upon the price they could charge, (2) Whereas the clause directed the Con-troller to include both the types of stockholders- " Registered " as well as "Controlled "-within the same class and make the same limit of prices applic- . able to both, the notification had included only "Con-trolled stockholders " as the second category of dealers and "registered stockholders" had not been specified eo nomine by him. This meant either that "Hegistered stockholders" were wholly outside the class of dealers governed by the notification or that they were intend-ed to be included in the residuary class in column III. On these premises learned Counsel urged that if "registered stockhoklers" like the second appellant were not within the notification, the prosecution must fail because the maximum 'prices chargeable by her had not been fixed. lf on the other hand such dealers had been separated from " •Controlled stockholders" and included in the residual category, such a classifi-cation was not countenaµced by cl. 11-B(l) and was therefore ultra vires.

We consider that these submissions are wholly without any .substance. Before the argument that " producers '' other than '"registered producers" had not been included in the notification ca;n be accepted, it has to be established of that there is any such producer. There is a list "registered producers" appended to the notification and learned Counsel admitted that he could not say that thore were any besides these, who wore "producers" of iron and steel within the meaning of the Control Order. If therefore every "producer'' was regi"tered, ther~ io< no scope for the argument that any persons had been left out and permitted to sell at r96I prices of their choice.

Bhagwati Saran The other part of learned Counsel's argument that v. " registered stockholders " were not governed by the State of notitication because they were not included in column Uttar Pradesh II thereof and that dealings by them were not subjected· to the maxima of prices fixed by it, has only to be stated Ayyangar j. to be rejected. The heading of the last column shows that all categories of dealers other than "registered pro-ducers?' and "controlled stockholders" were included in the residuary category. The related contention that the Controller acted outside his powers in differentiat-ing between "contro!led stockholders" and "registered· stockholders " and in fixing different ma,xima of prices that could be charged by the two categories of dealers;

does not deserve serious consideration either. If we understand the classification a.right, it is like one be-tween wholesale dealers and retailers and it is on this basis that the maximum price that could be charged · by the "Registered Stockholders" who fall under column III is fixed at Rs. 20/- per ton above that per-missible to "Controlled Stockholders" iP respect of the category of steel which we have extracted earlier.

The classification which gives persons in the category of the appellants this advantage is certainly not one regarding which a complaint could be made. Even when this advantage conferred on regfotered stock- .-.,i holders by the classification by the Controller was

pointed out to learned Counsel for the appellant he persisted in his argument that "registered stock-holders" should have been put in column II along with " controlled stockholders " and should have been per-mitted to sell only at the same maximum prices. 'l'his is sufficient to show that the argument regarding the classification was frivolous and could not have been urged with any seriousness. This apart, we consider that even on the terms of cl. 11-B (1), the Controlleds not prevented from drawing a distinction within the three classes which are specified in it. The purpose and policy of the enactment is to ensure that an essen-tial commodity like iron and steel is made available to

the consumer at reasonable prices and in the achieve-ment of this objective classification of producers or of Bhagwati Saran other stockholders based upon rational grounds would

v.

State of obviously be within the power of the Con_troller. Uttar Pradesh Ta.king for instance the la.st class (c) "any other

person or class of persons," it cannot be that this group Ayyangar ]. could not be sub-classified, if there was any reason or

necessity to do so. If head ( c) is susceptible of this interpretation, as it obviously must, we see no reason why head {b) should not be similarly construed. We have therefore no hesitation in rejecting the conten-tion of learned Counsel, that the notification of the Controller fixing maximum prices is beyond his power, as not warranted by the terms of cl. 11-B (1) of the Control Order.

The argument next advanced in challenge of the vali-dity of the notification was, that some of the General Conditions appended to the notification were discrimina-tory of the class of"registered stockholders" as compared with the "controlled stockholders " invoking for this purpose Art.14 ofth.e Constitution. Learned Counsel did not challenge the legality of the creation of the equa-lisation ,fund by the allowances for what is termed as " place extra ''.. Learned Counsel, however, urged two matters wherein facilities had been afforded or price increases permitted, to " controlled stockholders" which were denied to " registered stockholders " and that these had been done without any rational basis. These were: (1) The 3rd of the special conditions for sale .by "controlled stockholders" read: "The· question of credit faoi.lities will be a matter for negotiation be-tween the customers and the controlled stockholders." t (2) Similarly, Condition 5 also relating to "controlled stockholders" read : "The base-prices are for sizes and length available in size. · Customers requiring j mat«iria.l cut to length or size not available in stock will be required to pay cutting and wastage charges a.greed between the customers and the stockholders." Coming now to the special conditions for sale " by persons ot!ier than producers ana controlled stock-holders," i.e., the conditions which governed sales like those by the second appellant, special condition I read: "The base-rates given in column III above are ex.site and apply to sales by all persons other than Producers and Controlled Stockholders ............ and are Bhagwati Saran not subject to additional charges for cutting or for v. State of credit facilities. " Neither of these points-cutting Uttar Pradesh charges or credit facilities-could be held to be discriminatory without a full investigation of the facts Ayyangar and circ.umstances which led to the imposition of these special conditions. Differentiation could never per se be discrimination, nor is there -any presumption that the adoption of different rules for groups differently situated is unequal treatment violative of Art. 14. On the other hand, the presumption is the other way and the party that alleges unjustifiable discrimination should establish it to the satisfaction of the Court.

We consider that there is no material on the basis of which an argument could be sustained that the special-conditions to which lea.med Counsel adverted con-tained any element of unfair or irrational discrimina-tion to attract Art. l4.

There was a slight and subsidiary point raised in regard to the allowance of credit facilities and cutting charges. It was said that these charges were indeter-minate and that the Cpntroller having been directed by cl. 11-B (1) to fix definite maximum prices had departed therefrom by permitting increases of undefined a.mounts. This argument again has no substance. The base-price for the commodity having been fixed, there are incidentals which by their very nature were incapable of definite quantification, since they were dependent on ea.ch individual case. This contention also we therefore reject. In passing, we might observe that the matter before this Court in Union of India v. MesMs. Bhana Mal Gulzari Mal(•) related to e. prosecution for a. contravention of a. noti-fication of an earlier date, but in terms identical with the present, except as to the prices, wherein the dealers in the commodity were classified in -the so.me manner e.a he.a been done in the notification now before us and with the so.me general and specie.I conditions. The respondent then before this Court we.a '' a. registered 1961 stockholder" who was being prosecuted for effecting

sales in excess of the maximum prices fixed. The fact Bltagwati Saran that on that occasion no contention was urged chal-

v. lenging the validity of the notification as beyond the Slat1 of powers of the Controller, on the grounds now put Uttar Pradesh

forward clearly indicates, that the matters now urged