President of an unincorporated scrap dealers' association was convicted for selling scrap above the controlled price under the Indian Scrap Order. The Supreme Court held the Madhya Bharat price notification had been impliedly repealed with its parent order, that the association was a 'person' liable under the order, and dismissed the appeals.
This page shows the compact analysis of this judgement. The full analysis — procedural history, issue-by-issue holdings with ratio and obiter, advocates, and paragraph-level evidence for every claim — is being added to the record in batches and will appear here when this judgement has been through it.
328
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HARISHCHANDRA
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v.
STATE OF MADHYA PRADESH
September 24, 1964
(A. K. SARKAR, N. RAJAGOPALA AYYANGAR AND
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R. S. BACHAWAT JJ.)
Essontial Supplios (Temporary Powors) Amondmont Act, 1950 (Act 52 of 1950) Proviso to s. 17 ( 4 )-<:entral logislation oxtondod to Part B State-Notification under corresponding State law not expressly ropoalod -whether survives-Subordinate legislation whether can survive repeal. of parent /aw-Association of porsons whether 'person' for purpose of prosecution-Liability of President of Association.
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c The· Indian Scrap Order, 1943, passed under the Defence of India Rules, was after the expiration of the said Rules, preserved by the .Essential Supplies Act, 1946. By (Central) Act 52 of 1950, the wd Act was extended, inter alia to the Po:rt B State of Madhya Bharat. That State already bad its corresponding· law on the subject, namely, the Madhya Bharat Essential Supplies Act, 1948, under which the Madhya Bharat Scrap Order, 1949 had been issued. While extending the CenD tral legislation to the Part B States, Act 52 of 1950 also laid down, in s. 17(4) that the "corresponding law" in the State would stand repealed, with a proviso that the orders, directions etc., issued under the repealed law would continue. The appellant who was President of the Scrap Dealers Association, Indore, was prosecuted under the allegation that the A"'ociation had sold scrap iron at rates higher tho:n those fixed under the Indian Scrap Order. The defence taken was that the prices at which the sales had been effected were those fixed by a notification dated E 26th August, 1949 under the Madhya Bharat Scrap Order which continued in force. The appello:nt was acquitted by the trial Court but was convicted by the High Court o:nd appealed to the Supreme Court by special leave.
The contentions of the appellant were : (I) The Madhya Bharat Scrap Order had not been expressly repealed by the Indian Scrap Order and therefore it continued by force of the proviso to s. 17 ( 4) of the Act 52 of F 1950, and, in any case, the notification dated 26th August, 1949, continued in force as an independent piece of subordinate legislation.
(2) The appellant as President of the Sc1'3P Dealers Associatio11 which was an unincorporated body could not be held liable for a sale in excess .of the authorised maximum price effected by a Munim or Munima of the Association.
HELD : (i) ·The Central notification by which the Indian Scrap G Order was extended to Madhya Bharat, no doubt, did not expressly provide for the repeal of the Madhya Bharat Scrap Order, but the provisions of the two Orders were not identical and they could not. therefore, operate simultaneously. It was therefore obvious that on the extension to Madhya Bharat of the Indian Scrap Order, the Madhya Bharat Scrap Order was repealed and replaced by the Indian law. [331D].
(ii) The notification in questif>n could not survive even if it was treated as an independent piece of subordinate legislation under the Slate H law. According to Craies, if the statute under which bye-laws are made is repealed, those bye-Jaws are impliedly repealed and cease to have any vnlid1ty unless the repealing statute contains some provioiDn preserving the validity of the bye-laws, ootwithsto:nding the repeal. Ao the parent
[1965] 1 S.C.R.
surREME COURT REPORTS
324
ordet undu which the notification dated August 26, 1949, was made had been: repealed without a saving, the effect was !hat the said notification also stood repealed. [333D; 333G-H; 334H).
(iii) The definition of 'person' in lhe General Clauses Act includes within that term an unincorporaled body of persons. In the present case it was the Association that was given the faciliiy of· obtaining scrap al more favourable prices lhan dealers, and it was thll body which wa• subjected to control in the shape of having to sell what it had purchased from controlled sources at specified price... The argument ~ould not be accepted that the Association as such could not be penalised for !!Clling at unauthorised rates. The appellant as President of the Associalion wa. liable to be convicted by Yinue of s. 8 of the Essential Supplies (Temporary Powers) Ac1, J 946 which made the abetmenl of contravrnti•>n of any order under 1he Acl, also an offenc,,. [335C-D,PrF].
Waisvn v. Wi11clr. [1916] I K.B. 61'8 nod Craies on Sta1"1< Law. 61h Edn. 332, referred to.
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CRIMINAL APPELLATE JURISDICTION: Criminal Appeals Nos. 211 to 217 of 1962.
Appeals by special leave from the judgment and order dated May, 5, 1962; of the Madhya Pradesh High Court (Indore Bench) at Indore, in Criminal Appeals Nos. 216, 222 and 227 to 231 of D 1961.
C. B. Agarwala and Rameshwar Nath, for the appellant.
B. Sen and /. N. Shroff, for the respondent.
The Judgment of the Court was delivered by
Ayyaopr J. These ~eve.1 appeals are connected as they relate to the same appcl11nt rnd the point involved .in each is identical. They are befo:<: us by virtue of special leave granted· by this Court and are dire.:ted against the common judgment of the Indore Bench of the High Court of Madhya Pradesh conv .. cting the appellant of a cmlravention of the Indian Iron & .ileel (Scrap Control) Orolcr, '.943.
The accused, the appellant before us, was the President oZ lhe Scrai; Dealers Association at Indore and he was prosecuted bcf»re the learned Additional City Magistrate, Endore City in seven iets of criminal cases filed by the State of Madhya Pradesh alleg;ng contravention of s. 8(4) of the Iron & Steel (Scrap Control) Order, 1943 by selling ;,r causing to be sold scrap iron to differ.nt customers on different dates at a rate higher than was authorhed by notification dated :ept1imber 30, 1952 issued by the Steel Controller under the said order. He was acquitted by the Additional City Magistrate but on appeals preferred ty the State Government, th learned Judges set aside.the acquittal and convicted him of the offences and sentenced him to pay a fin of
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HARISHCHANDRA v. STATE (Ayyangar J.)
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(1965) I S.C.R.
SUPREME COURT llEPOllTS
326
authorised maximum price effected by a Munim or Munims of the Association.
We shall now proceed to narrate in brief outline the history of the parallel provisions relative to control over the sale price of Scrap in the Part B State of Madhya Bharat. These provisions undoubtedly continued in force in the State till September 12, 1950 when the Indian Scrap Control Order, 1943 was in terms made applicable in that State and the principal point raised by Mr. Agarwala was whether a certain notification which had been issued under the State law and was in force on that date continued in force even thereafter. The State legislation on this topic started on October 9, 1948 with the promulgation of the Madhya Bharat Essential Supplies (Temporary Powers) Ordinance, 1948, which was a reproduction of the Indian Essential Supplies (Temporary Powers) Ordinance, 1946. When this Ordinance was replaced in India by the Essential Supplies 1 Temporary Powers) Act, 1946, the same process was repeated in Madhya Bharat by the enactment of the Essential Supplies 1 Temporary Powers) Act (Sam vat 2005) (Madhya Bharat Act 111 of 1948). Among the "essential commodities" dealt with by the State enactment were iron and steel [vide s. 2(3)(7)). Sc·ction 4 of the Act read:
"4. Pc111·ers to control production, supply, distribution etc .. of essential commodities. (I) The Government so for as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodities, or for securing their equitable distribution and availability at fair prices may by an Order notified in the Official Gazette provide for regulating or prohibiting the production, supply, distribution and movement thereof, and trade and commerce therein.
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(2) Without prejudice to the generality of the powers conferred by sub-section (1 ) , an order made thereunder may provide :
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( c) For controlling the prices at which any essential commodity may be bought or sold;
to quote only the material words. In exercise of the powers thus conferred the Director of Civil Supplies, Madhya Bharat, to whom the powers in that behalf were delegated by the State Government. promulgated on June 4, 1949 the Madhya Bharat Iron, Steel and Scrap (Production, Procurement and Distribution)
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HARISHCHANDRA v. STATE (Ayyangar J.) 327
•J-
It is only necessary to add that there were similar Order~ passed under the Indian Scrap Ord:r, 1943 in which also the classification of dealers etc., proceeded on the same lines. The G form of the notification by the Steel Controller to the Government of India, referred to in this notification was on the following lines:
There was a schedule to the notification fixing the maximum prices and it was divided into five columns. First was the H number of the item, the second was the description or classification of the material and the next three which were headed columns I, II and III dealt with specified maximum basic prices per ton for sale at Calcutta. Bombay and Madras. There were adjustments
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.. , . [1965] I S.C.R.
328 , SUPREME COURT REPORTS _
indicated for arriving at the prices chargeable at other centres. Column I specified the prices for sales by Controlled sources other than those mentioned in column II. · The second colwnn was' headed "specified prices fixed for salc;s by scrap merchants who have been declared controlled' sources" and .the last or. third column specified the maximum for sales by all persons other than these mentioned in columns I · and II. Different maxima were fixed for sale by . persons falling under the· tliree columns, the first column. price being the lowest, the second a little higher and the last which included sales by retail dealers to the Consuming public being the highest. It is common ground that the Scrap Dealers Association, Indore of which the appellant was the President had· been declared "a Controlled Source" so that the maximum prices at which members of the Association which was an unincorp0ratoo ·body cou Id sell, were those specified ·in column II of the schedule. It is .not neces-' sary to set out the prices at which the actual sales which were stated to be in violation of the law, took place, but it is sufficient ·to state that admittedly the servants of the Association sold scrap iron at prices higher than those fixed in column II and at prices fixed for column m. '' '
The, first submission of Mr. Agarwala learned Coun..~el for the appellant was that the sale by the Association at the column III price was authorised and legal because ·of a notification issued by the· Government of Madhya Bharat dated August 26, 1949. The principal point argued before us iri respect of this notification is as to whether this notification wa5 alive and in force on the date of the sales in 1956 which were the subject of the several prosecutions and whether. it has survived subsequent Indian legislation extenoed to the State to which we shall advert ·presently.. But before proi:eedmg to do so, it would be convenient to consider the nature of that notification.
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,The Scrap Dealers Association of Madhya Bharat appear to have made a representation to the State Government. that though the dealers in Scrap as constituent units of the Association were · G ·-treated as a Controlled Source and secured advantages thereby and were bound to sell at prices fixed in column II, still the Association should :be accorded special privilege and be permitted to sell at prices fixed for the residuary class o[ dc;a!ers in column III. This representation was considered by an Advisory H Conimittee appointed by the State Government and a direction was given that "a change be made to the extent that at present . for the goods which is sold to consumers by the Scrap Association
HARISHCHANDRA l'. STATE (Ayyangar !.)
329
But the question is whether this direction or this modification of the prices fixed under s. 5 ( 1) of the Madhya Bharat Scrap Control Order by incorporating the notification by the Steel c Controller of the Government of India in its text, subsisted in 1956 when the sales which are stated as being in contravention of the Indian Scrap Order, took place.
We have already seen that the notification dated June 4, 1949 which we have extracted earlier, was issued under tb.e Madhya Bharat Iron and Steel etc., Control Ordl'.!, 1949 proD mulgated under the Madhya Bharat ~ntiaI Supplies (Temporary Powers) Act, 1948. The Madhya Bharat Act, however, stood repealed by virtne of the provisions of the Essential Supplies (Temporary Powers) Amendment Act, 1950 (Act 52 of 1950) under which the Essential Supplies (Temporary Powers) Act, 1946 was extended to the Part B States as and from such dates E ~s might be specified by the Central Government. By a notification issued by the Central Government the Essential Supplies Act, 1946 was made applicable to the Part B State of Madhya Bharat from August 17, 1950. The effect of this extension was provided for by s. 10 of Act 52 of 1950 which enacted :
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"10. Amendment of section 17, Act XXIV of 1946. After sub-section ( 3 ) of section 1 7 of the said Act, the following sub-section shall be inserted, namely :-
( 4) If immediately before the day on which this Act comes into force in a Part B State, there is in force in that State any law which corresponds to this Act, such G corresponding Jaw shall on that day stand repealed in so far as it relates to any of the essential commoditieii governed by this Act:
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Provided that any Order made and in force immediately before that day )n the said State shall continue in force and be deemed to be an Order made under this Act, and all appointments made, licences or permits granted, and directions issued, under any such Order and in force immediately before that day shall likewise continue in
[ 1965] I S.C.R.
330
SUPREME COURT REPORTS
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force and be deemed to be made, granted or issued in pursuance of this Act."
If the main part of sub-s. ( 4) stood alone without the proviso, the effect would have been not merely a repeal of the Madhya Bharat Essential Supplies (Temporary Powers) Act, 1948 which was "a corresponding law" which was in force in that State, but with that repeal, all the subordinate legislation enacted thereunder including the Control Orders as well as the Orders of the Director fixing prices would also have stood repealed. By virtue of the proviso, however, notwithstanding the repeal of the parent enactment, the Orders made under it were continued and were to be deemed to have been made under the Indian Act.
Mr. Agarwala laid considerable stress on the proviso and urged that by reason of its language it continued in force not merely the Madhya Bharat Scrap Order of June 4, 1949 and the price fintion by the Director under s. 5 (I) of that Order on the same date, but also the variation in the prices to be charged by the Association effected by the Government Order dated August 26, 1949 which enabled that body, notwithstanding its being a dealer specified in column II to sell at prices fixed for persons falling under column III. We need not pause to consider whether the direction or !he notification dated August 26, 1949 is "a direction issued under any such order" within the proviso to s. 17 ( 4) but shall proceed on the basis that it is, accepting the construction suggested by learned Counsel. But the replacement of the Madhya Bharat law on this topic by the law in force in India did not stop with that effected by Act 52 of 1950. By a notification of the Government of India dated September 12, 1950. the Indian Scrap Order, 1943 was extended to Madhya Bharat. It i5 really the legal effect of this extension that calls for scrutiny in these appeals.
The notification by which the Indian Scrap Order was extended to Madhya Bharat, no doubt, did not expressly provide for the repeal of the "Madhya Bharat Scrap Iron & Steel etc., Order, 1949", but if the tv.-o Control Orders cannot operate simultaneously, it would be obvious that the Indian Scrap Order would have repealed and replaced the State law. In the first place, even if the provi~ions contained in the two· sets of Orders were in identical tenns, it might be proper to hold that the Indian Scrap Order replaced the State law in order to give some meaning and effect to the extension of the Indian Scrap Order to Madhya Bharat. But that is not the position here. There are
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HAR!SHCHANDRA v. STATE (Ayyangar !.)
331
·332 SUPREME COURT REPORTS
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[1965] I S.C.R.
Act. When the Indian Scrap Order wa~ extended to Madhya · A Bharat, the. result was that it effectively replaced the Madhya Bharat Order on the same topic.
. Even granting that the Madhya Bharat Scrap Order of June 4, 1949 was repealed on the extension to that territory of the Indian Scrap Order, Mr. Agarwala urged that the direction contained in the notification of the State Government dated August 26, 1949 was a special law which stood unaffected by the extension of the Indian Scrap Order to Madhya Bharat. That when the Indian Scrap_ Order was · extended it carried with it the notifications issued by the Controller from time to time and that after the extension of the Scrap Order to Madhya Bharat, all sales of scrap would have· to be effected only in conformity th the prices fixed by the notifications issued under the Scrap Order was not contested. · Nor was it disputed that on the terms of the notifications issued fixing the prices at which several classes ,of dealers might effect sales under the Indian Scrap Order, the D .Association of which the appellant was the President would have fallen under column II and would have been bound to sell scrap only at the prices fixed in that column. But it was submitted · that the fact that even before the extension of the Indian Scrap Order to Madhya Bharat in September, 1950 under the very provisions of the notification dated June 4, 1949 itself the maximum prices fixed in Madhya Bharat were only those prescribed by the Controller in India and that the deviation in regard to these prices permitted to the Association was thus in effect a local modification of the Indian Order and that consequently the direction issued by the State Government on August 26, 1949 and which was continued _even after the repeal of the Madhya Bharat Temporary Powers Act, 1948 by reason of the proviso to s. 17 ( 4) of the Act 24 of 1946 was not affected by the extension of the Indian Scrap Order to Madhya Bharat. We find ourselves unable let accept this argument .. Th concession allowed to the Association by the notification dated August 26, 1949 could be G looked at from one of two alternative positions. The direction could be viewed as in effect a modification of the priCes fixed under s. 5 ( 1) of the Madhya Bharat Order by the Director so that in law it should be deemed to have been incorporated in that price fixation and · became, as it were, the price fixed by the Controller. The effect of this would be that in Madhya Bharat H before the extension of the Indian Scrap Order, the maximum prices chargeable by the specified type of dealer falling under
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HAR!SHC!L\NDRX. v. STATE. (Ayyangar J.)
333
•
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A c~lumn II would be those applicable to dealers in column III. If this were the true position, the· result would be that when the Indian Scrap Order was made applicable to Madhya Bharat without a saving or special provision as regards sales by the Association, it would supersede that law and the. special classification effected by the Madhya Bharat law would cease to be in force. D Jn this respect the fact that the prices fixed in Madhya Bharat for sales by dealers etc., specified in the three columns corresponded io thO'\e fi"ted by the Controller in India, would be wholly irrelevant, for the authority by which the fixation was effected would be traceable to Madhya Bharat and not the'Indian law.
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The other alternative would be that the notification dated August 26, 1949 was an independent piece of subordinate lawmaking under the Essential Commodities Act and the Madhya Bharat Scrap Order, and it was this aspect that was stressed by Mr. Agarwala. Even if that be so, the appellant would derive no advantage from this, because ·there has been a repeal not merely cf the Madhya Bharat Essential Supplies Act no doubt with a saving but of the Madhya Bharat Scrap Order without a saving and on the repeal of the Scrap Order under which the subordinate· rule or regulation was effected the latter would also stand repealed. As explained by Lord Reading C.J. in Watson
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v. Winch (1 ):
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"It has been long established that, when 'an Act of Parliament is repealed, it must be considered (except as to transactions passed and closed) as if it had never existed, . . . . . . . . It would follow that any bye-law made under a repealed statute cea~es to have any vali-. dity unless the repealing Act contains some· provision preserving the validity of the bye-law notwithstanding the repeal." · ·
·F
Admittedly, there is no saving clause either in the notification of the Central Governrrient by which the Indian Scrap Order was· G extended to Madhya Bharat nor, of course, in the Scrap Order itself. As , the parent order under which the notification was made has been repealed without a saving, the effect must be that the notification dated August 26, 1949 must, if i.t were held to be an independent subordinate legislation, be held also to have H been repealed. Mr. Agarwala next referred us to s. 24 of the . General Clauses Act No. X of 1897 and urged that the notifica-
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(l) [1916] I K.B. 688, 69?.
[1965] I S.C.R.
334
SUPREME COURT REPORTS
lion would be a bye-Jaw that would have continued notwithstanding the repeal of the Madhya Bharat Scrap Order. Section 24 of the General Clauses Act runs thus:
"24. Where any Central Act or Regulation, is after the commencement of this Act, repealed anel re-enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme, rule form or bye-law, made or issued under the repealed Act 01 Regulation, shall, so far as it is not inconsistent with the provisions re-enacted, continue in force and be deemed to have been made or issued under the provisions so re-enacted, unless and until it is superseded by any appointment, notification, order scheme, rule form or bye-law, made or issued under the provisions so re-enacted and when any Central Act or Regulation, which, by a notification undar s. 5 or 5A of the Scheduled Districts Act, 1874, or any like law, has been extended to any local area, has, by a subsequent notification, been withdrawn from and reextended to such area or any part thereof, the provisions of such Act or Regulation shall be deemed to have been repealed and re-enacted in such area or part within the meaning of this section."
We consider that this submission is entirely without force. Mr. Agarwala fairly conceded that the language of s. 24 would not cover a repeal of the Madhya Bharat Scrap Order by the introduction into the Madhya Bharat territory of the Indian Scrap Order, 1943, but he suggested that even though the section was in terms inapplicable, he could invoke the principle underlying il But this argument, however, proceeds on assuming thats. 24 was declaratory of the common rule of interpretation and that even in the absence of s. 24 the same principle of law would apply. The position apart from a statutory provision such as is found in s. 24 of the General Clauses Act, is thus summarised in Craici; on Statute Law 6th Edn. 334:
"If the statute under which bye-laws are made is repealed, those bye-Jaws are impliedly repealed and cease to have any validity unless the repealing statute contains some provision preserving the validity of the bye-law uotwithstanding the repeal. This follows from the rule .... when an Act of Parliament is repealed it must
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HARISHCHANDRA v. STATE (Ayyangar J.)
335
A be considered (except to transactions passed and closed) as if it had never existed."
This submission has, therefore, no merit and must be rejected.
The.second of the points urged by Mr. Agarwala was that the Scrap Dealers Association was an unincorporated body co11Sisting B wholly of retail dealers and that as each of them individually was · a dealer who could himself have sold at the column m rate, the Association could not be penalised for selling at that rate. As an unincorporated body, he submitted, it was merely the aggregate of its members and so would have the rights of its constituent units, There is no force in this pc&int either. · Apart from the C definition of "person" in the General Clauses Act as including an unincorporated body of persons, what we are concerned with is not sales by individual dealers who composed the Association, but · sales by and through the Association. It was the Association that was given the facility of obtaining scrap at more favourable prices D than dealers and it was that body which was subjected to control in the shape of having to sell what it had purchased from contrQlled sources at the prices specified in column II.
Lastly, it was faintly urged by Mr. Agarwala that the appellant was merely the President of the Association and could not be held liable for the sales effected by its employees. There was no E dispute that ,the sales were by the Association and at prices fixed by that body.. It was also admitted that these prices were in excess of the prices specified for sales fixed for the Association. Under s. 8 of the Essential Supplies (Temporary Powers) Act, 1946, "Any person who abets the contravention of any order .... F ·shall be deemed to have contravened that order." In the circumstances, we do not see how this affords any defence to the appel~ )ant.
The result is that these appeals fail and are dismissed.
Appeals dismissed .
. - .. -----
2 issues framed by the court
Whether a notification fixing prices under the repealed Madhya Bharat Scrap Order survived the extension of the Indian Scrap Order to Madhya Bharat.
Whether an unincorporated association and its President could be held liable for sales at unauthorised prices by the association's employees.
Colour shows how this judgement treated each authority
Watson v. WinchReferred
[1916] I K.B. 688
3 provisions across 3 enactments
Harishchandra
State of Madhya Pradesh
A. K. Sarkar
N. Rajagopala Ayyangar
R. S. Bachawat
As recorded by the court registry
Judgements on the same questions, provisions and authorities, from every court
