Allowed

State of Andhra Pradesh & Anr. v. Potta Sanyasi Rao & Ors.

Supreme Court26 Aug 19751975 INSC 179 · [1976] 1 S.C.R. 4231975 INSC 179

Case brief

AI extract

What is this about?

The Supreme Court allowed an appeal against a High Court order that struck down an Andhra Pradesh licensing order for tyres and tubes. The Court held that the delegation under section 5 covers commodities declared essential subsequently under section 2(a)(xi).

What did the court decide?

The judgment of the Andhra Pradesh High Court setting aside the State Tyres and Tubes Dealers' Licensing Order, 1973 was set aside. There will be no order as to costs.

What the court decided

State of Andhra Pradesh & Anr. versus Potta Sanyasi… — Company and Corporate | Supreme Court (1976)

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423

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STATE OF ANDHRA PRADESH & ANR.

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POTTA SANYASI RAO & ORS.

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August 26, 1975

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[A. ALAGHZ!SWAMI, P. K. GO'SWAMI A'<D N. L. U'.'iTWALIA, JJ.J

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E"ssential C'on11noditics Act, 1955, Ss. 2(a) (xi) and 5Deiegatio11 to S1ate C.iovernmenr po\l'er to 1nake Orders-Declaration of co111n10Jity as essential thercafterState Goi:enunent, if can exercise delegated power H'irh respect 10 .l"lu:h co'n1n1odity.

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In June, 1966_, the Central Governm·~nt, in exercise of the power-;. conferred by s.5 of the Essential Commodities Act, 1955. delegated its power to make Orders to the State Governments with respect to certain matters specified in c s.3 ( 2} in re1ation to all_ essential commodities other than certain specified commodities. Tyres. and Tubes were not essential comn1odities under s.2(a) (i) to (x), nor were they declared to be essential commodities by the Central Govern_ n1ent under s.2(a)(xi) at the time of the delegation; but, subsequent to the delegation of the power to the State Governments, certain types of tyres and tubes were declared to be essential commodities under s.2(a) (xi).

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!n exercise of the delegated power the State of Andhra Pradesh i~uc<l the Andhra Pradesh Tyres and Tubes Dealers' Licensing O·rder, 1973. The responD dents, who are aealers in tyres and tubes, challenged the validity of the Order on the ground that the· State Government had no power to issue an Or<.kr with regard to tyres and tubes which were declared by the Central Government to be essential commodities after the delegation of powers to the State GoYernment. The High Court struck down the Order.

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Allowing the appeal to this CDnrt.

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HELD: There is nothing: in s.5 to limit the power of delegation in favour E of the State Government only to the commodities specified in s.2(a)(i) to (x) or to those commodities declared essential under s.2(a)(xi) up to the date of delegation. Delegation under s.5 is a general delegation and will enure in favour of exercise of power by the State Government with respect to commoditie5 declared essential by the Central Government from time to time under s.2(a) (xi) even subsequent to the delegation. Tt is not necessary that every time the Central Government declares an essential commodity, it has Lilso to pass an order of delegation with regard to that commodity. It will be sufficient in Jaw if on the date the State Government. duly empowered under s.5, nlakes F notification Under s.3 with regard to an es-sential commodity within the meaning of s.2(a) including the residuary cl. (xi) thereof. (4250-GJ

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CIVIL APPELLATE JURISDICTION : Civil Appeal No. 14-08 of 1974.

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Appeal by special leave from the Judgment and order dated the 27th December, 1973 of the Andhra Pradesh High Court at Hyderabad m Writ Petition No. 7413173.

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R. Ram Reddy and P. P. Rao, for the appellant.

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Govind Das and Girish Chandra, for the respondent.

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The Judgment of the Court was delivered hy

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H . GoswAMI, J.-This appeal by special leave is directed against the .1udgment of the Andhra Pradesh High Court whereby the Andhra Pi:ades~ Tyres and Tubes Dealers' Licensing Order 1973 (briefly the L1censmg Order) was struck down as illegal and ultra vires. ·

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424 SUPRE11E COCRT REPORTS [1976] ] S.C.R.

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A few facts which are material may first be noted.

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By Notification s.o. 1844 dated June 18, 1966, the Central Government in exercise of the powers conferred by section 5 of th<': Essential Commodities Act, 1955 (bridly the Act) directed "t~at the powers coferred on it by sub-section (I) of section 3 of the said Act to make orders to provide for the matters specified in clauses (dJ, (c), (f), (g), (h), (i), (ii) and (j) of sub-section (2) thereof. ~hall in relation to all cununodities other than foodstuffs and fertilise.rs (whether inorganic, organic or mixed), be exercisable also by a State Government, or in relation to a Union Territory, by the administrator thereof. subject to the following conditions .... "

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Section 2 (a) of the Act defines "essential commodity" which means ten specified commodities and the residuary clause (xi) there- of refers to- "any other class of commodity which the Central Government may, by notified order, declare to be an essential commodity for the purposes of this Act, being a commodity with respect to which Parliament has power to make laws by virtue of entry 33 in List JU in the Seventh Schedule to the Constitution".

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Tvres a11d tubes are not included in the ten specified commodities in section 2(a). However. the Central Government by three notified orders, namely, S.0. No. 2511 dated August 17, 1966, S.O. No. 2878 of August 22. 1968 and S.O. No. 85 dated January 3, 1969, declared cycle tyres and tubes, car and tractor tyres and tubes and tyres of buses. vans, trucks, etc. as essential commodities under section 2(a) (xi).

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The impugned Licensing Order was passed by the Government of Andhra Pradesh on June 18, 1973 in exercise of the powers confcrm.l by sub-section (2) of section 3 of the Act read with S.O. No. 1844 dated J unc 18, 1966 and with the prior concurrence of the Central Government. The respondents, who were dealers in tyres and tubes of buses, trucks, jeeps. cars and other auto-vehicles, challenged the validity of the Licensing Order on the ground that the State Go- vcrn1nent had no power to issue the same with regard to tyres and tubes which were declared by the Central Government to be essential commodities subsequent to the delegation of powers to the State Government under section 5 which had been made earli'er on June 18. 1966. Their contention was accepted by the High Conrt and the Liccnsinl! Order was struck down. Hence this appeal by special leave at the mstance of the State Government

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The short question that arises for consideration is whether the order of delegation of power by the Cenitral Government under section 5 enabling the State Government to make orders· or issne notifications under section 3 would empower the State Government to

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425

A. P. STATE v. P. s. RAO (Goswami, J.)

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A promulgate orders with regard to commodities which were declared to be essential commodities by the Central Government subsequent to the order of delegation.

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Section 5 of the Act reads as follows :-

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''The Central Government may, by notified order, direct that the power to make orders or issue notifications under section 3 shall, in relation to such conditions, if any, as may be specified in the direction, be exercisable also by-

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(a) such officer or authority subordinate to the Central Government, or

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(b)^{such State Government or suoh officer or authority sub-} ordinate to a State Government, as may be specified in the direction." ..

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There is nothing in section 5 to limit the power of delegation in D favour of the State Government only to the commodities specified in section 2 (a) or to those commodities declared essential under section 2(a) (xi) upto the date of delegation. Delegation under section 5 is. a general delegation and will enure in favour of exercise of power by the State Government with respect to commodities <led a red essential by the Central Government from time to time under sectioll 2 (a)( xi) even subsequent to the order of delegation. It is not necessary that every time the Central Government declares an essential commodity it has also to pass an order of delegation under section 5 with regard to that commodity. Reading section 5 and section 3 together there is no warrant for the view that the power F of delegaion is confined to essential commodities specified under the Act and such others as may be declared by the Central Government upto the order of delegation. Delegation of power to the State Government to act under sectiCln 3 is not restricted to any specified essential commodity as such. It will be sufficient in law if on the date the State Government, duly empowered under section 5, makes a notification under section 3 with regard to an essential commodity within the meanir1g of section 2(a) including the residuary clause (xi) thereof. All that is required is that the commodity, on the date of the order of the State Government, answers the description of the clauses in section 2(a) of the Act. The fact that a commodity is declared essential after the order of delegation does not affect the H exercise of power by the State Government under section 3 of the Act. The High Court is, therefore, not right in narrowly cons•ruing the order of delegation under section 5 of the Act. The Licensing

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426 SUPREMECOURTREPORTS r1976] Is.C.R.
Orderis,therefore, not invalid on the ground that the tyres and tubes weredeclaredtobeessential commodities by the Central Govern- ment after the order of delegation under section 5 of the Act.	A
Inthe result the appealisallowed and the judgment of theHigh Courtisset aside. Therewillbe, however, no orderastocosts.
V.P.S. Appeal a/lowed.		•
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State of Andhra Pradesh & Anr. v. Potta Sanyasi Rao & Ors.

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State of Andhra Pradesh & Anr. v. Potta Sanyasi Rao & Ors.

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