Harishankar Bagla And Another vs The State Of Madhya Pradesh

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: Supreme Court of India

Case Number: Criminal Appeal No. 7 of 1953

Decision Date: 14 May 1954

Coram: Mehar Chand Mahajan, B.K. Mukherjea, Vivian Bose, Natwarlal H. Bhagwati

In this matter the petitioners identified as Harishankar Bagla and another contested a direction issued by the State of Madhya Pradesh. The judgment was delivered on 14 May 1954 by a bench of the Supreme Court comprising Chief Justice Mehar Chand Mahajan, Justice B. K. Mukherjea, Justice Vivian Bose, Justice Natwarlal H. Bhagwati, Justice Natwar L. Aiyy ar and Justice T. L. Venkatarama. The official citation of the decision is recorded as 1954 AIR 465 and 1955 SCR 313. Subsequent jurisprudence has frequently referred to this case, and it appears in a long series of later reports, including R 1957 SC 478 (reference 11), R 1957 SC 510 (reference 14), RF 1957 SC 896 (reference 12), R 1960 SC 475 (references 4, 9, 13, 16), RF 1961 SC 4 (references 4, 15), R 1961 SC 705 (reference 17), R 1961 SC 1602 (reference 12), F 1961 SC 1731 (reference 13), RF 1964 SC 381 (reference 38), R 1965 SC 1107 (reference 60), R 1966 SC 1788 (references 10, 14), RF 1967 SC 212 (reference 27), RF 1967 SC 669 (reference 21), RF 1968 SC 1232 (references 15, 53, 82, 95), RF 1970 SC 564 (reference 185), RF 1973 SC 106 (reference 147), RF 1973 SC 1461 (references 227, 450, 566, 1847, 1848, 1998), R 1974 SC 366 (reference 56), E D 1974 SC 543 (reference 13), R 1974 SC 1660 (reference 18), R 1978 SC 851 (reference 39), RF 1978 SC 1296 (reference 12), E 1980 SC 350 (reference 4), R 1982 SC 1126 (references 10, 11), RF 1983 SC 1019 (references 29, 30), F 1987 SC 1802 (reference 9), R 1990 SC 560 (references 13, 31), RF 1991 SC 672 (reference 29). The statutory provisions examined included Article 19(1)(f) and (g) of the Constitution of India, the Cotton Textile (Control of Movement) Order 1948, clause 3 of that order, which was promulgated under section 3 of the Essential Supplies (Temporary Powers) Act 1946, and sections 3, 4 and 6 of that Act. The questions presented to the Court concerned whether the requirement of a permit for the disposal or transport of cotton textiles infringed the constitutional freedoms guaranteed by Article 19, whether the legislature had exceeded its authority by delegating legislative power, and whether the order conflicted with provisions of the Railway Act.

The Court observed that clause 3 of the Cotton Textile (Control of Movement) Order 1948 does not strip a citizen of the right to dispose of or transport cotton textiles that he has purchased. Instead, the clause obliges the individual to obtain a permit from the Textile Commissioner before transporting the material. The Court held that this permit requirement does not constitute an unreasonable restriction on the freedoms protected by sub‑clauses (f) and (g) of Article 19(1). The purpose of the Order was to regulate the movement of cotton textiles so that the commodity would be distributed evenly throughout the country and made available at a fair price to all sections of the public. Accordingly, the grant of a permit—or the refusal thereof—must be guided by this policy, and the Commissioner’s discretion must be exercised in a manner that furthers the objective of equitable distribution. The decision therefore affirmed that the statutory scheme, including the permit requirement, was a valid and reasonable measure within the legislative competence and did not offend constitutional protections.

In this case, the Court observed that granting the discretionary authority to the Textile Commissioner could not be described as invalid, and that where such power is exercised improperly the judiciary possesses sufficient authority to rectify the resulting injustice. The Court referenced the decision in Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh ([1954] S.C.R. 803) to illustrate this point. It further noted that the majority opinion in the Delhi Laws Act case ([1951] S.C.R. 747) had established that essential legislative powers may not be delegated indiscriminately. Accordingly, the legislature is required to set out the policy underlying a law, to define the legal principles that will govern individual cases, and to provide a standard that will guide any officials or bodies entrusted with implementing the statute. The Court found that the Essential Supplies (Temporary Powers) Act, 1946 contained such a principle, namely the maintenance or increase of supply of essential commodities and the assurance of equitable distribution and availability at prescribed prices. The preamble and operative sections of the Act were held to articulate this legislative policy sufficiently, and the nature of the statute was such that the detailed application of the policy could only be achieved by delegating authority to a subordinate officer within the framework established by the legislature. Consequently, section 3 of the Act was not ultra vires on the ground of unlawful delegation of legislative power. Section 4 of the Act, which lists the categories of persons to whom the Central Government may delegate or further delegate powers, was likewise deemed to have been properly framed by the legislature; therefore the Court rejected the contention that the instrumentality had not been selected by the legislature and held that section 4 was not ultra vires for excessive delegation. The Court applied the principle from Shannon v. Lower Maintenance Dairy Products Board ([1938] A.C. 708). It held that the permit requirement in clause 3 and the powers in clause 4 of the Central Order, which enable the Textile Commissioner to direct a carrier to halt the booking or transport of cloth and apparel, do not clash with sections 27, 28 and 41 of the Railways Act. Rather, these clauses merely complement the relevant provisions of the Railways Act and do not supplant them. The Court further explained that section 6 of the Essential Supplies (Temporary Powers) Act does not expressly or impliedly repeal any existing statutes, nor does it abrogate them; the earlier laws therefore remain intact in the statute book. Repeal, the Court clarified, would mean treating the repealed enactment as if it never existed. Section 6 instead operates to bypass any earlier law that is inconsistent with the provisions of the 1946 Act or with orders made under it. Even assuming that an earlier law is impliedly repealed, such repeal would arise from the legislative declaration contained in section 6, not from an order issued by the delegate under section 3.

The Court observed that section 6 did not involve any delegation of authority and therefore could not be held unconstitutional on that ground. The matter before the Court was a criminal appeal numbered 7 of 1953, filed by special leave against a judgment and order of the High Court of Judicature at Nagpur dated 15 September 1952 in Criminal Case 45 of 1951, which itself arose from the order of the Magistrate‑First Class, Hoshangabad, in Criminal Case 75 of 1949. Counsel for the appellants consisted of H.J. Umrigar together with Rameshwarnath and Rajinder Narain, while the respondent was represented by T.L. Shevde, the Advocate‑General of Madhya Pradesh, assisted by T.P. Naik and I.N. Shroff. The judgment was delivered on 14 May 1954 by Chief Justice Mehar Chand Mahajan. The factual background, as recorded, stated that the appellant, Harishankar Bagla, and his wife, Smt. Gomti Bagla, were arrested at Itarsi by Railway Police on 29 November 1948 for allegedly violating section 7 of the Essential Supplies (Temporary Powers) Act, 1946 read with clause (3) of the Cotton Textiles (Control of Movement) Order, 1948. The police found them in possession of new cotton cloth weighing over six maunds, which was alleged to have been transported from Bombay to Kanpur without the requisite permit. After a series of procedural developments the case was withdrawn by the High Court to itself on 3 September 1951 because it raised constitutional questions. By its order of 15 September 1952 the High Court held that sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946 were constitutionally valid and also affirmed the validity of the impugned order. Although the High Court found section 6 to be inconsistent with the provisions of the Railway Act, it concluded that the alleged unconstitutionality of section 6 did not affect the prosecution in the present case and therefore directed that the prosecution should proceed, sending the records back to the trial court for trial in accordance with law. Both the appellants and the respondent were granted leave to appeal, and the necessary certificates under Articles 132 and 134 of the Constitution were issued. Consequently, this appeal together with the connected appeal numbered 6 of 1953 were placed before the Court on the basis of those certificates. Mr. Umrigar, appearing in both appeals, raised four points for consideration: first, that sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946 and the provisions of the Cotton Cloth Control Order infringed the fundamental rights guaranteed to the appellants by Article 19(1)(f) and (g) of the Constitution; second, that section 3 of the Act, particularly section 4, was ultra vires on the ground of excessive delegation of legislative power; third, that because section 6 had been found ultra vires, section 3 was inseparably linked to it and both sections should be declared ultra vires; and fourth, that the impugned Control Order violated existing statutes, namely sections 27, 28 and 41 of the Indian Railways Act, and was therefore void in its entirety.

Among the matters raised by counsel for the appellants was the contention that the impugned Control Order violated existing statutes, specifically sections 27, 28 and 41 of the Indian Railways Act, and consequently should be declared wholly void. The respondent contested the High Court’s finding that section 6 of the Essential Supplies (Temporary Powers) Act, 1946, was unconstitutional. In this judgment the Court held that none of the arguments advanced by counsel for the appellants possessed any merit. Conversely, the Court concluded that the High Court erred in declaring section 6 unconstitutional. For the record, sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, provide that the Central Government, whenever it deems it necessary or expedient to maintain or increase supplies of any essential commodity, or to ensure their equitable distribution and availability at fair prices, may by order regulate or prohibit the production, supply, distribution, trade and commerce of such commodity. Further, an order made under subsection (1) may, without limiting the generality of the powers, prescribe regulation by licences, permits or other means over the production, manufacture, storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity. Section 4 further empowers the Central Government, by a notified order, to direct that the authority to make orders under section 3 may be exercised, subject to specified matters and conditions, by an officer or authority subordinate to the Central Government or by a State Government or its subordinate officer or authority as may be directed.

Section 6 of the same Act declares that any order made under section 3 shall have effect notwithstanding any inconsistency with any enactment other than the Act itself, or any instrument having effect by virtue of any enactment other than the Act. Exercising the powers conferred by section 3, the Central Government issued on 10 September 1948 the Cotton Textiles (Control of Movement) Order, 1948. Clause 2 of that Order defines the terms “apparel,” “carrier,” “hosiery,” “cloth” and “textile commissioner.” Clause 3 of the Order stipulates that no person shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth, yarn or apparel unless such transport is carried out under a general permit notified in the Gazette of India by the Textile Commissioner or under a special transport permit issued by the Textile Commissioner. Clause 8 provides that the Textile Commissioner may, by Gazette notification, prescribe the procedure for applying for a special transport permit under the Order. The Central Government has accordingly prescribed application forms and the conditions required for obtaining such permits. The first question examined by counsel for the appellants concerned the validity of the provisions of section 3 of the Order.

In this matter, the Court examined whether clause 3 of the Control Order infringed the constitutional guarantees contained in sub‑clauses (f) and (g) of article 19(1). Those sub‑clauses protect a citizen’s right to dispose of property and to engage in trade or business. The Court observed that requiring a permit for the rail transport of cotton textiles imposes a limitation on a person who buys and sells such textiles as part of his trade. However, clause 5 of article 19 authorises the imposition of reasonable restrictions on these rights when the restriction serves the public interest. The Court noted that during a declared emergency it became necessary to regulate the production, supply and distribution of commodities essential for the community’s livelihood. Consequently, the Legislature enacted the Essential Supplies (Temporary Powers) Act, empowering the Central Government to issue orders that control the production, supply and distribution of essential commodities. Within that legislative framework, clause 3 of the Control Order does not withdraw the citizen’s right to dispose of or transport cotton textiles that he has lawfully purchased; instead, it obliges him to obtain a permit from the Textile Commissioner before transportation. The Court held that this permit requirement is not an unreasonable infringement of the rights under article 19(1)‑(f) and (g). It further stressed that unrestricted rail transport of essential commodities could seriously disrupt the flow of those commodities to the public. The Court also referred to Act XXIV of 1946, an emergency measure whose preamble expressly intended to retain, for a limited period, the authority to control the production, supply, distribution, trade and commerce of specified essential commodities. Section 2 of that Act lists the commodities deemed essential, and the need for a transport permit—whether by road, rail or any other means—cannot be characterised as an unreasonable restriction within the context of a temporary emergency legislation.

The Court then turned to the challenge raised by counsel for the petitioners, who contended that the Textile Commissioner possessed unfettered and arbitrary discretion to grant or refuse permits, and that, by analogy with the decision in Dwarka Prasad v. State of Uttar Pradesh, section 3 of the Control Order should be declared void. The Court rejected this argument as untenable. It observed that the petitioners had never applied for a permit and had made no effort to secure one. Since no application was made, there was no instance of arbitrary denial that could give rise to a claim of an unreasonable restriction of article 19(1). The Court further indicated that, had a permit been sought and arbitrarily denied, the petitioners might have acquired a cause of action to contest the discretionary power. In the present case, however, the absence of any application meant that the alleged arbitrariness could not be demonstrated. Accordingly, the Court affirmed the High Court’s conclusion that the contention that the Control Order was invalid for abridging article 19(1) rights was unsupported, and it upheld the validity of the permit requirement under the emergency legislation.

In this case, the Court observed that the appellants could not challenge the law on the basis that it vested arbitrary and unregulated power in the textile commissioner because the appellants had never applied for a permit and therefore had not suffered any injury from any act of the commissioner. The appellants had been transporting essential goods by rail without a permit, and the only relief available to them lay in attacking the provision that required a permit before such transport. The Court further noted that reference to the decision of this Court in Dwarka Prasad’s case was not applicable and had no bearing on the present matter. In Dwarka Prasad, Section 4(3) of the Uttar Pradesh Coal Control Order had been declared void because it granted an unrestrained discretionary power to a single individual to grant, withhold or cancel licences at his own will, without any mechanism to ensure proper execution of that power or to check possible injustice. Section 4(3) of that order read: “The Licensing Authority may grant, refuse to grant, renew or refuse to renew a licence and may suspend, cancel, revoke or modify any licence 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 authorized by him in this behalf.” The Court emphasized that the present Control Order contained no such provision as existed in the Uttar Pradesh Coal Control Order, and that the provisions of the two orders bore no analogy. The policy underlying the present Order was to regulate the transport of cotton textiles so as to ensure an even distribution of the commodity throughout the country and to make it available at a fair price to all. Accordingly, the grant or refusal of a permit was to be governed by this policy, and the discretion given to the textile commissioner was to be exercised in a manner that effected the policy. The Court held that conferring such discretion could not be termed invalid, and that any abuse of the power could be remedied by the courts. It appeared, from the different forms published in the Manual, that there were directions and rules laid down by the Central Government for the grant or refusal of permits. Counsel for the petitioner further contended that Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 amounted to an impermissible delegation of legislative power. The Court rejected this contention, observing that the majority judgment in the Delhi Laws Act case had settled that essential powers of legislation could not be delegated beyond permissible limits. Consequently, the Court found no merit in the argument that Section 3 delegated legislative power outside the allowable scope.

In this case, the Court observed that legislation cannot be delegated, meaning that the legislature may not transfer its essential function of formulating legislative policy and converting that policy into a binding rule of conduct to another body. The Court explained that the legislature must itself set out the policy of a law, define the legal principles that will govern particular situations, and provide a clear standard that will guide the officials or authority tasked with implementing the law. The core legislative function, according to the judgment, consists of choosing the policy and formally enacting it as a rule that has the force of law. In the matter before the Court, the legislature had already articulated a principle that required the maintenance or increase of the supply of essential commodities, along with the goal of ensuring equitable distribution and availability of those commodities at fair prices. The Court noted that this principle was unambiguous and gave sufficient direction to the Central Government for the exercise of the powers granted under section 3 of the Act.

The Court further observed that delegation of the type contemplated in section 3 had been upheld before the Constitution by several decisions of the Privy Council, specifically Russell v. The Queen (2), Hodge v. The Queen (3) and Shannon v. Lower Mainland Dairy Products Board (4). Since the commencement of the Constitution, the Court indicated that similar delegations had also been sustained by this Court in a number of rulings that followed the principles set out by the majority in the Delhi Laws Act case (1). The Court reiterated that both the pre‑amble and the operative provisions of the statute clearly set out the legislative policy, and that the scope and character of the Act were such that the detailed implementation of that policy could only be achieved by delegating certain functions to a subordinate authority within the established framework. Consequently, the Court concluded that Mr Umrigar could not persuasively argue that section 3 of the Act was invalid, and therefore the Court found it unnecessary to examine that question in greater depth.

Turning to the challenge to section 4 of the Act, the Court noted that the provision authorized the Central Government to delegate its power to make orders under section 3 to any officer or authority subordinate to it, or to any officer or authority subordinate to a Provincial Government, as specified in a direction issued by the Central Government. In effect, the delegate under section 4 was permitted to further delegate the powers necessary for the exercise of the authority conferred by section 3. The Court recorded that Mr Umrigar contended that the legislature itself should have identified the specific officers or authorities empowered to act under section 3, and that it was beyond the legislature’s authority to empower the Central Government to determine which officers or authorities could exercise that power. To support his position, Mr Umrigar cited two decisions of the United States Supreme Court, namely Panama Refining Co. v. Ryan (1) and Schechter v. United States (2), wherein the Court had held that a delegation is unconstitutional unless the legislature sets a clear policy and a standard. The Court, however, indicated that the present statutory scheme satisfied the requirement of a clear legislative policy and standard, thereby rendering the United States cases inapplicable to the present challenge.

In the Court’s view, because the policy was set out in a statute and a standard had been established by that statute, delegating to selected agencies the power to make subordinate rules within the limits prescribed by the legislation did not amount to an unconstitutional delegation of legislative authority. The Court further held that the determination of the factual situations to which the legislative policy applied could also be entrusted to those agencies without violating the separation of powers. Accordingly, the arguments advanced by Mr. Umrigar could not be sustained. The Court explained that section 4 of the Act expressly listed the classes of persons to whom the Central Government could delegate, or even sub‑delegate, the powers conferred by section 3. Consequently, it was inaccurate to claim that the Legislature had failed to select the instrumentalities itself. The Court also observed that the United States judgments cited by Mr. Umrigar did not assist his position, because the present facts differed. The Court then referred to the judgment of the Privy Council in Shannon’s case, noting that it wholly rejected the contention that section 4 was invalid. The Privy Council had been faced with a challenge to a provincial statute that authorised the Lieutenant‑Governor in Council to vest powers in a marketing board under section 4A(d) of the Natural Products Marketing (British Columbia) Act, 1936. The objection argued that the Lieutenant‑Governor in Council could not be given legislative powers to further delegate. In the Privy Council’s words, “The third objection is that it is not within the powers of the Provincial Legislature to delegate so‑called legislative powers to the Lieutenant‑Governor in Council, or to give him powers of further delegation… This objection appears to their Lordships subversive of the rights which the Provincial Legislature enjoys… 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.” The Court therefore concluded that the Privy Council’s reasoning undermined Mr. Umrigar’s argument about the invalidity of section 4. (1) 293 US 388. (2) 295 U.S. 495. (3) [1938] A.C. 708.

The Court next addressed the contention that the Textile Control Order operated as an implied repeal of sections 27, 28 and 41 of the Indian Railways Act and was therefore invalid. The Court found this contention to be without merit. It observed that the requirement of a permit under clause (3) of the Order and the powers given to the Textile Commissioner under clause (4) to direct a carrier to cease booking or transport of cloth, apparel and related items did not directly conflict with the provisions of the Railways Act. The Railways Act did not forbid the imposition of a disability on railway administration by the Government or any other authority, and the Order merely supplemented the relevant sections of the Act rather than superseding them. The Court made a similar observation regarding clause (5) of the Order, which authorised the Textile Commissioner to impose an embargo on the transport of certain textiles between specified areas. The Court held that nothing in clause (5) overrode or displaced the provisions of sections 27, 28 or 41 of the Railways Act. In sum, the Order was deemed to be complementary to the existing railway legislation and not in conflict with it.

The Court examined the last submission advanced by counsel that, since section 6 had been declared invalid, section 3, which was alleged to be inseparably interwoven with section 6, should likewise be held invalid. The Court found this submission untenable. First, the High Court had concluded that the two provisions were not so closely connected that the invalidity of one would automatically render the other void; that conclusion was based on its own assessment of the relationship between the sections. Second, the High Court erred in holding that section 6 was unconstitutional. Section 6 of the Act expressly provides that an order made under section 3 shall have effect notwithstanding any inconsistency with any enactment other than this Act or any instrument having effect by virtue of any enactment other than this Act. In other words, the provision states that if an order issued under section 3 conflicts with the provisions of another law, the order will prevail over the inconsistent provisions of that other law. The High Court relied on the decision in In Re Delhi Laws Act, where it was held that the power to repeal or abrogate an existing law is an essential legislative function and cannot be delegated. The High Court therefore treated the wide‑ranged power to make an order inconsistent with pre‑existing laws as tantamount to a power of repeal. The Court disagreed with that construction. Section 6 neither expressly nor by implication repeals any pre‑existing law; it does not abrogate them. A repeal removes a statute from the statute book as if it had never existed. Section 6 does not effect such a removal. Its purpose is merely to allow an order made under section 3 to operate in respect of the essential commodity covered by the Essential Supplies (Temporary Powers) (I) [1951] S.C.R., 747 Act, 1946, or the orders made thereunder, even where that order is repugnant to other existing statutes. Thus, where an order under section 3 conflicts with another law, the order will be operative for the essential commodity in question, and the conflicting provision of the other law will not apply for the period that the order remains in force. Bypassing the operation of a law in a particular field does not amount to its repeal or abrogation; the law remains on the books, but it is temporarily displaced in the specific context of the order. Consequently, the contention that the invalidity of section 6 automatically invalidates section 3 was rejected.

In dealing with the question of whether any provision of a pre‑existing law was repealed, the Court first acknowledged, for the sake of argument, that a conflict might arise between an order issued under section 3 of the Essential Supplies (Temporary Powers) Act, 1946, and the provisions of an existing statute. It was assumed that, to the extent of such a conflict, the existing law could be said to be repealed by implication. The Court observed, however, that such an implied repeal could not be attributed to the delegate who issued the order; rather, the repeal would stem from the legislative act of Parliament itself. By enacting section 6, Parliament expressly declared that an order made under section 3 would have effect notwithstanding any inconsistency that order might have with any enactment other than the Act itself. This declaration was not made by the delegate but by the Legislature, which thereby expressed its intention through section 6.

The Court explained that the abrogation or implied repeal arose from the legislative declaration contained in section 6 and not from the order issued by the delegate under section 3. The delegate’s authority was confined solely to the making of an order under section 3, and once that order was made, the delegate’s power was exhausted. Section 6 then intervened, with Parliament declaring that as soon as such an order came into force it would have effect notwithstanding any inconsistency with any other enactment, except the Act itself. The Court emphasized that Parliament, being supreme, could enact a law that impliedly repeals or abrogates provisions of any earlier law, and no objection could be raised that this amounted to an excessive delegation of power to the Parliament. There was, therefore, no delegation involved in the provisions of section 6, and that section could not be held unconstitutional on the ground of excessive delegation.

Consequently, the Court held that sections 3, 4 and 6 of the Essential Supplies (Temporary Powers) Act, 1946, were constitutionally valid, and that the impugned order was likewise constitutional. In accordance with this finding, the appeal was dismissed. The Court further directed the trial court to proceed expeditiously with the case in accordance with law, and affirmed that the appeal was dismissed.