Sri Vijaylakshmi Rice Mills, New
Contractors Company Vs. State of Andhra Pradesh [1976] INSC 63 (22 March 1976)
SINGH, JASWANT SINGH, JASWANT RAY, A.N. (CJ)
BEG, M. HAMEEDULLAH
CITATION: 1976 AIR 1471 1976 SCR (3) 775 1976
SCC (3) 37
ACT:
Rice (Andhra Pradesh) Price Control (3rd
Amendment) order 1964, clause 2-Whether retrospectivity of substitution
inferred in absence of express provision.
HEADNOTE:
Under s. 3 of the Essential Commodities Act
1955, the respondent passed the Andhra Pradesh Procurement (Levy) order 1959,
requiring every miller and dealer of rice (including the appellants) to sell to
the respondent certain specified varieties and quantities of rice at controlled
price on requisition being served on him. Clause 2(a) of the order defined
"controlled price" as the maximum price fixed by the Central
Government from time to time under s. 3 of the Act for the sale of rice. On
December 19, 1963, the Central Government Passed the Rice (Andhra Pradesh)
Price Control order 1963, fixing the maximum price of akkulu rice at Rs. 46.89
per quintal. The appellants sold several quantities of akkulu rice to the
respondent from January 26, 1964, to February 21, 1964, and were paid at the controlled
rate. On March 23, 1964 the Central Government issued the Rice (Andhra Pradesh)
Price Control (3rd amendment) order 1964, and substituted Rs. 52.28 for Rs.
46.89 as the maximum price per quintal, of akkulu rice. The appellant's claim
for the benefit of the enhanced price for the earlier sales was rejected by the
Government of Andhra Pradesh. The appellants succeeded before the Subordinate
Judge, Machilipatnam in their suits for recovery of the difference between the
two controlled prices but lost before the High Court, in appeals preferred by
the State of Andhra Pradesh. It was contended before this Court that the prices
fixed by the Government are for the entire season, and the appellants are
entitled payment at the amended rates, regardless of the dates when the
supplies were made, and that the word "substitute" infers
retrospective effect.
Dismissing the appeals, the Court.
HELD: In the absence of express words or
appropriate language from which retrospectivity may be inferred, a notification
takes effect from the date it is issued and not from any prior date. Statutes
should not be construed so as to create new disabilities or obligations or
impose new duties in respect of transactions which were complete at the time
the Amending Act came into force. [778B-C] (2) The property in the goods having
passed to the Government of Andhra Pradesh on the dates the supplies the made,
the appellants had to be paid only at the controlled prices obtaining on the
dates the sales were effects and not at the increased price which came into
operation subsequently.[778-D] K. Appayya Shanbhague & Co. v. The State of
Mysore and Anr. (Unreported decision S.C. dated 20-4-1962); The Union of India.
represented by the Secretary Ministry of Food & Agriculture, Government of
India, New Delhi v. Kanuri Damodariah & Co. Alluri Venkatanarasiah (1968) 1
An. W.K. 81 and Mani Gopal Mitra v. The State of Bihar (1969) 2 S.C.R.
411, followed.
CIVIL APPELLATE JURISDICTION: Civil Appeals
Nos. 805, 806 and 972-977 of 1973 From the judgment and decree dated the 8th
June 1971 and 23rd November 1971 respectively of the High Court of Andhra
Pradesh at Hyderabad in Appeal Suit Nos. 766 of 1968, 18 of 1969, 779, 780, 782
to 785 of 1968, respectively.
776 F. S. Nariman, J. V. K. Gurunathan, T. V.
Narasimhan Murty and A. Subha Rao, for the appellants.
P. Ram Reddy and P. P. Rao, for the
respondents.
The Judgment of the Court was delivered by
JASWANT SINGH, J. This batch of Appeals Nos. 805, 806 and 972 to 977 of 1973 by
certificate from the judgments and decrees of the High Court of Andhra Pradesh
in Appeals Nos.
766 of 1968, 18 of 1969, 779 of 1968, 780 of
1968, 782 of 1968, 783 of 1971, 784 of 1968 and 785 of 1968 raise a simple but
an interesting question namely, whether for the supplies of rice made by the
appellants in January and February, 1964, they are to be paid price according
to the rate specified in the Rice (Andhra Pradesh) Price Control (Third
Amendment) order, 1964 dated March 23, 1964 or according to the rate specified
in the Rice (Andhra Pradesh) Price Control order as it stood in 1963. The
question arises in the following circumstances:
The appellants are millers and carry on the
business of paddy and rice in the State of Andhra Pradesh. On July 31, 1959,
the Governor of Andhra Pradesh in exercise of the powers conferred on him by
section 3 of the Essential Commodities Act, 1955 (Central Act X of 1955)
hereinafter referred to as `the Act' made an order called the Andhra Pradesh
Rice Procurement (Levy) order, 1959 clause 3 of the order required every dealer
and every miller to sell to the State Government on requisition served on him
by the requisitioning authority at the controlled price (a) 40 percent of the
quantity of rice held in stock by him at the commencement of the order and (b)
40 percent of the total quantity of rice purchased by him every day beginning
with the commencement of the order. Clause 2(a) of the order defined
"controlled price" as meaning the maximum price fixed under section 3
of the Act for the sale of rice by the Central Government from time to time
(emphasis supplied). On December 19, 1963, the Central Government in exercise
of the power conferred on it by section 3 of the Act made an order called the
Rice (Andhra Pradesh) Price Control order, 1963, which extended to the
districts of Krishna, West Godavari, East Godavari, Guntur, Nizamabad, Warangal
and Nellore in the State of Andhra Pradesh. Clause (2) of the order provided
that the maximum prices at which the varieties of rice specified in column (1)
of the Schedule to that order were to be sold in wholesale quantities would be
as specified in the corresponding entries in column (2) of the said Schedule.
The said Schedule inter alia provided that Akkulu rice would be sold at Rs.
46.89 per quintal. In compliance with the requisitions served on them by the
requisitioning authority of the State of Andhra Pradesh, the appellants sold
various quantities of that variety of rice to the Government of that State from
January 26, 1964, to February 21, 1964, and were paid at the aforesaid rate of
Rs. 46.89 per quintal. By means of the Rice (Andhra Pradesh) Price Control
(Second Amendment) order, 1964, dated March 20, 1964, the Central Government
amended sub clause (1) of clause 2 of the Rice (Andhra Pradesh) Price Control
order, 1963 and ordained that in the said sub-clause for the words "the
Schedule', the words and figures schedule I shall be substituted. on 777 March
23, 1964, the Central Government issued the Rice (Andhra Pradesh) Price Control
(Third Amendment) order, 1964. Clause 2 of the order ran thus:-
2. In the Rice (Andhra Pradesh) Price Control
order, 1963, in Schedule I, for the varieties of rice and the maximum prices
thereafter, the following shall be substituted namely:-
____________________________________________________________ Varieties or rice
maximum price per quintal.
____________________________________________________________
1. Districts other than Nellore .. .. .. ..
Akulu .. .. .. 52-25 .. .. .. ..
____________________________________________________________
On the issue of this order, the appellants made representations to the
Government of Andhra Pradesh requesting that for the aforesaid supplies of
Akkulu rice made by them from January 26 to February 21, 1964, they should also
be paid at the enhanced price of Rs. 52.25 per quintal. As the representations
made by them did not evoke a favourable response, they filed suits in the Court
of the Subordinate Judge, Machilipatnam for recovery of the difference between
the controlled prices specified in the Rice (Andhra Pradesh) Price Control
order, 1963, dated December 19, 1963 and Rice (Andhra Pradesh) Price Control
(Third Amendment) order, 1964. The suits filed by them were decreed by that
Court. Aggrieved by these judgments and decrees the State of Andhra Pradesh
preferred appeals to the High Court at Hyderabad which were allowed on the
ground that is the supplies of rice were made by the appellants before the Rice
(Andhra Pradesh) Price Control (Third Amendment) order, 1964, they were entitled
only to the price specified in the Schedule to the Rice (Andhra Pradesh) Price
Control order, 1963. Dissatisfied with these judgments and decrees, the
appellants applied for certificate under Article 133(1) (a) of the Constitution
which was granted to them.
The sole question for determination in these
appeals, as already indicated, is whether the appellants were to be paid price
for the supplies to rice made by them from January 26, 1964, to February 21,
1964, at the rate of Rs.
46.89 per quintal the rate specified in the
Rice (Andhra Pradesh) Price Control order, 1963, dated December 19, 1963 or at
the enhanced rate of Rs. 52.25 per quintal as fixed by the Rice (Andhra
Pradesh) Price Control (Third Amendment) order, 1964 dated March 23, 1964.
Mr. Nariman appearing on behalf of the
appellants has laid great emphasis on the word "substituted"
occurring in clause 2 of the Rice (Andhra Pradesh) Price Control (Third
Amendment) order, 1964 and has urged that the claim of the appellants cannot be
validity ignored Elaborating his submission, counsel has contended that as the
prices fixed by the Government are meant for the entire season, the appellants
have to be paid at the controlled price as fixed vide the Rice (Andhra Pradesh)
Price Control (Third Amendment) order, 1964, regardless 778 of the dates an
which the supplies were made. We cannot accede to this contention. It is no
doubt true that the literal meaning of the word "substitute" is
"to replace' but the question before us is from which date the substitution
or replacement of the new Schedule took effect. There is no deeming clause or
some such provision in the Rice (Andhra Pradesh) Price Control (Third
Amendment) order, 1964 to indicate that it was intended to have a retrospective
effect. It is a well recognized rule of interpretation that in the absence of
express words or appropriate language from which retrospectivity, may be
inferred, a notification takes effect from the date it is issued and not from
any prior date. The principle is also well settled that statutes should not be
construed so as to create new disability or obligations or impose new duties in
respect of transactions which were complete at the time the Amending Act came
into force. (See Mani Gopal Mitra v. The State of Bihar.
The aforesaid sales in the instant cases
having been made by the appellants before the coming into force of the Rice
(Andhra Pradesh) Price Control (Third Amendment) order, 1964, and the property
in the goods having passed to the Government of Andhra Pradesh on the dates the
supplies were made, the appellants had to be paid only at the controlled price
obtaining on the dates the sales were effected and not at the increased price
which came into operation subsequently. This view is in consonance with the
provisions of section 3 of the Act and the Andhra Pradesh Rice Procurement
(Levy) order, 1959 which clearly indicate that the price payable to the dealers
and Millers for the supplies of rice made by them is the control price
obtaining on the date when the sale is made. Similar view is taken in the
unreported decision dated April 20, 1962 of this Court in K. Appayya Shambhague
and Co. v. The State of Mysore & Anr. where it was laid down that the order
made under section 3(2) (f) of the Act are offers of sale which the person on
whom a requisition is served has no option but to accept and that the price
that has to be paid is the controlled price fixed by the Government under
section 3(2) (c) of the Act on the date when he goods are ascertained or when
the property in the goods passes to the buyer. This decision was followed by
the High Court of Andhra Pradesh in The Union of India, represented by the
Secretary, Ministry of Food and Agriculture, Government of India, New Delhi v. Kanuri
Damodariah & Co. Alluri Venkatanarasiah, where it was held that an order
under section 3(2) (f) amounts to an agreement for sale and the price payable
for the quantities of rice supplied is a price payable in accordance with the
price notified under the provisions of section 3(3) of the Act.
In the instant cases, the sale having been
made before the coming into force of the Rice (Andhra Pradesh) Price Control
(Third Amendment) order, 1964, the appellants cannot justifiably claim the
benefit of the increased price specified in the Rice (Andhra Pradesh) Price
Control (Third Amendment) order, 1964. The acceptance of the.
779 contention raised on behalf of the
appellants will lead to grave consequences. It will have the effect of
reopening the transactions past and closed and would thus give rise to lots of
difficulties.
Mr. Nariman has, in support of his
contention, relied on the following passage occurring at p. 394 in Craies on
Statute Law (Sixth Edition):- "Explanatory and declaratory Acts
retrospective Where a Statute is passed for the purpose of supplying an obvious
omission in a former statute, or, as Parke J. (afterwards Baron Parke) said in
R. V. Dursley (1832) 3 B. & Ad. 465, 469 "to `explain a former
statute," the subsequent statute has relation back to the time when the
prior Act was passed. Thus in Att.-Gen v. Poughtt (1816) 2 Price 381, 392, it
appeared that by a Customs Act of 1873 (53 Geo. 3, c. 33) a duty was imposed
upon hides of 9s. 4d., but the Act omitted to state that it was to be 9s. 4d.
per cwt., and to remedy this omission another Customs Act 53 Geo. c. 105) was
passed later in the same year.
Between the passing of these two Acts some
hides were exported, and it was contended that they were not liable to pay the
duty 9s. 4d. per cwt., but Thomson C. B., in giving judgment for the Attorney
General, said:
"The duty in this instant was in fact
imposed by the first Act, but the gross mistakes of the omission of the weight
for which the sum expressed was to have been payable occasioned the amendment
made by the subsequent Act, but that had reference to the former statute as
soon as it passed, and they must be taken together as if they were one and the
same Act." Where an Act is in its nature declaratory, the presumption
against construing it retrospectively is inapplicable.' This passage has, in
our opinion, no bearing on the question before us in view of the fact that the
Rice (Andhra Pradesh) Price Control (Third Amendment) order, 1964 is neither
explanatory nor declaratory, as sought to be interpreted by the counsel.
The contention of Mr. Nariman that the
controlled prices fixed by the Central Government for sale of rice are seasonal
prices not being based upon any cogent material cannot also be accepted.
The High Court was, therefore, right in
allowing the aforesaid appeals preferred by the respondent and reversing the
judgment and decrees passed by the Subordinate Judge, Machilipatnam.
In the result, the appeal, fail and are
dismissed with cost, limited to one set.
M.R. Appeals dismissed.
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