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State Of Andhra Pradesh And Another v. Potta Sanyasi Rao And Others
Factual and Procedural Background
On June 18, 1966 the Central Government, acting under Section 5 of the Essential Commodities Act, 1955, issued Notification S.O. 1844 delegating to State Governments the power to make orders under Section 3 concerning certain commodities. At that time tyres and tubes were not classified as “essential commodities.” Subsequently, through three separate notifications (S.O. 2511 dated August 17, 1966; S.O. 2878 dated August 22, 1968; and S.O. 85 dated January 3, 1969) the Central Government declared various categories of tyres and tubes to be essential commodities under Section 2(a)(xi) of the Act.
Relying on the 1966 delegation and with the prior concurrence of the Central Government, the Government of Andhra Pradesh issued the Andhra Pradesh Tyres and Tubes Dealers' Licensing Order, 1973. Dealers in tyres and tubes challenged this Licensing Order before the Andhra Pradesh High Court, contending that the State lacked authority because the delegation pre-dated the declaration of tyres and tubes as essential commodities. The High Court accepted this contention and struck down the Licensing Order as ultra vires. The State Government obtained special-leave and appealed to the Supreme Court.
Legal Issues Presented
- Whether a delegation of powers made by the Central Government to a State Government under Section 5 of the Essential Commodities Act empowers the State to regulate commodities that are declared “essential” only after the date of delegation.
Arguments of the Parties
Respondents' Arguments
- The State Government’s 1966 delegation did not cover tyres and tubes because those items were classified as essential commodities only in 1966–1969, after the date of delegation.
- Consequently, the Andhra Pradesh Tyres and Tubes Dealers' Licensing Order, 1973 was beyond the State’s authority and therefore invalid.
Table of Precedents Cited
No precedents were cited in the provided opinion.
Court's Reasoning and Analysis
The Supreme Court examined Section 5 of the Essential Commodities Act and found no textual limitation restricting a delegation solely to commodities already listed as “essential” at the time of delegation. The Court emphasized that:
- Delegation under Section 5 is general in nature and “will inure” to cover commodities that may later be declared essential under Section 2(a)(xi).
- The statutory scheme does not require a fresh delegation each time the Central Government adds a commodity to the essential list; it suffices that on the date the State issues an order under Section 3, the commodity falls within the statutory definition of an essential commodity.
- A narrow reading, like that adopted by the High Court, would frustrate the purpose of the Act and impose unnecessary procedural hurdles on effective regulation.
Applying these principles, the Court concluded that the Andhra Pradesh Government was validly empowered to issue the 1973 Licensing Order regulating tyres and tubes because, by that date, those items had already been declared essential commodities.
Holding and Implications
Appeal Allowed—High Court judgment set aside.
The Andhra Pradesh Tyres and Tubes Dealers' Licensing Order, 1973 stands validated, restoring the State’s regulatory framework over the tyre and tube trade. The decision resolves the dispute between the parties but does not articulate broader doctrinal changes; no costs were awarded.
P.K Goswami, J.— This appeal by special leave is directed against the judgment of the Andhra Pradesh High Court whereby the Andhra Pradesh Tyres and Tubes Dealers' Licensing Order, 1973 (briefly “the Licensing Order”) was struck down as illegal and ultra vires.
2. A few facts which are material may first be noted.
3. By Notification SO 1844 dated June 18, 1966, the Central Government in exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 (briefly “the Act”) directed
“that the powers conferred on it by sub-section (1) of Section 3 of the said Act to make orders to provide for the matters specified in clauses (d), (e), (f), (g), (h), (i), (ii) and (j) of sub-section (2) thereof shall in relation to all commodities other than foodstuffs and fertilizers (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....
* * *”
4. Section 2(a) of the Act defines “essential commodity” which means ten specified commodities and the residuary clause (xi) thereof 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 III in the Seventh Schedule to the Constitution”.
5. Tyres and tubes are not included in the ten specified commodities in Section 2(a). However, the Central Government by three notified orders, namely, SO No. 2511 dated August 17, 1966, SO No. 2878 of August 22, 1968 and SO No. 85 dated January 3, 1969, declared cycle tyres and tubes, car and tractor tyres and tubes and tubes and tyres of buses, vans, trucks, etc. as essential commodities under Section 2(a)(xi).
6. The impugned Licensing Order was passed by the Government of Andhra Pradesh on June 18, 1973 in exercise of the powers conferred by sub-section (2) of Section 3 of the Act read with SO No. 1844 dated June 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 Government 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 earlier on June 18, 1966. Their contention was accepted by the High Court and the Licensing Order was struck down. Hence this appeal by special leave at the instance of the State Government.
7. The short question that arises for consideration is whether the order of delegation of power by the Central Government under Section 5 enabling the State Government to make orders or issue notifications under Section 3 would empower the State Government to promulgate orders with regard to commodities which were declared to be essential commodities by the Central Government subsequent to the order of delegation.
8. Section 5 of the Act reads as follows:
“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 matters and subject to such conditions, if any as may be specified in the direction, be exercisable also by —
(a) such officer or authority subordinate to the Central Government, or
(b) such State Government or such officer or authority subordinate to a State Government,
as may be specified in the direction.”
9. There is nothing in Section 5 to limit the power of delegation in 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 inure in favour of exercise of power by the State Government with respect to commodities declared essential by the Central Government from time to time under Section 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 of delegation 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 Section 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 meaning 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 exercise of power by the State Government under Section 3 of the Act. The High Court is, therefore, not right in narrowly construing the order of delegation under Section 5 of the Act. The Licensing Order is, therefore, not invalid on the ground that the tyres and tubes were declared to be essential commodities by the Central Government after the order of delegation under Section 5 of the Act.
10. In the result the appeal is allowed and the judgment of the High Court is set aside. There will be, however, no order as to costs.
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