Dwarka Prasad Laxmi Narain vs. The State of Uttar Pradesh and Ors.

Facts

The petitioners are Dwarka Prasad Laxmi Narain, a firm of traders carrying on the retail business of selling coal at a coal depot in the town of Kanpur. The District Magistrate of Kanpur and the District Supply Officer-respondents Nos. 2 and 3 in the petition-imposed various restrictions upon the sale of coal, soft coke, etc.

The State of Uttar Pradesh issued an order titled "The Uttar Pradesh Coal Control Order, 1953" (Control order). On the 16th of July, 1953, respondent No. 2 issued a declaration fixing the retail rates for the sale of soft coke, coal, etc. The petitioners contended that the selling prices were reduced so much that the coal traders couldn't carry on their business at all and thus the violation of their fundamental rights guaranteed under Article 14 and clauses (f) and (g) of Article 19(1) of the Constitution.

Key Takeaways for Students

Legal Issue

Whether the Control Order of 1953 is constitutionally valid?

Holding

The prices are calculated based on the landed costs of coke and coal up to the depot as enumerated in Schedule III, to which a profit of 10 percent is added. The entire dispute concerns incidental charges specified in item 5 and the allowance for shortage which forms item 7. The rates undoubtedly vary according to local conditions and some amount of discretion must be given to the local authorities. The discretion given to the licensing authority in fixing these rates must be exercised considering the condition prevalent in the locality with which the local officers must be presumed to be familiar. The discretion vested in public officers is not an uncontrolled discretion, no unfair discrimination has resulted from the exercise of it, and the order or declaration made by such an officer is not illegal.

The clauses (7) and (8) of the Control Order do not impose unreasonable restrictions upon the freedom of trade enjoyed by the petitioners and consequently, the declaration of the 16th of July, 1953 cannot be held to be invalid.

Final Decision Petition Allowed

Ratio

Law inconsistent with any provision of part III of the Constitution of India shall be void.