Narendra Kumar And Others vs The Union Of India And Others on 3 December, 1959 – Case Summary

In the case of Narendra Kumar and Others vs The Union of India and Others, a landmark judgment was delivered by the Supreme Court of India on December 3, 1959. The case revolved around the interpretation of fundamental rights and their restrictions, particularly in relation to trade and commerce.

Facts of the Case

The petitioners, Narendra Kumar and others, were dealers in imported copper, conducting their business in Jagadhri, Punjab. Prior to April 3, 1958, they entered into contracts of purchase of copper with importers at Bombay and Calcutta. However, before they could take delivery from the importers, the Government of India, exercising its powers under Section 3 of the Essential Commodities Act, 1955, issued the Non-ferrous Metal Control Order, 1958 on April 2, 1958.

This order included provisions that no person shall sell or purchase any non-ferrous metal at a price exceeding the amount represented by an addition of 3.5% to its landed cost. Additionally, no person shall acquire any non-ferrous metal except under and in accordance with a permit issued by the Controller, following principles specified by the Central Government. However, these principles were not published in the Gazette or laid before the two Houses of Parliament.

The petitioners applied for permits to enable them to take delivery of the copper in respect of which they had entered into contracts, but the applications were refused. This led to the petitioners challenging the validity of the order refusing the grant of the permit.

Issues Raised

The petitioners contended that the fixation of the price under Clause 3 of the Non-ferrous Metal Control Order, 1958, which had the effect of driving the dealer out of business in imported copper, contravened Articles 19(1)(f) and 19(1)(g) of the Constitution. They also argued that the principles specified in the communication dated April 18, 1958, were discriminatory in nature as between the manufacturers and dealers in copper, thus infringing Article 14.

Court’s Observations and Judgment

The court observed that the word “restriction” in Articles 19(5) and 19(6) of the Constitution includes cases of “prohibition” also. However, when a restriction reaches the stage of total restraint of rights, special care has to be taken by the Court to ensure that the test of reasonableness is satisfied.

The court held that the differentia which distinguished dealers as a class from manufacturers placed in the other class had a reasonable connection with the object of the legislation. Therefore, the principles specified in the communication dated April 18, 1958, did not contravene Article 14 of the Constitution.

However, the court also held that Clause 4 of the Non-ferrous Metal Control Order was not effective without the principles to be specified by the Central Government in the manner laid down by sub-sections (5) and (6) of Section 3 of the Essential Commodities Act. As the principles specified in the Communication dated April 18, 1958, were not notified in the Gazette nor laid before both Houses of Parliament, as required under by Section 3, sub-sections (5) and (6), of the Act, Clause 4 could not be enforced. Accordingly, Clause 4 of the Order, as it stood, was void till such time as the principles are published in accordance with Section 3, sub-sections (5) and (6).