PATEL TOBACCO COMPANY AND G. C. SHANKAR v. STATE OF ORISSA
1960-11-30
R.K.DAS, R.L.NARASIMHAM
body1960
DigiLaw.ai
JUDGMENT : Narasimham, C.J. - This is an application under Article 226 of the Constitution by a firm engaged in the business of collecting and selling Kendu leaves in the former zamindari Estate) of Himgir in the district of Sundergarh. The said estate was taken over by the Government of Orissa under the provisions of the Orissa Estates Abolition Act. An application under Article 226 of the Constitution challenging the validity of the acquisition of the zamindari by the State Government was dismissed by this Court and the matter is now pending on appeal before the Supreme Court. During the pendency of this appeal, the estate of Himgir has been placed in charge of the District Magistrate of Sundergarh, as Receiver, subject to the control of this Court. Some confusion has arisen because of the dual nature of the functions of the District Magistrate of Sundergarh. As Receiver in charge of the estate he has not only to manage the affairs of the estate but has also to safeguard the interests of persons who might have taken leases fro the former Zamihdar prior to the acquisition of the estate by the State-provided those leases are subsisting later on. But as District Magistrate he bas certain statutory functions to perform under the provisions of the Orissa Kendu Leaves (Control and Distribution) Order 1949, which was repealed and replaced by the Orissa Kendu Leaves Control Order, 1960 which came into force on the 6th February, 1960 (Vide Notification No. 4165-D. dated 6.2.1960 of the Government of Orissa development (Forest) Department). 2. In considering the merits of this application under Article 226 this Court is mainly concerned with the Constitutional validity or otherwise of the license issued by the District Magistrate of Sundergarh as the statutory authority under the Orissa Kendu Leaves Control Order, 1960. 3. The admitted facts are as follows. On 30th December 1956 the then Zamindar of Himgir granted a license to the Petitioners to collect Kendu' leaves from the reserved and other forests within his zamindari on payment of a fee of Rs. 65551/- annually. The Petitioners were given monopoly rights under this license (vide Annexure A). This license may be conveniently termed as a 'lease' so as to distinguish it from the statutory license issued by the District Magistrate under the Kendu Leaves Control Order.
65551/- annually. The Petitioners were given monopoly rights under this license (vide Annexure A). This license may be conveniently termed as a 'lease' so as to distinguish it from the statutory license issued by the District Magistrate under the Kendu Leaves Control Order. The aforesaid lease was to commence from 1st January 1958 and to last for a period of five years. In the meantime, as already stated, the estate of Himgir was taken over by the Government and the District Magistrate of Sundergarh was placed in charge of the management of the estate as Receiver. The Orissa Kendu Leaves (Control and Distribution) Order, 1949, was in force at that time. Under the, provisions of that Order no person other than one who has taken a license under that Order could engage in any undertaking involving collection, purchase, sale, or storage of Kendu leaves for purpose of sale. The Order did not lay down any Rules for the guidance of the District Magistrate as regards the number of licenses to be issued in a particular area. The matter was left entirely to the discretion of the District Magistrate and it was open to him either to grant one license for the entire district or a license for a particular area of the district and thereby create monopoly rights, or to issue several licenses for a particular area. In pursuance of the aforesaid Order, the last license granted to the Petitioners was issued on 3rd February 1960 (vide Annexure) which was to have remained' in force till the en of December 1960. In the meantime the new Kendu Leaves Control Order, 1960 which had already been published in the Gazette on the 25th January 1960, was brought into operation with effect from the 6th February 1960. It is unnecessary for the purpose of the present application to discuss at length the main differences between the old Order of 1949 and the new Order of 1960.
It is unnecessary for the purpose of the present application to discuss at length the main differences between the old Order of 1949 and the new Order of 1960. It is sufficient to say that the hew Order of 1960 authorised the State Government to declare a particular area within a district to be a Unit for the purpose of that Order and further authorised the District Magistrate concerned to determine the number of licenses to be issued in each district, or for: each Unit of a district having regard to (i) the prevention of unhealthy competition; and (ii) the giving of facilities for viable areas of business for each licenses; see Clause 4(3)(i) and (ii) of the Order. Clause 11 of the Order while repealing the old Order of 1949 contained the usual deeming provision to the effect that all licenses issued under the Old Order shall be deemed to have been issued under the provisions of the new Order. Purporting to act in excessive of the powers conferred by the New Order, the State Government on the 15th March 1960, fixed Himgir as Unit No. 46 in Sundargarh district. The District Magistrate, thereupon, passed an order on 31st March 1960 (Annexure D) determining the number of licenses to be issued for that Unit to be three and calling upon all interested persons to apply for a license under the new Order. The Petitioners appear to have sent a protest petition on the 6th April 1960 (Annexure E) and this was followed up by a. telegram addressed to the District Magistrate by his Advocate (Annexure F). In spite of this, however, the Petitioner also joined in filing an application before the District Magistrate, along with several other persons, for the issue of a license under the New Order. On 9th April 1960 there was given a license. Two other persons were also given licenses for carrying on the business of collecting and selling Kendu leaves in the said Unit. 4. Mr.
On 9th April 1960 there was given a license. Two other persons were also given licenses for carrying on the business of collecting and selling Kendu leaves in the said Unit. 4. Mr. M.S. Mohanty for the Petitioners contended that inasmuch as the Petitioners had been granted monopoly rights by virtue of the license granted by the District Magistrate, under the old Order of 11:149 and that license must be deemed to have been continuing by virtue of the saving provision in Clause 11(ii) of the new Order of 1960, their monopoly rights should have been respected and that the District Magistrate had no jurisdiction to grant licenses for two other persons to carry on the said business within Himgir Zamndari. 5. There are two answers to this contention. Firstly, the Petitioner did not reply on their rights under the license granted under the old Order and inspite of their sending a protest petition, they also applied for a license under the new Order of 1960. Consequently they cannot be permitted to rely on the deeming provision in Clause 11(ii) of the new Order of 1960 which keeps alive licenses issued under the old Order of 19-19. The learned Advocate-General rightly contended that the principle of estoppel would apply. On the other hand, Mr. Mohanty urged that the Petitioners was coerced into applying for a fresh license under the new Order, by the District Magistrate, purporting to act under Clause 4(2) and 4(3) of the New Order. No allegation of any such coercion was made in the petition, nor is there any material on record to show that the Petitioners were compiled to apply for a license under the new Order. Merely sending a protest application was not enough. If they wanted to rely on the deeming provisions in Clause 11(ii) they could have taken their stand on that clause instead of applying to the District Magistrate for a fresh license. After having thus submitted themselves to the jurisdiction of the District Magistrate and applied for and obtained a license under the new Order, it is not open to the Petitioner's to rely on Clause 11(ii) of that Order and claim that the rights under the old license continued. 6. Secondly even under the new license issued under the old Order it cannot be said that the Petitioners were given any statutory monopoly rights in the entire Zamindari area.
6. Secondly even under the new license issued under the old Order it cannot be said that the Petitioners were given any statutory monopoly rights in the entire Zamindari area. The old license did not say either expressly, or by implications, that the licenses under that Order shall have monopoly rights to carry on the business of collecting and selling Kendu leaves within the area allotted to them. The number of licenses to be issued for a particular area was left unrestricted. Doubtless, by virtue of the earlier lease granted to them by the former Zamindar of Himgir, the Petitioners might have been conferred monopoly rights in those areas. But the rights as between the Petitioners and their lessor namely the former Zamindar of Himgir or his successor in interest, namely the Receiver should not be confused with the rights which they obtained as a licensee under the old Order of 1949. If the Petitioner felt that the monopoly conferred on him by the lease executed by the previous zamindar are adversely affected by the giving of two more licenses to other persons, it is always open to the Petitioner to apply to the Receiver for reducing the amount of annual fee payable, and the Receiver will doubtless dispose of his application in accordance with the well known rules of law of contract bearing in mind the terms of the lease as given in Annexure A. In this judgment we need not express any opinion as to whether, in the circumstances the Petitioner is entitled to substantial abatement in the monopoly fee which he had agreed to pay to Himgir Estate. This will be decided by the Collector-Receiver on its own merits. But, as no monopoly rights were granted to the Petitioner by the license granted under the old Order of 1949, there can be no question of any such rights being continued under the deeming provisions of the Clause 11(ii) of the new Order of 1960. 7. Mr. Mohanty then contended that the Petitioners had incurred a heavy liability by paying an annual salami of Rs. 65551/- to the lessor (now Receiver) whereas the new licenses were paying such smaller amounts and to the extent there was discrimination against them.
7. Mr. Mohanty then contended that the Petitioners had incurred a heavy liability by paying an annual salami of Rs. 65551/- to the lessor (now Receiver) whereas the new licenses were paying such smaller amounts and to the extent there was discrimination against them. This argument, again, overlooks the distinction between the rights as between the lessor and the lessees on the one hand and the statutory rights under the Orders as between the Petitioners and the licenser (District Magistrate). So far as the statutory rights created by the license under the Control Order are concerned the Petitioners have not been discriminated against. On the other hand it would appear from the letter of the District Magistrate dated 9th April, 1960 (Annexure B) that in view of their carrying on the business for a long time in the area the Petitioners were given some special preference. All the licensees paid the same amount of fee. But as regards premium or rent-whatever may be the expression used-payable by these licensees to the Receiver for carrying on the business within the estate of Himgir, even if there is great difference, that would not effect the Constitutional validity of the statutory order passed by the District Magistrate granting the licenses. Article 14 of the Constitution on which Mr. Mohanty relied has absolutely no application. 8. Some other objections based on other Constitutional grounds were raised in the petition. But I do not think that have any application in the present case in view of the distinction between the rights of the Petitioners as lessees from the old Zamindar on the one hand and his rights as licensee under the Control Order, granted by the District Magistrate on the other. Some reference was made to Article 19 of the Constitution on the ground that the new Control Order of 1960 imposed unreasonable restrictions on a person carrying on the business of collecting and selling Kendu leaves. But we are satisfied that the restrictions imposed by the said Order are reasonable and do not think it necessary to discuss this point any further. 9. This application is therefore dismissed with costs. Hearing fee Rs. 100/- (Rupees one hundred only). R.K. Das, J. 10. I agree. Final Result : Dismissed