Judgment :- 1. These writ petitions challenge the vires of Clause.51A of the Kerala Rationing 0.1966, and the validity of the action taken thereunder, viz., the notices issued to the petitioners to show cause against terminating their appointments to deal in rice and wheat. It is common ground that the petitioners are persons who are authorised Ration Distributors under Clause.51 of the Rationing Order or who may be deemed to have been appointed as such under the provisions of the said clause. The Rationing Order was promulgated by the Government of Kerala under the powers conferred by sub-sections (1) and (2) of S.3 read with S.5 of the Essential Commodities Act 1955. Clause.54(1) of the Rationing Order empowers the District Collector by order to appoint in respect of any area, any person as authorised whole-sale distributor in respect of any rationed article. On such appointment, by Clause.4, the whole-sale distributor is entitled to supply rationed articles in accordance with the provisions of the Order in the areas specified in the order of appointment. The distributor is to furnish to the Government sufficient security for the due performance of his work and to execute an agreement with the District Collector for the due performance of the conditions of appointment. Sub clauses (8) and (9) of Clause.51 of the Order provided for the grounds for suspension or cancellation of the appointments. These sub-clauses may conveniently be extracted% "51 (8) On receipt of a report from any of the officers referred to in sub-clause (7) or on his own inspection of the stocks and accounts in a shop, if the District Collector or any officer of the Civil Supplies Department not below the rank of a Taluk Supply Officer finds any shortage or excess in the quantity of rationed articles in the stock or any irregularities in the accounts, or detects non-compliance with any of the directions issued by competent authorities, he may after giving the authorised whole-sale distributor an opportunity of stating his case and for reasons to be recorded in writing, amend, vary, suspend or cancel his appointment and/or order forfeiture of the whole or any part of the amount deposited by the authorised whole-sale distributor as security under sub-clause (5). Notwithstanding anything contained in this sub-clause he may order the realisation of an amount equivalent in value of the quantity of rationed articles found short at the time of inspection. Notwithstanding anything contained in this sub-clause he may order the realisation of an amount equivalent in value of the quantity of rationed articles found short at the time of inspection. If considered necessary, he may suspend the appointment of the authorised whole-sale distributor, pending enquiry. (9) Notwithstanding the provisions contained in sub-clause (8), the District Collector or any Officer of the Civil Supplies Department not below the rank of a District Supply Officer may, after giving the authorised whole-sale distributor an opportunity of stating bis case and for reasons to be recorded in writing, amend, vary, suspend or cancel his appointment whenever in the opinion of the District Collector or other officer, it is in the interest of the general public necessary or expedient so to do and in every such case the authorised whole-sale distributor shall surrender on demand to the District Collector or other Officer, the order of appointment for endorsement or cancellation, as the case may be." Sub clause (10) provided for a right of appeal to the Government, to the Commissioner of Civil Supplies, or to such authority as the Government may specify, against the orders passed under Clause.51. Sub clause (11) conferred on the Government or the Commissioner, a power of revision either suo moto or on application to call for and examine the records of any order passed by a subordinate authority under the provisions of this clause, and pass appropriate orders. 2. The impugned Clause.51A was introduced by a Government notification dated 19-9-1967 published in the Kerala Gazette Extraordinary of the same date and reads as follows: "51A (I) Notwithstanding anything contained in Clause.51 or any contract to the contrary, if at any time, the Government are of opinion that in the interest of the general public, it is necessary or expedient so to do, the Government may, by general or special order, cancel the appointment of any or all or any class of authorised whole-sale distributors after giving an opportunity to such distributor or distributors of being heard; and such order of the Government shall be final. (2) When the appointment of any authorised whole-sale distributor or authorised whole-sale distributors is cancelled under sub-clause (1) the stocks of rationed articles available with him or them at the time of such cancellation shall be disposed of in accordance with the directions of the Government." A copy of the notification dated 19th September 1967 is Ext P3 in O. P. No. 3415 of 1967. The same was issued in exercise of the powers conferred by sub-clauses (1) and (2) of S.3 and S.5 of the Essential Commodities Act 1955, read with the order of the Government of India, a copy of which has been filed as Ext. PI, in O. P. Nos. 3498 to 3500 of 1967. I do not extract the said order of the Government of India, as it was not shown that the conditions placed on the exercise of the State Government's powers by the same have not been complied with. 3. By way of a sample, Ext. P4 in O. P. No. 3415 of 1967 may be treated as representative of the notices issued to the various petitioners to show cause against the cancellation of their appointment. It reads: "GOVERNMENT OF KERALA FOOD DEPARTMENT Trivandrum No. 15662/B5/67/Fd. D Trivandrum Dated: 27th September, 1967 NOTICE Under Clause.51A of the Kerala Rationing Order, 1966 WHEREAS after considering the working of the scheme for distribution of rationed articles in the State and all aspects of the matter Government are of opinion that the whole-sale depots should be organised by a phased programme through co-operative organisations and the Food Corporation of India and that in the interest of the general public it is necessary and expedient that your appointment as authorised whole-sale distributor under the Kerala Rationing Order, 1966 for rice and wheat under order of the District Collector, Calicut should be cancelled. Now, therefore notice under Clause.51A of the Kerala Rationing Order, 1966 is given to you to make representations, if any, in the matter to the secretary to Government of Kerala, Food Department, Kerala Secretariat, Trivandrum, on or before 15-10-1967 and also, if you so desire, appear before him, in the Kerala Secretariat at 11 A. M. on 18-10-1967 for being heard in the matter. If no representation is received from you before the expiry of the period specified above or if you do not appear before the Secretary to Government, Food Department at the appointed time, it will be deemed that you do not wish to be heard and further action taken. (By Order of the Government) (Sd) M. Abdussalam Secretary to Government (Food)" The petitioners have placed reliance on a press release dated 4th October 1967, a copy of which has been produced as Ext. P5 in O. P. No. 3415 of 1967, and which, according to them would furnish the factual background for the action taken against them. According to the said press release, Mrs. Gowri, the Food Minister of the State told the pressmen that: "53 out of about 300 whole-sale distributors had been served with 15 days? notice, under the Kerala Rationing Order empowering the Government to take over the whole-sale distribution and they would be brought under the control of the Food Corporation. The Government's idea was to bring all the whole-sale depots except those managed by the Co-operative Societies under the control of the Food Corporation of India, under a phased programme." There was no denial that Ext. P5 did not correctly reflect the Minister's statement. It was also made clear by the Advocate-General that Ext. P-4 notice in so far as it stated that the Government proposed to organise whole-sale distribution through the Co-operative Societies and the Food Corporation of India, did not embody the policy of the Government as correctly reflected in Ext. P5. 4. The petitioners laid their challenge mainly on the grounds that: (1) Clause.51A is beyond the purview of S.3(1) and (2) (d) of the Essential Commodities Act and also violative of Art.14 and 19 of the Constitution; (2) Assuming Clause.51A is valid, the action initiated under the same as evidenced by the notices is invalid as beyond the purview of the clause, and also violative of Art.14 and 19 of the Constitution; and (3) That the action is mala fide. 5. It is convenient to quote S.3(1) and (2) (d) of the Essential Commodities Act 1955 in order particularly to examine the contention that Clause.51A is beyond the scops of these provisions. 5. It is convenient to quote S.3(1) and (2) (d) of the Essential Commodities Act 1955 in order particularly to examine the contention that Clause.51A is beyond the scops of these provisions. 3(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. (2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide XX X X X (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity." 6. In Narendrakumar & Co v. Union of India (A. I. R.1960 S. C. 430) it was ruled that the power of regulation or prohibition in respect of any essential commodity, conferred by S 3 of the Essential Commodities Act can be exercised only without violating any of the fundamental rights guaranteed by the Constitution of India and such a restriction must necessarily be implied in S.3 of the Act. With particular reference to this decision it was argued for the petitioners that Clause.51A must encounter the challenge of Art.14 and 19 of the Constitution. The learned Advocate-General met the challenge based on Art.19 of the Constitution in two ways. First, that the petitioners have no fundamental lights to deal in food grains which are the property of the Government; and next, that Art.19 is unavailable to the petitioners in view of the Proclamation of emergency, and of Art.358 of the Constitution. 7. While it is true that none of the petitioners can claim to have a fundamental right to deal in any food grains procured or otherwise obtained by the Government, the fact remains that under the provisions of the Rationing Order noticed supra, the Government have chosen to place the right to deal in these food grains, on a statutory basis-nonetheless statutory despite the agreements executed by the petitioners under sub-clause 6 of Clause.51 of the Rationing Order. Having chosen to make statutory regulations for the appointment of persons to deal in food grains and the conditions for the suspension and the cancellation of the said appointments, these regulations are as much binding on the State as on the subject. (Vide K. N. Guruswamy v The State of Mysore (A. I. R.1954 S. C. 592) and Chandy Pillai v. State of Kerala (1959 K. L T. 1278). The validity of any statutory provision dealing with the appointment or its termination must pass the test of scrutiny inter alia with respect to Art.14 and 19 of the Constitution. The decision in Commissioner for the Port of Calcutta v. Asit Ranjan Majumder (A. I. R.1952 Cal. 530) relied on by the Advocate-General is distinguishable. It was there ruled that the writ-petitioner who complained of the provisions requiring the taking out of a licence under the Dock Workers' Regulation of Employment Scheme and the Bye-laws, for carrying on the business of stevedoring in the docks owned and controlled by the Port of Calcutta, had no fundamental right to carry on his business within the Dock area, and therefore the licensing provision did not offend Art.19 of the Constitution. The position here is different. The validity or reasonableness of the provision requiring appointment as distributor of foodgrarins is not under challenge. The petitioners, having a statutory right to deal in food grains, challenge the vires of the provision for terminating their appointment. The broad submission that the petitioners have no fundamental rights under Art.19, seems in the circumstances, difficult to accept. Indeed, in Mannalal Jain's case (AIR. 1962 SC 386), to be noticed more fully hereafter, the refusal of a licence to deal in food grains under the Assam Food Grains (Licensing and Control) 0.1961, was held inter alia, to offend the petitioner's fundamental rights under Art.19. The decision of Govindan Nair J. in O. P. 2044 of 1963, relied on by the Advocate-General was rendered under the Kerala Food Stuffs Distribution Control 0.1960. The learned judge held that no person can insist that he should be given an authority to distribute or sell the rice given by the Government, and further that the authorisation can be cancelled even without a memo being issued to those who have been authorised. The learned judge held that no person can insist that he should be given an authority to distribute or sell the rice given by the Government, and further that the authorisation can be cancelled even without a memo being issued to those who have been authorised. This latter proposition, with respect, is difficult to accept, when, as I have already pointed out, the Government have chosen to put the exercise of the right to deal in food grains, and its termination, on a statutory basis. I would therefore proceed on the footing that the petitioners have established their rights under Art.19 of the Constitution. 8. Art.358 of the constitution enacts: "While a Proclamation of Emergency is in operation nothing in Art.19 shall restrict the power of the Stale as defined in Part III to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take but any law so made shall, to the extent of the incompetency, ceases to have effect as soon as the Proclamation ceases to operate. except as respects thing done or omitted to be done before the law so ceased to have effect." On its language, the Article is prospective in its operation. The petitioners relied on the ruling in M/S. Channan Pam Jagannath v. The State of Punjab and others (AIR. 1965 Punjab 74). It was there held that although the provisions of the Gur Dealers Licensing 0.1963 made under the provisions of the Essential Commodities Act, cannot be challenged as violative of Art.19 of the Constitution by reason of Art.353, there was no bar to questioning its validity as being beyond the purview of S.3 of the parent Act as interpreted by the Supreme Court in Narendrakumar's case. Applying the reasoning of the said decision, it is difficult to see how the Rationing 0.1966 or Clause.51A thereof can be said to transgress the limits set to S.3 of the Essential Commodities Act in Narendra Kumar's case without seeing whether it does not violate the petitioners' right under Art.19 of the Constitution. That enquiry is now precluded by Art.358 of the Constitution. The decision in State of Madhya Pradesh v.Thakur Bharat Singh (AIR. 1967 SC. 1170) does not seem to advance the case of the petitioners any further. That enquiry is now precluded by Art.358 of the Constitution. The decision in State of Madhya Pradesh v.Thakur Bharat Singh (AIR. 1967 SC. 1170) does not seem to advance the case of the petitioners any further. As I understand the said ruling, it only decided that the Madhya Pradesh Public; Security Act of 1959 was void as infringing the fundamental freedom guaranteed under Art.19(1)(d) of the Constitution. It was argued before the Supreme Court that Art.19(1)(d) was not available by reason of the proclamation of emergency and of Art.358 of the Constitution. It was held that the said Article does not operate either to validate or to revive a legislative provision which was invalid by reason of the constitutional inhibitions even before the Proclamation of Emergency. It was then sought to be argued that the executive order made by the State under the Act placing restrictions on the movements and residence of the petitioner in that case was not liable to challenge at the altar of Art.19 in view of Art.358. It was ruled that any executive action which operates to the prejudice of any person must have the authority of law to support it and that the terms of Art.353 do not detract from the said proposition. The Madhya Pradesh Public Security Act being invalid from its inception as contravening Art.19(1)(d) of the Constitution, could not afford the legal basis for the executive order. Unless Clause.51A is itself shown to be unconstitutional, the decision of the Supreme Court is of no assistance to the petitioners in these cases. I am therefore inclined to hold that Art.19 is not available to the petitioners in view of Art.358. 9. Assuming that Art.19 is still available to the petitioners the question for consideration would be whether the restrictions imposed by Clause.51A on the petitioners' fundamental right to trade or property was a reasonable restriction in the interests of the public. Statedly, the power under Clause.51A is to be exercised only in the interests of the public. As will be noticed later, it is not an unregulated power. T am therefore of the view that Clause.51A as such is not violative of Art.19 of the Constitution. 10. I shall next examine the challenge based on Art.14. Statedly, the power under Clause.51A is to be exercised only in the interests of the public. As will be noticed later, it is not an unregulated power. T am therefore of the view that Clause.51A as such is not violative of Art.19 of the Constitution. 10. I shall next examine the challenge based on Art.14. It was pointed out that by Clause.51A a naked and arbitrary power to terminate the appointments had been vested in the Government without any control by any superior authority. Sub clause (9) of the Clause.51 has been extracted earlier, and sub-clauses (10) and (11) thereof have been summarised. I am not concerned with the wisdom or the policy of the legislature in duplicating two provisions substantially identical in content, such as Clause.51 (9) and Clause.51A. Nor am I impressed by the clash or conflict between the Collector's power of appointment under Clause.51 (1) and the Government's power of termination under Clause.51A, in view of the overriding effect given to the latter provision. I am concerned only with the validity of Clause.51 A. The power being vested in such a high authority as the Government is it not open to the objection that it is easily capable of arbitrary exercise. Such an exercise of power by the Government cannot be lightly presumed. Nor can I accept the contention that no guide lines have been provided for the exercise of the power. Clause.51A itself provides that the power is to be exercised only in the interests of the general public. I have no doubt that the power is also to be exercised for securing the objects of the Rationing Order, namely the equitable distribution and availability of food grains at fair prices. There is the further safeguard that the power can be exercised only after affording the distributor an opportunity of being heard. From the absence of a right of appeal or further control against the exercise of the power, it cannot be condemned as arbitrary. I am therefore of the opinion that the power conferred by Clause.51A cannot be characterised as an uncanalised or unregulated power or as offending Art.14 of the Constitution. 11. From the absence of a right of appeal or further control against the exercise of the power, it cannot be condemned as arbitrary. I am therefore of the opinion that the power conferred by Clause.51A cannot be characterised as an uncanalised or unregulated power or as offending Art.14 of the Constitution. 11. However, attack has been made that in the exercise of the power the Government has been guilty of hostile discrimination in that they have singled out only individual wholesale distributors other than co-operative societies, and that these latter have been allowed to continue in their appointment. Under Clause.51A of the Rationing Order the only criterion for termination of the appointments is the interest of the general public. It was made clear by the Advocate-General that the Government's policy was not to create a monopoly or to eliminate the private distributors in food grains altogether. It was only to progressively replace these distributors by the Food Corporation of India, leaving the existing Co-operative Societies engaged in food grains distribution, untouched. No case based on the creation of monopoly therefore falls to be considered. The question is whether there has been any discrimination in allowing co-operative societies to continue as whole-sale distributors while terminating the appointments of individual distributors like the petitioners It was not disputed, and cannot be disputed, that any classification of distributors into co-operative societies and other individuals in the matter of termination of their appointments must be a rational classification based on intelligible differentia having regard to the object of the legislation. In Mannalal Jain v. The State of Assam (AIR 1962 SC. 386), the Writ Petition in the Supreme Court in its final and amended form, was directed against the order of the licencing authority under the Assam Food Grains (Licencing and Control) 0.1961, refusing a licence to the petitioner to deal in food-grains on the ground that having regard to the existing licence the grant of any further licence would be superfluous. The existing licences to which the order referred were in favour of the Assam Cooperative Apex Marketing Society. The 1961 Order under which the grant was made contained a provision in Clause.5(e) thereof that in granting licences the licencing authority shall have regard to the question whether the applicant was a co-operative society or not. The existing licences to which the order referred were in favour of the Assam Cooperative Apex Marketing Society. The 1961 Order under which the grant was made contained a provision in Clause.5(e) thereof that in granting licences the licencing authority shall have regard to the question whether the applicant was a co-operative society or not. The provision was attacked as beyond the purview 6f the power granted to the State Government under S.3 read with S.5 of the Essential Commodities Act. The grant to the co-operative society was itself challenged as offending Art.14 and 19 of the Constitution. The broad contention that Clause.5 (e) of the Control Order can have no relation to the objects mentioned in S.3 of the Act was repelled. The alternative contention that the grant violated Art.14 and 19 of the Constitution was sustained on the ground that the object of the grant was to create a monopoly in favour of co-operative societies sand to exclude individual dealers other than co-operative societies. The decision furnishes a complete answer to the contention of the petitioners that preference to Co-operative Societies is wholly unrelated to the objects in S.3 of the Essential Commodities Act. In view of this decision the said contention must be repelled. 12. It remains to consider whether the elimination of individual dealers from the field and the continuance or retention of Co-operative Societies can be said to be a rational classification based on intelligible differentia. The petitioners were at pains to point out that co-operative societies, like the individual petitioners, are subject to the same controls and restrictions or the provisions of the Rationing Order and that having regard to the controlled economy in the matter of food-grains, it cannot be contended that the Co-operative Societies stand in a class separate from other individuals. The decision in Ratanlal Nagardas v, M. S. Palmitkar (AIR. 1961 Gujarat 38) was strongly relied on by the petitioners. That case arose under the provisions of the Bombay Sugar Dealers Licensing 0.1959. The whole-sale distribution of Sugar was entrusted by the State to dealers who were Cooperative Societies to the exclusion of those who were not. The decision in Ratanlal Nagardas v, M. S. Palmitkar (AIR. 1961 Gujarat 38) was strongly relied on by the petitioners. That case arose under the provisions of the Bombay Sugar Dealers Licensing 0.1959. The whole-sale distribution of Sugar was entrusted by the State to dealers who were Cooperative Societies to the exclusion of those who were not. It was ruled having regard to the control not only on the price but also on the distribution and sale of sugar that it cannot be said that the whole-sale distribution of sugar through Cooperative Societies in preference to the licence holders would serve the policy or object of the Act. and that the classification of licence holders into those who are co-operative Societies and those who are not, is totally un-related to the policy or object of the Act. It may perhaps be difficult to sustain this part of the ruling in the light of the pronouncement of the Supreme Court in Mannalal Jain's case. But there is another aspect of the matter which was examined by the Gujarat High Court, namely, whether the distribution of sugar on a more satisfactory basis would afford a reasonable basis for the classification. Examining this aspect of the matter, it was pointed out that nothing had been shown how the whole-sale distribution can be put on a more satisfactory basis by entrusting the same to Co-operative Societies, or by retaining dealers who are Co-operative Societies, and eliminating those who were not. This was held to amount to discrimination. There was no case before me that any of the petitioners had been guilty of any misconduct or malpractice to warrant the termination of their appointments. As in the Gujarat Case, my attention was not called to anything either in the Co-operative Societies Act, or in any other law to show that Co-operative Societies are better-fitted to deal with whole sale-distribution of food grains than other distributors. There has been certain generalisations in the counter-affidavit that it was felt that distribution through Co-operative Societies will be in the interests of consumers and that there is scope for a greater measure of check and control including organizational and functional check which are greater in the case of Co-operative Societies and that their functioning is in the larger interests of the general public. But these generalisations in the counter-affidavit were not made good by any concrete facts or details either in regard to the composition or personnel of the Co-operative Societies or the manner of their functioning. The singling out of the individual whole-sale distributors like the petitioners for termination leaving alone Co-operative Societies who are also distributors, has not been shown to be a rational classification on intelligible differentia. It is significant that the Gujarat decision was noticed by the Supreme Court in Mannalal Jain's case (1962 SC. 386) without any adverse comment. 13. Counsel for the petitioner in O. P. No. 3376 of 1967 stressed that notices of termination had been issued only to seven out of fifty-seven whole-sale distributors in the Kottayam District, allowing other distributors to continue in their appointment. In the counter-affidavit this has been justified on the ground that the Food Corporation of India has been able to make available storage facilities only in the Kottayam town, and therefore distributors outside Kottayam town have not so far been proceeded against. It may be that this has relation to the Government's objective to bring the scheme of whole-sale distribution under the control of the Food Corporation of India, through a phased programme. In the view that I have taken that the singling out of individuals for action under Clause.51A and the leaving out of Co-operative Societies from the pale of the action is discriminatory, it is unnecessary to dwell on the question of the particular aspect of discrimination sought to be presented by Counsel for the petitioner in O. P. No. 3376 of 1967. 14. The learned Advocate-General relied on the decisions in Glass Chalons Importers and Users Associations v Union of India (1961 SC. 1514) and in Daya v. Joint Chief Controller of Imports and Exports (A. I. R.1962 SC. 1796). These and others were concerned with the canalisation of import and export trade through specialised agencies, such as the State Transport Corporation or the Imperial Chemical Industries etc. There was a special provision is the Import and Export Control Order allowing canalisation of imports and exports, through specialised agencies. The validity of such provision had been up-held by the Supreme Court also. No such provision for canalisation of distribution of food grains if I may say so call it is to be found in the provisions of the Rationing Order. The validity of such provision had been up-held by the Supreme Court also. No such provision for canalisation of distribution of food grains if I may say so call it is to be found in the provisions of the Rationing Order. Besides, as pointed out by Sri H. M. Seervai in his recent publication on the 'Constitutional Law of India': "Those cases dealt with the policy governing export and import of goods and considera-ions which led the court to hold the restrictions imposed in those cases as reasonable restrictions, would be mostly inapplicable to domestic trade in an essential commodity." (See Seervai'Constitutional Law of India' P. 407) 15. Objection was raised by the learned Advocate-General that the petitioners' rights are founded on contracts and that their remedy is not by a petition under Art.226. It was also objected that these petitions are premature as only a show cause notice has been issued and it is open to the petitioners to urge their objections in answer to the notices. These objections appear to be groundless. As stated already, the petitioners' rights stem from their statutory appointments under the provisions of the Rationing Order. 'Their rights are nonetheless statutory, despite their having executed a written contract as required by the Rationing Order. 16. Nor do I think that these petitions are premature. The vires of Clause.51A itself has been challenged in these writ petitions. Assuming that the clause is valid, the action taken in pursuance of the clause has been further challenged as discriminatory. These are matters hardly appropriate for decision by the Government. The resort made by the petitioners to this Court under Art.226 was, in the circumstances justified and proper. 17. Neither pleading, nor material, is sufficient to uphold the plea of malafides. 18. I hold that although Clause.51A of the Rationing Order does not infringe Art.14 or 19 of the Constitution, the action complained of by the petitioners in these writ petitions is discriminatory and violative of Art.14 of the Constitution. On that ground, I allow these writ petitions and quash the impugned notices in these cases calling upon the petitioners to show cause against the termination of their appointment. There will be no order are to costs. Allowed.