Judgment :- 1. The acquisition, sale, supply and distribution of lime shells in the State of Kerala is controlled by the provisions of the Kerala Lime Shells (Control) Act, 1967 Kerala Act 18 of 1958 (hereinafter referred to as the Act). S.3(1) of the Act lays down that no persons other than a dealer or producer licensed under that section, shall carry on the business of selling lime shells or of collecting and stocking lime shells for sale. The petitioner in O.P. No. 3465 of 1971 (Damodaran Puthentharayil) has been carrying on the business of collection and sale of lime shells since 1968 and he had been duly granted the requisite producer's licence and dealer's licence during the years 1967-68,1968-69 and 1970-71 in respect of an area of about 766 acres forming part of the Kaipuzha-Vechoor Puthankayal. When his application for the renewal of licence for the year 1971-72 was pending consideration before the licensing authority the Government of Kerala issued G.O.Ms. No.101/71/DD dated 116 1971, copy of which has been marked as Ext.P1 in O.P.No 2763 of 1961 and as Ext. P3 in O.P. No. 3465 of 1971 (hereinafter referred to as Ext. P1) whereby it was ordered that, in future, licences for collection or sale of lime shells for non-individual use will be issued only to lime shell co-operative societies. By the very same order Government, however, directed that as an exception to the aforesaid rule Sri. Damodaran petitioner in OP. No. 3465 of 1971 may be given a licence for collection and sale of white lime shell during 1971-72 till a lime shell society is registered for the Vechoor Puthankayal area. By para 2(c) of Ext. P1 Government have also instructed the Director of Fisheries to see that a lime shell cooperative society is registered in the Vechoor Puthankayal area as early as possible. 2. The writ petitioner in O. P. No. 2763 of 1971 is a lime shell co-operative society by name Kumarakom Kakka Vyavasaya Co-operative Society. It has filed the writ petition challenging the validity of Ext. P1 in so far as it incorporates a direction from the Government for the grant of a licence to Damodaran who has been impleaded as the 4th respondent in this writ petition (O.P.No. 2765 of 1971). According to the petitioner society the Government have issued the impugned direction in Ext. P1 in so far as it incorporates a direction from the Government for the grant of a licence to Damodaran who has been impleaded as the 4th respondent in this writ petition (O.P.No. 2765 of 1971). According to the petitioner society the Government have issued the impugned direction in Ext. P1 on the basis of an erroneous assumption that there is no lime shell co-operative society functioning in the Vechoor Puthankayal area. It is alleged by the petitioner society that it has a sales depot in Vechoor and that the Vechoor Puthankayal area therefore forms part of its operational territory. On this basis it is contended that the licence in respect of the said area ought to have been granted only to the petitioner society on a correct application of the principles and policy enunciated in Para.1 of Ext. P1. 3. Pursuant to the direction given by the Government in Ext. P1 the Assistant Director of Fisheries, Alleppey (3rd respondent) issued to Sri. Damodaran dealer's licence No 7/71-72 dated 18 61971 authorising collection and sale by him of fifty thousand tins of white lime shell till the formation of a lime shell co-operative society in the area in question. But, on 2 81971 the 3rd respondent passed an order cancelling the said licence given to Sri. Damodaran on the ground that subsequent to the issuance of the licence in his favour a lima shell co-operative society had started working in the area. By the said order Sri. Damodaran was allowed fifteen days' time for disposing of the stock of lime shells remaining with him. He was also informed that further collection of shells should not be made after receipt of the said communication and if any stock remained with him after the period of fifteen days allowed for disposal, the Vaikom Lime Shell Co-operative Society had been instructed to take over the said stock after paying the collection charges. Thereupon Sri. Damodaran has filed the writ petition O. P. No. 3465 of 1971 challenging the legality of the aforesaid order of the Assistant Director of Fisheries, a copy of which has been produced and marked as Ext. P4 in the said writ petition. He has also attacked the validity of the Government's action in issuing G.O.MS. No. 101/ 7J/DD dated 1161971 Ext. P4 in the said writ petition. He has also attacked the validity of the Government's action in issuing G.O.MS. No. 101/ 7J/DD dated 1161971 Ext. P1 whereby the grant of licences for collection or sale of lime shells has been restricted to co-operative societies alone and a direction has been given that the licence which may be issued to him should enure only till the formation of a lime shell co-operative society for the area. According to the writ petitioner, there is nothing in the Act or in the rules framed thereunder which warrants the imposition of such a restriction amounting to the conferment of an exclusive monopoly on co-operative societies. It is, therefore, contended that Ext. P1 is ultra vires the Act and is also violative of Art.14 and 19 of the Constitution. 4. The operation of the order Ext. P4 whereby the licence of the petitioner Sri. Damodaran had been cancelled, was stayed by this court as per the orders dated 12 81971 passed in C, M. P. No. 9606 of 1971. After the expiry of the financial year 1971-72 the petitioner applied to the 2nd respondent for a renewal of his licence for carrying on his business in lime shells both as producer and dealer. He had remitted a sum of Rs. 510/- being the prescribed licence fees and the 3rd respondent issued to the petitioner a licence authorising him to deal in lime shells during 1972-73. Subsequently the 3rd respondent as per his proceedings evidenced by Ext. P8 dated 17 51972 cancelled the licence issued to the petitioner for 1972-73. The reason stated in Ext. P8 is that the licence had been issued to the petitioner for 1972-73 on the basis of a mistaken assumption that the stay order passed by the High Court in O. P. No. 3465 of 1971 would be operative in respect of the year 1972-73, also, while the correct position is that the stay order would have effect only till 313 1972. No notice was issued to the petitioner nor was any opportunity given to him to make any representations before the 2nd respondent proceeded to pass Ext. P8 cancelling the petitioner's licence. O.P. No 2714 of 1972 has been filed by the petitioner Sri. Damodaran challenging Ext. P8 as illegal and violative of the principles of natural justice. No notice was issued to the petitioner nor was any opportunity given to him to make any representations before the 2nd respondent proceeded to pass Ext. P8 cancelling the petitioner's licence. O.P. No 2714 of 1972 has been filed by the petitioner Sri. Damodaran challenging Ext. P8 as illegal and violative of the principles of natural justice. From the above narration of facts it will be seen that the basic order under challenge is Ext. P1 G.O.M.S. No. 101/71/DD-dated 11-6-1971 whereby it has been ordered by the Government that in future licence for collection or sale of lime shells for "non-individual" use should be issued only to lime shell co-operative societies. The other orders passed by the 3rd respondent (Assistant Director of Fisheries, Alleppey), which are under challenge in these writ petitions, evidence consequential actions taken by him in implementation of the directive given in Ext. P1 and their legality and validity would largely depend upon the validity of Ext. P1 itself. 5. It is common ground that if the direction given by the Government as per Ext. P1 that co-operative societies alone shall be granted licences for collection or sale of lime shells for "non-individual" use to the exclusion of every one else is held to be ultra vires or illegal the orders passed by the 3rd respondent, which are under challenge in OP. No. 3465 of 1971 and 2714 of 1972 have also to be automatically pronounced illegal and void. The order Ext. P1 reads: "GOVERNMENT OF KERALA. Sub: Fisheries Licences in collection and sale of lime shells foe nonindustrial use-orders issued. DEVELOPMENT (A) DEPARTMENT G.O.Ms. No.101/71/DD. Trivandrum Read the following: 1161971 G.O. Rt. No. 472 Development dated 26 31971 from the Director of Fisheries letter No.D2-9206/71 dated 23 41971. ORDER Government have received a number of representations for and against grant of licence for collection and sale of lime shells to individuals. Lime Shell Co-operative Societies have said that the grant of licence to individuals is detrimental to the interest of the Co-operative Societies. These questions were therefore discussed with the representatives of lime shell co-operative societies and individual licencees. White lime shell co-operative societies generally objected to the grant of licence to individuals. Black lime shell co-operative societies did not have such objection for issue of licence to individuals. These questions were therefore discussed with the representatives of lime shell co-operative societies and individual licencees. White lime shell co-operative societies generally objected to the grant of licence to individuals. Black lime shell co-operative societies did not have such objection for issue of licence to individuals. (2) After considering all the points raised in this regard by the representatives of co-operative societies and individual lime shell licencees. Government are pleased to order as follows: (a) In future licence for collection or sale of lime shells for non-individual use will be issued only to lime shell co-operative societies. (b) However as an exception to the above order, Sri. K. Doraodaran Puthanlha-rayil Veedu, Vechoor Village, Kudavechoor P.O. Vaikom Taluk may be given a licence for collection and sale of white lime shell during 1971 72 till a lime shell society is registered for the Vechoor Puthankayal area. (c) The Director of Fisheries is requested to see that a lime shell co-operative society is registered in the Vechoor Puthankayal area as early as possible. 3. Sri. K. Damodaran of Puthentharayil Veedu, Vechoor Village is referred to the Director of Fisheries for order on his representation dated 12 41971. By Order of the Government Sd/-V. P. Krishnakumar, Under Secretary to Government. To The Director of Fisheries. Sri. K. Damodaran, Puthantharayil Veedu, Vechoor Village, Kudavachoor P. O, Vaikom Taluk. The Director of Geology for information. The Registrar of Co-operative Societies for information. The Industries Department for information. Forwarded/by order. Sd. Section Officer. Endt. No. D2-9206/71 dated 14 61971. Copies communicated to the Deputy Director of Fisheries, Quilon and the Assistant Director of Fisheries, Alleppey for compliance of the order see para 2 (b) above. They will ensure that a co-operative society for collection and sale of lime shells is formed in the Vechoor Puthankayal area as early as possible as ordered above. Sd/-For Director of Fisheries-15-6-71. Copy to Stock File." 6. It is obvious that the direct consequence of the implementation of the provisions of Ext. P1 would be the creation of a complete monopoly in favour of lime shell co-operative societies in regard to the business of collection of sale of lime shells and the exclusion of every one else from that field. 7. Copy to Stock File." 6. It is obvious that the direct consequence of the implementation of the provisions of Ext. P1 would be the creation of a complete monopoly in favour of lime shell co-operative societies in regard to the business of collection of sale of lime shells and the exclusion of every one else from that field. 7. Art.19 (1) (g) of the Constitution guarantees to all citizens the right to carry on any occupation, trade or business subject to the power reserved to the State under clause (5) thereof to make any law imposing in the interests of the general public reasonable restrictions on the exercise of the said right. A restriction on the fundamental right, even if reasonable, can be imposed only by a statute made by the legislature or by statutory rules validly made by an authority to whom the legislature has delegated such a function. We have, therefore, to examine whether the provisions contained in the Act or in the rules framed thereunder authorise the imposition of drastic restrictions amounting to the conferment of a complete monopoly on co-operative societies and the exclusion of all others from the said trade or business is warranted by the provisions of the Act and the rules framed thereunder. If on an examination of the Act and the rules it is found that any of the provisions contained therein empower the State Government to confer such monopolistic rights on lime shell co-operative societies a further question would arise as to whether the concerned provisions in the Act and the rules are consistent with the fundamental rights guaranteed under Art.14 and 19 of the Constitution. 8. The preamble to the Act states that the purpose of the Act is to provide for the control of acquisition, sale, supply and distribution of lime shells in the State of Kerala. The Act contains in all only 18 sections and the subject of licensing of dealers and producers is dealt with only in S.3. Sub-section (1) thereof lays down that no person other than a dealer or producer licensed under the said section shall carry on the business of selling lime shells or of collecting lime shells and stocking the same for sale. Sub-section (1) thereof lays down that no person other than a dealer or producer licensed under the said section shall carry on the business of selling lime shells or of collecting lime shells and stocking the same for sale. Sub-section (2) of the said section provides that every person who carries on or wishes to carry on the business of lime shells or of collecting lime shells and stocking the same for sale shall make an application in the prescribed form for a licence to the licensing authority. Sub-section (3) of the same section lays down that the licensing authority may grant a licence in such form and subject to such terms and conditions as may be prescribed or may refuse to grant a licence, in which case he should communicate his reasons for such refusal to the applicant. As per subsection (4) the licensing authority is vested with the power to rescind a licence at any time during its currency in case the licence holder commits a breach of any of the terms of the licence. Under S.4 power is conferred on the State Government to fix the maximum price which may be charged by a dealer or producer and the maximum quantity which may at any time be possessed by a dealer or be sold by him to any one person in any one transaction. S.5 deals with the obligation of the licensees to abide strictly by the restrictions imposed under S.4 regarding the maximum price, quantity etc. S.6 to 16 are not relevant for our present purpose and hence it is unnecessary to set out their contents. S.17 invests the State Government with the power to make rules for carrying out the purpose of the Act. Sub-section (2) of that section lays down that without prejudice to the generality of the power conferred by sub-section (1) the rules may provide for all or any of the matters enumerated in clauses (a) "to (e) thereof. 9. On a careful scrutiny of the relevant provisions contained in the Act it is evident that the intention of the legislature in enacting them was only to regulate the business of collection and sale of lime shells by a process of licensing of producers and dealers and by subjecting them to certain restrictions regarding the maximum price to be charged and the maximum quantities which may be held or sold. Under S.3 (2) it is open to any person who carries on or wishes to carry on business of selling lime shells or collecting and stocking lime shells for sale to apply to the licensing authority for the grant of a licence. The provisions of S.3 do not authorise the creation of a monopoly in the trade in favour of any particular class of dealers. Far from being warranted by the said section any such action would be opposed to its very scheme. None of the other provisions of the Act also either expressly or even by implication invests the State Government with power to confer on co-operative societies the exclusive right to carry on trade in lime shells. 10. We shall now turn to the rules framed under the Act and see whether there is any provision therein authorising the State Government to exclude all persons other than co-operative societies from the trade in lime shells. As noticed already the power to make rules has been conferred on the State Government by S.17 of the Act. The creation of an exclusive monopoly in the business in favour of any class of dealers is not a subject covered by any of the clauses (a) to (e) of sub-section (2) of the said section. No doubt sub-section (1) of S 17 empowers the Government to make rules to carry out the purpose of the Act. But, as we have already seen none of the sections of the Act contemplates the grant of such a monopoly and hence it cannot be said that the making of rules providing for the creation of a monopoly in favour of any class of dealers is an action taken for carrying out the purposes of the Act. This discussion is however only of academic interest, since, as a matter of fact the Kerala Lime-Shells (Control) Rules, 1958 do not contain any provision to the effect that if there is a lime shell co-operative society in any area it alone shall have the exclusive right to be granted a licence for collection, stocking and sale of lime shells. This discussion is however only of academic interest, since, as a matter of fact the Kerala Lime-Shells (Control) Rules, 1958 do not contain any provision to the effect that if there is a lime shell co-operative society in any area it alone shall have the exclusive right to be granted a licence for collection, stocking and sale of lime shells. On the other hand, consistently with the scheme of the parent statute the provisions contained in Parts I and II of the rules also proceed on the basis that it is open to any person desirous of carrying on the business of collection and sale of lime shells to apply for and obtain a licence after satisfying the requisite conditions. Strong reliance was, however, placed by the respondents on clause (b) of R.7 and clause (a) of R.17 as being indicative of an intention that wherever a lime shell co-operative society is functioning a licence should not be granted in respect of such area to any other person. R.7 enumerates the matters to be taken into consideration by the licensing authority in granting or refusing a producer's licence and clause (b) enjoins that the licensing authority shall consider whether the applicant is a member of a lime shell collectors' co-operative society in the locality. I fail to see how this clause is at all helpful to the respondents, because even on the most liberal construction it only provides for a preference being shown under certain circumstances in favour of members of lime shell collectors' co-operative societies. 11. In Mannalal Jain v. State of Assam (AIR. 1962 SC. 386), the Supreme Court had occasion to consider against the background of very similar statutory provisions the validity of an executive order passed by the State Government of Assam conferring on the co-operative apex marketing society the right of monopoly procurement of paddy in the District of Kamrup. Under the Assam Food grains (Licensing and Control) Order, 1961 no person could do business in food grains including rice and paddy in wholesale quantities except under a licence issued thereunder. Clause.5 of the said Order specified in sub-clauses (a) to (e) thereof the matters which the licen-ing authority shall among other things, have regard to in granting or refusing a licence, sub-clause (e) being "whether the applicant is a co-operate society". Clause.5 of the said Order specified in sub-clauses (a) to (e) thereof the matters which the licen-ing authority shall among other things, have regard to in granting or refusing a licence, sub-clause (e) being "whether the applicant is a co-operate society". In 1959, the State Government of Assam issued directions to all licensing authorities that the right of monopoly procurement had been given to the co-operative apex marketing society in respect of Kamrup District. The writ petitioner before the Supreme Court was a person carrying on wholesale trade in food grains and he had been granted a licence to deal in paddy during 1958. In 1959 also he carried on the trade apparently on the strength of a renewed licence. On the 28th of January, 1960 he applied under the licensing Order then in force fora licence to deal in paddy in Kamrup District but that application was rejected on the ground that it could not be entertained or considered since the co-operative apex marketing society had been given the right of monopoly procurement in the District of Kamrup. When the petitioner challenged the validity of the State Government's order conferring the right of monopoly procurement in favour of the apex co-operative society on the basis of which alone his application for renewal was refused the impugned action was sought to be sustained by the State Government by relying on Clause.5(e) of the Control Order which laid down that the fact of the applicant being a co-operative society was one of the matters which the licensing authority shall have regard to in granting or refusing the licence. The Supreme Court held that Clause.5(e) of the Control Order did not confer a monopoly on co-operative societies and that the said clause merely enabled the licensing authority to prefer a co-operative society in certain circumstances in the matter of granting a licence. Their Lordships also held that the denial of a licence to the petitioner on the footing that the monopoly must be created in favour of cooperative societies when the Control Order did not justify the creation of such monopoly amounted to an arbitrary discrimination against the petitioner violative of the fundamental rights guaranteed under Art.14 and 19(1)(g) of the Constitution. 12. The principles enunciated by the Supreme Court in the above decision apply on all fours to the present case. 12. The principles enunciated by the Supreme Court in the above decision apply on all fours to the present case. There being nothing in the Act or the rules authorising the creation of a monopoly in favour of co-operative societies the order Ext. P1 must be held to be illegal on the ground that it is violative of the petitioners' fundamental rights guaranteed under Art.14 and 19(1)(g) of the Constitution. Ext. P1 will accordingly stand quashed. It must then follow that neither the State Government nor the Assistant Director of Fisheries, Alleppey was justified in imposing a condition that the licence granted to the petitioner for the year 1971-72 was to enure only till a lime shell society was registered for the Vechoor Puthankayal area. Under the rules a licence when granted will enure for the full period of one calendar year and there is no provision therein warranting the imposition of any such condition or limitation. The order dated 2-8-1971- Ext. P4 in O.P. No. 3465 of 1971- whereby the 3rd respondent purported to cancel the licence granted to the petitioner Sri. Damodaran on the ground that a lime shell co-operative society had started working in the area, is manifestly illegal and is quashed. Likewise the order Ext. P8 challenged in O.P. No. 2714 of 1972 whereby the 3rd respondent has proceeded to cancel the licence issued to the petitioner Sri. Damodaran for the year 1972-73 will also stand quashed since it is clear from the recitals contained in the said order that it is based solely on G.O.MS. No.101/71/DD - Ext. P1. Ext. P8 was passed without any notice to the petitioner and in gross violation of the principles of natural justice and it is illegal on that ground also. 13. The Kumarakom Kakka Vyavasaya Co-operative Society who is the writ petitioner in O.P. No. 2763 of 1971 has founded its claim for relief wholly on the terms of Ext. P1. Since that order has been now held to be illegal the said writ petition has only to be dismissed. 14. In the result, O.P. Nos. 3465 of 1971 and 2714 of 1972 are allowed. O P. No. 2763 of 1971 will stand dismissed. The parties will bear their respective costs in all the three writ petitions.