JUDGMENT : ( 1. ) THE petitioners in this petition are formula tors who carry on the business of manufacture of pesticides. The basic raw materials used by the petitioners in their manufacturing units are technical grade pesticides. Technical grade pesticides are by dilution converted into lower grade pesticides which are used for spraying or dusting on the crops. The petitioners are registered under the Insecticides Act, 1968. The manufacturers who manufacture technical grade pesticides within the country use 50 per cent of their product for formulating units established by them or by their associates. We were informed that under the licences the manufacturers are obliged to part with the remaining 50 per cent of the product to the Government of India for allotment to formulators who are not associated with the manufacturers. The Government of India in 1974 devised a scheme for distribution of 50 per cent of the technical grade pesticides manufactured by indigenous units which under the licences the units were required to supply for use by the non associate formulators. The Government of India in the Ministry of agriculture in consultation with the Ministry of Petroleum and Chemicals, decided that this 50 per cent of the technical grade pesticides be allotted to the States for distribution to non associate formulators nominated by the state Governments. The petitioners used to receive their requirement of technical grade pesticides on allotment by the State Government from the manufacturers. By an order passed on September 1978 (Annexure P-3), the director of Agriculture, Madhya Pradesh, allotted the entire quota of technical grade pesticides for the quarter ending October-December 1978 in favour of respondents 3 and 4 who are respectively a Government Company and Apex Co-operative Society. By this petition under Article 226 of the constitution, the petitioner challenge this order of allotment. ( 2. ) LEARNED counsel for the petitioners contended before us that in passing the impugned order of allotment, the Director of Agriculture did not follow the directions issued by the Central Government on the subject of distribution of technical grade pesticides. It was also contended that in selecting the respondents and in denying to the petitioners any share in the quota, the Director violated the petitioners fundamental rights under artical 14 of the Constitution. It was further contended that one of the technical grade pesticides was parathion which was allotted to respondent no. It was also contended that in selecting the respondents and in denying to the petitioners any share in the quota, the Director violated the petitioners fundamental rights under artical 14 of the Constitution. It was further contended that one of the technical grade pesticides was parathion which was allotted to respondent no. 3 even though the said respondent has no licence for formulation of parathion. ( 3. ) ENTRY 52 of List I to the Seventh Schedule confers exclusive power on Parliament to make laws with respect to "industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. " Parliament enacted the Industries (Development and Regulation) Act, 1951. Section 2 of the said Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule to the Act. Section 18g empowers the central Government for securing the equitable distribution and availability at fair prices of any articles relatable to any schedule industry, to provide by notified order for regulating the supply and distribution thereof and trade and commerce therein. Item 19 (11) of the First Schedule specifies the industries of "insecticides, fungicides, weedcides and the like. " parliament then enacted the Insecticides Act 1968, "to regulate the import, manufacture, sale, transport, distribution and use of insecticides with a view to prevent risk to human beings or animals, and for matters connected therewith. " Section 3 (e) of the Act defines "insecticide" to mean (i) any substance specified in the Schedule; or (ii) such other substances as the central Government may include in the Schedule from time to time; or (iii) any preparation containing any one or more such substances. The pesticides in respect of which this petition has been filed are included in the schedule to this Act and, therefore, they are insecticides within the meaning of the Act. Section 9 of the Act deals with registration of insecticides by manufacturers. Section 13 provides that any person desiring to manufacture or to sell, stock or exhibit for sale or distribute any insecticide has to apply for licence to the licensing officer. Section 9 of the Act deals with registration of insecticides by manufacturers. Section 13 provides that any person desiring to manufacture or to sell, stock or exhibit for sale or distribute any insecticide has to apply for licence to the licensing officer. Section 34 confers power on the central Government to give such directions to the State Government as may appear to the Central Government to be necessary for carrying into execution in the State any of the provisions of this Act or any rule or order made there under. Section 36 confers power on the Central Government to make rules. In particular, the Central Government may make rules to prescribe "the conditions to be observed in regard to import, manufacture, sale, transport, distribution, storage or use of an insecticide. " ( 4. ) THE Government of India (Ministry of Agriculture) issued directions by its letter dated 25th July 1974 on the subject of distribution of technical grade pesticides to the formulators under a system of State Government control. We have earlier indicated that the indigenous manufacturers of technical grade pesticides are obliged under the licences granted to them to part with 50 per cent of their product in favour of non-associate formulators, i. e. formulation capacities out sides what has been set up by the manufactures or their associates. The Government of India decided to allot this 50 per cent technical grade pesticides to formulators nominated by State Governments. The decision was taken to ensure that. State governments have adequate control over the distribution of technical grade pesticides. Specific directions to give effect to the aforesaid decision are contained in paragraph 3 of the aforesaid letter which reads as follows: "iii. To give effect to this decision, it has been decided in consultation with the ministry of Petroleum and Chemicals, that the following procedure should be adopted :- (1) Allocation of technical grade pesticides will be made to Slates once in a quarter by the Ministry of Agriculture. (2) The State Government will further allot this quantity to this non-associate formulators, located within the State or any other formulators, with whom the State government has entered into contracts for formulation arrangements. (2) The State Government will further allot this quantity to this non-associate formulators, located within the State or any other formulators, with whom the State government has entered into contracts for formulation arrangements. (3) Since this scheme has been drawn up to enable the State to obtain requisite quantities of formulated materials for supply to farmers at reasonable prices, it would be necessary for the State Governments to provide in the contracts with the formulators, that the latter shall sell to the State Governments specified quantities of the formulated materials at mutually agreed rates. (4) In arriving at the rates referred to above, the State Governments should work out reasonable formulation and other charges on the basis of tenders and negotiations. (5) In respect of the quantity which the State Government does not purchase for departmental distribution, the formulators shall have the freedom to market the material within the State at prices which are mutually agreed upon with the State governments. (6) The allocation of technical grade pesticides to formulators referred to in (2)above may be decided by a Committee with the Agricultural Production Commissioner or Secretary (Agriculture) as the Chairman and Secretary State Department of Indus tries, Directors of Industries and Managing Director of Small Industries Corporation and Director of Agriculture as Members. (7) In the allocation of technical grade materials to formulators it will have to be ensured that the quantity allotted to any formulator does not exceed the licensed capacity or in the case of Small Scale Industries, the programme approved by the director of Industries. (8) The Ministry of Agriculture in allocating the technical grade material to the states would indicate to which manufacturing units the formulators of a particular state will be linked. Once the State decides they shall issue necessary letters of authority to the selected formulators to the extent of the allotment made to each. The formulators shall thereafter obtain their supplies of technical grade from the manufacturing units, indicated in the letter of authority. (9) It will have to be ensured that rigorous quality control measures are observed by the formulation and that wherever ISI standards have been laid down, these are adopted. " ( 5. ) THE scheme evolved by the Government of India which the State governments were required to follow in the matter of distribution of technical grade pesticides to formulators is, briefly stated, as follows. " ( 5. ) THE scheme evolved by the Government of India which the State governments were required to follow in the matter of distribution of technical grade pesticides to formulators is, briefly stated, as follows. The government of India will allot technical grade pesticides to the State once in a quarter. The State Government will distribute and allot the said quantity to the non-associate formulators. The State Government will enter into agreements with the formulators to whom the quota is distributed for supply of a specific quantity of the formulated material at an agreed price. This will be done to ensure that the State Government obtains requisite quantities of formulated material for supply to farmers at reasonable prices. The rates are fixed by working out reasonable formulation charges on the basis of tenders and negotiations. The allocation of technical grade pesticides to formulators may be decided by a Committee consisting of the Agricultural Production Commissioner or Secretary Agriculture, as the Chairman, and Secretary, State Department of Industries, Director of industries, Managing Director of Small Scale Industries Corporation and director of Agriculture as Members. The formulators nominated by the state Government will get the quota allotted to them from the manufacturers on showing the letter of authority issued by the State Government. ( 6. ) THE argument of the learned counsel for the petitioners is that the aforesaid scheme evolved by the Government of India in its letter dated 25th July 1974 amounted to directions issued under section 34 of the insecticides Act and has the force of law and the Director of Agriculture was bound to follow it. Learned counsel appearing for the respondents on the other hand submitted that the scheme is not for carrying into execution in the State any provision of the Act within the meaning of section 34 and, therefore, it could not be construed as directions under that section. It is not necessary to go into this question because, in our opinion, the scheme, even if non-statutory, was binding on the Director of Agriculture. We have already indicated that the industry of insecticides is one of the scheduled industries the control of which by the Union was declared to be in the public interest by the Industries (Development and Regulation) Act, 1951. As earlier seen, section 18g of the said Act empowers the Government of India to control supply, distribution, price etc. We have already indicated that the industry of insecticides is one of the scheduled industries the control of which by the Union was declared to be in the public interest by the Industries (Development and Regulation) Act, 1951. As earlier seen, section 18g of the said Act empowers the Government of India to control supply, distribution, price etc. of articles relatable to any scheduled industry. The Scheme laid down by the Government of. India in its letter dated 25th July 1974 was for supply of technical grade pesticides to the manufacturing units in the States for manufacture of pesticides. The Scheme and the directions fall within the ambit of control of the industry of insecticides and control and distribution of articles relatable to that industry. These subjects are covered by Entry 52, List I and Entry 33, List II of the Seventh Schedule to the Constitution. The union under Article 73 of the Constitution has exclusive executive powers for the administration of laws made by Parliament in its exclusive field. Parliament may also provide for exercise of executive power of the Union for administration of laws in the concurrent field. Section 18g of the industries (Development and Regulation) Act, 1951, is a law of that nature. The exercise of the executive power in laying down the scheme for distribution of technical grade pesticides to non-associate formulators within the states and the directions issued in that behalf were thus well within the executive power of the Government of India. The State Government got the quarterly allotment of technical grade pesticides under the aforesaid scheme and it was not open to the officers of the State to evolve their own scheme for distribution and to disobey the scheme or the directions of the central Government. As provided in Article 257 of the Constitution, the executive power of every State has to be so exercised as not to impede or prejudice the exercise of the executive power of the Union and the executive power of the Union extends to the giving of such directions to a State as may appear to the Government of India to be necessary for that purpose. So when the Government of India made the allotment of quota to be utilised in a particular manner in accordance with its directions, the officers of the State were bound to follow those directions. So when the Government of India made the allotment of quota to be utilised in a particular manner in accordance with its directions, the officers of the State were bound to follow those directions. Learned counsel for the respondents submitted that the insecticides manufactured by the formulators within the State by using technical grade pesticides were meant for distribution to the farmers and, therefore, this topic fell within Entry 14, list II of the Seventh Schedule on which the State Government has exclusive executive power. This entry reads: "agriculture, including agricultural education and research, protection against poets and prevention of plant diseases. " We do not agree. Entry 14, List II has not to be read in isolation. It has to be read along with Entries 24, 26 and 27 of List II and corresponding entries relating to a scheduled industry i. e. Entry 52, list I and Entry 33, List III. So read, it is clear that the scheme and directions of the Central Government fall within Entry 52, List I and Entry 33, list III and not within Entry 14, List II. ( 7. ) IT is not disputed before us that no committee for distribution of the quota allotted to the State Government by the Central Government was formed. The State Government did not enter into agreements with respondents 3 and 4 as contemplated under the scheme and directions of the central Government. Respondent No. 3 to whom parathion was allotted is not even a licensed formulator for that insecticide. It is clear to us that the scheme evolved by the Central Government and its directions for distribution of technical grade pesticides to the non associate formulators within the State were not followed in distributing the quota to respondents 3 and 4. The distribution of quota to respondents 3 and 4 is therefore, unauthorised and invalid. ( 8. ) LEARNED counsel for the respondents, however, submitted that the allotment and distribution of quota in favour of respondents 3 and 4 was; done substantially in compliance with the scheme and directions of the central Government. It was submitted that under the said scheme, the state Government was to nominate formulators who were to receive the quota from the manufacturers. It was also submitted that Constitution of a committee for distribution of the quota was not mandatary. We are unable to accept these submissions. It was submitted that under the said scheme, the state Government was to nominate formulators who were to receive the quota from the manufacturers. It was also submitted that Constitution of a committee for distribution of the quota was not mandatary. We are unable to accept these submissions. The nomination contemplated under the scheme of the Central Government is the final act after the formulators to whom the quota is distributed are selected and agreements are entered into with them for supply of manufactured material to the State at reasonable prices. After these formalities are complete, the State Government issues a letter of authority which entitles the formulators concerned to lift their share of the quota from the manufacturers. Even assuming that constitution of a committee as contemplated in the directions of the Central government is not mandatory, some alternative method has to be evolved for proper selection of formulators so that there is no discrimination in distribution of the quota allotted to the State. Nothing of that kind seems to have been done. Moreover, the requirement of entering info agreements with the formulators selected under the scheme is essential, otherwise the supply of manufactured material at reasonable prices for distribution to the farmers cannot be ensured. Further, under the scheme there cannot be any allotment of a technical grade pesticide to a formulator who is not a licensed manufacturer of that particular pesticide. As earlier pointed out by us, the distribution of quota and allotment of technical grade pesticides to respondents 3 and 4 was clearly in breach of the scheme and directions of the Central Government. ( 9. ) IT was submitted by the learned Government Advocate that the state Government decided to nominate respondents 3 and 4 for lifting the quota as respondent No 3 is a Government Company and respondent No. 4 is a Co-operative Society under the State control and it was expected that this will ensure regular supply of the manufactured material at reasonable prices to the farmers. It was also submitted that allotment of quota to the petitioners cannot ensure supply of manufactured pesticides to the farmers at reasonable prices. It was further submitted that as there was epidemic, emergent action was necessary. It was also submitted that allotment of quota to the petitioners cannot ensure supply of manufactured pesticides to the farmers at reasonable prices. It was further submitted that as there was epidemic, emergent action was necessary. In spite of the fact that we, during arguments, orally directed respondents 1 and 2 to produce the decision of the government referred to in their return in paragraph 4, the same was not produced before us. We have before us only the impugned older of the director of Agriculture which cannot be taken to be an order or decision of the State Government. Indeed, the learned Government Advocate finally intimated us that there was no such decision. Thus, there is no decision or order of the State Government as pleaded in the return. Further, it is difficult to understand as to how without any written agreement with respondents 3 and 4 binding them to supply the manufactured pesticides at reason able prices supply of pesticides to farmers at reasonable prices was assured; more so, when respondent No. 3 is not even a licensed formulator. Again, it is also difficult to understand as to how distribution of quota of technical grade pesticides to petitioners would not have ensured supply of pesticides at reasonable prices to the Government for distribution to the farmers. As earlier pointed out by us, under the scheme evolved by the Central Government an allottee has to enter into an agreement for supply of the product manufactured by him to the State Government at a reasonable price. The petitioners never refused to enter into such agreements with the State government. Had they refused to enter into such agreements for supply of the manufactured product at reasonable prices, it could have been said that they were not entitled to the allotment. The fact, however, is that petitioners were never considered by the Director of Agriculture for allotment of the quota. The Director never had in mind the scheme and the directions of the Central Government for distribution of the quota of technical grade pesticides to the formulators. It cannot be gainsaid that the non allotment of quota to the petitioners would seriously affect their business and they may have to close their units for want of one of the basic materials for manufacture of pesticides. It cannot be gainsaid that the non allotment of quota to the petitioners would seriously affect their business and they may have to close their units for want of one of the basic materials for manufacture of pesticides. The authorities must see that justice is done to all formulators within the State in the matter of distribution of technical grade pesticides in accordance with the directions of the government of India. ( 10. ) BEFORE concluding, we must state that we are unhappy to find that although the impugned order of the Director was supported in the return of respondents 1 and 2 (para 4) on the basis of a decision of the State Government, no such decision existed. To say the least, it shows how irresponsible the officer in charge was in instructing counsel who drafted the return and in filing an untruthful affidavit in support of the return. ( 11. ) THE petition is allowed. The order of the Director, Agriculture, dated September 1978 (Annexure P-3) is quashed. The respondents 1 and 2 are directed to distribute the quota in accordance with the scheme and directions contained in the letter of the Central Government dated 25th july 1974. There shall be no order as to costs. The security amount be refunded to the petitioners. Petition allowed.