RAJKOT LODHIKA SAHAKARI KHARID VECHAN SANGH LIMITED v. STATE
1980-09-09
G.T.NANAVATI, S.H.SHETH
body1980
DigiLaw.ai
S. H. SHETH, J. ( 1 ) ). Six petitioners who have filed this petition are manufacturers or producers of groundnut oil. It is their case that they receive groundnuts from the growers and they produce oil on their behalf and sell it also on their behalf. After oil is produced it is stored in bulk in storage tanks and then it is sold under the advice of the owners of groundnuts who act through their primary societies. Petitioner No. 1 does not charge any commission for effecting the sales. It only collects process charges for the production of oil out of groundnuts supplied to it by the growers. ( 2 ) AT the relevant time petitioner No. 1 had in stock 804 tonnes of groundnut oil. According to petitioner No. 1 it belonged to the owners who had supplied groundnuts to it. It also had in stock 18 tonnes of refined solvent groundnut oil. Petitioner No. 1 had also in its storage tanks 666 tonnes of oil belonging to the marketing federation and 150 tonnes of refined solvent oil belonging to that federation. So far as the oil of the marketing federation is concerned petitioner No. 1 charges the federation rent for storage of oil It does not charge the growers of groundnut any rent for the storage of any oil. So far as the financial aspect is concerned it is the case of the petitioners that the growers who supply groundnuts to petitioner No. 1 are entitled to credit from the Bank to the extent of 75 % of the value of groundnuts supplied by them to petitioner No. 1. ( 3 ) IN 1977 Gujarat Government issued two Orders under the Essential Commodities Act 1955 The first Order was called Gujarat Pulses and Edible Oils Dealers Licensing Order 1977 It was issued on 14th October 1977. We shall be referring to this Order hereinafter in this judgment as the first Licensing Order. On 16th December 1977 Gujarat Government issued Gujarat Pulses Edible Oil Seeds and Edible Oils Dealers Licensing Order 1977 We shall hereinafter refer to it in this judgment as the second Licensing Order. The second Licensing Order superseded the first Licensing Order. That is what is provided in clause 21 of the second Licensing Order.
On 16th December 1977 Gujarat Government issued Gujarat Pulses Edible Oil Seeds and Edible Oils Dealers Licensing Order 1977 We shall hereinafter refer to it in this judgment as the second Licensing Order. The second Licensing Order superseded the first Licensing Order. That is what is provided in clause 21 of the second Licensing Order. In 1977 Gujarat Government issued another Order known as Gujarat Essential Articles Dealers (Regulation) Order 1977 It was issued on 21st September 1977. We shall hereinafter refer to this Order as the Regulation Order. We may state that in this petition we are not concerned with any challenge to the Regulation Order. Reference has been made to it only for the purpose of elucidating the contentions which have been raised against the validity of the certain provisions of the second Licensing Order. ( 4 ) THE petitioners inter alia contend that their fundamental rights are adversely affected by the second Licensing Order and the directions issued thereunder. On their behalf therefore Mr. V. R. Patel has raised before us as many as ten contentions. We now proceed to deal with each of them. However before we do so it is necessary to note two preliminary objections which the learned Government Pleader has raised in this case. His first preliminary contention is that the Union of India is a necessary party to this petition and that in its absence this petition cannot be decided. In this petition there is no challenge to any of the sections of the Essential Commodities Act 1955 nor is there any challenge to any order made by the Central Government thereunder. The challenges which the petitioners have raised are directed against the Orders made by the Government of Gujarat and directions issued by them thereunder In our opinion therefore the Union of India is not necessary party to this petition. This petition can be finally and effectively decided in absence of the Union of India. The first preliminary contention raised by the learned Government Pleader is therefore without any substance and is rejected. ( 5 ) THE second preliminary contention which the learned Government Pleader has raised is that the petition cannot proceed without issuing notice to the Advocate General. He has relied in that behalf upon Order XXVIIA of the Code of Civil Procedure 1908 He has not relied upon any other provision to make good this contention.
( 5 ) THE second preliminary contention which the learned Government Pleader has raised is that the petition cannot proceed without issuing notice to the Advocate General. He has relied in that behalf upon Order XXVIIA of the Code of Civil Procedure 1908 He has not relied upon any other provision to make good this contention. Rule 1 in Order XXVIIA of the Code of Civil Procedure 1908 provides as follows :- in any suit in which it appears to the Court that any such question as is referred 10 in clause (1) of Article 132 read with Article 147 of the Constitution is involved the Court shall not proceed to determine that question until after notice has been given to the Attorney General for India if the question of law concerns the Centra Government and to the Advocate-General of the State if the question of law concerns a State Government. In this petition no question contemplated by clause (1) of Art. 132 read with Art. 147 of the Constitution has been raised on behalf of petitioners before us. Therefore such a question does not arise. Under Rule 1 of Order XXVIIA therefore no notice to the Advocate-General is necessary. Rule 1a in Order XXVIIA provides as follows :- in any suit in which it appears to the Court that any question as to the validity of any statutory instrument not being a question of the nature mentioned in rule 1 is involved the Court shall not proceed to determine that question except after giving notice (a) to the Government Pleader if the question concerns the Government or (b) to the authority which issued the statutory instrument if the question concerns an authority other than Government. There is no doubt about the fact that the petitioners are challenging the validity of the second Licensing Order made by the Government of Gujarat and directions issued by it thereunder. Therefore they are challenging the validity of that Order which is a statutory instrument. Notice to the Government Pleader was therefore necessary to be issued in this case. The learned Government Pleader himself appears on behalf of the State of Gujarat to defend the statutory instruments which are challenged in this petition. Since he himself is appearing for the State of Gujarat a further notice to him will be an idle formality.
Notice to the Government Pleader was therefore necessary to be issued in this case. The learned Government Pleader himself appears on behalf of the State of Gujarat to defend the statutory instruments which are challenged in this petition. Since he himself is appearing for the State of Gujarat a further notice to him will be an idle formality. We may say that he appears on behalf of the State of Gujarat in response to the notice issued by us in this petition to the State of Gujarat. However once the Government Pleader appears the charm of issuing a formal notice to him within the contemplation of rule 14 of Order XXVIIA is lost. The learned Government Pleader also saw the substance in what we have said and therefore did not press his preliminary objection in so far as it was founded upon rule IA of Order XXVIIA. The second preliminary objection raised by the learned Government Pleader is therefore rejected. ( 6 ) THE first contention which has been raised by Mr. Patel on behalf of the petitioners is that certain provisions of clause 18 of the second Licensing Order are ultra vires sec. 3 (2) (j) of the Essential Commodities Act 1955 He has not challenged the entire clause 18. The petitioners have challenged sub-clause (1) (iv) (a) and sub-clause (1) (vi) of clause 18 of the second Licensing Order. In order to appreciate this contention let us reproduce the relevant portion of clause 18 which is under challenge :- any Civil Supply Officer not below the rank of a Supply Inspector any Revenue Officer not below the rank of a Deputy Mamlatdar or any Police Officer not below the rank of Police Sub-Inspector and any other officer not below the rank of a Class II Gazetted Officer authorised by the State Government in this behalf may with a view to securing compliance with this Order and to satisfying himself that this Order has been complied with. . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . (iv) search and so far as may be necessary for that purpose detain any person or seize (a) any stock of pulses or edible oil seeds or edible oils in respect of which he has reason to suspect that a contravention of any of the provisions of this Order has been is being or is about to be committed. . . . . . . . . . . . . . . . . . . . (vi) direct by an order in writing any person who owns or is in possession of any stocks of pulses or edible oil seeds or edible oils in respect of which he has reason to suspect that a contravention of the provisions of this Order has been is being or is about to be committed not to remove or dispose of in any manner such stock of pulses or edible seeds or edible oils package covering or receptacle in which such pulses or edible oils seeds or edible oils is found any animal vehicle. vessel or other conveyance used in carrying such pulses Or edible oils seeds or edible oils without further direction from the officer making such order. The ground of challenge which Mr. Patel has raised against the two subclauses which we have quoted above is that seizure of goods on suspicion is ultra vires sec. 3 (2) (j) of the Essential Commodities Act 1955 In other words according to him reason to suspect which the State Government has used in clause 18 is much wider that `reason to believe on the strength of which alone goods belonging to a person who has committed breach of the second Licensing Order can be seized. ( 7 ) IN that behalf it is necessary to turn to a couple of provisions in sec. 3 of the Essential Commodities Act 1955 Sub-sec.
( 7 ) IN that behalf it is necessary to turn to a couple of provisions in sec. 3 of the Essential Commodities Act 1955 Sub-sec. (1) confers a general power upon the Central Government to control production supply and distribution and such other matters relating to essential commodities It reads as follows :-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 or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may by order provide for regulating or prohibiting the production supply and distribution thereof and trade and commerce therein. Clause (j) of sub-sec. (2) of sec. 3 inter alia provides as follows :- without prejudice to the generality of the powers conferred by sub-sec. (1) an order made thereunder may provide. (J) for any incidental and supplementary matters including in particular the entry search or examination of premises aircraft vessels vehicles or other conveyances and animals and the seizure by a person authorized to make such entry search or examination (I) of any articles in respect of which such person has reason to believe that a contravention of the order has been is being or is about to be committed and any packages coverings or receptacles in which such articles are found. We may at this stage point out that sub-clause (i) of clause (j) of subsec. (2) of sec. 3 confers power to seize goods if a person who is authorised to seize has reason to believe that a contravention of the order has been made is being made or is about to be made ( 8 ) THE scheme of sec. 3 so far as it is relevant for the purpose of this case shows that power to make provisions in respect of matters specified therein has been conferred upon the Central Government. Sec. 5 provides for delegation of powers. So far as it is relevant for the purpose of the present case it reads as follows. The Central Government may by notified order direct that the power to make orders or issue notifications under sec.
Sec. 5 provides for delegation of powers. So far as it is relevant for the purpose of the present case it reads as follows. The Central Government may by notified order direct that the power to make orders or issue notifications under sec. 3 shall in relation to such matters and subject to such conditions if any as may be specified in the direction be exercisable also by (B) such State Government or such officer or authority subordinate to a State Government as may be specified in the direction. In pursuance of the power conferred upon the Central Government to delegate some or all of its powers under sec. 3 the Central Government made a notified order on 20th June 1972. It reads as follows :-In exercise of the powers conferred by sec. 5 of the Essential Commodities Act 1955 (10 of 1955) the Central Government hereby directs that the powers conferred on it by sub-sec. (1) of sec. 3 of the said Act to make orders to provide for the matters specified in clauses (a) (b) (c) (d) (e) (f) (h) (i) (ii) and (j) of subsec. (2) thereof shall in relation to foodstuffs be exercisable also by a State Government subject to the conditions (1) that such powers shall be exercised by a State Government subject to such directions if any as may be issued by the Central Government in this behalf; (2) that before making an order relating to any matter specified in the said clauses (a) (c) or (f) or in regard to distribution or disposal of foodstuffs to places outside the State or in regard to regulation of transport of any foodstuff under the said clause (d) the State Government shall also obtain the prior concurrence of the Central Government; and (3) that in making an order relating to any of the matters specified in the said clause (j) the State Government shall authorise only an officer of Government. It is by virtue of the provisions of sec. 5 of the Essential Commodities Act 1955 read with the notified order dated 20th June 1972 quoted above that the State Government has made the second Licensing Order under clauses specified in the said notified order of the Central Government. There is no doubt the fact that the State Government had obtained the prior concurrence of the Central Government before making the second Licensing Order.
There is no doubt the fact that the State Government had obtained the prior concurrence of the Central Government before making the second Licensing Order. ( 9 ) IT is beyond controversy that the Order which the State Government has made as a delegate must confirm to the provisions of the Essential Commodities Act 1955 ( 10 ) MR. Patel has argued that under clause (j) of sub-sec. (2) of sec. 3 a person who is authorised to make seizure can seize goods only if he has reason to believe that a contravention of the order of the State Government is being or is about to be or has been committed. He cannot exercise the power to seize the goods if he has no reason to believe but only if he has reason to suspect. Now turning to clause 18 of the second Licensing Order we find that the State Government when it made the second Licensing Order was fully conscious of the distinction between reason to suspect and reason to believe. Whereas in sub-clause (1) (vi) (a) and in sub-clause (1) (vi) the State Government has used the expression reason to suspect it has used the expression reason to believe in sub-clause (1) (iv) (c ). For the purpose of ready reference we reproduce below sub-clause (1) (iv) (c) of clause 18 of the second Licensing Order. (C) any animal vehicle vessel or other conveyance used in carrying such pulses or edible oil seeds or edible oils if he has reason to believe that such animal vehicle vessel or other conveyance is liable to be forfeited under the provisions of the Act. The simultaneous use of these two different expressions in clause 18 of the second Licensing Order leaves no doubt in our minds that the expression reason to believe was not loosely used by the State Government without realizing its full implications. ( 11 ) LET us now see the difference between reason to believe and reason to suspect or between belief and suspicion. It cannot be gainsaid on a commonsense plane that suspicion is wider than belief.
( 11 ) LET us now see the difference between reason to believe and reason to suspect or between belief and suspicion. It cannot be gainsaid on a commonsense plane that suspicion is wider than belief. ( 12 ) IN Corpus Juris Secundum pages 236-237 Belief has been explained as follows :- there are different degrees of belief for belief admits of all degrees from the slightest suspicion to the fullest assurance; and so as a mere mental function or state the word in its ordinary sense has been defined as meaning actual conclusion drawn from information conclusion arrived at from external sources after weighing probabilities conclusion of the mind as to the existence of a fact conviction of the truth of a given proposition or an alleged fact upon grounds insufficient to constitute positive knowledge or partial assurance without positive knowledge or absolute certainty. In what may be termed its stronger degrees expressing something akin to positive assurance rather than mere opinion belief has been defined as assurance gained by evidence and from other persons conviction of assurance of the truth or actuality of anything on grounds other than personal observation or experience that is on other than demonstrative evidence. conviction of the mind founded on evidence that a fact exists that an act was done that a statements true. . . . . . . In Aiyers Law Terms and Phrases 7 Edition (1973) the expression Reason to believe has been explained in the following terms:- a person is said to have reason to believe a thing if he has sufficient cause to believe that thing but not otherwise. It is not necessary to refer to other law dictionaries. ( 13 ) A similar question arose before the Andhra Pradesh High Court in K. Munivelu v. The Government of India and Others AIR 1972 Andhra Pradesh 318. It arose in the context of the Andhra Pradesh Coarse Grains (Export) Control Order 1965 Clause 5 of that Order used the expression `suspects instead of `reason to believe. The validity of clause 5 of that Order was challenged on the ground that it was ultra vires sec. 3 (2) (j) of the Essential Commodities Act 1955 Dealing with `belief and `suspicion this is what the Andhra Pradesh High Court has observed in that decision.
The validity of clause 5 of that Order was challenged on the ground that it was ultra vires sec. 3 (2) (j) of the Essential Commodities Act 1955 Dealing with `belief and `suspicion this is what the Andhra Pradesh High Court has observed in that decision. From the meanings attributed to these two expressions it is evident that the initial stage for believing the existence of a certain thing or an alleged fact is suspicion. After the existence of a thing is suspected information is collected and then it is examined. Thereafter a final conclusion on the basis of that information is reached. It is clear therefore that `suspicion is the first or the initial stage in the formation of the belief. The belief is a result of the development of suspicion collection of information checking up that information and arriving at the final conclusion. It may be stated at this stage that since Clause 5 of the Andhra Pradesh Coarse Grains (Export) Control Order 1965 used the expression `suspects it was struck down by the Andhra Pradesh High Court as violative of sec. 3 (2) (j) of the Essential Commodities Act 1955 Mr. Patel has very heavily relied upon this decision to bring home to us the first contention which has been raised before us. The learned Government Pleader has tried to distinguish it on two grounds. According to him the Andhra Pradesh High Court had not noticed the generality of power conferred upon the Central Government by sub-sec. (1) of sec. 3. The aforesaid Andhra Pradesh Order was made by the Central Government According to him therefore power to seize goods can be exercised under sub-sec. (1) of sec. 3 even if an authorised officer has no `reason to believe to do so within the meaning of sec. 3 (2) (j) of the Essential Commodities Act 1955 The second argument which he has raised is based upon the decision of the Supreme Court in Santosh Kumar Jain v. The State AIR 1951 S. C. 201 which was not noticed by the Andhra Pradesh High Court. We shall revert to these aspects later. Suffice it to say at this stage that the contention which the petitioners have raised before us is supported at least by a decision of one High Court in this country.
We shall revert to these aspects later. Suffice it to say at this stage that the contention which the petitioners have raised before us is supported at least by a decision of one High Court in this country. Whether exercise of power to seize when there is only `reason to suspect is valid or not under sub-sec. (1) of sec. 3 is at this moment a solely different question. It cannot be gainsaid and the learned Government Pleader has not tried to dispute the proposition that if clause (j) of sub-sec. (2) of sec. 3 was alone in the field power to seize the goods could not ordinarily have been exercised unless there was reason to believe that goods were required to be seized. There also he has tried to point out to us that power to seize goods where there is reason to believe is one of the illustrative supplementary and incidental matters in respect of which sub-sec. (4) of sec. 3 confers power upon the Central Government. ( 14 ) THE next decision upon which reliance has been placed by Mr. Patel is in The Income-tax Officers Calcutta and Others v. Lakhmani Mawal Das AIR 1976 S. C 1753. It was a case under the Income-tax Act 1961 Sec. 147 of that Act enables an Income-tax Officer to reopen the assessment if he has reason to believe that an assessee had escaped assessment by reason of the omission or failure on his part to make a return under sec. 139 for any assessment year or to disclose fully and truly all material facts necessary for his assessment. Elucidating the connotation of the expression reason to believe the Supreme Court has observed as follows. The reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material corning to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts.
Rational connection postulates that there must be a direct nexus or live link between the material corning to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. While it is true that a Court of Law cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment it is not any and every material howsoever vague and indefinite or distant remote and far-fetched which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. ( 15 ) IN reply the learned Government Pleader has invited our attention to a few decisions. The first decision is in The State of Uttar Pradesh and Others v. Suraj bhan Pande AIR 1972 Allahabad 401. It was a case under the Essential Commodities Act 1955 The only principle which has been laid down and which has a bearing on the case before us relates to the scope and amplitude ox the power of the Central Government under subsecs. (1) and (2) of sec. 3 of the Essential Commodities Act 1955 A Division Bench of the Allahabad High Court has observed in that behalf as under :- The power granted to the Central Government under sub-sec. (1) of sec. 3 is very wide and the Central Government can exercise it either for the purpose of regulating or for the purpose of prohibiting or for both. The Allahabad High Court therefore negatived the argument that the storage which was not specified in clause (d) of sub-sec. (2) of sec. 3 was not within the ambit of sub-sec. (1) of sec. 3. It has next been observed by the Allahabad High Court that sub-sec. (2)of sec. 3 merely illustrates some of the powers and cannot be read as restrictive of the generality of the powers conferred by sub-sec. (1) of sec. 3. Sub-sec. (1) of sec. 3 embraces both the power to regulate and the power to prohibit storage of an essential commodity.
(2)of sec. 3 merely illustrates some of the powers and cannot be read as restrictive of the generality of the powers conferred by sub-sec. (1) of sec. 3. Sub-sec. (1) of sec. 3 embraces both the power to regulate and the power to prohibit storage of an essential commodity. ( 16 ) THE next decision to which he has invited our attention is in Badri Prasad v. Collector of Central Excise Sarvodayanagar Kanpur and Others AIR 1971 S. C. 1170. It was a case under Gold (Control) Act 1968 It was argued thai sec. 58 (1) of the Gold (Control) Act which inter alia allowed a Gold Control Officer authorised by the Administrator to enter and search any business premises merely if he had any reason to suspect that any provision of the Act was being or was about to be contravened was contrary to law and should be struck down. It was contended on behalf of the petitioner in that case that the exercise of power to enter and search any business premises in a case of suspicion was too wide and could be made an engine of oppression in the hands of an unscrupulous officer if he was minded to do so. It was further argued in that behalf that in the Sea Customs Act 1878 there was a different provision which used the expression reason to believe. The Supreme Court held that sub-sec. (1) of sec. 58 is valid firstly because the Gold Control Officer is required to act with expedition in the matter of search so that the information that he is going to search a premises may not leak out and the only safety in this regard is that the Cold Control Officer must be authorised by the Administrator in this behalf and he in his turn if he is empowered by the Central Government may authorise other Government officers to enter and search the premises. In that case evidence showed that a huge quantity of gold had been lying with the petitioner in that case in respect of which he bad made no declaration. The Supreme Court further pointed out that the Gold (Control) Act was not the only provision of law under which power to search on suspicion was conferred on the officer. The Supreme Court illustrated the proposition by referring to sec.
The Supreme Court further pointed out that the Gold (Control) Act was not the only provision of law under which power to search on suspicion was conferred on the officer. The Supreme Court illustrated the proposition by referring to sec. 41 of the Madras General Sales Tax Act 1 of 1959 which was considered by it in Commissioner of Commercial Taxes Board of Revenue Madras v. Ramkishan Shrikishan Jhaver AIR 1968 S. C. 59. It is clear from this decision that exercise of power on suspicion was upheld by the Supreme Court on account of two reasons. Firstly what could be done on suspicion was to enter and search the premises. It was not a case in which seizure of goods was contemplated. Secondly the Parliament itself had in Gold (Control) Act 1968 provided that power to search and enter the premises could be exercised on a mere suspicion. When Parliament makes a provision for exercise of such power on suspicion it stands on a different footing from a case where no such expression has been used by Parliament. Search and examination of premises on suspicion is different from seisure of goods on suspicion. A wider power may in the facts and circumstances of a particular situation be conferred upon an officer to do a lighter thing. Search and examination of premises in our opinion are lighter in impact than the seizure of goods. The principle laid down by the Supreme Court in Badri Prasads case (supra) cannot proprio vigore be applied to the facts of the instant case. ( 17 ) THE next decision to which our attention has been invited by the learned Government Pleader is in Afzal Ullah v. State of Uttar Pradesh and Another AIR 1964 S. C. 264. It was a case under U. P. Municipalities Act 1916 He has relied upon this decision to make good the proposition that even if a bye-law could not be justified under particular matters specified in sub-sec. (2) of sec. 298 of that Act they could be justified under the general power conferred under sub-sec. (1) of sec. 298. It that behalf it has been observed by the Supreme Court that specific powers merely illustrative and cannot be read as restrictive of the generality of the powers conferred by the preceding provision. Therefore if the powers specified by sub-sec. (1) of sec.
(1) of sec. 298. It that behalf it has been observed by the Supreme Court that specific powers merely illustrative and cannot be read as restrictive of the generality of the powers conferred by the preceding provision. Therefore if the powers specified by sub-sec. (1) of sec. 298 of the U. P. Municipalities Act 1916 were very wide and if they took within their scope bye-laws like the once with which they were concerned in that appeal it cannot be said that the particular powers enumerated in sub-sec. (2) of sec. 298 controlled the general words used in sub-sec. (1) of that section. The latter clauses merely illustrate and do not exceed ail the powers conferred under an earlier provision. He has asked us to bear this in mind while construing the generality of power conferred by sub-sec. (1) of sec. 3 and the particular power specified in sub-sec. (2) of the Essential Commodities Act 1955 ( 18 ) THE next decision to which he has invited our attention is in Rohtak and Hissar Districts Electric Supply Co. Ltd. v. State of Uttar Pradesh and Others AIR 1966 S. C. 1471. It was a case under the Industrial Employment (Standing Orders) Act 1946 A similar question of construing the statute arose in that case in the context of sub-sec. (1) of sec. 15 which conferred general rule-making power upon the Government and sub-sec. (2) of sec. 15 which specified matters enumerated in several clauses thereof. The principle which the Supreme Court has reiterated in that decision is that the enumeration of particular matters by sub-sec. (2) does not control the width of powers conferred upon the appropriate Government by sub-sec. (1) of sec. 15. ( 19 ) THE next decision upon which reliance has been placed by the learned Government Pleader is in Emperor v. Sibnath Benerji and Others AIR 1945 P. C. 156. The question which arose in that case in the context of Defence of India Act 1939 and the rules made thereunder was similar to the one which has been raised before us. The principle which has been laid down is that the generality of power conferred by sub-sec. (1) of the section which empowers the Government to make rules is not controlled by the particularity of the subjects specified in another sub-section of that section.
The principle which has been laid down is that the generality of power conferred by sub-sec. (1) of the section which empowers the Government to make rules is not controlled by the particularity of the subjects specified in another sub-section of that section. We may state that this is the oldest and leading case on the subject. Referring to sub-sec. (1) and sub-sec. (2) of sec. 2 of the Defence of India Act 1939 the Privy Council has observed that the function of sub-sec. (2) was merely illustrative. The rule-making power was conferred by sub-sec. (1) and the rules which were referred to in the opening sentence of sub-sec. (2) were the rules which were authorised by and made under sub-sec. (1 ). The provisions of sub-sec. (2) were not restrictive of sub-sec. (1) because sub-sec. (2) opens with the words Without prejudice to the generality of the powers conferred by sub-sec. (1 ). ( 20 ) THE next decision to which our attention has been invited by the learned Government Pleader is in Santosh Kumar Jain v. The State AIR 1951 S. C. 201. A similar question arose in the context of sub sec. (1) and (2) of sec. 3 of Essential Supplies (Temporary Powers) Act 1946 It has been observed by the Supreme Court in that decision that sub-sec. (1) of sec. 3 was wide enough to cover special as well as general orders relating to the matters specified in sec. 3. The power to provide for regulating or prohibiting production distribution and supply conferred on an executive body may well include the power to regulate or prohibit by issuing directions to a particular producer or dealer or by requiring any specific act to be done or forborne in regard to production etc. That subsection therefore authorized the making of ad hoc or special orders with respect to any particular person or thing. Sub-sec. (2) of sec. 3 conferred on further or other powers on the Central Government than what were conferred under sub-sec. (1) for one or the other of the matters specifically enumerated in sub-sec. (2) which was only illustrative as such enumeration was without prejudice to the generality of the powers conferred by sub-sec. (1 ). Therefore the expression without prejudice to the generality of the powers conferred by sub-sec. (1) was used in sub sec. (2 ).
(1) for one or the other of the matters specifically enumerated in sub-sec. (2) which was only illustrative as such enumeration was without prejudice to the generality of the powers conferred by sub-sec. (1 ). Therefore the expression without prejudice to the generality of the powers conferred by sub-sec. (1) was used in sub sec. (2 ). In the opinion of the Supreme Court seizure of an article was shown to fall within the purview of sub-sec. (1 ). Therefore it was competent for the Central Government or its delegate the Provincial Government to make an order for seizure under that sub-section apart from and irrespective of the anticipated contravention of any other order as contemplated by clause (j) of sub-sec. (2 ). . ( 21 ) THE learned Government Pleader has tried to advance further arguments on the strength of secs. 6a 6 and 6c of the Essential Commodities Act 1955 Sec. 6a provides for confiscation of an essential commodity and sec. 6b provides for procedure before such a confiscation can be ordered. Sec. 6c provides for an appeal against the order of confiscation to the judicial authority appointed be the State Government and empowers the judicial authority after giving an opportunity to the appellant to be heard to pass such order as it may think fit confirming modifying or annulling the order appealed against. The object with which the learned Government Pleader has invited our attention to these provisions is that the procedure prescribed in sec. 68 is a reasonable procedure which conforms to the principles of natural justice and that the right of appeal to judicial authority provided by sec. 6c is a sufficient guarantee against misuse of poser to seize goods on mere suspicion. According to him therefore the impugned provisions of clause 18 of the second Licensing Order should he read in the context of provisions of sec. 6a 6 and 6c. According to him if so read there will be no reason to believe that the power to seize goods on mere suspicion will be abusively used. ( 22 ) THE question which has been argued before us by Mr. Patel does not so much relate to the abuse of power conferred by the impugned provisions of clause 18 of the second Licensing Order as it relates to their validity in the context of the provisions of sec. 3 of the Essential Commodities Act.
( 22 ) THE question which has been argued before us by Mr. Patel does not so much relate to the abuse of power conferred by the impugned provisions of clause 18 of the second Licensing Order as it relates to their validity in the context of the provisions of sec. 3 of the Essential Commodities Act. 1955. ( 23 ) THE next elucidation which the learned Government Pleader has tried to make is that sub-clause (1) (iv) (a) of clause 18 of the second Licensing Order relates to storage only and that therefore power to seize goods on mere suspicion is exercisable in a case of contravention of provisions relating to storage only. There is some substance in what the learned Government Pleader has argued in that behalf. However the spring board for jumping to exercise power under ths impugned provisions of clause 18 is furnished by reason to suspect. If exercise of power on such a ground is valid the entire scheme upon which the impugned provision stands can be sustained and must be upheld. If it is void in law then the entire scheme of the impugned provision of clause 18 must fail. In this behalf the learned Government Pleader has invited our attention to the decison of the Mysore High Court in M/s. A. K. Appanna Setty and Sons and Others v. The State of Mysore by its Chief Secretary Govt. of Mysore Vidhant Soudha Vidhana Veedhi Bangalore 1 and Others AIR 1970 Mysore 289. It was a case under Mysore Foodgrains (wholesale) Dealers Licencing Order 1964 With reference to this decision he has tried to argue that the power to seize on a mere suspicion is not an unguided unregulated unconditional or uncanalised power because that power is exercisable only with a view to securing compliance with the statutory order or to satisfying himself that the provisions of the statutory order have not been contravened. The latter expression occurred in clause 8 of the Mysore Order. It also occurs in the opening part of clause 18 of the second Licensing Order. ( 24 ) IN reply to the arguments which the learned Government Pleader has advanced before us Mr. Patel has invited our attention to the decision of the Supreme Court in V. S. Rice and Oil Mills and Others v. State of Andhra Pradesh etc. AIR 1964 S. C. 1781.
( 24 ) IN reply to the arguments which the learned Government Pleader has advanced before us Mr. Patel has invited our attention to the decision of the Supreme Court in V. S. Rice and Oil Mills and Others v. State of Andhra Pradesh etc. AIR 1964 S. C. 1781. It was a case under Madras Essential Articles Control and Requisitioning (Temporary Powers) Act 1949 In that decision reference has been made to the decision of the Privy Council in Sibnath Banerjees case (supra) and it has been observed that it is well settled that the function of a clause like Cl. (2) of sec. 3 is merely illustrative. Reference has been made in that decision to the decision of the Supreme Court in Santosh Kumars care (supra ). However it has been observed by the Supreme Court that the proper approach while construing clauses (1) and (2) of sec. 3 is to assume that whatever is included in Cl. (2) is also included in Cl. (1 ). That is not to say that if the words of Cl. (1) are wide enough to enclude cases not included in Cl. (2) they must for that reason receive a narrower construction. The Supreme Court therefore in that case proceeded to decide whether the supply of electrical energy made by the respondent to the appellants in that case could be regulated by a notified order issued under it or not and the answer was in the affirmative. ( 25 ) THESE are all the decisions to which our attention has been invited on this aspect. ( 26 ) THERE is no doubt in our minds that if the impugned provisions of clause 18 of the second Licensing order are required to be Judged in lights of the provisions of sub-clause (i) of clause (j) of sub-sec. (2) of sec. 3 of the Essential Commodities Act 1955 they would be ultra vires those provisions. Therefore. we are required to consider two questions. Are they saved by the generality of power conferred by sub-sec. (1) of sec. 3? Are they saved by the expression any incidental and supplementary matters which have been particularized not exhaustively in clause (j) of sub-sec. (2) of sec. 3 ?
Therefore. we are required to consider two questions. Are they saved by the generality of power conferred by sub-sec. (1) of sec. 3? Are they saved by the expression any incidental and supplementary matters which have been particularized not exhaustively in clause (j) of sub-sec. (2) of sec. 3 ? We think enumeration of incidental and supplementary matters in clause (j) is not exhaustive because that clause itself opens with the following words:- for any incidental and supplementary matters including in particular the entry search or examination of premises. The use of the expression including clearly suggests that the list of incidental and supplementary matters given in clause (j) is not exhaustive but that it is illustrative. ( 27 ) SO far as sub-sec. (1) is concerned it in its turn raises two aspects before us. Have powers under sub-sec. (1) of sec. 3 has conferred by the Central Government upon the State Government ? Is sub-sec. (1) so wide and all embracing that it envisages exercise of power even on suspicion ? We have already reproduced the notified Order made by the Central Government on 20th June 1972. The opening part of that order inter alia. states as follows : -. . . . . the Central Government hereby directs that the powers conferred on it by sub-sec. (1) of sec. 3 of the said Act to make orders to provide for the matters specified in clauses (a) (b) (c) (d) (e) (f) (h) (i) (ii) and (j) of sub-sec. (2) thereof shall in relation to foodstuffs be exercisable also by at State Government. Indeed they are exercisable subject to the conditions specified in that Order. On a close reading of the expression which we have reproduced hereinabove it is clear that power under sub-sec. (1) of sec. 3 has been delegated only for specified purposes. The purposes for which it has been delegated are specified in clauses (a) (b) (c) (d) (e) (f); (h) (i) (ii) and (j) of sub-sec. (2) and not for any other purpose. Therefore the delegation of the power to the State Government under the notified Order dated 20th June 1972 is in respect of specific matters. The unbounded generality of power conferred upon the Central Government by sub-sec. (1) of sec. 3 has not been delegated to the State Government by that Order.
(2) and not for any other purpose. Therefore the delegation of the power to the State Government under the notified Order dated 20th June 1972 is in respect of specific matters. The unbounded generality of power conferred upon the Central Government by sub-sec. (1) of sec. 3 has not been delegated to the State Government by that Order. Therefore power to seize goods on suspicion in the context of the impugned provisions of clause 18 of the second Licensing Order cannot be justified under the provisions of sub-sec. (1) read with sub-sec. 2 of sec. 3. Assuming that we are in error in reaching this conclusion and assuming further that the Central Government has delegated to the State Government by the notified Order dated 20th June 1972 the unbounded generality of power conferred upon it by sub-sec. (1) of sec. 3 can seizure on suspicion by justified thereunder ? Our answer is in the negative for the following reasons. ( 28 ) THE generality of power under sub-sec. (1) is exercisable to provide for regulation or prohibition of the production supply and distribution of the essential commodities and trade and commerce therein. The objects for which they can be exercised are inter alia the equitable distribution and availability at fair prices of the essential commodities and the maintenance or increase in the supply of essential commodities. Regulation and prohibition of production and supply of distribution of essential commodities and trade and commerce therein may embrace within their sweep the control of prices regulation by licence entry and search of the premises the examination of goods and their seizure. But it is difficult to imagine that generality of power under sub-sec. (1) of sec. 3 can be exercised on a mere suspicion. Exercise of power on a mere suspicion is capable of doing greater harm than good to the community. It has a strong potentiality of disrupting the trade and commerce. It need not necessarily be founded on any material evidence relating to the misbehaviour of a producer or a dealer. A suspicion is a suspicion and cannot be elevated to any higher status. It is a state of mind which may not be based on any evidence. Its degree varies from man to man. Its intensity varies from time to time. Therefore firstly we are not inclined to read in sub-sec. (1) of sec.
A suspicion is a suspicion and cannot be elevated to any higher status. It is a state of mind which may not be based on any evidence. Its degree varies from man to man. Its intensity varies from time to time. Therefore firstly we are not inclined to read in sub-sec. (1) of sec. 3 exercise of the generality of power on more suspicion. In an emergent situation or an exceptional case the Parliament may provide for seizure of goods on suspicion as it did in Gold (Control) Act 1968 The principle laid down by the Supreme Court in Badri Prasads case (supra) has no application to the instant case firstly because the expedition with which the action was required to be taken under Gold (Control) Act 1968 does not appear to underlie the provisions of the Essential Commodities Act 1955 It appears to be a temporary statute which may be permanently on the statute book. Secondly the principle laid down in Badri Prasads case has no application to the instant case because Gold (Control) Act 1968 provided for search and examination on suspicion and not seizure on suspicion. We may not be understood to be saying that Parliament cannot in any conceivable case provide for taking an action on mere suspicion. All that we mean to say in the context of this case is that sub-sec. (1) of sec. 3 does not necessarily imply the exercise of the generality of power on mere suspicion because the Parliament could not have thought of disrupitng the trade and commerce in essential commodities of which exercise of power on mere suspicion is capable. Secondly sub-sec. (1) if sec. 3 does not appear to refer to grounds on which power can be exercised. Thirdly when we read sub-sec. (1) with clause (j) of sub-sec. (2) of sec. 3 we feel that the Parliament did not think of laying down a basic norm in sub-sec. (1) different from one which it has laid down in clause (j) of sub-sec. (2 ). Therefore for the reasons stated above we are unable to uphold the argument raised by the learned Government Pleader that the power to seize goods on mere suspicion can be justified under sub-sec. (1) of sec. 3. ( 29 ) WE now turn to the next argument which he has raised in that behalf. According to him clause (j) of sub-sec.
(1) of sec. 3. ( 29 ) WE now turn to the next argument which he has raised in that behalf. According to him clause (j) of sub-sec. (2) of sec. 3 provides for making orders in relation to any incidental and supplementry matters. Hie is correct in his submission that clause (j) does not exhaustively enumerate the incidental and supplementary matters. Therefore something not expressly specified therein can be regarded as an incidental or supplementary matter. To that extent the learned Government Pleader is right in his submission. However is suspicion as distinguished from belief an incidental and supplementary matter? It is necessary for us to answer this question. In our opinion on a close reading of clause (j) entry in premises search of any premises or examination of premises or examination of any goods or seizure of any goods or property are illustrative of incidental and supplementary matters. To this list of supplementary matters by virtue of the inclusive provision which clause (j) of sub-sec. (2) of sec. 3 makes something more can be added. The expression incidental and supplementary matters has reference to a matter in respect of which power can be exercised and has no reference to the degree of satisfaction which may be required for the exercise of that power because the degree of satisfaction is not an incidental and supplementary matter. Therefore on a close reading of clause (j) of sub-sec. (2) of sec. 3 though the list of incidental and supplementary matters can be expanded degree of satisfaction which is not an incidental and supplementary matter cannot be contracted or whittled down. Therefore though by virtue of the inclusive character of incidental and supplementary matters in clause (j) arms of law can be stretched to a longer distance than what is expressly provided in it they can be stretched only from a fixed centre. viz. from belief and not from suspicion. ( 30 ) BEFORE we part with the first contention we may usefully refer to the notified order made by the Central Government on 25th October 1972 It provides as under :- in exercise of the powers conferred by sec. 5 of the Essential Commodities Act 1955 (10 of 1955) the Central Government hereby directs that the power to make orders under sub-sec. (1) of sec.
5 of the Essential Commodities Act 1955 (10 of 1955) the Central Government hereby directs that the power to make orders under sub-sec. (1) of sec. 3 of the said Act to provide for the prohibition of or the imposition of restrictions on the storage of foodstuffs shall be exercisable also by a State Government :- provided that before making an order relating to the aforesaid matter a State Government shall obtain the prior concurrence of the Central Government. We are referring to this Order to bring into bold relief the distinction in language used in this Order and the notified Order of 20th June 1972 to which we have referred earlier. The last mentioned Order expressly confers upon the State Government power under sub-sec. (1) of sec. 3 but it does so only in matters of storage of foodstuffs. There is no such delegation of power by the Central Government upon the State Government under notified Order dated 20th June 1972. ( 31 ) IN our opinion therefore sub-clause (1) (iv) (a) and sub-clause (1) (iv) of clause 18 of the second licensing Order go beyond the sweep of sub-clause (i) of clause (j) of sub-sec. (2) of sec. 3 and are therefore violative of it. They therefore are void and ultra vires the aforesaid provisions of the Essential Commodities Act 1955 Indeed they are void to the extent to which any of the powers specified therein is exercisable on suspicion. We declare accordingly. The first contention raised by Mr. Patel is therefore upheld. ( 32 ) THE second contention which Mr. Patel has raised relates to the directions issued by the State Government under clause 13 of the second Licensing Order which provides as follows :- the state Government the Director of civil Supplies the Director of Food the Food and Civil Supplies Controller Ahmedabad city the Collector of a district or any licensing authority may by general or special order issue to any licence holder or class of licence holders such directions regarding maintenance of stocks storage sate display of prices weighment disposal delivery or distribution of pulses edible oil seeds and edible oils as it or he as the case may be may deem fit. (2) Every licence holder to whom any direction is issued under sub-clause (1) shall comply with such direction.
(2) Every licence holder to whom any direction is issued under sub-clause (1) shall comply with such direction. Clause 13 which we have reproduced above is not under challange before us It enables the State Government and the officers specified therein to issue directions inter alia in respect of sale and disposal of edible oils. ( 33 ) WE now turn to the impugned directions On 10th July 1980 the State Government issued the following directions :- in pursuance of clause 13 of the Gujarat Pulses Edible Oilseeds and Edible Oils Dealers Licensing order 1977 the Government of Gujarat hereby direct that every Licence Holder shall with effect from 10th July 1980 furnish to the Collector of the District or as the case may be to Food and Civil Supplies Controller Ahmedabad city information regarding sale including agreement to sell disposal delivery or distribution of edible oilseeds or the case may be edible oils outside the State of Gujarat in the Form appended hereto before moving such edible oilseeds or edible oils from the place where it is stored with a view to sell including agreement to sell dispose off deliver or distribute the same outside the State of Gujarat and shall obtain from the Collector of the District or as the case may be the Food and Civil Supplies Controller Ahmedabad an acknowledgement of having furnished such information. (Emphasis supplied ). The object with which these directions were issued was to collect information or statistics in relation only to inter-State commercial transactions in edible oilseeds and edible oils. Collection of such information or statistics can hardly be objected to. It has been averred in the affidavitin-reply filed on behalf of the State Government that groundnut oil is a sensitive commodity. It need not be said that it is an essential commodity because it falls within the compass of sub-clause (v) of clause (a) of sec. 2 of the Essential Commodities Act 1955 Because it falls within that compass power delegated by the Central Government to the State Government under sec. 5 read with sec. 3 has led to the issuance of statutory Orders and the directions which we have reproduced above.
2 of the Essential Commodities Act 1955 Because it falls within that compass power delegated by the Central Government to the State Government under sec. 5 read with sec. 3 has led to the issuance of statutory Orders and the directions which we have reproduced above. If in regard to an essential commodity whose behaviour in the market is sensitive and transactions in which are required to be watched in the interest of general public if the State Government wants to collect information and statistics no exception can be taken to it. Therefore the directions issued on 10th of July 1980 appear to us to be beyond challenge. It was a part of supplementary and incidental matters within the meaning of clause (j) of sub-sec. (2) of sec. 3 of the Essential Commodities Act 1955 The learned Government Pleader has also on behalf of the State Government stated to us that collection of information and statistics in regard to the movement and behaviour of thus essential commodity is the sole purpose and object underlying the impugned directions. ( 34 ) BEARING that purpose in mind let us now turn to the amendment made to those directions on 7th August 1980. The amendment reads as under :- in the said Order for the portion beginning with the words and shall obtain and ending with the words such information the following shall be substituted namely :- and shall obtain an acknowledgement from the concerned Collector or as the case may be the Food and Civil Supplies Controller Ahmedabad City who shall within a period of seven days of the receipt of such information by him :- (a) issue the acknowledgement if such information is found after due verification by him to be correct and complete; or (b) refuse to issue the acknowledgement if such information is found after due verification by him to be incorrect or incomplete. When we incorporate the amendment in the original directions they read as under : -. . . .
When we incorporate the amendment in the original directions they read as under : -. . . . the Government of Gujarat hereby direct that every licence holder shall with effect from 10th July 1980 furnish to the Collector of the District or as the case may be to Food and Civil Supplies Controller Ahmedabad city information regarding sale including agreement to sell disposal delivering or distribution of edible Oil seeds or as the case may be edible oils outside the State of Gujarat in the Form appended hereto before moving such edible oilseeds or edible oils from the place where it is stored with a view to sell including agreement to sell dispose off deliver or distribute the name outside the State of Gujarat and shall obtain all acknowledgement from the Collector of the District or as the case may be the Food and Civil Supplies Controller Ahmedabad who shall within a period of seven days of the receipt of such information by him :- (a) issue the acknowledgement if such information is found after due verification by him to be correct and complete; or (b) refuse to issue the acknowledgement if such information is found after due verification by him to be incorrect or incomplete. (Emphasis supplied) the amended directions have centralized the function of issuing acknowledgements in the Collector of the District alone. Secondly it is open to the Collector to take as seven days to issue an acknowledgement even if the information furnished by a dealer is correct and complete. Thirdly he has the authority to refuse to issue an acknowledgement in case the information is found to he incorrect or incomplete. Are these basic features of the amended directions valid or void under Art. 19 (1) (g) bearing in mind that the only purpose with which the directions have been issued is to collect information and statistics in regard to the movement and behaviour of edible oils and as stated on behalf of the State Government in its affidavit-in-reply not to control the business in them or place restrictions on their business. One consequence which follows from the amended directions is the potentiality of holding up inter-State business transactions for a period of seven days.
One consequence which follows from the amended directions is the potentiality of holding up inter-State business transactions for a period of seven days. If the information furnished by a dealer in the prescribed form is incomplete and incorrect the amended directions have the potentiality of holding up the inter-State transactions in edible oils for an indefinite period of time. The queswhich we are therefore required to answer is whether these restrictions are reasonable within the meaning of clause (6) of Art. 19 in the context of the mere requirement of the State Government to collect and statistics in regard to the inter-State movement behaviour of the edible oils and edible oilseeds. The reasonableness of the restriction is to be judged in light of the interests of the general public within the meaning of that expression used in clause (6) of Art. 19 of the Constitution. Indeed the ultimate object in collecting this information may be to decide whether control on trade and business in edible oilseeds and oils should be imposed. The information which the State Government collects indeed is likely to serve a very laudable object. It will be able to find out whether stocks of edible oilseeds and oils are drained off outside the State and also to find out whether a dealer dupes the Government and the public. Mr. Patel has indeed argued that there is nothing in this information which requires verification. That indeed is the other extreme of the argument. According to him the requirement to furnish transactionwise information when edible oilseeds and oils are sold and delivered outside the State is really redundant and futile. There is no doubt in our minds that in discharge of its obligations to the members of the public to make adequate provision for the supply of edible oils the State Government may adopt a means to keep a watch on the inter-State transactions. In order to substantiate his argument Mr. Patel has also invited our attention to condition No 4 in the licence which is issued to a dealer. It requires him to maintain a register of daily transactions showing the opening stock of the day how much he purchased in course of the day and from what places how much he delivered or otherwise disposed of during the day and the places where he sent them and the closing stock of the day.
It requires him to maintain a register of daily transactions showing the opening stock of the day how much he purchased in course of the day and from what places how much he delivered or otherwise disposed of during the day and the places where he sent them and the closing stock of the day. Such forthnightly returns are required to be furnished in Form-C appended to the second licensing Order. ( 35 ) MR. Patel has next argued that we must judge the reasonableness of this restriction in light of certain undisputed facts. They are as follows:- (i) there is no fixation of price of edible oils by the Government in this State (ii) there is no control on its export or regulation thereof (iii) it is a freely marketable commodity. Besides these three facts he has also stated to us that it is a normally available commodity. There is also no doubt or dispute about the fact that market conditions in relation to edible oils are fluctuating. In view of these facts he has argued that there is no nexus between the collection of information and seven days gap in issuing the acknowledgement. He has also tried to argue that there is no reason why the Collector alone should be the centralized agency to issue an acknowledgement. It is bound to impede the delivery of edible oils from the buyer to the purchaser outside the State particularly when in a district there are a number of edible oil purchasers. According to him it is enough if the object is to collect only information that some one checks and issues a receipt. There is no doubt about the fact that seven days time has been allowed for the purpose of issuing acknowledgments because Collector has been constituted as the centralized agency to issue acknowledgements. Sales as such may not be affected by the seven days gap but the delivery outside the State is bound to he affected. ( 36 ) LET us now see how the constitution of the centralized agency will work in case of inter-State transactions. A dealer enters into a transaction of sale with a dealer in some other State fills in the prescribed form goes to the district town and submits it to the Collector.
( 36 ) LET us now see how the constitution of the centralized agency will work in case of inter-State transactions. A dealer enters into a transaction of sale with a dealer in some other State fills in the prescribed form goes to the district town and submits it to the Collector. The Collector thereafter deputes some one who will go to the site and check up the information supplied in the prescribed form will make a report to the Collector and then the Collector will scrutinize the report and issue an acknowledgement. The argument which Mr. Patel has raised is that though the State Government has not expressly imposed control on interstate transactions in edible oils it wants to achieve the same object by employing a subterfuge in the shape of these directions. Let us now see how far the allegation made by Mr. Patel is correct. ( 37 ) HE has first invited our attention to the averments in paragraph 30 of the affidavit-in-reply filed by Mr. N. Vittal Secretary to the Government of Gujarat Food and Civil Supplies Department It was affirmed on 27th August 1980. Those averments show that even before the impugned directions were amended instructions were issued in advance to hold up the issuance of such acknowledgements. In that very paragraph it has been stated on behalf of the State Government that it has not imposed a ban on the sale of groundnut oil outside the State of Gujarat and that the State of Gujarat has not imposed any ban on free trade commerce or inter-course in edible oils throughout the territory of India. It has next been averred by him on behalf of the State Government that the impugned directions are only a regulatory measure introduced with the object of collecting information. In paragraph 8 in the affidavit-in-rejoinder filed by Mr. Vallabhbhai Patel one of the Directors of petitioner No. 1 it has been stated that this device has been introduced by the State Government in order to force the producers to give to the Government edible oil in voluntary levy. It has also been averred that the State Government wants 30 of edible oil in levy.
Vallabhbhai Patel one of the Directors of petitioner No. 1 it has been stated that this device has been introduced by the State Government in order to force the producers to give to the Government edible oil in voluntary levy. It has also been averred that the State Government wants 30 of edible oil in levy. The petitioners have produced before us a Form the columns in which are required to be answered by the Mamlatdar who inspects the quantity of edible oil in regard to which an application for the issuance of an acknowledgement has been made by a dealer. It is at Annexure `l to the affidavit-in-rejoinder filed on behalf of petitioner No. 1. Col. 10 in that Form requires him to answer the following question:- Has the dealer entered into an agreement of voluntary levy ? Col. 11 requires the Mamlatdar to answer the following question :- Has voluntary levy oil been delivered to the Agro-Industries Corporation ? The fact that the Mamlatdar is required to answer these two questions amongst others in the prescribed Form before the Collector issues the acknowledgement means that an acknowledgement will be issued to a dealer who has entered into an agreement of voluntary levy and who has delivered the required quantity of voluntary levy to the Agro-Industries Corporation. Mr. Patel who has asked us to hold that if these two questions are answered by the Mamlatdar in the negative the Collector will not issue an acknowledgement is therefore correct in his submission. It appears to us therefore that under the cloak of obtaining information in regard to the inter-State movement and behaviour of this essential commodity the State Government has been trying to control the interstate trade in it with the ulterior object of procuring edible oils from the dealers in levy in regard to which the State Government has no authority whatsoever in law. Bearing in mind the only avowed object of collecting information in regard to inter-State transactions in edible oilseeds and edible oils can we firstly say that a provision which has the potentiality of holding up inter-State transactions in this essential commodity for a period of seven days is reasonable within the meaning of clause (6) of Art. 19 ?
Bearing in mind the only avowed object of collecting information in regard to inter-State transactions in edible oilseeds and edible oils can we firstly say that a provision which has the potentiality of holding up inter-State transactions in this essential commodity for a period of seven days is reasonable within the meaning of clause (6) of Art. 19 ? ( 38 ) NOW the thread-bare analysis of the facts and circumstances of the case strips the controversy of all its embroidery and embellishments and presents it to us in its naked form. Whatever test of reasonableness may be applied it is difficult to imagine that merely for the purpose of collecting information in regard to the movement and behaviour of this essential commodity inter-State transactions can be held up for a period of seven days. The method which the State Government has devised to collect information outweighs the object for which it has been devised. If the State Government wants to collect the information all that is required to be done is to set up necessary check-posts at inter-State border for the purpose of checking the quantity of edible oil which is exported outside the State. At that checkpost a dealer can be asked to submit the information in the prescribed Form. Any one who is posted in charge of the check-post will verify the information and issue the acknowledgement. Or if a clerk at the border checkpost could not be trusted Mamlatdar in each taluka could have been empowered to perform this job. In a district there are a number of Mamlatdars. It is necessary to remember in this connection that the Mamlatdar is the licensing authority under the second Licensing Order. Instead of devising this simple method to serve the purpose of securing to the State Go vernment necessary information without holding up the inter-State transactions in edible oils a cumbrous and time-consuming method has been devised which develops the suspicion of the Court which in its turn is not unfounded. The device which the State Government has introduced in the shape of impugned directions has the strong potentiality of holding up inter-State business in this essential commodity and appears to be intended to force an inter-State dealer to give edible oil in levy in respect of which the State Government has no authority in law.
The device which the State Government has introduced in the shape of impugned directions has the strong potentiality of holding up inter-State business in this essential commodity and appears to be intended to force an inter-State dealer to give edible oil in levy in respect of which the State Government has no authority in law. The impugned directions therefore appear to amount to an unreasonable restriction on the petitioners fundamental right to carry on business in edible oilseeds and oils. ( 39 ) THE learned Government Pleader has however tried to justify them. He has tried to make out six propositions. Firstly the power to issue acknowledgment has been given to a high officer who is supposed to act in a responsible and reasonable manner. It minimises the chances of abuse of power He has cited in support of his argument Chinta Lingam v. The Government of India AIR 1971 S. C. 474. Secondly the impugned directions do not operate as a prohibition against inter-State commercial transactions in edible oilseeds and oils. Thirdly seven days time is the maximum period of time. It is neither a fixed period of time nor a minimum period of time. Fourthly sale transactions are not affected but what is affected is mere delivery which may in a given case he delayed by seven days. Fifthly information which the State Government seeks to collects is in regard to sales or agreements of sale. Lastly whereas prior to the amendment of these directions there was no time fixed for issuing acknowledgements. Now the maximum period has been fixed at seven days which places a fetter on the Collector. According to him therefore the impugned directions are a reasonable restriction under Art. 19 (6 ). ( 40 ) WE do not agree to these propositions. The Collector has been constituted the centralized agency for the entire district to issue acknowledgements. Though he is a high officer since he is the centralized agency for the entire district it is bound to cause undue delay. We have shown in the earlier parts of this judgment how such a system operates. They demolish the sophisticated arguments advanced by the learned Government Pleader. When a military marksman is engaged to shoot down an ant it indeed raises Strong suspicion about the intention of one who engages him. This is what the State Government has done in the instant case.
They demolish the sophisticated arguments advanced by the learned Government Pleader. When a military marksman is engaged to shoot down an ant it indeed raises Strong suspicion about the intention of one who engages him. This is what the State Government has done in the instant case. To achieve the only purpose of collecting information as to inter-State dealings in edible oilseeds and oils it has devised a procedure which is too lengthy too cumbrous unduly centralized and which seriously tells upon the inter -State business. Therefore it is not the responsible behaviour of a Collector which ensures reasonableness but it is the unduly lengthy and motivated procedure at the apex of which the Collector sits which interferes with inter-State trade in edible oilseeds and oils. Now if a Mamlatdar can be trusted to issue a licence under the second Licensing Order why can he not be trusted to issue an acknowledgment? As a Court of law it is not our function to tell the Government what it should do and how it should behave. Our function is to remove the cloak or tear off the veil if there is one and to discover the naked truth. . ( 41 ) WE now proceed to make a brief reference to the decisions which have been cited before us by both the sides. ( 42 ) MR. V. B. Patel who appears on behalf of the petitioners has invited our attention to the decision of the Supreme Court in The State of Madras v. V. G. Row AIR 1952 S. C. 196 In the context of Art. 19 the Supreme Court has observed that the Court should consider not only factors such as the duration and the extent of the restrictions but also the circumstances under which and the manner in which their imposition has been authorized. The test of reasonableness wherever prescribed should be applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be said down as applicable to all cases. The factors which should enter in the judicial verdict are (a) the nature of the right alleged to have been infringed (b) the underlying purpose of the restrictions imposed and the extent and urgency of the evil sought to be remedied thereby (c) the disproportion of the imposition and (d) the prevailing conditions at the time.
The factors which should enter in the judicial verdict are (a) the nature of the right alleged to have been infringed (b) the underlying purpose of the restrictions imposed and the extent and urgency of the evil sought to be remedied thereby (c) the disproportion of the imposition and (d) the prevailing conditions at the time. ( 43 ) THE next decision to which Mr. Patel has invited our attention is in Saghir Ahmad and Another v. State of U. P. and Others AIR 1954 S. C. 728. It was a case under the U. P. State Road Transport Act 1951 In the context of Art. 19 (1) (g) it has been laid down by the Supreme Court in that decision that if any legislation takes away or curtails the fundamental right guaranteed to a citizen under Art. 19 (1) (g) any more than is permissible under clause (6) of Art 19 a citizen can legitimately complain against it. ( 44 ) THE next decision to which our attention has been invited by Mr. Patel is in R. At Seshadri v. Dist. Magistrate Tanjore and Another AIR 1954 S. C. 747. It was a case under Cinematograph Act 1898. In that case one of the conditions which the cinema licence specified an unregulated discretion on the Government to compel a licence to exhibit a film of any length which may consume the whole or the greater part of the time for which the performance is given. Referring to this condition it has been observed by the Supreme Court that such a condition couched in wide language is bound to operate harshly upon the cinema business and cannot be regarded as a reasonable restriction. It savoured more of an imposition than of a restriction. Such a condition was therefore held to amount to an unreasonable restriction on the cinema exhibitors right to carry on his business. ( 45 ) THE next decision to which Mr. Patel has invited our attention is in Messrs Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh end Others. AIR 1954 S. C. 224.
Such a condition was therefore held to amount to an unreasonable restriction on the cinema exhibitors right to carry on his business. ( 45 ) THE next decision to which Mr. Patel has invited our attention is in Messrs Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh end Others. AIR 1954 S. C. 224. It was a case under U. P. Coal Control Order 1953 In the context of Art. 19 (1) (g) the Supreme Court has observed that the limitation which may be imposed upon a person in the enjoyment of his fundamental right under Art. 19 (1) (g) should not be arbitrary or excessive in nature beyond what is required in the interest of the public. Legislation which arbitrarily or excessively limits the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed under Art. 19 (1) (g) and the social control permitted by clause (g) of Art. 19 it must be held to be wanting in reasonableness. The Supreme Court has in that context further observed that a law or order which confers arbitrary or uncontrolled power upon the executive in the matter of regulating trade or business in normally available commodities cannot but be held to be unreasonable. ( 46 ) THE next decision to which our attention has been invited by Mr. Patel is in P. N. Kaushal etc. v. Union of India and others etc. AIR 1978 S. C. 1457. It was a case under Punjab Liquor Licence Rules 1956 The question of reasonableness of restrictions placed by those rules arose under Art. 19 (1) (g ). The Supreme Court in that decision has referred with approval to its earlier decisions in V. G. Rows case (supra) and in R. M. Seshadris case (supra ). It has been held in that decision that unchannelled and arbitrary discretion is patently violative of the requirements of reasonableness in Art. 19 and of equality under Art. 14 a proposition with which no one can now quarrel. Reasonableness and arbitrariness are not abstractions and must be tested on the touchstone of principled pragmatism and living realism. ( 47 ) THE last decision to which Mr. Patel has invited our attention is in Mohd. Faruk v. State of Madhya Pradesh and Others AIR 1970 S. C. 93.
Reasonableness and arbitrariness are not abstractions and must be tested on the touchstone of principled pragmatism and living realism. ( 47 ) THE last decision to which Mr. Patel has invited our attention is in Mohd. Faruk v. State of Madhya Pradesh and Others AIR 1970 S. C. 93. It was a case under Madhya Pradesh Municipal Corporation Act 1956 The principle which has been laid down in that decision is that the onus of proving to the satisfaction of the Court that the restriction is reasonable lies upon the State. If the restriction infringes the fundamental right of the citizen guaranteed by Art. 19 (1) (g) it may be upheld only to establish that it seeks to impose reasonable restrictions in the interest of general public and that the less drastic restriction will not ensure the interest of general public. ( 48 ) IN his turn the learned Government Pleader has invited our attention to four decisions of the Supreme Court. The first is in Madhya Bharat Cotton Association Ltd. v. Union of India and Another AIR 1954 S. C. 634. It was a case under Cotton Control Orders 1950. The principle which has been laid down in that decision is that cotton being a commodity essential to the life of the community it is reasonable to have restrictions which may in certain circumstances extend total prohibition for a time of all normal trading in the commodity. This decision has been cited by the learned Government Pleader with the object of showing that depending upon the facts and circumstances of each case a reasonable restriction may amount to a total prohibition also. ( 49 ) THE next decision to which the learned Government Pleader has invited our attention is in State of Rajasthan v. Nath Mal and Another AIR 1954 S. C. 307. It was a case under the Rajasthan Foodgrains Control Order 1949 The object of the Act was to secure equitable distribution and availability at fair prices of the foodgrains and to regulate transport distribution and acquisition of that commodity. Clause 25 of the Order besides regulating transport distribution disposal and acquisition of an essential commodity such as foodgrains provided that the stocks of foodgrains freezed under that Order shall also be liable to be requisitioned or disposed of under orders of the same authority at the rate fixed for purposes of Government procurement.
Clause 25 of the Order besides regulating transport distribution disposal and acquisition of an essential commodity such as foodgrains provided that the stocks of foodgrains freezed under that Order shall also be liable to be requisitioned or disposed of under orders of the same authority at the rate fixed for purposes of Government procurement. This part of clause 25 was held to amount to an unreasonable restriction upon the carrying on of trade or business and was thus an infringement of the dealers right under Art. 19 (1) (g) ( 50 ) THE next decision to which the learned Government Pleader has invited our attention is in Harishankar Bagla and Another v. The State of Madhya Pradesh AIR 1954 S. C. 465. It was a case under Cotton Textiles (Control of Movement) Order 1948 It was challenged on the ground that it violated the fundamental right of a dealer under Art. 19 (1) (g ). Clause (3) of that Order required a dealer to take a permit from the Textile Commissioner for transporting cotton textiles. The Supreme Court held that the requirement of taking a permit could not be regarded as an unreasonable restriction on the dealers right under Art. 19 (1) (g ). The Supreme Court has further observed that if the transport of the essential commodity by rail or other means or conveyance was left uncontrolled in might as well seriously hamper the supply of those commodities to the public. Therefore the contention raised against clause (3) of that Order was not upheld. ( 51 ) THE last decision upon which the learned Government Pleader has placed reliance is in Narendra Kumar and Others v. The Union of In and Others AIR 1560 S. C. 430. It was a case under the Essential Commodities Act 1955. The question which arose before the Supreme Court in that case was whether in the facts and circumstances of a case a reasonable restriction would include prohibition. Adverting to clauses (5) and (6) of Art. 19 of the Constitution the Supreme Court has observed that the word restriction is sufficiently wide to save laws which are inconsistent with Art. 19 (1) or to take away the rights conferred by that Article provided the inconsistency or taking away was reasonable in the interests of different matters mentioned in that clause.
The Supreme Court has further observed that restriction within the meaning of clause (6) of Art. 19 includes prohibition also. however the reasonableness of a mere restriction or prohibition depends upon the interests of the general public which it serves. ( 52 ) BEARING in mind the undisputed fact that the sole purpose of issuing amended directions is to collect information we think that to hold up inter-State business for a period of seven days or less for such a purpose is an excessive and disproportionate direction. it is therefore not a reasonable restriction within the meaning of clause (6) of Art. 19. The amended directions are therefore ultra vires Art. 19 (1) (g) and are void. The second contention raised by Mr. Patel is therefore upheld ( 53 ) THE next catenation which has been raised by Mr. Patel on behalf of the petitioners is that the amended directions issued by the State Government are violative of Art. 301 of the Constitution. While answering the contention raised under Art. 19 (1) (g) we have already held that they unreasonable hold up the inter-State trade. The holding up of the inter-State business may be for a day or more the maximum being seven days. Art. 301 provides:- Subject to the other provisions of this Part trade commerce and intercourse throughout the territory of India shall be free. Trade commerce and intercourse within the meaning of Art. 301 connote both intra-State trade commerce and business as well as inter-State trade commerce and business In the instant case we are not concerned with intra-State trade commerce and business in edible oil seeds and oils because no restriction in that behalf has been placed by the amended directions. The freedom of trade commerce and intercourse throughout the territory of the country which Art. 301 guarantees is subject to the other provisions of Part XIII. Mr. Patel has invited our attention to Art. 304 and has argued that it does not save the amended directions.
The freedom of trade commerce and intercourse throughout the territory of the country which Art. 301 guarantees is subject to the other provisions of Part XIII. Mr. Patel has invited our attention to Art. 304 and has argued that it does not save the amended directions. Art 304 infer alia provides that notwithstanding anything in Art. 301 or Art. 303 the Legislature of a State may by law impose such reasonable restrictions on the freedom of trade commerce or intercourse with or within that State as may be required in the public interest:- Provided that no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President. It is not the Essential Commodities Act 1955 which places the restriction upon the inter-State trade on edible oils. The restriction as stated by us earlier has been placed by the State Government by issuing amended directions under clause 13 in the second Licensing Order which they have made in pursuance of the powers delegated to them under sec. 5 read with sec. 3 of the Essential Commodities Act 1955 In our opinion Art. 304 has no application to the instant case because they are not a legislation passed by the State. Art. 304 (b) contemplates a legislation which the Legislature of a State may pass. That is the clear effect which emerges out of clause (b) of Art. 304 when it is read with the proviso. In the affidavit-in-reply it has been stated on behalf of the State Government that by issuing the attended directions it is not trying to control trade in edible oils. Before we examine the decisions to which our attention has been invited we may refer to Art. 302 upon which the learned Government Pleader has placed reliance. It provides:- parliament may by law impose such restrictions on the freedom of trade commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Essential Commodities Act 1955 is a parliamentary legislation. But can it be said that the directions issued under a statutory Order made by the State Government under the Essential Commodities Act 1955 also amount to a parliamentary legislation ?
Essential Commodities Act 1955 is a parliamentary legislation. But can it be said that the directions issued under a statutory Order made by the State Government under the Essential Commodities Act 1955 also amount to a parliamentary legislation ? ( 54 ) THE first decision to which our attention has been invited by the learned Government Pleader is in Laljimal Premsukhdas and Another v. B. K. Kambrabail Div. Superintendent W. R. and Anr. 6 GLR 282. It was a case under the Gujarat Groundnut (Transport Control) Order 1964 made under Rule 125 of the Defence of India Rules 1962 The Defence of India Act under which. Defence of India Rules were made was a parliamentary legislation. It has been held in that decision that subordidate legislation made under a parliamentary legislation falls within the purview of Art. 302. ( 55 ) THE learned Government Pleader has next invited our attention to the decision of this Court in Bachumian Hamidmian v. State of Gujarat 13 GLR 693. In that case the scope and ambit of Art. 302 have not been dealt with ( 56 ) THE learned Government Pleader has next invited our attention to the decision in M/s Narain Dass Daulat Ram v. State of Haryana and Another AIR 1978 Punjab and Haryana 310. It was a case under the Essential Commodities Act 1955 The Haryana Government issued under that Act a notification prohibiting the use of milk for the manufacture of cream and its export out of the State for a period of about two months. The validity of that notification was challenged before the High Court. It has been held that Art. 301 was not violated because Art. 19 (1) (g) was not violated. It has been observed in that decision that since the notification impugned in that decision was reasonable under Art. 19 (1) (g) it was also reasonable under Art. 301. ( 57 ) THE next decision to which our attention has been invited is in M/s. Prag Ice and Oil Mills and Another etc. v. Union of India AIR 1978 S. C. 1296. It has been observed by Chief Justice Beg and Mr. Justice D. A. Desai in that decision that Art. 302 does not speak of reasonable restrictions. However it is evident that the restrictions contemplated by Art. 302 must have reasonable nexus with the need to serve pub]ic interest.
v. Union of India AIR 1978 S. C. 1296. It has been observed by Chief Justice Beg and Mr. Justice D. A. Desai in that decision that Art. 302 does not speak of reasonable restrictions. However it is evident that the restrictions contemplated by Art. 302 must have reasonable nexus with the need to serve pub]ic interest. The next principle which has been laid down is that in order to find out whether a legislative enactment or a statutory instrument places a reasonable restriction on freedom of trade commerce and intercourse it is not necessary to examine each and every minute detail pertaining to the Government decision. ( 58 ) MR. V. B. Patel has in his turn invited our attention to the decision of the Supreme Court in the State of Mysore v. H. Sanjeeviah AIR 1967 S. C. 1189. It was a case under the Mysore Forest Act 1900 which required a permit to be taken for transporting forest produce. In that case question under Art. 304 of the Constitution arose. The Supreme Court has laid down that Art. 304 is an exception to Art 301 It exempts from the operation of Art. 301 reasonable restriction on the freedom of trade commerce and intercourse with or within the State as may be requited in the public interest. It has next been observed that Art. 304 saves certain law from the operation of Art. 301. ( 59 ) THE next decision to which he has invited our attention is in Syed Ahmed Aga etc. v. The State of Mysore and Another AIR 1975 S. C. 1443 It was a case in which Mysore Silkworm Seed and Cocoon (Regulation of Production Supply and Distribution) (Amendment) Act 1969 was challenged. In particular the constitutional validity of secs. 3 4 5 and 7 of that Act was challenged. It was held that even though that Mysore Act infringed Art. 301 it was saved by Art. 304 (b ). ( 60 ) THE next decision to which our attention has been invited is in M/s Fatehchand Himatlal and Others etc. v. State of Maharashtra AIR 1977 S. C. 1826. It was a case under the Maharashtra Debt Relief Act 1976 The question which arose was whether it was violative of Art. 301 of the Constitution.
( 60 ) THE next decision to which our attention has been invited is in M/s Fatehchand Himatlal and Others etc. v. State of Maharashtra AIR 1977 S. C. 1826. It was a case under the Maharashtra Debt Relief Act 1976 The question which arose was whether it was violative of Art. 301 of the Constitution. The observations which the Supreme Court has made in that decision are that free movement and exchange of goods throughout the territory of the country is essential for the economy of the nation and for sustaining and improving living standards in the country. Art. 301 embodies and enshrines the principle that the economic unity of the country will provide the main sustaining force for the stability and progress of the political and cultural unity of the country. It has also been observed that since such is the perspective the judicial sights must be set high while reading Art. 301. Social solidarity is a human reality not mere constitutional piety and a non-exploitative economic order outlined in Art. 35 is the bedrock of a contented and united society. . ( 61 ) THE last decision to which he has invited our attention is in Firm A. T. B. Mehtab Majid and Co. v. State of Madras and Another AIR 1963 S. C. 928. It was a case under the Madras General Sales Tax (Turnover and Assessment) Rules 1939 The Supreme Court has considered in that decision the scope of clause (a) of Art. 304. There is nothing in that decision to which a particular reference should be made for the purpose of this case. ( 62 ) THE above reasoning leads us to the conclusion that since the amended directions have been issued under a parliamentary legislation they attract Art. 302. However we have already held that they do not impose a reasonable restriction on a citizens right to carry on trade in edible oils. The decisions to which we have referred above clearly show that Art. 302 contemplates a legislation which imposes a restriction in public interest. Bearing in mind the fact that the sole purpose in issuing the amended directions is to collect information we are of the opinion that their potentiality to hold up inter-State business for a maximum period of seven days does not impose in public interest restriction on trade and commerce in edible oil seeds and oils.
Bearing in mind the fact that the sole purpose in issuing the amended directions is to collect information we are of the opinion that their potentiality to hold up inter-State business for a maximum period of seven days does not impose in public interest restriction on trade and commerce in edible oil seeds and oils. Therefore they are not saved by Art. 302. The amended directions are therefore ultra vires Art. 301 read with Art. 302. ( 63 ) THE next contention which has been raised by Mr. V. B. Patel is that the amended directions are ultra vires clause 13 of the second Licensing Order under which the have been issued and they are also ultra vires the power conferred by the Central Government under the delegation Order made in that behalf. We have already reproduced clause 13 of the second Licensing Order. It inter alia empowers the State Government to issue directions in regard to maintenance of stocks storage sale display of prices weighment disposal delivery or distribution of pulses edible oil seeds and edible oils. It is difficult to say that amended directions are ultra vires clause 13 under which they have been issued because they fall within the area of sale disposal and delivery of edible oil seeds and oils in regard to which under clause 13 of the second Licensing Order directions can be issued. Therefore they are not ultra vires clause 13 of the second Licensing Order. ( 64 ) NOW so far as the second part of this contention is concerned we are required to find out whether they are ultra vires the power delegated by the Central Government by its delegation order to which we have referred above. One of the conditions subject to which power delegated under the said delegation Order can be exercised by the State Government is that no order under clause (d) of sub-sec. (2) of sec. 3 shall be made by the State Government without the prior concurrence of the Central Government. There is no doubt about the fact that the second Licensing Order has been made under clause (d) read with clause (j) of sub-sec. (2) of sec. 3 Clause (d) provides for regulation by the storage transport licences permits or otherwise distribution acquisitions use or consumption of an essential commodity and clause (j) confers power to provide for incidental and supplementary matters.
(2) of sec. 3 Clause (d) provides for regulation by the storage transport licences permits or otherwise distribution acquisitions use or consumption of an essential commodity and clause (j) confers power to provide for incidental and supplementary matters. The second Licensing Order has indeed received the prior concurrence of the Central Government. ( 65 ) THE question which has been raised before us whether amended directions could have been issued without obtaining the prior concurrence of the Central Government. There is no doubt about the fact that merely because the amended directions appear to have been issued under clause 13 it cannot be said that they are in substance really issued under that Order or that therefore they should be deemed to have received the prior concurrence of the Central Government. What has been provided by the amended directions could have been provided in the second Licensing Order itself If it was so done then prior concurrence of the Central Government in respect of amended directions would have been required. Therefore merely because they have been physically separated from the second Licensing Order and not made a part thereof it cannot be said that they did not require the prior concurrence of the Central Government. In our opinion therefore in so far as no concurrence of the Central Government has been obtained in respect of the amended directions. they go beyond the power conferred by the Central Government under the said delegation Order upon the State Government. They must therefore be held to be invalid in law on that account. ( 66 ) THE next contention which Mr. Patel has raised is that the amended directions have been issued in colourable exercise of power. He has not been able to advance any independent argument in support of this contention. The arguments which he has advanced on the other contentions and which we have dealt with have been marshalled to show that they have been issued in colourable exercise of power. In our opinion this contention independently does not survive. It is in fact a part of the second third and fourth contentions which Mr. Patel has raised and which we have dealt with. ( 67 ) MR. Patel has next contended that the delegation Order made by the Central Government on 20th June 1972 is ultra vires Art. 14 and is a piece of excessive delegation.
It is in fact a part of the second third and fourth contentions which Mr. Patel has raised and which we have dealt with. ( 67 ) MR. Patel has next contended that the delegation Order made by the Central Government on 20th June 1972 is ultra vires Art. 14 and is a piece of excessive delegation. The petitioners have not joined Union of India as a party to this petition. In absence of the Union of India before us we cannot effectively decide this contention. It was necessary for the petitioners to join the Union of India and give an opportunity to the Central Government to be heard in support of the said Order. Since the Union of India is not before us we did not permit Mr. Patel to raise this contention. In fact Mr. Patel has not pressed this contention. ( 68 ) THE next contention which Mr. Patel has raised is that refusal to issue acknowledgments to the petitioners by the Collector was invalid and bad in law. In order to export groundnut oil out of State the petitioners made three applications to the Collector for issuing acknowledgements. The first application was made on 17th of July 1980. No reply was given to it by the Collector. We may say that it is the duty of the Collector either to issue an acknowledgment or to refuse to issue it. Readiness to issue an acknowledgment or unwillingness to issue an acknowledgment pre-supposes some reply from the Collector. Inasmuch as he did not reply to the petitioners he was in error. In the affidavitin-reply it has been stated that that application was not in the prescribed form and that therefore it was rejected. We are shortly examining the argument raised on behalf of the State Government in that behalf. But at this stage we must observe if the application was not in the pescribed form and therefore liable to be rejected it was necessary for the Collector to reply to the petitioners in that behalf. The petitioners made the second application on 28th July 1980. The Collector rejected their application and refused to issue an acknowledgment on the ground that the information supplied was incomplete. The petitioners made a third application on 11th August 1980. That application was also rejected by the Collector on the ground that it was vague.
The petitioners made the second application on 28th July 1980. The Collector rejected their application and refused to issue an acknowledgment on the ground that the information supplied was incomplete. The petitioners made a third application on 11th August 1980. That application was also rejected by the Collector on the ground that it was vague. It is clear therefore that the applications made by the petitioners to issue acknowledgments enabling them to transport edible oil outside the State were rejected either on the ground that it was not in the prescribed form or on the ground that the information furnished the application was incomplete or on the ground that it was vague. ( 69 ) SO far as the objection of the Collector that the application was not made in the prescribed form is concerned it is without any substance. Annexure G shows that the application was made in the form prescribed under the Regulation Order and not in the Form prescribed under the second Licensing Order. We have compared both these forms. There is no material difference between the two. However care was taken on behalf of the petitioners to correct words which were not applicable to an application under the impugned directions with the object of bringing it in conformity with the form prescribed under the impugned directions. The only difference in the two forms which appealed to the Collector for rejecting the application was as follows:- Col. 1 in the Form issued under the Regulation Order stated thus:- Name of the dealer with full address. Col. 1 in the form prescribed under the impugned directions reads thus:- Name of the licence holder with full particulars and licence number. There is hardly any difference between these two colums. However the petitioners took care and scored off the word dealer and substituted for it the expression licence bolder. Secondly they added the expression the licence number in order to bring it in conformity with the one prescribed under the impugned directions. It is difficult to say that the petitioners had not applied in the prescribed form. They had given all the information which they were required to give and yet on such a highly trivial and flimsy ground the applications were rejected without in one case any reply to the petitioners.
It is difficult to say that the petitioners had not applied in the prescribed form. They had given all the information which they were required to give and yet on such a highly trivial and flimsy ground the applications were rejected without in one case any reply to the petitioners. The learned Government Pleader has also conceded in course of his arguments that the petitioners had tried to comply with the requirements of the impugned directions and that such a trivial objection could not have been taken for rejecting the applications. ( 70 ) THE second third grounds which weighed with the Collector for rejecting the applications made by the petitioners were that the petitioners supplied incomplete and vague information. What was the incomplete or vague character of the information which the Collector thought was falal to the petitioners applications ? The petitioners had made applications for issuing acknowledgments in respect of groundnut oil which they were transporting loose in tankers. Since they wanted to transport out of State loose groundnut oil in motor tankers they stated the quantity in slightly approximate figures. Groundnut oil is liquid in character and it is difficult to think that its exact quantity can be stated. Even after weighing the groundnut oil its quantity may be slightly reduced on account of some oil which may he spilled in course of handling and in course of loading. It has not been shown in the affidavit-in-reply filed on behalf of the State Government that by stating the quantity of the groundnut oil in approximate terms the petitioners had been trying to dupe the Government or to furnish the false information to it. All the three grounds which weighed with the Collector therefore cannot be sustained in law. It was an error on the part of the Collector not to have issued acknowledgements for transporting groundnut oil outside the State. The three applications made by the petitioners ought to have been granted. Refusal express or otherwise on the part of the Collector to issue acknowledgements cannot therefore he supported in law. ( 71 ) NEXT contention which has been raised by Mr. Patel is that clause 4 of the second Licensing Order is not applicable to a Cooperative society which owns an oil mills but does not own the oil seeds or the oil.
( 71 ) NEXT contention which has been raised by Mr. Patel is that clause 4 of the second Licensing Order is not applicable to a Cooperative society which owns an oil mills but does not own the oil seeds or the oil. He has also contended that if it is applicable to a cooperative society it is ultra vires the power of the State Government delegated by the Central Government to it under the Essential Commodities Act 1955 Clause 4 of the second Licensing Order Inter alia provides as follows on or after 6th December 1977 no dealer shall either by himself or by any person on his behalf Store or have in his possession at any time any pulses edible oilseeds or edible oils in excess of the quantity specified below:- ( 72 ) THERE are five provisos to clause 4. Third proviso has been challenged before us. It reads as follows:- provided also that no producer of edible oils other than mustard oil shall store or have in his possession at any time edible oilseeds in excess of one-eighth of the oilseeds used by him in the year ending on the 31st day of October 1977 and he shall not hold the finished stock of oils in a quantity exceeding one-twelfth of his production during the year ending 31st day of October 1977 ( 73 ) THE question which has been raised before us is whether petitioner No. 1 which is a federal cooperative society of farmers can be said to be a dealer within the meaning of that expression given in clause 2 (g) of the second Licensing Order. Dealer has been defined in the second Licensing Order in the following terms:- dealer means a person engaged in the business of purchase sale or storage for sale of any pulses edible oil seeds or edible oils whether or not in conjunction with any other business and includes his representative or agent. ( 74 ) THERE is no doubt about the fact that the petitioner No. 1 which is a federal cooperative society of groundnut growers is a dealer within the meaning of this definition. It may not be purchasing groundnut seeds. However it is selling groundnut oil. Mr. Patel has argued that it has been selling on behalf of the farmers.
( 74 ) THERE is no doubt about the fact that the petitioner No. 1 which is a federal cooperative society of groundnut growers is a dealer within the meaning of this definition. It may not be purchasing groundnut seeds. However it is selling groundnut oil. Mr. Patel has argued that it has been selling on behalf of the farmers. In our opinion it does not make any difference because dealer includes a representative or an agent of the owner. Therefore even if petitioner No. 1 is selling edible oil on behalf of the groundnut growers it falls within the definition of the expression dealer given in clause 2 (g ). Secondly indisputably it has been storing groundnut oil for sale indeed as argued by Mr. pate] on behalf of the groundnut growers. The definition of the expression dealer is so wide that a person who stores groundnut oil for sale on behalf of another also becomes a dealer. Therefore under second Licensing Order petitioner No. 1 is a dealer. ( 75 ) NOW clause 3 of the second Licensing Order provides for two types of licences. Sub-clause (1) of clause 3 requires a dealer in edible oils to take out a licence. Sub-clause (2) of Clause 3 of the second Licensing Order requires a producer also to hold a licence. Is appears to us from the scheme of sub-clauses (1) and (2) of clause 3 that a dealers licence is different from a producers licence. Producer has been defined by clause 2 (n) of the second Licensing order in the following terms:- producer means a person carrying on business of milling any of the pulses or expelling extracting or manufacturing any edible oil. ( 76 ) PETITIONER No. 1 owns an oil mill and expels or extracts oil out of groundnuts. It also therefore falls within the category of a producer. In our opinion the second Licensing Order is applicable to petitioner No. 1 and requires it to take out both a dealers licence as well as a producers licence. ( 77 ) MR. Patel has however argued that petitioner No. 1 has already been holding a dealers licence which was originally issued to it under the first Licensing Order of 1977. The first Licensing Order did not provide for two sets of licences-one for a producer and another for a dealer.
( 77 ) MR. Patel has however argued that petitioner No. 1 has already been holding a dealers licence which was originally issued to it under the first Licensing Order of 1977. The first Licensing Order did not provide for two sets of licences-one for a producer and another for a dealer. It only provided for a licence which a dealer was required to take Definition of dealer was in the following terms in that order:- dealer means a person engaged in the business of purchase sale or storage for sale of any pulses edible oil seeds or edible oils. . . . . ( 78 ) A licence issued to a dealer under the first Licensing Order cannot in our opinion serve the purpose of a dealers licence as well as the or producers licence under the second licensing order as contended by Mr. V. B. Patel on behalf of the petitioners. It was necessary therefore on the part of petitioner No. 1 to take out a separate producers licence after the second Licensing Order came into force. Mr. Patel has tried to show us a good deal of correspondence with the object of pointing out to us that the licence issued to petitioner No. 1 under the first Licensing order was treated as the producers licence by the concerned authorities. The contention raised by Mr. Patel in that behalf is not very sound. Assuming however that it was so it did not legally exonerate petitioner No. 1 from talking out two licences under the second Licensing Order. In fact the dealers licence which was issued to petitioner No. 1 under the first Licensing Order of 1977 was renewed under the second Licensing Order on 8th of January 1980 and would it remain in force till 31st December 1980 (Annexure-A ). ( 79 ) IT has next been argued by Mr. Patel that clause 4 of the second Licensing Order is ultra vires the power of the State Government to make it. It inter alia provides for limiting the stock of edible oils which a wholesaler may hold for the purpose of business. Petitioner No. 1 is carrying on his business at Kasturba Dham near the city of Rajkot. It is undisputed that edible oil which can be held in stock at a time is 350 quintals in terms of the table which forms a part of clause 4.
Petitioner No. 1 is carrying on his business at Kasturba Dham near the city of Rajkot. It is undisputed that edible oil which can be held in stock at a time is 350 quintals in terms of the table which forms a part of clause 4. The argument which Mr. Patel has advanced is that the power to regulate which has been delegated by the Central Government to the State Government does not include the power to fix the ceiling of the stock which a dealer or a producer may hold at any particular time. We are unable to uphold this argument. Regulation indeed includes fixing the ceiling. Fixation at the ceiling of stock which a dealer or a producer may hold is an enti-hoarding provision. It is one of the methods which can be employed for the purpose of making edible oil freely available to the community. We therefore do not think that it is ultra vires the power of the State Government. ( 80 ) WE now Turn to the third proviso which has been challenged before us. The only vice which has been pointed out to us relates to the static date which has been specified therein 31st day of October 1977. A producer of edible oils by virtue of that proviso cannot have in his possession one-eight of the oilseeds used by him during the year ending on 31st of October 1977. It has been argued that reference to the year 1977 is likely to arrest the development of business in edible oils. It has also been pointed Out that no one could have or can start business in oil after 31st December 1977 because he would not be able to show how much oilseeds he had in his possession during the year ending on 31st october 1977 as he had no business them it may be noted in this context that on 4th February 1978 the Central Government made Pulses Edible Oils and Edible oils (Storage Control) Order 1977 They amended it in 1978. Pursuant to the amendment made by the Central Government.
Pursuant to the amendment made by the Central Government. the State Government has also amended the second Licensing Order and has provided as follows:- if a producer of edible oils was carrying on business during three years ending on 31st October 1977 he would be able to bold in his possession one-twelfth of his maximum production in any of the aforesaid three years. . ( 81 ) THE second provision which has been made is in respect of a new producer who wants to enter the business. The provision which has been made in regard to him is that he shall be able to hold in his possession edible oil for a period of one year 1/12th of which represents his annual installed capacity. The vice on the strength of which Mr. Patel attacked the third proviso in clause 4 is removed by the subsequent amendment which the State Government has made to the second Licensing Order. ( 82 ) SO far as the ceiling is concerned it in our opinion is not open to any objection because it means that a producer can hold at any particular time the quantity prescribed in the amended second Licensing Order. The only effect of this provision is as follows:- A producer may go on milling any quantity of oilseeds and producing any quantity of edible oils. But he must go oil selling edible oils so that he does not hold in stock at any particular time the quantity more than the one prescribed in the second Licensing Order. This is clearly an anti-hoarding provision which is in the interest of the public. It falls squarely within the power of the legislation which has been delegated by the Central Government to the State Government under sec. 3 (2) (j) of the Essential Commodities Act 1955 read with sec. 5 thereof. We therefore do not find any substance in this contention which Mr. Patel has raised before us. ( 83 ) THE next contention which Mr. Patel has raised before us is that clause 4 of the second Licensing Order is ultra vires Art. 19 (1) (g) Art. 14 and Art. 301. In regard to the challenge which Mr. Patel has raised under Art. 19 (1) (g) he has argued that the ceiling of stock which has been fixed is too law. Clause 4 fixes the ceiling of 350 quintals for a wholesaler.
In regard to the challenge which Mr. Patel has raised under Art. 19 (1) (g) he has argued that the ceiling of stock which has been fixed is too law. Clause 4 fixes the ceiling of 350 quintals for a wholesaler. 350 quintals is equal to 35000 Kgms. We do not think that in case of a sensitive commodity which groundnut oil is this is too low a limit. No one can be permitted to hold a larger quantity which may lead to the community being deprived of it and to his making undue profits out of the dire need of the society. So far as the producer is concerned it has been fixed under the amendment second Licensing Order at 1 of the maximum produced during any of the three years on 31st of October 1977 or 1/12th of his installed capacity. So far as petitioner No. 1 is concerned the limit which has been fixed by the authorities is 3728 quintals which is equal to 3 72 800 Kgms. In our opinion this is a very fair limit taking into account the need of the community for edible oils and their sensitive character in this State. We do not have before us the case of a person who has started production of edible oil after 31st October 1977. We are therefore not inclined to consider the validity of the provision made in case of a producer under the second Licensing Order. ( 84 ) SO far as the challenge under Art. 301 is concerned same considerations weigh with us in rejection that challenge. Anything that is done in order to serve the interests of the community is in our opinion reasonable and valid. No individual can make an exaggerated claim against the needs of the community. Mr. Patel has in that behalf tried to pinpoint to us certain facts. Trade in edible oils is a trade in ordinary commodity. Edible oils are freely available. Thirdly there is no price control of edible oils in particular groundnut oil. There is no procurement and there is no levy of edible oils. the has lastly submitted that consumption of edible oils is not injurious to public health and welfare. Assuming that all these factors which Mr.
Edible oils are freely available. Thirdly there is no price control of edible oils in particular groundnut oil. There is no procurement and there is no levy of edible oils. the has lastly submitted that consumption of edible oils is not injurious to public health and welfare. Assuming that all these factors which Mr. Patel has brought to our notice are wellfounded even then since groundnut oil is a sensitive commodity inasmuch as its behavior in the matter of availability and price is unpredictable it is open to the State Government to regulate its supplies by measures which fall short of price control levy or procurement. We therefore do not find any substance in the challenge raised on behalf of the petitioners to clause 4 of the second Licensing Order under Art. 19 and Art. 301 of the Constitution. ( 85 ) ART. 14 has been brought into play because though the groundnut oil which petitioner No. 1 held on behalf of others was seized groundnut oil stored by petitioner No. 1 on behalf of the marketing federation was not seized. This challenge is also without any substance because the marketing federation is a State level agency and under clause 19 (1) (ii) of the second Licensing Order a State level cooperative society engaged in the production procurement sales purchases or distribution of pulses or edible oil seeds or edible oils has been exempted from the application of the said Order. There is no doubt or dispute about the fact that the marketing federation to which petitioners refer falls squarely within the exempted categories specified in clause 19 (1) (ii) of the second Licensing Order. ( 86 ) THE last contention which has been raised by Mr. Patel is that seizure of groundnut oil belonging to the petitioners is unauthorized arbitrary mala fide and discriminatory. He has argued in that behalf that the conditions under which groundnut oil belonging to the petitioners could be seized under clause 18 of the second Licensing Order did not exist. The second argument which he has raised is that the grounds on which groundnut oil was seized were not stated in the order Annexure-E Lastly he has argued that there was no non-compliance with the second Licensing Order. It is not necessary for us to deal with the first and the second arguments raised by Mr. Patel in that behalf.
The second argument which he has raised is that the grounds on which groundnut oil was seized were not stated in the order Annexure-E Lastly he has argued that there was no non-compliance with the second Licensing Order. It is not necessary for us to deal with the first and the second arguments raised by Mr. Patel in that behalf. So far as his third argument is concerned it cannot be upheld because Petitioner No. 1 was required to take out producers licence which it did not take out. However since we have held that power to seize on suspicion is ultra vires sec. 3 of the Essential Commodities Act 1955 the impugned seizure must fail. ( 87 ) IN the result the petitioner is allowed. (1) It is declared that sub-clause (iv) (d) and sub-clause (vi) of Clause 18 (1) of the second Licensing Order in so far as they relate to the seizure of goods on suspicion are ultra vires sec. 3 of the Essential Commodities Act 1955 and are therefore void. (2) It is also declared that the amended directions issued by the Government of Gujarat on 7th August 1980 under clause 13 of the second Licensing Order are ultra vires Art. 19 (1) (g) and Art. 301 and they are also ultra vires the power to it State Government delegated by the central Government to it under its delegation Order made in that behalf and that therefore. they are void. (3) It is further declared that the refusal of the Collector of issue acknowledgments to petitioner No. 1 in respect of its applications dated 17th July 1980 20 July 1980 and 11th August 1980 was unlawful and therefore void. (4) Since we have struck down sub clause (iv) (a) and sub-clause (vi) of clause 18 of the second Licensing Order the seizure of the goods belonging to petitioner No. 1 was unlawful and unauthorized. ( 88 ) A writ of mandarins shall issue directing the respondents to desist and forbear from implementing and enforcing sub-clauses (iv) (a) and (vi) of cause 18 and the amended directions issued under clause 13 of the second Licensing Order. The writ shall also direct the respondents to return forthwith to petitioner No. 1 or to the petitioners as the case may he the stock of groundnut oil seized from them. ( 89 ) RULE is made absolute With costs.
The writ shall also direct the respondents to return forthwith to petitioner No. 1 or to the petitioners as the case may he the stock of groundnut oil seized from them. ( 89 ) RULE is made absolute With costs. ( 90 ) MR. M. S. Shah who appears on behalf of the respondents makes an oral application to grant certificate of fitness under Art. 133 (1) of the Constitution to enable the respondents to appeal against this decision to the Supreme Court. In our opinion this case raises important questions of law. They have been set out and dealt with in this judgment. It is not necessary for Its to repeat them here. We therefore grant certificate of fitness to the respondents under Art. 133 (1) to appeal against this decision to the Supreme Court. ( 91 ) MR. M. S. Shah who appears on behalf of the respondents makes a further oral request to stay the implementation of this order for a period of two weeks. The facts and circumstances of this case do not warrant the issuance of stay order as it is likely to disturb the business of the petitioners seriously. The oral request is therefore rejected. Petition allowed:- Leave to appeal granted. .