JUDGMENT K.N. Misra, J. - Petitioners are engaged in business of retail sale of High Speed Diesel Oil (hereinafter referred to as H.S.D. Oil) and Light Diesel Oil (hereinafter referred to as L. D. Oil) in the district of Etah and hold licence for the said purpose under the United Provinces Sales of Motor Spirit and Diesel Oil Taxation Act, 1939. They claim to be carrying on this business for the last so many years and approximate length of business of each petitioner is mentioned in para 24 of the writ petition and they have averred to be well equipped for handling and trading in H.S.D. Oil and L.D. Oil and that they have earned goodwill in the said business. 2. The petitioners are said to have applied for renewal of their licences for the year 1982-83, but their applications were rejected by opposite party No. 3 District Supply Officer, Etah on 31-3-1982. A copy of the said order passed on the renewal application of petitioner No. 1 is annexed as Annexure I to the writ petition. The reason for rejecting the renewal application, as given in the said order, is that H.S.D. Oil is being sold in a regulated manner through the local retail outlets of the companies and the consumers are getting their required supply therefrom, hence there appears to be no necessity for the distribution and sale of it through petty dealers and a decision to this effect has been taken by the State Government in the matter, and as such, the application for renewal cannot be granted. The petitioners have challenged this order of the licensing Authority and prayed for its quashing. They also sought quashing of the impugned control Order dated 21-2-1981, contained in Annexure-IV to the writ petition, and further prayed for a writ of mandamus to be issued commanding opposite party No. 3 to issue licences to the petitioners for the year 1982-83 and to further direct him not to interfere in their business as dealers in H.S.D. Oil and L.D. Oil. 3. Learned counsel for the petitioners Sri R. P. Goyal contended that the impugned Control Order cannot be promulgated by the State Government as it was beyond, the legislative competence of the State Government to pass such an order in respect of petroleum and petroleum products which fall in entry 53 of List-I of VII Sch.
3. Learned counsel for the petitioners Sri R. P. Goyal contended that the impugned Control Order cannot be promulgated by the State Government as it was beyond, the legislative competence of the State Government to pass such an order in respect of petroleum and petroleum products which fall in entry 53 of List-I of VII Sch. Referring to Article 162 of the Constitution learned counsel contended that the executive power of the State Government shall extend only to matters with respect of which legislature of State has powers to make laws. We are unable to agree with this contention. 4. H.S.D. Oil and L.D. Oil have been declared to be essential commodities under the provisions of Essential Commodities Act, 1955, and the Central Government, in exercise of powers conferred by S. 5 of the Essential Commodities Act, 1955 (hereinafter referred to as the Act), delegated powers conferred on it by sub-s. (1) of S. 3 of the said Act to make orders in relation to all essential commodities providing for the matters specified in els. (c) to (g) and (j) of sub-s. (2) of S. 3 of the said Act vide S. O. 681(E) and 682(E), both dated Nov. 30, 1974, issued by Ministry of Industries and Civil Supplies, Government of India. The State Government, having found it necessary and expedient to do so for maintaining and increasing supplies of H.S.D. Oil and L.D. Oil and for securing its equitable distribution and availability thereof at fair price, promulgated an order known as: The Uttar Pradesh High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1980. This Order was repealed and replaced by another Order made on Feb. 21, 1981 of the name: 'The Uttar Pradesh High Speed Diesel Oil and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981. Since the State Government has promulgated this impugned Control Order in exercise of the delegated powers in accordance with the provisions of the Essential Commodities Act as such it cannot be said to be without any lawful authority nor it can be said to be ultra vires the delegation. 5.
Since the State Government has promulgated this impugned Control Order in exercise of the delegated powers in accordance with the provisions of the Essential Commodities Act as such it cannot be said to be without any lawful authority nor it can be said to be ultra vires the delegation. 5. The learned counsel for the petitioners next contended that Diesel Oil Supply position is satisfactory and so the Indian Oil Corporation, through Circular Letter dated May, 12, 1981, had requested all its retail outlet dealers to push up sales irrespective of quota entitlement and that the Ministry of Petroleum and Chemicals has also issued instructions to all the Chief Secretaries of the State that they should remove all restrictions on H.S.D. Oil Sales. Learned counsel urged that since H.S.D. Oil is available in abundance, the Central Government had directed all the States to remove all restrictions and as such, in this background, the impugned Control Order dated Feb. 21, 1981 should have been repealed forthwith and its continuance operates as unreasonable restriction in carrying on trade and business.in H.S.D. Oil by the petitioners who are otherwise entitled to carry on the said business and so it is violative of fundamental right guaranteed under Article 19(1 )(g) of the Constitution. We do not find any merit in this contention. 6. The unfettered right guaranteed under Article 19(l)(g) of the Constitution to practice any profession or to carry on any occupation, trade or business is subject to cl. (6) which provides that the State can make laws imposing, in the interest of general public, reasonable restrictions on the exercise of rights conferred by the said clause. The Supreme Court, in the case of P.P. Enterprises v. Union of India, (1982 All L R 236) : ( AIR 1982 SC 1016 at p. 1019) observed that: "A person has a right to carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of the State to make a law imposing reasonable restrictions under cl. (6). The expression 'reasonable restriction' signifies that the limitation imposed on a person in enjoyment of that right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public." 7. It cannot be denied that H.S.D. Oil and L.D. Oil are highly inflammable commodities.
(6). The expression 'reasonable restriction' signifies that the limitation imposed on a person in enjoyment of that right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public." 7. It cannot be denied that H.S.D. Oil and L.D. Oil are highly inflammable commodities. These fall under the category of essential commodities referred to in cl. (viii) of cl. (a) of S. 2 of the said act. Undoubtedly this essential controlled commodity sometimes runs in short supplies for reasons beyond control of oil companies and the Government. Its non-availability in required quantity at sale points adversely affects and paralyses the entire transportation machinery resulting in creating a situation of scarcity of the essential commodities of daily use in the market and the common man is thus placed in a state of grave helplessness. Not only this, in rural areas agriculture is also adversely affected on account of non-availability of diesel oil for running tractors, diesel-pump engines and other machinery. The need of society and agro-economic considerations are paramount and most vital which no Government can ignore and it has to take such measures and pass such orders which may be found necessary and expedient to regulate supply and equitable distribution of this essential commodity at fair price. There can be no denial of the fact that such a control and regulation can be brought about by licences and permits or otherwise for storage, transportation, distribution, disposal, acquisition and use or consumption of an essential commodity and by fixing prices at which any essential commodity may be brought or sold. Such a legislative power rests in the Central Government under S. 3(1) of the E. C. Act but the State Government, in exercise of power delegated to it under S. 5 of the. E. C. Act could promulgate the impugned Control Order and as such it cannot be said to have been made without any lawful authority or to be ultra vires of the delegation, nor it can be said to suffer from the vice of excessive delegation in any manner whatsoever. 8.
E. C. Act could promulgate the impugned Control Order and as such it cannot be said to have been made without any lawful authority or to be ultra vires of the delegation, nor it can be said to suffer from the vice of excessive delegation in any manner whatsoever. 8. We also do not find any merit in the submission to the effect that since at the present moment there is no scarcity and H.S.D. Oil is available in abundance as such the said Control Order deserves to be repealed as its continuance would operate as an unreasonable restriction on carrying on trade and business in the said commodity. The impugned Control order 1981. was not promulgated merely to meet any contingency arising out of an acute shortage in supplies of H.S.D. Oil and L.D. Oil at the time of its promulgation, and no such inference can be drawn from the impugned Control Order, nor it can be said to be applicable only in period of scarcity and short supply of H.S.D. Oil and not at the time when its supply position is satisfactory. The impugned Control Order, in our opinion, was promulgated in the public interest for maintenance of supplies and distribution of H.S.D. Oil and L.D. Oil at fair price and it cannot be confined to be operative only in period of scarcity of said product hot it can be said to impose unreasonable restriction on trade and business carried therein on the aforesaid ground urged by the learned counsel. 9. Learned counsel for the petitioners next referred to cl. 3 of the Control Order and pointed out that no guideline has been provided therein in accordance with which the Licensing Authority may grant or refuse to grant the licence and the matter has been left entirely to the subjective satisfaction of the Licensing Authority, who is further vested with the power to pass order rejecting application without affording any opportunity of hearing to the applicant. The Licensing Authority would, therefore, be able to act arbitrarily and whimsically without any hindrance in the matter. He thus urged that cl. 3 of the impugned Control Order imposes an unreasonable restriction upon the petitioner's right to carry on trade and business in the commodity in question and so it deserves to be struck down on the said ground.
The Licensing Authority would, therefore, be able to act arbitrarily and whimsically without any hindrance in the matter. He thus urged that cl. 3 of the impugned Control Order imposes an unreasonable restriction upon the petitioner's right to carry on trade and business in the commodity in question and so it deserves to be struck down on the said ground. We have given our anxious consideration to the argument raised but find no substance in it. Similar argument was raised before the Supreme Court in the case of Kishan Chand Arora v. Commr. of Police, Calcutta, AIR 1961 SC 705 , wherein at page 709. para 6, it was observed : ''There is no doubt that procedural provisions of a statute also enter into the verdict as to its reasonableness; but at the same time there can be no abstract or general principles, which would govern the matter and each statute has to be examined in its own setting. It is undoubtedly correct that no provision has been made for giving a hearing to a person applying for a licence and the Commissioner has not to give reasons when refusing the licence; but it cannot be laid down as a general proposition that where in the case of licensing statute no provision is made for hearing and there is no provision for giving reasons for refusal the statute must be struck down as necessarily an unreasonable restriction on a fundamental right." 10. Reference was, however, made on behalf of the petitioners to an earlier decision in Dwarka Prasad Laxmi Narain v. State of U. P., AIR 1954 SC 224 , wherein, an objection was raised on behalf of the petitioners against cl. 4(3) of the U. P. Coal Control Order, 1953, which relates to granting or refusing to grant licences. It was contended that the Licensing Authority has been given absolute power to grant or refuse to grant, renew or refuse to renew a licence, suspend or cancel a licence under this Order and the only thing he has to do is to record reasons for the action he takes. Not only this the power can be exercised by any person whom the State Coal Controller may choose and the choice can be made in favour of any and every person. The Supreme Court, in these circumstances, observed that such provision cannot be held to be reasonable.
Not only this the power can be exercised by any person whom the State Coal Controller may choose and the choice can be made in favour of any and every person. The Supreme Court, in these circumstances, observed that such provision cannot be held to be reasonable. Learned counsel for the State had contended that sufficient safeguard has been provided in the said Order against any abuse of power by reason of the fact that the Licensing Authority has got to record reasons for what he does. Considering this argument Hon'ble B. K. Mukhetjea, J. observed that (para 8) : - "This safeguard, in our opinion, is hardly effective: for there is no higher authority prescribed in the Order who could examine the propriety of these reasons and revise or review the decision of the subordinate officer. The reasons, therefore, which are required to be recorded are only for the personal or subjective satisfaction of the Licensing authority and not for furnishing any remedy to the aggrieved person." In the present case, however, an appeal has been provided under cl. 9 of the impugned Control Order to the Commissioner of the Division against the order passed by the Licensing Authority refusing the application for grant or renewal of licence. The Licensing Authority under cl. 3 is required to record reasons in writing for rejecting an application for grant or renewal of licence. It cannot, therefore, be said that the reasons which the licensing Authority is required to record are only for his personal or subjective satisfaction and not for furnishing any remedy to the aggrieved person against the order so passed. 11. Like all courts of appeal exercising general jurisdiction in Civil Cases, the appellate court under Cl. 9 of the impugned Control Order has been constituted in the words of the widest amplitude and the legislature has not limited its jurisdiction by providing that such an exercise will depend on the existence of any particular state of facts. That being so the power of the appellate authority in the matter would be co-extensive with the powers of the primary licensing authority to be exercised on being invoked by the person aggrieved by the order of Licencing Authority. The appellate authority in all fairness, as is also expected of it, would take decision in the matter after hearing the appellant before passing any order in appeal preferred by him.
The appellate authority in all fairness, as is also expected of it, would take decision in the matter after hearing the appellant before passing any order in appeal preferred by him. The orders passed in the matter by the appellate authority, in whose order the order of the Licensing Authority would undoubtedly merge, would be amenable to writ jurisdiction of this Court. It is well-settled that the orders passed by a statutory authority, either in a purely administrative capacity or in a quasi-judicial capacity, if made in excess of power vested in it or in abuse of such power, are open to challenge and scrutiny by this Court in exercise of extraordinary powers under Article 226 of the Constitution. In this view of the matter it cannot be said that the applicant would be remediless in the matter against the orders passed by the Licensing Authority rejecting his application either for grant or renewal of licence. 12. Thus, in our opinion, cl. 3 of the impugned Control Order cannot be struck down as imposing an unreasonable restriction upon the freedom of trade and business merely on the ground that no opportunity of hearing is provided to the applicant by the Licensing Authority while rejecting application for grant of licence. 13. So far as the question regarding absence of guideline in the matter is concerned, it may be stated that the policy underlying the Order is to regulate supplies and ensure an even distribution of the commodity and to make it available at a controlled price to all. The grant or refusal of a licence is thus to be governed by this policy and the discretion given to the licensing authority is to be exercised in such a way so as to effectuate the policy and to serve best the public interest at large.
The grant or refusal of a licence is thus to be governed by this policy and the discretion given to the licensing authority is to be exercised in such a way so as to effectuate the policy and to serve best the public interest at large. It is true that no specific guideline is provided in the matter, excepting that the application for grant or renewal of licence if not made within the prescribed time, the delay in filing such application can be condoned by the licensing authority on sufficient cause being shown to his satisfaction but in the absence of any other guideline it is expected of the licensing authority to act with great care and responsibility according to the principles of equity and fair play and to faithfully record reasons in writing where in his opinion licence cannot be granted as his order is open to challenge in appeal. If there is any abuse of power, the appellate authority constituted under cl. 9 has ample power to undo the mischief. The contention, therefore, that cl. 3, and for that the Control Order itself as a whole, is invalid and ultra vires to delegation as no guideline is provided therein in accordance with which licensing authority is to act in the matter while dealing with 'the application for licence, cannot be upheld. 14. Learned counsel for the petitioners Sri Goyal next contended that the petitioners' applications for grant and renewal of licences have been refused on the basis of an order dated 27th Jan. 1982 passed by the State Government according to which no licence is now to be issued to petty dealers. He further urged that the Government cannot pass such prohibitory orders which are invalid and ultra vires having no nexus with the object to he achieved as provided under S. 3 of the E. C. Act. 15. In reply the learned Standing Counsel, Sri Mathur placed before us Orders dated 25th Nov. 1981 and 27th Jan. 1982 issued by the Deputy Secretary, Uttar Pradesh Government, and Commissioner/ Secretary, Uttar Pradesh Government respectively. In the first aforesaid order, instructions were issued to all the District Magistrates and District Supply Officers in the matter regarding appointment of H.S.D. Oil retail dealers (petty diesel dealers). It was indicated in the said Order that in the earlier Orders dated 19th Oct. 1975 and 13th Oct.
In the first aforesaid order, instructions were issued to all the District Magistrates and District Supply Officers in the matter regarding appointment of H.S.D. Oil retail dealers (petty diesel dealers). It was indicated in the said Order that in the earlier Orders dated 19th Oct. 1975 and 13th Oct. 1979, issued by the State Government on the subject, it was provided that with a view to provide diesel oil to the consumers in rural areas, it was directed to establish diesel dumps at Block-Headquarters, but these diesel-dumps were not to be located within 10 Kilometers of the established diesel retail outlets of the companies and the District Magistrates were required to appoint petty dealers for operating such diesel-dumps as aforesaid and they were required to obtain their supplies from diesel retail outlets in barrels or in drums. Learned counsel pointed out that what was the intention of the State Government in issuing such order has been indicated in the Order dated 25th Nov. 1981, by saying that no petty dealer was to be granted a licence within 10 Kilometers of the retail outlets of the company and this was done with the object of providing facility to the agriculturists in getting required diesel oil at a place nearby their residences from petty dealers and not to cover long distances to approach retail outlets situated at long distances. In the said Order, it was, however, observed that licences appear to have been issued to petty dealers even for places situated within 10 Kilometers near the companies' retail outlets and it is not known from where these petty dealers are getting their supplies and since no checking is being done to ascertain quality of diesel oil which they are selling and as such these retail sale points can be taken to be a source of sale of adulterated diesel oil. It was also mentioned in the said Order that petty dealers are selling diesel either at the price which is charged by the oil companies' diesel retail outlets or even at a price lower than that, hence it is not understandable as to how they are selling diesel at such rates without doing adulteration.
It was also mentioned in the said Order that petty dealers are selling diesel either at the price which is charged by the oil companies' diesel retail outlets or even at a price lower than that, hence it is not understandable as to how they are selling diesel at such rates without doing adulteration. In this back-ground, it was mentioned in the order that the State Government has taken a decision that the licences of petty dealers in urban areas should not be renewed after expiry of the period of their licences and their applications for licence be not granted, and in the rural areas the licences in very limited number be granted to petty dealers with a condition that their sale points be located beyond 10 Kilometers of the retail outlets of the companies and it be assured that they will be receiving their supplies in barrels and drums from such retail outlets of the companies to which they will be attached to receive under orders of the District Magistrates and that the quality of the product which they sell be also checked from time to time by taking samples. 15-A. In the subsequent order dated 27th Jan. 1982 the State Government is said to have taken a decision that no petty dealer be appointed at all for doing this business and that licences be issued in future for storage of petroleum and petroleum products only to those persons who hold storage licence in Form T under the Explosive Act and the District Magistrates were further directed to furnish data regarding the number, strength etc. of existing petty dealers in urban area and rural area, which are not relevant for the purposes of this case. 16. In the said Order dated 27th Jan. 1982 it was mentioned that the State Government has taken the decision for not issuing licence to petty dealers because it was brought to the notice of the Government through large number of complaints received that kerosene oil is being mixed in adulterating petroleum products and there appears to be hand of petty diesel dealers in it. 17. Learned counsel for the petitioners challenged the validity of the action taken by the State Government and urged that both the aforesaid Orders, which were passed by the State Government, were illegal and ultra vires and deserve to be quashed.
17. Learned counsel for the petitioners challenged the validity of the action taken by the State Government and urged that both the aforesaid Orders, which were passed by the State Government, were illegal and ultra vires and deserve to be quashed. According to him, these Orders purport to impose an unreasonable restriction on the right of the petitioners to carry on business in H.S.D. Oil. He further urged that the State Government had no authority to pass such an order under the impugned Control Order and such Order cannot be justified under any lawful authority vested in the State Government. Learned counsel further contended that the aforesaid reasons mentioned in the Order dated 27th Jan., 1982 cannot be said to be sufficient grounds for totally banning the trade by petty dealers in H.S.D. Oil. He strenuously urged that it is no doubt an offence to sell a commodity at a price higher than the fixed controlled rate, but it cannot be treated to be unlawful or an offence to sell it at a lower price. He pointed out that since transportation charges are less in bringing diesel oil from the depots of the companies as such the petty dealers, in order to push up their sales, sell diesel oil sometimes at a rate lower than that at which it is sold at retail outlets of the companies. They are able to reduce the price because of less transportation charges than what is paid by the dealers of the retail outlets. He further contended that if any adulteration is being done by the petty dealers, they can be apprehended by making surprise checking and can be prosecuted if found indulging in selling adulterated diesel oil and such a charge cannot be levelled in general against all the petty dealers and they cannot as a class be eliminated altogether in such an unwarranted and arbitrary manner. 18. Learned counsel also challenged and urged that the Order dated 25th Nov.. 1981 cannot be sustained by which it was directed that licence in rural areas can be granted only to those petty dealers who have their sale points situated beyond 10 Kilometers of the companies 'retail outlets. According to him. such condition amounts to an unreasonable restriction not envisaged under S. 3(1) of the E.C. Act hence no such condition can be imposed while granting licences. 19.
According to him. such condition amounts to an unreasonable restriction not envisaged under S. 3(1) of the E.C. Act hence no such condition can be imposed while granting licences. 19. Learned Standing Counsel in reply urged that the power rests in the State Government to make order bringing about a change in the policy and laying down guideline in the matter for granting or totally refusing to grant licences to the petty dealers. He contended that in the circumstances shown above, it was found to be expedient in the interest of general public to pass the aforesaid orders. 20. Learned counsel further contended that diesel oil is not such a commodity which is readily available for free sale and it cannot be made available everywhere being highly inflammable and dangerous. Learned counsel pointed out that it was during scarcity period in the year 1979 that petty dealers were given licences to carry on this business and the State Government, after taking stock of the whole situation and in the circumstances stated above, decided to do away with the system of sale and distribution of this essential commodity through petty dealers and there is no illegality in this action taken by the State Government. He further urged that in respect of a controlled commodity of which the production, supply and distribution is in the hands of statutory corporations subject to such orders which may be issued by the Central Government or the State Government from time to time pertaining to price fixation, supply and distribution, no one can claim an absolute and unfettered right to carry on business in such a commodity. It is not such a trade or business which is free for all and the Government can impose such restrictions which may be found to be in the best interest of the general public. According to him, the orders of the State Government referred to above cannot be struck down as these cannot be said to impose an unreasonable restriction in conducting trade and business or to create monopoly in favour of such dealers who are holding agencies in respect of companies' retail outlets. 21.
According to him, the orders of the State Government referred to above cannot be struck down as these cannot be said to impose an unreasonable restriction in conducting trade and business or to create monopoly in favour of such dealers who are holding agencies in respect of companies' retail outlets. 21. The crucial question, therefore, which crops up for consideration in the writ petition is whether the aforesaid two orders dated 25th Nov., 1981 and 27th Jan., 1982 are legally sustainable or not and whether they have any nexus with the object to be achieved as contemplated in S. 3 (1) of the E.C. Act. 22. Power vested in State Government under S. 3(1) of the E.C. Act is for regulating by licences, permits or otherwise, the storage, transportation, distribution, disposal, acquisition, use or consumption of any essential commodity for the purpose of maintaining or increasing supply of any essential commodity or for securing its equitable distribution and availability at fair price. In other words, the objects to be achieved at are : - (i) For maintaining or increasing supplies of any essential commodity; (ii) for securing its equitable distribution; and (iii) its availability at fair price. For achieving these objects, the Government can pass orders regulating and prohibiting the transportation, supply and distribution of essential commodities and trade and commerce therein. 23. The policy decision of the Government contained in the order dated 25th Nov., 1981 is to the effect that the numerical strength of the licencees petty diesel dealers in rural areas be considerably reduced and that the licences be granted to petty dealers with the condition that their sale points be situated beyond 10 Kilometers from the companies' retail outlets and they will obtain their diesel supply in barrels/drums from retail outlets to which they may be attached by the District Magistrate in that behalf. Such an order cannot be said to have been made without any lawful authority because it falls within the ambit of the authority for regulating, by licences the storage, distribution, disposal and acquisition of the said essential commodity. Such an Order could be made, having nexus with the objet to be achieved as enumerated in S. 3 (1) of the E.C. Act and it cannot be said to be devoid of any reason.
Such an Order could be made, having nexus with the objet to be achieved as enumerated in S. 3 (1) of the E.C. Act and it cannot be said to be devoid of any reason. If petty dealers are granted licences to open their sale points near the companies' retail outlets, no useful purpose will be served in granting licences for carrying on business located at one place and it will not meet the requirement for which the petty dealers were granted licences to establish their sale points at scattered specified places for the facility of the consumers. The object to be achieved in requiring the petty dealers to have their sale points beyond 10 Kilometers of the companies' retail outlets in rural area was to provide facility to the agriculturists in getting diesel oil at short distances from their residences instead of covering long distances in reaching companies' retail outlets. Keeping in view the interest of the consumers in general, such a decision was taken which cannot be said to suffer from the vice of unreasonable restriction in carrying on this trade and business by petty dealers. At which place the essential commodity be stored and its vending sale point be located can very well be regulated through licences under cl. (d) of S. 3(1) of the EC. Act in the public interest. 24. We also do not find any merit in the argument that there is nothing in the Control Order in support of authority for issuing such a regulatory administrative order for regulating and controlling the place of storage and sale of Diesel Oil by diesel dealers and as such the impugned order dated 25th Nov., 1981, deserves to be struck down on the ground that no such administrative order could be passed nor the State Government could take such a policy decision without bringing about an amendment in the Control Order authorising State Government to make such an order. 25. In B.N. Nagarajan v. State of Mysore, AIR 1966 SC 1942 , the Supreme Court observed that (Para 5) : - "The State Government has executive power, in relation to all matters with respect to which the Legislature of the State has power, to make laws." Reference was made to its earlier decision in Ram Jawaya Kapur v. State of Punjab, AIR 1955 SC 549 .
wherein it was held that (at p. 556) : - "It is not necessary that there must be a law already in existence before the executive is enabled to function and that the powers of the executive are limited merely to the carrying out of these laws." 26. The power of executive to act without law on the subject was justified with reference to Article 162 of the Constitution. This question again came up for consideration in a recent case in V.T. Khanzode v. Reserve Bank of India, AIR 1982 SC 917 , wherein after considering said earlier decision it was observed that (at p. 926) : "It is true that reliance was placed in that case on the provisions of Article 162, by which the executive power of a State extends to the matters with respect to which the legislature of the State has power to make laws. But the decision is useful for illustrating that the power to frame rules or regulations does not necessarily imply that no action can be taken administratively in regard to a subject-matter on which a rule or regulation can be framed, until it is so framed." (emphasis supplied). 27. In this view of the matter we are of the opinion that the G. O. dated 25th Nov., 1981 cannot be said to be illegal and ultra vires the delegation nor it can be said to impose an unreasonable restriction on trade and business in this essential controlled commodity. Such Order could be made by the State Government without bringing about an amendment in the Control Order as in regard to it control order could be made under delegated power by the State Government. 28. Under sub-cl. (d) of cl. 18 (1) of the Control Order the State Government and other officers enumerated therein can issue such general or special directions from time to time for the purpose of giving effect to the provisions of the Control Order, which may not be inconsistent with the said Control Order and every dealer would be bound to make compliance of such general or special Order.
Thus if the State Government finds it expedient in the interest of general public for providing facility to consumers to make the diesel oil available at convenient places, makes an order directing the diesel dealers to establish their storage and sale points located beyond 10 Kilometers of the company's outlet, such an order cannot be said to be inconsistent with the provisions of the Control Order nor it will be said to be an unreasonable restriction on the trade and business of diesel dealers. Such a regulatory order being in the best interest of general consumer public would also not be beyond the scope of S. 3(1) of the E. C. Act, which provides for regulating through licences, storage, sale and equitable distribution of any essential commodity. If such an order can be sustained being justified and lawfully binding on the licencee diesel dealers then in the absence of anything to the contrary in the Control Order the State Government could very well issue such an order regulating grant of licences to diesel dealers with such conditions as are envisaged in the G.O. dated 25th Nov., 1981, which does not appear to be inconsistent with the provisions of the Control Order nor it would amount to an abuse of regulatory powers in respect of matters enumerated under S. 3 (1) of the E. C. Act, with regard to which power to promulgate orders were delegated by the Central Government to the State Government under S. 5 of the E. C. Act. 29. Learned counsel for the petitioner, however, placed reliance upon Sarkari Sasta Anaj Vikreta Sangh v. State of M. P., AIR 1981 SC 2030 , wherein the earlier decision in Mannalal Jain v. State of Assam, AIR 1962 SC 386 , was referred. In the said latter case the directions issued by the Government to all licensing authorities with regard to rights of monopoly procurement which were given to the Apex Co-operative Society were challenged. The petitioner's application for license was rejected because of aforesaid Government directions. It was observed by the Supreme Court that (at pp. 2035 & 2036) : "The duty of the licensing authority was to pass orders in accordance with Cl. 5 of the Control Order. 1961.
The petitioner's application for license was rejected because of aforesaid Government directions. It was observed by the Supreme Court that (at pp. 2035 & 2036) : "The duty of the licensing authority was to pass orders in accordance with Cl. 5 of the Control Order. 1961. Instead of doing that, it passed an order in accordance with the instructions given to it on behalf of the State Government, instructions which appear to us to be not in consonance with sub-cl. (c) of Cl. 5, because sub-cl. (c) contemplates a preference to co-operative societies in certain circumstances, but not a monopoly in their favour." 30. Referring to the said decision it was observed by the Supreme Court in Sarkari Sasta Anaj Vikreta Sangh ( AIR 1981 SC 2030 at p. 2036) (supra) that : - "It is apparent that the question before us is altogether different from the question considered in Mannalal Jain's case. In that case the Control order prescribed the matters to be considered in deciding whether a licence should be granted or not. The licence was refused on a ground extraneous to the matters prescribed by the Control Order. It was not the Control Order that was found to be wrong but its administration. That was expressly stated by the Court." 31. It was further observed at page 392 in Mannalal Jain's case ( AIR 1962 SC 386 ) (supra) that : - "It was open to the licensing authority to give preference to co-operative societies, if it was of the opinion that granting a licence to a co-operative society in a particular locality would facilitate the objects of S. 3 of the Act. This is not what the licensing authority did. He repeatedly refused a licence to the petitioner, for the only reason and purpose of granting a monopoly to cooperative societies. In other words, the discrimination that has been made by the licensing authority is really in the administration of the law. It has been administered in a discriminatory manner and for the purpose of achieving an ulterior object, namely, the creation of a monopoly in favour of co-operative an object, which, clearly enough, is not within sub-cl. (c) of Cl. 5 of the Control Order, 1961". 32.
It has been administered in a discriminatory manner and for the purpose of achieving an ulterior object, namely, the creation of a monopoly in favour of co-operative an object, which, clearly enough, is not within sub-cl. (c) of Cl. 5 of the Control Order, 1961". 32. The aforesaid decision is not of much assistance to the petitioners because by order of 25th Nov., 1981 the petitioners are not altogether eliminated from doing business in High Speed Diesel Oil nor this Order would operate to create any monopoly in favour of the company's retail outlets by prescribing that licences be not granted to petty dealers for doing business in High Speed Diesel Oil at a place situate within 10 Kilometers from company's retail outlets. The said order can also not be said to be discriminatory nor it can be said to have been passed for the purposes of achieving an ulterior object, namely, creating a monopoly in favour of retail outlets of the company because the said Order does not provide that the diesel oil retail purchasers, who reside within 10 Kilometers of the company's retail outlets, cannot purchase diesel oil from retail dealers and they have to purchase it only from company's retail outlets. 33. The State Government, as already mentioned above, could make an Order covering the aforesaid matter under sub-cl. (d) of S. 3 (1) of the E. C. Act in exercise of powers delegated to it under S. 5 of the said Act by the Central Government in that behalf. Thus in our opinion since the State Government could in exercise of .the aforesaid delegated power make Control Order regulating by licences or otherwise for the location of places of storage, distribution and sale of an essential commodity as may be deemed fit and proper in the interest of general public, the impugned order dated 25th Nov., 1981 cannot be said to be illegal and ultra vires the delegation on the aforesaid ground urged by the learned counsel. 34. Thus in our opinion the direction and guideline provided in G.O. dated 25th Nov., 1981 regarding issuing licences to petty dealers for locating their, sale points beyond 10 Kilometers from companies' retail outlets cannot be said to be an unreasonable restriction and such regulatory orders could be made by the State Government in the public interest.
34. Thus in our opinion the direction and guideline provided in G.O. dated 25th Nov., 1981 regarding issuing licences to petty dealers for locating their, sale points beyond 10 Kilometers from companies' retail outlets cannot be said to be an unreasonable restriction and such regulatory orders could be made by the State Government in the public interest. We are also not at all impressed by the argument that it will not serve any public good or that it is devoid of any wisdom and rational justification. Thus in our opinion the said Order dated 25th Nov. 1981 is neither void nor it is ultra vires of delegation. 35. The next question which comes up for our consideration is whether the subsequent Order dated 27th Jan., 1982 issued by the State Government directing that no licences be issued .to petty dealers is legally sustainable or not. 36. The said Order as a matter of fact operates as a total ban on the trade and business carried on by petty dealers in H.S.D. Oil. It is thus to be seen whether such a prohibitory Order can be passed by the State Government in exercise of delegated powers referred to above on the basis of which the impugned Order dated 31-3-1982 contained in Annexure 1 rejecting the application for the renewal of licence was passed. 37. The general power under S. 3 (1) of the E. C. Act vests in the Central Government to make orders for regulating and prohibiting the production, supply and distribution of any essential commodity and trade and commerce thereof. The delegate of this authority can exercise power in making law and promulgate Orders in accordance with the delegation made under' S. 5 of the E. C. Act. 38. S. O. 681 (E) and S. O. 682 (E), both dated 30th April, 1974, contained in Annexure-III, refer to powers delegated by the Central Government which has got to be strictly construed for testing the validity of Order dated 27th Jan., 1982. 39.
38. S. O. 681 (E) and S. O. 682 (E), both dated 30th April, 1974, contained in Annexure-III, refer to powers delegated by the Central Government which has got to be strictly construed for testing the validity of Order dated 27th Jan., 1982. 39. Relevant portion of S. O. 681 (E) reads thus : - "In exercise of the powers conferred by S. 5 of the E. C. Act, 1955 (10 of 1955), the Central Government hereby directs : (a) that the powers conferred on it by subsection (1) of S. 3 of the said Act to make orders to provide for the matters specified in clauses (d), (e), (f), (g) thereof shall, in relation to all essential commodities, other than foodstuffs and fertilizers (whether inorganic, organic or mixed) be exercisable also by a State Government, of, in relation to a Union territory, by following conditions, namely, (i) That the delegation of powers under cl. (d) shall not extend to inter-State transport or distribution and the powers under that clause shall not be exercised so as to prejudicially affect such transport or distribution in pursuance of any order issued by the Central Government. (ii )....." 40. Under cl. (a) of the aforesaid Order, power to make order to provide for matters specified in cl. (d) etc. of sub-sec. (2), in relation to all essential commodities other than foodstuffs and fertilizers has been delegated to State Government subject to conditions enumerated in the said Order. 41. In the present case we are concerned with the powers delegated for making order in the matters specified in cl. (d), which refers to power for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity (emphasis supplied). 42. The word 'regulating' referred to above indicates that in exercise of this power, no order can be made by the State Government prohibiting altogether trade or commerce in the essential commodities. Similar question cropped up for consideration before a Division Bench of this Court in State of U. P. v. Suraj Bhan Pande, ( AIR 1972 All 401 ) wherein it was held that (at p. 404) : "Cl. (d) of S. 3 (2) has relation to the power to regulate and has no connection whatsoever with the power to prohibit. On the foot of the delegation made under cl.
(d) of S. 3 (2) has relation to the power to regulate and has no connection whatsoever with the power to prohibit. On the foot of the delegation made under cl. (d), therefore, the State Government has derived the power as a delegate to regulate "Storage" but has no authority to prohibit "storage". 'Regulating' and 'prohibiting' are two distinct and separate attributes of power. They are mutually exclusive; otherwise there was no point in the Legislature using two different words "regulating" or "prohibiting" if both the words were intended to convey the same meaning. The power to regulate portrays the idea of control, governance and direction, while the power to prohibit conveys the sense of the imposition of a ban or a placing of a restraint or restriction. The power to regulate the production, supply and distribution of an essential commodity and trade and commerce therein may easily comprehend and embrace the power to control or govern these matters by issue of licences and permits or in some other manner, or by controlling transport, warehousing or price or by regulating sale to specified persons or class of persons, or for maintenance of books of accounts or for inspection of such books of accounts, or for imposition of fees for issue of licences and permits or for search and seizure of stock for contravention of any regulated matter or for other subsidiary and ancillary subjects. On the other hand, the power to prohibit conveys a wholly contrary idea, for example the imposition of a total or partial ban or the imposition of certain restrictions with regard to production, supply and distribution of an essential commodity and trade and commerce therein." It was further observed that : - "The impugned orders could have been passed only under sub-sec. (1) of S. 3 and not under cl. (d) of sub-sec. (2) of S. 3. The power to pass an order or the nature of the impugned order is not within the specific power under cl. (d) of sub-sec. (2) of S. 3; it is within the general power under subsec.
(1) of S. 3 and not under cl. (d) of sub-sec. (2) of S. 3. The power to pass an order or the nature of the impugned order is not within the specific power under cl. (d) of sub-sec. (2) of S. 3; it is within the general power under subsec. (1) of S. 3; this general power was not delegated to the State Government under the notification and hence the U. P. Foodgrains (Restrictions on Hoarding) Order, 1966, was ultra vires the delegation." In State of Mysore v. H. Sanjeeviah, ( AIR 1967 SC 1189 ) their Lordships of- the Supreme Court while considering the powers to impose restriction of the nature contemplated in the provisos (1) and (2) to R. 2 of sub-sec. (2) of S. 37 of the Mysore Forest Act, in para 5 of the report observed : - "Power to impose restrictions of the nature contemplated by the two provisos to R. 2 is not to be found in any of the clauses of sub-sec. (2) of S. 37. By sub-sec. (1) the State Government is invested with the power to regulate transport of forest produce "in transit by land or water". The power which the State Government may exercise is, however, power to regulate transport of forest produce, and not the power to prohibit or restrict transport. Prima facie, a rule which totally prohibits the movement of forest produce during the period between Sun-set and Sun-rise is prohibitory or restrictive of the right to transport forest produce. A rule regulating transport in its essence permits transport, subject to certain conditions devised to promote transport; such a rule aims at making transport orderly so that it does not harm or endanger other persons following a similar vocation of the public and enables transport to function for the public good." (emphasis supplied). Their Lordships, considering the previous decision on the point in AIR 1962 SC 1406 . observed : - "Whether or not these are good grounds for imposing restriction on transport of forest produce is not a matter with which we are concerned in dealing with the power of the State by rules to restrict the right to transport forest produce. The power conferred upon the State Government is merely "to regulate the transit" of forest produce and not to restrict it.
The power conferred upon the State Government is merely "to regulate the transit" of forest produce and not to restrict it. If the provisos are in truth restrictive of the right to transport the forest produce, however good the grounds apparently may be for restricting the transport of forest produce, they cannot on that account transform the power conferred by the provisos into a power merely regulatory. The High Court was, therefore, in our view, right in holding that the two provisos to R. 2 are not regulatory in character, but are restrictive." (emphasis supplied). 43. In this view of the matter we are of the opinion that the State Government, in exercise of powers under cl. (d) of S. 3 (1) of the E. C. Act could not pass such order, as is contained in para 3 of the Order dated 27th of Jan., 1982 which undoubtedly operates to prohibit petty dealers in doing trade and business in H.S.D. Oil. The said Order dated 27th Jan., 1982 to that extent is bad and ultra vires the delegation. 43A. There is yet another reason to hold the said Order to be void, namely, that it has got no nexus with the object to be achieved as provided under S. 3 (1) of the E. C. Act and the imposition of total prohibition on the trade and commerce in H.S.D. Oil carried on by petty dealers will serve no public good. Merely for the reason that the petty dealers were selling diesel oil at price either at par or even at a lesser price than what was charged at the companies' retail outlets, it cannot be urged that the petty dealers were indulging in sale of diesel oil by making adulteration in it. Nothing has been brought on record to indicate that any case of adulteration was caught and reported against any petty dealer and merely on conjunctures it cannot be said that the persons in trade as petty dealers were in general indulging in adulteration. If any individual dealer is found selling adulterated diesel oil, he can be apprehended and prosecuted and his licence, can be suspended or cancelled. But in general such a ground cannot be made the basis for refusing to grant licences to all the petty dealers. 44.
If any individual dealer is found selling adulterated diesel oil, he can be apprehended and prosecuted and his licence, can be suspended or cancelled. But in general such a ground cannot be made the basis for refusing to grant licences to all the petty dealers. 44. With regard to second ground referred in the aforesaid orders of the State Government, it would suffice to say that no dealer can certainly charge a price higher than what is fixed by the Government. If he is found to be doing so, he can be prosecuted. It is, however, not an offence to sell an essential commodity at a price lower than the control rate provided it is sold without any adulteration and is not a spurious one. There may be some justification for selling at a lower rate than what is charged at the companies' retail outlets. The petitioners have suggested that the transport charges which they have to pay are less than what are paid by the dealers of the companies' retail outlets and so they are able to charge lower price on account of lower transportation charges. Although nothing has been brought on record to substantiate this allegation, but the said contention cannot be said to be devoid of any merit. Be that as it may, we are of the opinion that on the said ground, no total ban on the trade or business carried on by petty dealers could be imposed and such an Order cannot be construed to be a reasonable restriction falling under cl. (6) of Article 19 of the Constitution. 45. Licences were issued to petty diesel dealers to obviate the difficulties with which agriculturists in rural areas were faced in tracking long distances to reach company's retail outlets in order to obtain their required quota of diesel oil. It has not been indicated by the State Government nor it is understandable as to how these factors which had weighed much with the Government while establishing retail diesel-dumps and granting licences to petty dealers with a view to provide facility to consumers in rural area and for achievement of general upliftment of agro-economic conditions in rural area, can now, be said to have ceased so as to give a good bye to the scheme regarding retail sale of diesel oil at convenient points in rural area through petty dealers.
In the 2bser.ee of any change having taken place in the said situation and without any justifiable explanation for imposing complete ban on trade and business in the commodity by petty dealers, we are constrained to hold that the said prohibitory Order contained in clause (3) of the Order dated 27th Jan., 1982, which has got no nexus with the object to be achieved cannot be sustained and deserves to be quashed. The licensing authority while rejecting petitioners' applications for renewal of the licence has not afforded any opportunity to them for submitting their explanation which he was bound to give in view of specific provision in that behalf contained in the proviso to cl. 8 of the Control Order. Thus the impugned order dated 31st Mar., 1982 contained in Annexure-1 by which renewal of license is refused cannot be sustained on this ground also. 46. Learned Standing Counsel, in the end, contended that since the petitioners have got alternative remedy of filing an appeal under cl. 9 of the impugned Control Order, the present writ petition is not maintainable and deserves to be rejected on the ground that the alternative remedy has not been availed by the petitioners. No doubt it is correct to say that if an alternative remedy is available to the petitioners, this Court will not generally entertain writ petition in exercise of powers under Article 226 of the Constitution, but the existence of alternative remedy does not operate as an absolute bar to the maintainability of writ petition nor it takes away jurisdiction of this Court in passing appropriate orders in exercise of powers under Article 226 of the Constitution where it is found that the impugned order is per se illegal, without jurisdiction and violative of fundamental rights guaranteed under Article 19 of the Constitution and is ultra vires. It is also well settled that where a writ petition has been admitted for hearing it will not ordinarily be dismissed on the ground of availability of alternative remedy. (See AIR 1971 SC 31 (sic) and 1976 Rent Control Cases 2751 (sic)). Apart from it we find that no useful purpose will be served in directing the petitioners to avail the alternative remedy of filing appeal against the impugned order refusing to grant renewal of their licences, which have been refused merely on the basis of Government Orders dated 27th Jan., 1982.
Apart from it we find that no useful purpose will be served in directing the petitioners to avail the alternative remedy of filing appeal against the impugned order refusing to grant renewal of their licences, which have been refused merely on the basis of Government Orders dated 27th Jan., 1982. The appellate Court could not possibly ignore directions contained in the said Order while deciding the appeal The question about the validity and constitutionality of the Control Order and also of the aforesaid two Orders passed by the State Government in the matter regarding grant or renewal of licences to petty dealers could not possibly be challenged and determined and struck down by the appellate Court constituted under the impugned Control Order itself. In this view of the matter, we overrule the objection raised by Sri Mathur, the learned Standing Counsel. 47. In the result, the writ petition succeeds in part and is hereby partly allowed and the order dated Mar. 31, 1982 passed by the Licensing Authority, rejecting the applications for renewal filed by petitioner No. 1 and also other similar orders of the said date passed by opposite party No. 3 rejecting the applications of other petitioners for grant of renewal of licences are hereby quashed. Further cl. (3) of the Order dated 27th Jan., 1982 issued by the State Government is also quashed in so far as it relates to totally refusing to grant licences to petty dealers and the Licensing Authority, opposite party No. 3, is directed to entertain applications for renewal of licences of the petitioners and also accept the requisite licence fee from the petitioners and consider the same in accordance with law and in the light of observations made above treating the directions contained in cl. 3 of the Order dated 27th Jan., 1982 as non est in so far it relates to matter pertaining to grant or renewal of licences of petty diesel dealers.