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1988 DIGILAW 428 (KER)

ITTEYRA v. MOIDU

1988-09-09

G.VISWANATHA.IYER

body1988
Judgment :- 1. The petitioner is running a rice mill in Kattakambal Village in Talappilly Taluk with licence No. 104/TPY. The first respondent was also running a rice mill in the same Village in SY. No 673. He has now shifted that rice mill to SY. No. 715/3 of the same Village. He holds licence No. 374/TPY. This shifting of the rice mill of the first respondent is challenged by the petitioner as violating the provisions of the Rice Milling Industry (Regulation) Act, 1958 (the Act). The petitioner challenges it on two grounds. Both these grounds proceed on a basic premise that even an "existing rice mill" becomes a "new rice mill" on change of location. The first contention raised on this postulate is that having regard to extent government orders in the matter, a new rice mill can be installed only if it is equipped with modern machinery for rice milling. Though this contention was stated at the threshold of the arguments, counsel did not persist in it in view of subsequent government orders granting time till 1989 for modernisation of rice mills This point does not therefore, survive for consideration. 2. The other point which the petitioner raised and which was pressed with vehemence, was that when a rice mill is shifted from one location to another, it becomes a "new rice mill" and therefore, a permit under S.5 of the Act is required for its establishment in the new site. The first respondent has not applied for, or obtained any such permit. The shifting, and the subsequent operation of the rice mill by the first respondent, are therefore, illegal and liable to be restrained. 3. Respondents 2 to 4 submit in reply that the first respondent had only shifted the rice mill from one survey number to another in the same Village. He had submitted an application for permission for such shifting supported by no objection certificate from the Executive Officer of the Kattakambal Panchayat. The matter was enquired into by the Taluk Supply Officer, Talappilly and on the basis of his report, the District Collector, to whom the powers under S.5 and 8 of the Act have been delegated, accorded sanction for shifting the rice mill from SY. No. 673 to SY. No. 715/3 of Kattakambal Village. Accordingly the first respondent shifted the rice mill and it is now operating in its new location. 4. No. 673 to SY. No. 715/3 of Kattakambal Village. Accordingly the first respondent shifted the rice mill and it is now operating in its new location. 4. The point for consideration is whether the shifting of a rice mill from one place to another requires a permit under S.5 as if it were a "new rice mill" as defined in S.3 (b) of the Act. Petitioner places reliance on two decisions, one of the Patna High Court in Radheshyam Kalbalia v. Sub Divisional Officer, AIR 1966 Patna 242, and the other of Kader, J. of this court in Mytheen Kunjukunju v. District Collector, 1984 KLT 333. The latter decision substantially followed the decision of the Patna High Court. 5. Before adverting to these decisions, I must mention that the Act envisages three types of rice mills. The first comprises those which were in existence at the commencement of the Act, which are called "existing rice mills". The second category is those which have become defunct, known as "defunct rice mills". The third category is the "new rice mill" which means a rice mill other than an existing or a defunct rice mill. The establishment of a new rice mill requires a permit under S.5 from the authorised authority. This permit is granted after making investigation into the matters prescribed by sub-s. 4 of the section and with reference to the preferences laid down in sub-s. 5. The owner of the rice mill having an effective permit, has also to get a licence under S.6 for carrying on the rice milling operations. S.8 imposes restrictions on rice mills, namely that no rice mill shall be established except under, and in accordance with, a permit granted under S.5 and that no rice mill owner shall carry on operations in his mill except under, and in accordance with, a licence granted under S.6. It is further provided that no person shall carry on rice milling operation after the licence has ceased to be valid. Sub-clause 3 (c) is important. It provides that no owner of a rice mill shall without the previous permission of the Central Government, change the location of the whole or any part of the rice mill in respect of which a licence has been granted under S.6. It is not in dispute that permission under this clause has been accorded to the first respondent for shifting his rice mill. It is not in dispute that permission under this clause has been accorded to the first respondent for shifting his rice mill. As stated earlier, the petitioner's contention is that this will not suffice and that the basic permit under S.5 itself is needed for the establishment of the mill in its new location. 6. The decision in Radheshyam Kalbalia's case related to a rice mill which was in existence on the date of commencement of the Act and which was shifted to a new location 15 miles away after such commencement. The rice mill owner did not obtain any permit under S.5; nor, for that matter, the permission to shift under S.8(3)(c). But he applied for the licence under S.6, treating his mill as an existing one, requiring only this licence. The licensing authority held that the mill in its new location was one established after the commencement of the Act and was therefore, a "new rice mill", obliging the owner to obtain the permit under S.5. Counsel for the rice mill owner raised the contention that it was an existing rice mill as defined in.the Act, that its character was not changed by the shifting, and therefore, no permit under S.5 was required. The question therefore, arose whether the mill in question was a new rice mill. The court said that a rice mill includes not only the plant and the machinery but also the place where it is located and if it is fixed at a new place, even though the plant and the machinery may be the same, and the ownership also continued to be the same.it will cease to be an existing rice mill, and be a new rice mill. In the course of the discussion the Bench pointed out. that so far as S.8 (3) (c) was concerned, the change in location may be brought about by obtaining previous permission and in such a case it may not be a new rice mill. The Bench observed: "Ss. 5 and 8(1) of the Act clearly require the obtaining of a permit from the competent authority for starting a new rice mill. There is nothing in the context of these two sections to Show that in construing the expression "rice mill" the premises and the precincts where the plant and machinery are erected may be ignored. 5 and 8(1) of the Act clearly require the obtaining of a permit from the competent authority for starting a new rice mill. There is nothing in the context of these two sections to Show that in construing the expression "rice mill" the premises and the precincts where the plant and machinery are erected may be ignored. The definition would, therefore, apply with full force and a mill erected at a different place will become a new rice mill within the meaning of Clause (e) of S.3 of the Act. It is true that by virtue of the special provisions of Clause (c) of sub-s. (3) of S.3 of the Act a change of location of an existing rice mill may be brought about by obtaining previous permission of the competent authority. In such a case' it may not be a new rice mill not because any restrictive interpretation can be given to the definition clause but merely because of the express provisions of Clause (c) of sub-s. (3) of S.8 of the Act. In other words, though the statute provided for two distinct classes of rice mills, namely, an existing rice mill and a new rice mill, nevertheless the framers of the statute thought it advisable to make a special provision for change of location of an existing rice mill after obtaining previous permission. The necessity far inserting such a provision in Clause (c) of sub- s. (3) of S.8 arose because otherwise by virtue of the definition clause by mere change of location of an existing rice mill it will become a new rice mill and permission will have to be obtained under S.5 of the Act. It is with a view to obviate this difficulty that a special provision was made in clause (c) of sub-s.(3) of S.8 of the Act. The insertion of a special provision of that type is itself the best argument to show that in all cases not coming within the said clause a mere change of location would make a rice mill a new rice mill". This decision was followed by Kader, J. in Mytheen Kunjukunju's case. This court was again dealing with a case of shifting. The facts disclose that no permission under S.8 (3) (c) had been obtained for the shifting. This decision was followed by Kader, J. in Mytheen Kunjukunju's case. This court was again dealing with a case of shifting. The facts disclose that no permission under S.8 (3) (c) had been obtained for the shifting. It was on these premises that Kader, J. stated that the mill in its shifted location was a new rice mill. The decision was not concerned, nor did it deal with the question whether permission under S.8 (3) (c) was alone sufficient for the shifting of a rice mill. 7. As I understand it, the ratio of these two decisions is that the owner of a rice mill may get it shifted after obtaining the permission under S.8(3) (c). If however, no such permission has been obtained, necessarily the owner has to obtain the permit under S.5 to establish the mill in its new location. This appears to be the import of the observations in the Patna decision that in all cases not coming within S.8 (3) (c) a mere change of location will make the rice mill a new rice mill. 8. If this be their scope, these decisions do not lend any support to the case of the petitioner. The first respondent has been accorded the permission under S.8 (3) (c) and that is all that is required as per the decisions to take the case out of the purview of S.5. 9. Even otherwise the original petition has to fail based on the decision of the Supreme Court in Nagar Rice & Flour Mills v. N.T Gowda & Bros. (1970) 1. S.C.W.R. 627. In that case the competent authority exercising powers under S.8 (3) (c) had sanctioned the change in the location of the appellant's rice mill from its original site. The first respondent challenged this order inter alia on the grounds that the permission under S.8(3) (c) was a condition precedent to the shifting and that the ex post facto permission accorded to the appellant, after the shifting took place, was liable to be "struck down as ultra vires". It was also contended that before granting permission under S.8 (3) (c) the authority was bound to take into account the matters which govern the issue of a permit under S.5(4) of the Act. Both these contentions were repelled by the Supreme Court. It was also contended that before granting permission under S.8 (3) (c) the authority was bound to take into account the matters which govern the issue of a permit under S.5(4) of the Act. Both these contentions were repelled by the Supreme Court. It was held that the rice mill of the appellants could not be regarded as a new mill. This was emphasised with the further observations that the considerations prescribed by S.5 (4) applied only for grant of permit in respect of a new rice mill or a defunct rice mill and had no application at all in considering the shifting of an existing rice mill. The relevant observations in Para.9 and 10 are as under: "9. S.8 (3) (c) is merely regulatory; if it is not complied with the appellants may probably be exposed to a penalty, but a competitor in the business cannot seek to prevent the appellants from exercising their right to carry on business, because of the default, nor can the rice mill of the appellants be regarded as a new rice mill. Competition in the trade or business may be subject to such restrictions as are permissible and are imposed by the State by a law enacted in the interests of the general public under Art.19 (6), but a person cannot claim independently of such restriction that another person shall not carry on business or trade so as to affect his trade or business adversely. The appellants complied with the statutory requirements for carrying on rice milling operations in the building on the new site. Even assuming that no previous permission was obtained, the respondents would have no locus standi for challenging the grant of the permission, because no right vested in the respondents was infringed. 10. xx xx xx xx The considerations which are prescribed by sub-s.(4) of S.5 only apply to the grant of a permit in respect of a new rice mill or a defunct rice mill. They have no application in considering the shifting the location of an existing rice mill. In respect of a new or defunct rice mill a permit and a licence are both required; in respect of an existing rice mill only a licence is required. The conditions prescribed by Sub-s. (4) of S.5 only apply to the grant of a permit and not to a licence. In respect of a new or defunct rice mill a permit and a licence are both required; in respect of an existing rice mill only a licence is required. The conditions prescribed by Sub-s. (4) of S.5 only apply to the grant of a permit and not to a licence. By S.8 (3) it is made one of the conditions of the licence that the location of the rice mill shall not be shifted without the previous permission of the Central Government. It is true that the appropriate authority clothed with the power must consider the expediency of permitting a change of location. But there is no statutory obligation imposed upon him to take into consideration the matters prescribed by sub-s. (4) of S.5 in granting the permission to change the location." 9. Three propositions flow from this decision: a) The shifting of an existing rice mill does not give rise to a new rice mill. What is therefore, required for shifting a rice mill to a new site is only permission under S.8 (3) (c) and not permit under S.5. b) The application for permission to shift a rice mill need not be tested in the light of the considerations prescribed by S.5 (4) which apply only to the grant of permit in respect of a new rice mill or a defunct rice mill. However, the appropriate authority must consider the expediency of permitting a change of location. c) A rival in the trade has no locus standi to challenge the grant of permission. The Patna High Court did not have the advantage of this decision when the decision in Radheshyam Kalbalia's case was rendered. Kader, J. also did not have the benefit of seeing this decision as it does not appear to have been referred to before him. The observations of Kader, J. have therefore, to be treated as per incuriam. As per the decision of the Supreme Court, the distinction made by the Patna High Court between cases falling within S.8 (3) (c) and others does not really exist as cases of shifting do not fall under S.5, in the absence of a new rice mill. 11. S.8 (3) (c) is a specific provision for the shifting of rice mills. It has to be read in harmony with S.5. 11. S.8 (3) (c) is a specific provision for the shifting of rice mills. It has to be read in harmony with S.5. If every shifted rice mill is to be treated as a new rice mill requiring a permit under S.5, there is no purpose to be subserved by the special provision S.8 (3) (c). The general provision in S.5 must yield to the special provision S.8 (3) (c). The two must be read as operating in different fields, without any overlapping. S.8 (3) (c) applies to establishment of a rice mill on shifting; S.5 applies to such establishments in other cases. The original petition has therefore, to fail. It is accordingly dismissed without any order as to costs. Issue carbon copy on usual terms.