JUDGMENT K.C. Agarwal, J. - The petitioners are the group of certain cold storages situated at various places in the State of U. P. They have challenged the validity of U. P. Regulation of Cold Storages Act, 1976' (hereinafter referred to as 'the Ac4'), on the ground that the State Legislator was not: competent to enact it. They have further, challenged the validity of the Explant appended to sub-sec. (2) of S. 14 of the said Act. 2. The point urged on the ground of being beyond the legislative competence is covered by a decision of this Court reported in M/s. Shree Durga Barisal Cold Storage and Ice Factory v. State of U.P., 1979 5 All LR 323.. The Act was enacted by the State Legislature in pursuance of the power conferred by Seventh Schedule (List II) of the Constitution. The present Act has been justified by the Bench aforesaid under Entry 24 of List II of the Seventh Schedule of the Constitution. The argument raised before the aforesaid Division Bench was repelled by observing : It would thus appear that the requirement of compulsory insurance of goods stored in a cold storage was only meant to protect both the hirer and the licensee. The law, in pith and substance, clearly falls within Entry 24 of List 11, and the encroachment, if it can be so called, on Entry No. 47 of List 1, is merely incidental, and cannot affect the competence of the State Legislature". 2A. -When a similar question arose before the Supreme Court, in Ishwari Khetan Sugar Mills v. State of U.P., AIR 1980 SC 1955 , it was said in paragraph 7 of the judgment that : "It is, therefore, not correct to say that once a declaration is made in respect of an industry, that industry as a whole is taken out of Entry 24, List II". 3. The pronouncement made by the Supreme Court demonstratively shows that before State Legislature is denuded of power to legislate under Entry 24, List II, in respect of a declared industry, the scope of declaration and consequent control assumed by the Union must be demarcated with precision and then proceed to ascertain whether the impugned legislation trenches upon the accepted field. 4.
4. We are, accordingly,' of the view that the power of the State Legislature under Entry 24, List II, to enact any legislation in respect of cold storage is within its scope. I 5. Coming to the second argument,, counsel for the petitioners urged that the' Explanation to sub-sec. (2) of S. 14 places', unreasonable restriction on the right to trade which is guaranteed by the Constitution by Article 19(1)(g), and, as such, the Court should hold the same to be ultra vires the Constitution. Counsel's submission further was that the restriction placed is unreasonable and being not incidental to sub-sec. (2) of S. 14, has to be struck out. 6. Chapter IV deals with rights and duties of a licensee. Section 12 requires a licensee to take reasonable care of goods deposited, whereas S. 13 provides for duty to exhibit capacity of the cold storage. Under this section, every licensee is required to display and exhibit in the prescribed manner on or near the main entrance of cold storage the been a marked development in the cold information mentioned in Cls. (a) to (c). Clause (c) lays down the vacant capacity (both in area and tonnage). 7. Section 14 obliges a licensee not to accept for storage agricultural produce which is likely to cause damage to other agricultural produce which is stored in the cold storage. The proviso, however, imposes a bar on the right of the licensee of refusal by providing that the licensee will have to store potato, seeds of bona fide cultivators, so certified in the prescribed form. Sub-see. (2) and the Explanation of S. 14,-with which we are' concerned, read : "(2) Subject to the provisions of sub sec. (1), no licensee shall refuse to accept agricultural produce for storage in his cold storage without any lawful excuse. Explanation - The refusal to accept any agricultural produce on the ground that the space in the enclosed chamber, though physically vacant, is booked in favour of any other person, shall not be deemed to be a "lawful excuse" within the meaning of this section". 8. Sub-section (2) of S. 14 controls and regulates the working of a cold storage by providing as a mandate that no licensee will be entitled to refuse to accept agricultural produce for keeping it in his cold storage without any lawful excuse.
8. Sub-section (2) of S. 14 controls and regulates the working of a cold storage by providing as a mandate that no licensee will be entitled to refuse to accept agricultural produce for keeping it in his cold storage without any lawful excuse. A cold storage, therefore, can refuse to accept only when there is a valid and ligitimate ground for refusal. Refusal is not allowed or permitted, on unauthorised grounds. 9. from the grounds of refusal, the' Legislature has taken out the ground of the cold storage not being physically vacant on the basis that it is booked in favour of any other person. This Explanation has been added with a view to regulate the running of cold storages for achieving the object of the Act, the same being, amongst others, "supervision and control of cold storages". The Statement of Objects and Reasons of the' Act are as under : "Prefatory Note - Statement of Objects and Reasons - In Uttar Pradesh there has storage industry during the last decade and a large number of cold storages have been set up in the private sector. particularly in and around the potato growing areas. To ensure efficient maintenance of cold storages and to remove the hardship of agricultural producers proper control and regulation of the cold storage business was considered necessary in the public interest." 10. For removing hardship of agricultural producers and in order to keep proper control and regulation, it was necessary that cold storages were not permitted to advance the pretext of prior booking as a ground for refusal. The ground was capable of creating a chaotic situation inasmuch as an agriculturist bringing his potato, which is a perishable commodity, after having travelled 50 kilometres, although there was a physical vacancy, but as it had already been booked or reserved, could not store the same. If such a clause was riot provided. one can imagine the consequences of not providing of the provision that is contained in the Explanation, which could have resulted in defeating the object of the Act, and the cold storages could run without any control for which purpose the Act was passed. 11.
If such a clause was riot provided. one can imagine the consequences of not providing of the provision that is contained in the Explanation, which could have resulted in defeating the object of the Act, and the cold storages could run without any control for which purpose the Act was passed. 11. Sri R. P. Gael, counsel appearing for the petitioners, urged that since the prices on which storage could be made under the Act' have been controlled, there was no possibility of a cold storage refusing to accept the' agricultural produce by taking the plea of advance booking as aground for not keeping the same. Whether goods of A were kept in the cold storage or of B, counsel urged, it was not material for its owner and, therefore, the ground given in the Explanation is actually a restraint on the right to trade. We are unable to accept this submission. 12. For the pursuit of lawful trade or business, the law can impose conditions. Regulations have to differ from case to case. If the tendency that is generally or ordinarily or often of a profession is likely to cause irreparable damage to the rights of agriculturists, the same could be checked by making the provision in the Explanation. It is settled that validity of a provision of law can be justified on the basis of objects of an Act. In the present case, we have noticed above, one of the objects of the Act was to remove the hardship of agricultural producers and proper control and regulation of cold storage business and, therefore, the Legislature could make a provision in the Act which could achieve the same. 13. Even if counsel's argument is accepted that Explanation to sub-sec. (2) of S. 14 is a restriction on the right to trade, it was reasonable, having been enacted to achieve the object of the Act. Under this Explanation, a cold storage cannot plead that on account of prior agreements entered into, although the cold storage is physically vacant, it cannot keep the potato or other agricultural produce in the cola storage. If the cold storage uses advance booking as a ground, it would bell liable to prosecution under S. 37 of the Ac,r:' The Legislature has deliberately used the word "deemed".
If the cold storage uses advance booking as a ground, it would bell liable to prosecution under S. 37 of the Ac,r:' The Legislature has deliberately used the word "deemed". The scope of a deeming provision has been considered by the Supreme Court in State of Bombay v. Pandurang Vinayak, AIR 1953 SC 244 . The word "deem" is, sometimes used to remove uncertainty or leave no scope for doubts and debates which', may entitle a party to raise ingenious grounds. At times it is used to give extended meaning which cannot be given to it if the same is not done. 14. For what we have said above, we find that advance booking of a cold storage, although the same is physically vacant, is not a lawful excuse. Such a ground is not legitimate, authorised, allowed or permitted., That being so, it is not a justifying explanation. 15. Consequently the writ petition fails and is dismissed with costs.