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1991 DIGILAW 389 (ORI)

MAA DAKSHINAKALI ANIMAL FEEDS v. STATE OF ORISSA

1991-10-30

A.K.PATNAIK, ARIJIT PASAYAT

body1991
R. C. PATNAIK, J. ( 1 ) THE petitioner has filed this writ application for a declaration that the decision of the Government as conveyed by Annexure-A / 3 prohibiting setting up of dairy plants, cattle feeds plants, chilling plants excepting by the Orissa State Co-operative Milk Producers Federation was ultra vires Art. 19 (1) (g) of the Constitution of India and for grant of a mandamus directing opposite parties 1, 2 and 5 for issue of licence. ( 2 ) WITH a view to setting up of an industry for the purpose of manufacturing animal feeds, the petitioner after registering herself with the District Industries Centre; Puri, obtained sanction of a loan from the Orissa State Financial Corporation, for the infrastructure machinery and entered into an agreement with the Orissa State Electricity Board for supply of electricity. She made an application to the Project Manager, District Industries Centre, Bhubaneswar, for grant of a licence who, as per Annexure-1 recommended her case to the Director of Veterinary and Animal Husbandry, Orissa, for grant of licence under the provisions of the Orissa Cattle and Poultry Feed (Regulation) Act, 1979. She was informed by the Director (O. P. 3) vide Annexure-2 dated 8-2-90 that in view of the restriction imposed by the Government, her case for grant of licence could not be considered so long as the restriction imposed by the Government was in force. The petitioner was assailed the said decision of the Government in this writ application. ( 3 ) COUNTER-AFFIDAVIT has been filed on behalf of the State by opposite party No. 3. He has relied upon the decision of the Government as conveyed to him as per Annexure-A / 3 directing that no agency except the Orissa Co-operative Milk Producers Federation would be granted licence for setting up of dairy plant, cattle feed plant, chilling plant etc. in the operation flood-II area which includes the districts of Cuttack, Puri, Dhenkanal and Keonjhar. By Annexure-B / 3 the Director was intimated that grant of new licences for cattle feed in the aforesaid areas was totally prohibited unless it was in favour of the OMFED / OAIC or Utkal Gomangal Samities. The State Government has not filed any return justifying the decision. ( 4 ) MR. By Annexure-B / 3 the Director was intimated that grant of new licences for cattle feed in the aforesaid areas was totally prohibited unless it was in favour of the OMFED / OAIC or Utkal Gomangal Samities. The State Government has not filed any return justifying the decision. ( 4 ) MR. Misra, the learned counsel for the petitioner, has placed two contentions before us for consideration: Firstly, a total prohibition on setting up of cattle feed plant for the purpose of manufacturing and carrying on trade in animal feed by an executive order was ultra vires Art. 19 (1) (g) of the Constitution and secondly, the prohibition with a view to creating monopoly in favour of OMFED, OAIC and Utkal Gomangal Samiti not being in favour of a State or Corporation owned and controlled by the State, it was not protected by sub-cl. (2) of Cl. (6) of Art. 19. ( 5 ) THE Orissa Cattle and Poultry Feed (Regulation), 1979, as the title itself indicates, is a law to regulate the manufacturing of cattle and poultry feed. The statement of objects and reasons make the object and purpose of the enactment absolutely clear by stating that because of unscrupulous traders engaged in manufacture of low quality of feed at lower cost for quick profit in their business, the diary development programmes and poultry development programmes are getting affected and the farmers sustain heavy loss due to low production of milk and eggs on account of malnutrition. Hence, it was considered necessary to enact a law "to control the quality of cattle feed and poultry feed for the benefit of dairy farmers and poultry farmers". The regulations contain provision for grant of licence and prescribe conditions on fulfilment of which licence may be granted and it also makes provision for cancellation or suspension of licence, submission of return by the licencee and provides that the standard of feed manufactured or processed by a licensee shall be as may be prescribed and no licensee should manufacture any type of feed mentioned in Schedule I unless it conforms to the prescribed standard. It also makes provision for testing of feed and for packing, marking and labelling of the feed and for regulation of sale of feed. It also makes provision for testing of feed and for packing, marking and labelling of the feed and for regulation of sale of feed. It does not contain any provision creating a monopoly in favour of any person, nor does it authorise the Government to put an embargo on manufacture of feed in any area or in respect of any person. ( 6 ) MR. Misra, therefore, has contended that there being no statutory law authorising the Government to impose prohibition on manufacture of cattle feed by establishing a plant for the purpose, imposition of the embargo by an administrative order / executive decision, infringed Art. 19 (1) (g ). He relied upon the case of Mannalal Jain v. State of Assam, AIR 1962 SC 386 . He has also urged that the monopoly created by Annexure-B / 3 not being in favour of the State or State owned and controlled corporation, as contemplated by sub-cl. (2) of Cl. (6) of Art. 19, is not saved by the said sub-clause. He has relied upon Rasbihari Panda v. State of Orissa, AIR 1969 SC 1081 and Hari Chand Sarda v. Mizo District Council, AIR 1967 SC 829 . He has also urged that when the exercise of a fundamental right is prohibited, the burden is on the State to show that the restriction is reasonable and is in public interest. He has relied upon Mohd. Faruk v. State of Madhya Pradesh, AIR 1970 SC 93 . ( 7 ) THE rights guaranteed by sub-cl. (g) of Art. 19 (1) are not absolute rights but subject to restrictions contemplated by Cls. (2) to (6 ). It is clear that the restrictions referred to in these clauses can be imposed only by law, i. e. , statutory law; laws enacted by the legislature and by subordinate legislation. Without legislative authority, the executive cannot impose any restriction on any of the fundamental rights guaranteed by Art. 19 (1 ). In Kharak Singh v. State of U. P. , AIR 1963 SC 1295 , the vires of Regulation 12 (b) of the U. P. Police Regulations authorising 'domiciliary visits' was assailed as violative of Articles 19 (2) and 21 of the Constitution. In that context, it was observed :". . . . . In Kharak Singh v. State of U. P. , AIR 1963 SC 1295 , the vires of Regulation 12 (b) of the U. P. Police Regulations authorising 'domiciliary visits' was assailed as violative of Articles 19 (2) and 21 of the Constitution. In that context, it was observed :". . . . . the only manner in which this violation of the fundamental right can be defended is by justifying the impugned action taken by the police under the said regulation by reference to a valid law, i. e. , be it a statute, a statutory rule or a statutory regulation. . . . . "since the regulations contained in Chapter XX in which Regulation 236 find place had no statutory basis but were merely executive or departmental instructions, it was held by the six-Judge Bench that they were not 'laws' which the State was entitled to make under the relevant Cls. (2) to (6) of Art. 19 in order to regulate or curtail fundamental rights guaranteed by the several subclauses of Art. 19 (2 ). In view of the aforesaid authoritative pronouncements and the settled position of law, it is unnecessary for us to refer to other decisions on this aspect. We are of the view that in the absence of any law authorising the State Government to put a total embargo of executive decision prohibiting grant of licence for the purpose of manufacturing cattle feed except to persons named in Annexure-A / 3 is violative of Art. 19 (1) (g ). ( 8 ) IN view of the aforesaid, the second contention raised by the petitioner is of academic interest. The Supreme Court in Rasbihari's case (supra) observed :". . . . . Validity of the law by which the State assumed the monopoly to trade in a given commodity has to be judged by the test whether the entire benefit arising therefrom is to ensure to the State, and the monopoly is not used as a cloak for conferring private benefit upon a limited class of persons,. . . . " ( 9 ) BUT, as we have said, this question did not trouble us since the petitioner has to succeed on the first ground itself. We, therefore, declare the decision of the Government as per Annexures-A / 3 and B / 3 illegitimate and ultra vires Art. 19 (1) (g ). . . . " ( 9 ) BUT, as we have said, this question did not trouble us since the petitioner has to succeed on the first ground itself. We, therefore, declare the decision of the Government as per Annexures-A / 3 and B / 3 illegitimate and ultra vires Art. 19 (1) (g ). The prohibition without sanction of law affected the petitioner's rights to carry on trade, a right guaranteed by the Constitution as fundamental right. ( 10 ) IN the result, we quash Annexures-A / 3 and B / 3, allow the writ application and direct the opposite parties 1, 2 and 3 to consider the petitioner's application for grant of licence in accordance with the provisions contained in Orissa Act 10 of 1979 and dispose of the same within 6 weeks from the date of receipt of this order. There would be no order as to costs. ( 11 ) A. PASAYAT, J. :- I agree. Petition allowed.