Hari Oil And General Mills v. State Of Uttar Pradesh
1992-02-11
R.R.K.TRIVEDI, V.K.KHANNA
body1992
DigiLaw.ai
JUDGMENT : R.R.K. Trivedi, J. Petitioner, who is a producer/manufacturer of mustard oil from mustard oil seed, by means of this writ petition, has prayed for a direction in the nature of mandamus restraining the Respondents from enforcing clause 11 of the Uttar Pradesh Scheduled Commodities Dealers (Licencing and Restriction on Hoarding) Order, 1989 (here-in-after referred to as 'State Order of 1989'), in so far as the same is inconsistent and contrary to clause 4 of the Pluses, Edible Oilseeds and Edible Oils (Storage Control) Order, 1977, (here-in-after referred to as (Central order of 1977'). It has also been prayed that the Respondents be restrained from enforcing condition Nos. 7, 8, 9, 11 and 12 incorporated in the licence issued to Petitioner in Form B and further to prohibit Respondent No. 3 namely Regional Food Controller, from taking any proceeding or action on the basis of the power vested in him under clause 8 of the State Order aforesaid. 2. We have heard Sri V. K. Gupta, learned Counsel appearing for the Petitioner and also learned Standing Counsel. 3. The grievance of the Petitioner is that under clause 4 of the Central Order of 1977 the storage limits, in respect of the edible oil seeds and edible oil, are much higher than that provided by the State Order of 1989. With reference to clause-6 of Central Order of 1977, it has been strongly urged that as Central Order of 1977 specifically provides the Storage limits for edible oil seeds and edible oil in case of producer, the limits prescribed under clause-11 of State Order of 1989 cannot be applied against the Petitioner. In continuation of the aforesaid submission, it has been also submitted that the Central Government in exercise of its powers u/s 3 of the Essential Commodities Act, 1955. (here-in-after referred to as 'Act') has further amended the Central Order of 1977 by pluses, Edible oilseeds and Edible oils (Storage Control) Second Amendment Order, 1991 which is later in time from the State Order of 1989 and since by the aforesaid amendment of Order 1991 the different stock limits have been provided in case of producer the storage limits prescribed by the State Order of 1989 shall cease to have any application in respect of Petitioner who is a manufacturer.
Sri V. K. Gupta has further submitted that the State Government in exercise of the delegated powers cannot legislate the inconsistent provision in respect of the same filed for which the Central Government has already promulgated an order providing the specific provision in respect of the storage limits. It has also been submitted that in view of the storage limits provided by the State Order of 1989 day to-day working in the factory of the Petitioner has become difficult and the same has been rendered impracticable. Sri Gupta has farther submitted that the conditions mentioned in the licence issued to Petitioner under the State Order of 1989 are also arbitrary and unreasonable and in fact cannot be applied so far as the Petitioner is concerned. The grievance of the Petitioner is against the conditions enumerated above. 4. The learned Standing Counsel, on the other hand, has submitted that the State Government was fully competent to promulgate the order fixing any different stock limits within the maximum limits specified in the Central Order of 1977 under clause 7-B of the aforesaid order, with the previous approval of the Central Government. As the State Order of 1989 has been issued after having prior concurrence of the Central Government, the competence of the State Government to legislate the order of 1989 cannot be doubted. It has been further submitted that the Petitioner is required to obtain the licence under law for doing manufacturing business and it is bound to observe the terms and conditions provided in the licence and if it commits any breach of the terms and conditions of the licence or the provisions of the State Order of 1989, the Petitioner can be lawfully subjected to a suitable action by the authorities, under law. With these contentions it has been submitted that the Petitioner has failed to make out any case for interference by this Court. 5. We have examined the rival contentions advanced by the learned Counsel for the parties and have also persued the relevant provisions. It would be relevant to recall that earlier Petitioner and other producers filed several writ petitions questioning the applicability of Uttar Pradesh Oil Seed and the Oil Seed Produce Control Order, 1966 and Uttar Pradesh Essential Commodities (Display of prices and Stocks and Control of Supply And Distribution) Order, 1977. These writ petitions were allowed by this Court.
It would be relevant to recall that earlier Petitioner and other producers filed several writ petitions questioning the applicability of Uttar Pradesh Oil Seed and the Oil Seed Produce Control Order, 1966 and Uttar Pradesh Essential Commodities (Display of prices and Stocks and Control of Supply And Distribution) Order, 1977. These writ petitions were allowed by this Court. The present Petitioner was also one of the Petitioners in the aforesaid bunch of cases. The writ petitions were allowed and it was declared that none of the Petitioner is required to take out the licence under the State Control Order, 1966 mentioned above. So far as the Petitioner is concerned the first information report lodged against it on 29th September, 1986 was quashed and the Respondents were directed to return the seized goods and the documents to the Petitioners. The reasoning adopted by the Division Bench while allowing the writ petitions was that the Petitioner is a producer who is not covered under the aforesaid orders as the producer is not included within the word 'dealer'. The judgment of the Division Bench is M/s. Hari Oil and General Mills v. State of Uttar Pradesh 1987 EFR 211. 6. It is clear that after the aforesaid judgment of the Division Bench the Central Government in 1987 amended clause-3 of the Central Order of 1977 and it provides that no person shall carry on business as a producer in edible oil except under a licence granted under the State Order if the stock of edible oil seeds and edible oil in his possession exceeded the quantities specified there under. It would be appropriate to quote clause-3: Licensing of dealers (and producers) - Notwithstanding anything contained in any State Order, no person shall carry on business as a dealer after the expiration of a period of fifteen days from the coming into force of this clauses or, as a producer after the expiry of a period of fifteen days from the date of coming into force of the pulses, Edible Oil Seeds and Edible oils (Storage Control) Amendment Order, 1987) in pulses or in edible oil seeds or in edible oils except under and in accordance with the terms and conditions of licence granted under a State Order if the stocks of pulses or edible oil-seeds or edible oils in his possession exceed the quantities specified below. 7.
7. The Central Order of 1977 also contains clause-7B which was inserted w.e.f. 20th September, 1979. Under this clause the State Government has been authorised that it may by notification in the official Gazette, fix any stock limit within the maximum limits specified in Clause 4, either generally or for any specified period, subject to such conditions as may be specified in the notification. Clause 7-B is reproduced below: 7-B. Power to fix lower stock limits. The State Government may, if it considers it necessary for just and sufficient reason, by notification in the official Gazette, fix any stock limit within the maximum limits specified in Clause 4, either generally or for any specified period, subject to such conditions as may be specified in the notification: provided that no notification under this clause shall be issued except with the previous approval of the Central Government. 8. Now coming to the State Order of 1989, it is clear that the State Government has issued the order in exercise of powers u/s 3 of the Act which has been delegated to it u/s 5 of the Act vide Notification No. DSR-800 dated June 19, 1978. Under this notification State Government has been empowered to make orders to provide for matter specified in clauses (a), (b), (c), (d), (e) and (f) of Sub-section (2) of Section 3 of the Act. However exercise of power is, subject to direction of the Central Government for making orders relating to matters specified in clauses (a), (c) and (f) in regard to distribution and disposal of foodstuffs to places outside the State or in regard to matters under Clause (d) the prior concurrence of the Central Government is also required. While making the orders under Clause (j) the State Government can authorise only officer of the Government; subject to these limitations mentioned in the notification dated 9th June, 1978, the government has ample power to make orders provided for the matters specified in the various sub-clauses. Thus so far as the competence to make order of 1989 is concerned, we have no doubt that the State Government was fully competent to enact the State Order 1989. The Petitioner is required to obtain under clause 3 of the State Order, as producer, the licence for manufacturing edible oil and it is also to observe the terms and conditions mentioned in the licence.
The Petitioner is required to obtain under clause 3 of the State Order, as producer, the licence for manufacturing edible oil and it is also to observe the terms and conditions mentioned in the licence. The grievance of the Petitioner relates to the conditions No. 7, 8, 9. 11 and 12 of the licence. The licence has been issued in statutory Form-B. However at the end of the form it had been provided ''Strike of whichever is not applicable. This has been substituted by Notification No. 3401/XXIX-kha-2-11-compo-19-89 dated November 26, 1990. Thus the Petitioner can approach the licensing authority to strike of any condition which may not be applicable in the case of Petitioner. The Petitioner has been served with a show cause notice dated 30th October, 1991. Annexure-12 to the writ petition in which it has been said that why the action should not be taken against him for non-observance of the condition No. 12 of the licence The Petitioner submitted his reply vide Annexure-13 However, it appears that the Petitioner has not invited attention of the authorities towards the provisions substituted by Notification dated 26th November, 1990 under which the conditions which are not applicable may be struck of In the facts and circumstances of the case it shall be open to the Petitioner to approach the licencing authority in respect of the grievance regarding conditions No. 7, 8, 9. 11 and 12 and the licensing authority after considering the grievance of the Petitioner strike of such conditions from the licence which nay not be applicable to Petitioner. 9. Now we are coming to the main controversy regarding stock limitation. As Clear from clause 7-B of the Central Order of 1977, the State Government may if it considers necessary for just and sufficient reason by notification in the official gazette fix any stock limit within the maximum limitation specified in clause-4. On a bare perusal of this clause 7- B it is clear that the stock limit fixed by State Government has to be within the limits already specified under clause-4 and before issuing the notification a prior approval of the Central Government has to be obtained.
On a bare perusal of this clause 7- B it is clear that the stock limit fixed by State Government has to be within the limits already specified under clause-4 and before issuing the notification a prior approval of the Central Government has to be obtained. Under clause 4, as amended vide notification dated 26th July, 1991, of Central Order 1977, the stock limit provided in respect of the edible oil is one-eighth of the maximum quantity of edible oil seeds used by him in any of the three years ending on the 31st day of October, 1989 and 1/24th of his maximum production of edible oil in any of the three years ending on the 31st day of October, 1989. Under clause 11 of the State Order of 1989 as amended by Eighth Amendment order of 1990 the stock limit in respect of edible oil seeds is one-twelfth of the quantity equal to the annual installed capacity, where as in respect of the edible oils it is 1/50th of the quantity equal to the annual installed capacity. It cannot be disputed that the stock limit fixed by the State Order of 1989 under clause 11 is within the limits specified under clause 4 of the Central Order of 1977. The State Government before making the orders and providing a different stock limits in respect of the State of Uttar Pradesh also obtain the prior concurrence of the Central Government. Thus the conditions mentioned under clause-7-B of the Central order of 1977 have been fully complied with. It has neither been challenged in the writ petition nor has been argued before us that there were not just and sufficient reasons and consequently the State Government wrongly considered it necessary to fix a different stock limit than provided under clause 4 of the Central Order of 1977. The Slate Government has been delegated the powers to legislate u/s 5 of the Act and in our opinion, the State Government has adequate machinery and means to judge and appreciate the conditions in market about availability of the edible oil and edible oil seeds and the demand of the same among the consumers and in order to avoid hoarding of edible oil seeds and edible oil it could have reasons to fix any stock limit within the maximum limitation. 10.
10. The submission of learned Counsel for the Petitioner that in view of clause 6 of Control Order of 1977, since specific provisions providing storage limits has been provided under clause 4, the State Order shall not apply, is also not correct. It is true that both the control orders are operating in the same field i. e. controlling storage limits of edible oil and edible oil seeds but from a perusal of the provisions contained in clause 7-B it is clear that the Central Government permitted the State Government to fix different stock limits in respect of the edible oil seeds and edible oil, according to the conditions prevalent in the particular State. The maximum limit has also been fixed, and the State Government has been permitted to operate within that limit. Clause 7-B has been inserted subsequently w.e.f. 20th September, 1979 Thus the Central Government was fully aware of the existence of clause 6 and even then it authorised the State Government under clause 7-B to fix a different stock limit than fixed by it under clause 4 The stock limit thus fixed in exercise of powers under clause 7-B cannot be said to be inconsistent to the power already exercised by Central Government under clause 4 Both are though occupying the came field but with different limits according to the necessity of the situation prevailing in a particular State. 11. The third limb of the argument advanced by Sri V, K. Gupta, learned Counsel for the Petitioner fur questioning the validity of the stock limit fixed under clause 11 of the State Order 1983 is that the criterian adopted by the State Government is different for fixing the stock limit than adopted by the Central Government under clause 4 of the Central order of 1977. It is true that both orders provide different method for ascertaining storage limit fixed. Under the Central Order. The limitation has to be ascertained with reference to maximum quantity of oil seeds used in three years and maximum production of edible oil in any of the three years ending on 31st day of October, 1989. However, the State Order provides that the stock limit shall be ascertained on the basis of the annual installed capacity. The limitation for the edible oil seeds in one twelfth whereas for the edible oil it is 1/50th.
However, the State Order provides that the stock limit shall be ascertained on the basis of the annual installed capacity. The limitation for the edible oil seeds in one twelfth whereas for the edible oil it is 1/50th. In our opinion, (he difference alleged is more technical than real. It cannot be denied that every plant or mechanism has as known capacity of production. The maximum production cannot exceed than the capacity of production of the plain or machinery. In our opinion, the order of the State Government is not, in any manner, disadvantageous to the Petitioner so far as this aspect of the matter is concerned. Maximum production or maximum storage has a definite relation with the annual capacity of the installation and thus the criterian fixed by the State Government under the Order of 1989 is more scientific and reasonable and does not require any kind of calculation with the help of other factors It does not. in any way, violate the provisions of clause 7-B of the Central Order 1977. If the State Government has been left free to fix a different stock limit, it shall also be assumed that the State Government has also been conferred incidental powers to have a different criteriaon for ascertaining the limits. though as we have already stated above, there is no substantial difference in the criterian adopted in the two orders for ascertaining the storage limits. 12. Last submission of Sri Gupta is that after the amendment of 1991 in the Central Order 1977 the storage limit fixed by the State Government cannot be applied in the case of Petitioner We are not impressed by this submission also of the learned Counsel for the Petitioner. By amendment of 1991 the storage limit fixed for edible oil seeds and edible oil is still on the higher side and the storage limits fixed by the State Order of 1989 is within that limit. The Central Government while amending the storage limit for edible oil seeds and edible oil. shall be deemed to have been fully aware of the different limits fixed by the state of Uttar Pradesh for which the concurrence was also given. In spite of this nothing has been said in the amendment order 1991, in respect of stock limit fixed in exercise of powers under clause 7-B of the Order of 1977.
shall be deemed to have been fully aware of the different limits fixed by the state of Uttar Pradesh for which the concurrence was also given. In spite of this nothing has been said in the amendment order 1991, in respect of stock limit fixed in exercise of powers under clause 7-B of the Order of 1977. Thus the powers delegated to the State Government and already exercised, has not been effected in any manner. 13. Sri V. K. Gupta, learned Counsel for the Petitioner placed reliance on certain authorities in support of his submissions. We have examined the case law cited by Sri V. K. Gupta and in our opinion all the cases cited are distinguishable as in none of the cases, the situation like the present case, was there. However in order to be more specific, we propose to give brief discussion of the cases relied on. In District Collector, Chittoor and Others Vs. Chittoor District Groundnut Traders Association and Others, (1989) 2 SCC 58 the direction issued by the State Government placing restriction on the movement of oil seeds and edible oil to outside state and imposing compulsory levy and requiring millers and traders to sell oil seeds and oil at a price fixed by it without prior concurrence of the Central Government was held to be ultravires As already noticed exercise of delegated powers u/s 5 is subject to certain conditions. For exercising such powers the prior concurrence of the Central Government was necessary which was wanting in the aforesaid case and thus Hon'ble Supreme Court upheld the view taken by the Division Bench of Andhra Pradesh High Court, for quashing the State Government's order. However, in the present case, we find that the prior concurrence has already been obtained and there are sufficient enabling provisions under clause 3 and 7-B of the Central Order of 1977, besides the notification dated 9th June, 1978 of providing sufficient power to the State Government to make orders providing to regulate business of edible oil. In our opinion, for the reasons stated the case is clearly distinguishable. 14. In Kishore Boiled Rice Mill Vs.
In our opinion, for the reasons stated the case is clearly distinguishable. 14. In Kishore Boiled Rice Mill Vs. State of Andhra Pradesh and Others, AIR 1983 AP 230 conditions 5 and 7 issued under clause 4 of Andhra Pradesh Rice procurement (Levy and Restriction of Sale) Order, 1967 were in question Hon'ble B. P. Jeevan Reddy, J. (as he then was) struck down the conditions No. 5 and 7 of the licence holding them to be unreasonable and arbitrary. The conditions required that loading of the goods under a permit shall be done in the presence of the officer of the State. Such a condition was found arbitrary. In the present case the conditions impugned namely 7, 8, 9, 11 and 12 can be questioned before the licensing authority itself and if they are irrelevant or inapplicable in case of the Petitioner they can be struck of. No such approach has been made by the Petitioner before the licensing authority and in our opinion, it is not a fit case for this Court to exercise powers under Article 226 to examine the conditions contained in the licence unless the Petitioner first approaches the relevant authorities under the provisions of the Control Order itself. 15. In Tata Iron and Steel Company Ltd. v. State of Bihar 1988 EFR 200, Bihar Trade Articles (Licence Unification) Order, 1984 was challenged which contained the different definition of coal than provided in Collary Control Order, 1945 issued by the State Government and which continued to operate as existing law and was enforced. It may be noticed that the Collary Control Order, 1945 did not contain any provision like clause 7-B of Control Older, 1977. The case is clearly distinguishable and it cannot be applied in the present case. Some is position of the case Punjab Dal Besan and Oil Mills and Others Vs. State of Madhya Pradesh, AIR 1974 MP 85 , wherein by State Order the restriction was imposed prohibiting the transporting to cattle fodders outside State which also included oil cakes consumeable by cattle. It was held that such power cannot be exercised by State Government. It was beyond the legislative competence of the State Government in exercise of delegated powers u/s 5 of the Act. The case is clearly distinguishable from the controversy which is subject-matter of the present writ petition. 16.
It was held that such power cannot be exercised by State Government. It was beyond the legislative competence of the State Government in exercise of delegated powers u/s 5 of the Act. The case is clearly distinguishable from the controversy which is subject-matter of the present writ petition. 16. Similarly in Vijoy Kumar Rautrai v. State of Orissa AIR 1976 Ori. 178. The controversy was regarding imposing levy on the basis of the holding was found not in conformity with Section 3(2)(f) of the Act, ratio of this case cannot be applied in the present case. In Tata Iron and Steel Company Ltd. Vs. The State of Kerala and Another, AIR 1972 Ker 97 , the provisions of Kerala Iron and Steel (Declaration of stock and Maintenance of Accounts) Order, 1968 were questioned, as it was inconsistent to the provisions of Iron and Steel Control Order, 1956 issued by the Central Government It was held that the powers delegated by Central Government to the State Government u/s 5 are not additional power but current powers which can be exercised subject to exercise of such powers by the Central Government. There was also no provision in Iron and Steel Control Order, 1956 equivalent to clause 7-B contained in Control Order of 1977 by which the State Government have been specifically authorised to fix different stock limits in case of producer and manufacturer subject to conditions mentioned therein The case is clearly distinguishable on the facts in The State of Uttar Pradesh and Others Vs. Suraj Bhan Pande, AIR 1972 All 401 , it was found that the notification delegating powers does not confer power to prohibit storage of food grains, on the State Government and for this reason Uttar Pradesh Foodgrain (Restriction on Hoarding) Order, 1966, was held to be ultravires. There also no provision could be pointed out like clause 7 B empowering the Stale Government to have a different storage limits in State of Uttar Pradesh. The case has no application in the present writ petition. 17.
There also no provision could be pointed out like clause 7 B empowering the Stale Government to have a different storage limits in State of Uttar Pradesh. The case has no application in the present writ petition. 17. For the reasons stated above, in our opinion, this writ petition has no merit and is liable to be dismissed, subject to directions only to the extent that in respect of the grievances against the conditions mentioned in the licence issued under the State Order of 1989 the Petitioner may approach the licensing authority for striking of such conditions which may be irrelevant or inapplicable so far as the Petitioner is concerned and in case such a representation is made before the licensing authority within a period of three weeks the licensing authority shall consider the representation and dispose of the sane within a. period of six weeks from the date of certified copy of this order along with the representation is filed before it. For the period mentioned above the Respondents shall desist from taking any action for violating the conditions mentioned in the licence which may be subject-matter of the representation before the licensing authority. 18. Subject to the aforesaid, the writ petition shall stand dismissed in limine. There will be no order as to costs. 19. A certified copy of this order shall be given to the learned Counsel for the parties on payment of usual charges within a week.