Assam Rice Mills Association, Ambari, Guwahati v. State of Assam
1993-10-01
D.N.BARUAH
body1993
DigiLaw.ai
In this writ application under Article 226 of the Constitution, the petitioners are seeking appropriate writ or direction to cancel, recall or otherwise forbear from giving effect to the Annexure XI WT message issued by the respondents. 2. Every year the Government of Assam in exercise of power under section 3 of the Essential Commodities Act issued Order under the name "The Assam Paddy and Rice Procurement (Levy and Licensing) Order" and also under notification issued by the Central Government. The validity of such Orders remain in force from 1st October to 30th September of subsequent year, and thereafter, next Order comes into effect. The millers having valid licence under Rice Miller Industries (Regulation) Act, 1958 are exempted from taking any licence under the aforesaid Order. For the purpose of levy, rice millers are divided into three categories: first mills having capacity of 8 tonnes and above per diem; secondly, mills having capacity of 4 tonnes to 7. 9 tonnes per diem; and thirdly, mills having capacity of less than 4 tonnes per diem. 3. Under such Order the Government fixes quantity of rice to be supplied by the mills as "levy rice" and price of such rice is axed by the Government irrespective of market price. As per provisions of the said Orders on submission of levy rice as fixed by the Government, certificate is issued by the Deputy Commissioner/Sub Divisional Officer as the case may be, in favour of the mills and only such miller is authorised to sell rice subject to the compliance of other conditions. The price of levy rice is always fixed much lower than the market price. The quantity of levy rice are fixed by the authorities. In 1988, 1989 and 1990 quantity of such rice to be supplied by three categories of rice millers had been fixed according to the milling capacity of the aforesaid mills. However, for the year 1991-92 no such Order was issued in the month of September as had been the practice in early years. 4. The Government, however, issued an Order published in the Gazette dated 30.12.91 wherein quantity of levy rice had been fixed at the rate of 40%, 30% and 20% respectively. On 26.12.91 a meeting was held between the petitioner mills and the Government.
4. The Government, however, issued an Order published in the Gazette dated 30.12.91 wherein quantity of levy rice had been fixed at the rate of 40%, 30% and 20% respectively. On 26.12.91 a meeting was held between the petitioner mills and the Government. In the said meeting as per minutes of discussion it was agreed that the said three categories of mills would supply levy rice at the rate of 10%, 5% and 4% respectively. Thereafter, by Annexure VIIWT Message dated 4.2 92 addressed to Deputy Commissioners and SDOs, the Government revised the percentage of levy at the rate of 10%, 5% and 4% in place of 40%, 30% and 20% respectively. Subsequently, by another WT Message dated 20.3.92 (Annexure XI) the Government cancelled the earlier Annexure VII WT Message dated 4.2.92 and directed the Deputy Commissioners and Sub Divisional Officers to collect levy at the earlier rate of 40%, 30% and 20% in place of 10%, 5% and 4% respectively. As a result, all the mills of the petitioner association were required to give huge quantity of rice as levy rice to the authority. According to the petitioners, issuance of Annexure XI WT message dated 20.3.92 was arbitrary and violative of Article 19 (1) (g) of the Constitution and if this order is allowed to take effect this would invite closure of the mills. Hence the present petition. 5. I have heard both sides. Mr. NM Lahiri, learned counsel for the petitioners submitted that under Assam Paddy and Rice Procurement (Levy and Licensing) Order, the Government have power to impose levy but that does not mean that the Government has unbriddled power to impose levy according to their whims and caprices. Such levy should be reasonable and proper. The Government may enhance the rate of levy of rice to be supplied by mills, but the Order must be informed of reasons. Mr.
Such levy should be reasonable and proper. The Government may enhance the rate of levy of rice to be supplied by mills, but the Order must be informed of reasons. Mr. Lahiri further submitted that though the Government by Order published in Gazette dated 30.12.91 raised levy at the rate of 40%, 30% and 20% respectively, on representation submitted by the petitioners a meeting was held on 26.12.91 between the representatives of the petitioner association and top officials of Food and Civil Supplies Department of the Government of Assam, as per the minutes of the said meeting, it was agreed that rice millers would cooperate with the Government in fulfilling the target of procurement of one lakh MT of rice during the Kharif year 1991-92 and the Government would consider to amend the provision of the levy liabilities by reducing the percentage from 40%, 30% and 20% to 10%, 5% and 4% respectively. The minutes were signed by the Commissioner and Secretary to the Government of Assam, Food and Civil Supplies Department and representatives of the petitioners. 6. By corrigendum dated i7th February, 1992 (Annexure VI) the Government reduced the levy from 40%, 30% and 20% to 10%, 5% and 4% respectively. Thereafter, by Annexure XI WT Message dated 20.3.92 the Government again revised the rate of levy fixed by earlier notification published in Gazette dated 30.12.91 without showing any reason. 7. Mr. DP Chaliha, learned Government Advocate on the other hand supported the impugned message dated 20.3.92. He submitted that the Government was compelled to raise the quantity of levy rice as the millers of the petitioner's association did not act as per agreement arrived at in the meeting held on 26.12.91. As they failed to comply with the terms of agreement the petitioners are not entitled to get any equitable relief. 8. Affidavit-in-opposition has been filed on behalf of respondents stating that Assam Paddy and Rice Procurement (Levy and Licensing)Order 1991 was promulgated by notification dated 21.12.91 and was published in the Assam Extraordinary Gazette dated 30.12.91. Before promulgation of the Order concurrence of the Central Government was obtained vide No.6 (ASM) (i)/91-D & R-I order dated 26.11.91 and immediately on receipt of the concurrence the 1991 Order was notified.
Before promulgation of the Order concurrence of the Central Government was obtained vide No.6 (ASM) (i)/91-D & R-I order dated 26.11.91 and immediately on receipt of the concurrence the 1991 Order was notified. The petitioner association after coming to know about the raising of percentage of levy of paddy and rice, submitted representation before the State Government r'-questing not to raise percentage of levy as proposed. In the affidavit it is further stated that the State of Assam is a deficit State so far rice is concerned and unless sufficient quantity is received from Central Government it would be difficult to meet the requirement of the State. Therefore, the enhancement of levy was necessary. 9. On receipt of representation, the State Government convened a meeting on 26.12.91 between the representatives of petitioners association and officials of State Government. After due deliberation it was decided to reduce the levy with an understanding that the quota of one lakh MT would be achieved. On that basis corrigendum dated 17.2.92 was issued reducing in to percentage of levy. However, this was done without approval of the Central Government. The State Government, thereafter, approached the Ministry of Food und Civil Supplies, Union of India, to give export facto concurrence to the rates of levy fixed by the State Government, however, the Union Government expressed their inability to agree with it, as the Central Govt. was of the view that the quantity of rice requited to be procured by the State Govt. was even less than 10% of total production of rice in the State. Further, it would be difficult for Central Government to maintain monthly allocation of food grains to the State to meet the requirement for public distribution. The affidavit further stated that the petitioners failed to discharge their obligation in pursuance of the assurance given by the petitioner association. The State Government revised the percentage with a view to maintain the target of one lakh as per the decision taken in the meeting held on 26.12.91. 10. On the rival Contentions of the parties, it is to be seen whether the impugned Annexure XI WT Message dated 20.3.92, can be sustained in law, 11.
The State Government revised the percentage with a view to maintain the target of one lakh as per the decision taken in the meeting held on 26.12.91. 10. On the rival Contentions of the parties, it is to be seen whether the impugned Annexure XI WT Message dated 20.3.92, can be sustained in law, 11. In the petition, however, the petitioners have stated that almost all the member mills of the petitioner association submitted levy rice and paddy at the rate agreed upon and therefore the contention of the respondents that the petitioners failed to discharge their obligation has no foundation at all. 12. On perusal of the Annexures and copy of the minutes of the meeting held on 26.12.91 it is abundantly clear that earlier the percentage of levy was 10%, 5% and 4% in respect of the aforesaid three categories of mills. This percentage of levy remained upto 1990. However, the Government decided to increase the percentage to 40%, 30% and 20%. After representation by the petitioners, the State Government in consultation with the representatives of the petitioners association reduced the percentage to 10%, 5% and 4% on an understanding that rice millers would co-operate with Government in fulfilment of target of procurement of one lakh MT rice for the Kharif year 1991-92. The State Government, thereafter, reduced the percentage of levy to 10%, 5% and 4%. Accordingly, Annexure VI corrigendum was issued. However, thereafter, without assigning any reason and giving notice to the petitioner association the State Government suddenly revised the earlier decision and raised the levy to 40%, 30% and 20%. In the affidavit-in-opposition only the State Government has come forward and states that the Central Government refused to give concurrence for reduction of percentage as agreed upon between the representatives of the petitioners association and the officials of the State Government. The respondents have not placed any record before this Court to show that the members of the petitioners association failed to comply with the assurance given in the minutes of discussion though they stated in the affidavit. On the other hand the petitioners in their petition submitted a list of rice mills supplying levy rice to the Government. This was submitted in an attempt to show that the mills of the petitioners association had complied with the terms of the agreement entered into as per the minutes 01 discussion referred to above. 13.
On the other hand the petitioners in their petition submitted a list of rice mills supplying levy rice to the Government. This was submitted in an attempt to show that the mills of the petitioners association had complied with the terms of the agreement entered into as per the minutes 01 discussion referred to above. 13. The Union of India which is a party neither filed counter affidavit nor the counsel for the Union of India appeared at the time of hearing of this case. 14. State Government has been empowered to fix the rate of levy rice under section 3 of the Essential Commodities Act. In exercise of the power under section 3 of the Essential Commodities Act the State Government may issue notification for fixing the rate of levy rice. This is in the nature of a legislative action even when it is based on objective criteria founded on relevant materials. Therefore, the principles of natural justice is applicable to any such Order. It is nevertheless imperative that the action of the authority should b; inspired by reason. The Government can neither fix the rate arbitrarily nor it can fix the rate on extraneous consideration. 15. Any arbitrary action, whether in the nature of legislative or administrative or quasi-judicial, exercises of power is liable to attract the prohibition of Article 14 of the Constitution. The Supreme Court in EP Royappa vs. State of Tamil Nadu & another, (1974) 4 SCC 3 observed thus :- "... equality and arbitrariness are sworn enemies; one belongs to the rule of law in a republic while the other, to the whims and caprice of an absolute monarch." Unguided and unrestricted power is affected by the vice of discrimination. The principle of equity enshrined in Article 14 must guide every State action, whether it be legislative, executive, or quasi-judicial (See RD Shetty vs. International Airport Authority of India, (1979) 3 SCC 489 ). Power delegated by statute is limited by its terms and subordinate to its objects. The delegate must act in good faith, reasonably, intra vires the power granted and on relevant consideration of material facts. All actions be that legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws. Such action must be reasonable related to the purposes of the legislation.
The delegate must act in good faith, reasonably, intra vires the power granted and on relevant consideration of material facts. All actions be that legislative or administrative or quasi-judicial, must be in harmony with the Constitution and other laws. Such action must be reasonable related to the purposes of the legislation. If they are manifestly unjust or oppressive or outrageous or directed to an unauthorised end or do not tend in some degree to the accomplishment of the objects of delegation, Court might well say that the legislature never intended to give such authority to make such rule which are unreasonable and ultra vires. 16. The Government once having agreed to reduce the percentage of levy H rice cannot abruptly go back from their promise without giving any valid reasons. The reasons shown in the counter affidavit, in my opinion, are not valid and sufficient for raising the percentage to 40%, 30% and 20% in one go and it appears to be unreasonable. The Government did not come forward to show why such abrupt jump was necessary. Besides the Government raised the percentage by WT Message in the month of March when procurement of rice by the miller should be extremely difficult. Therefore, I am of opinion that the direction to supply levy rice at the enhanced rate is not justified and not informed of any reason. Therefore, the action of the respondents directing the mills of the petitioners association to supply levy rice at enhanced rate cannot be sustained in law. Accordingly I set and quash Annexure XI WT message and direct the respondents to collect levy at the rate of 4%, 5% and 10% as agreed upon for the year 1991-92. No costs.