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1995 DIGILAW 415 (KAR)

UNION OF INDIA v. STATE OF KARNATAKA

1995-08-30

A.J.SADASHIVA, M.L.PENDSE

body1995
M. L. PENDSE, J. ( 1 ) THIS batch of appeals raises the question of correct interpretation of proviso (ii) of order dated 22nd may, 1984 issued by government of india, ministry of food and civil supplies in exercise of powers conferred by clause 5 of the sugarcane (control) Order, 1966. The learned single judge by the impugned judgment dated February 25, 1991 disposed of all the writ petitions by relying upon the previous decision of this court in Ganeshmal jain, s, and another v Union of India and another. ( 2 ) THE facts giving rise to this litigation are required to be briefly stated to appreciate the grievance of the appellant. The respondents in all these appeals are recognised dealers under sugarcane (control) order and are wholesalers dealing in sugar and khandasari. Sugar being an essential commodity the production, prices, movement and distribution is required to be regularised in the interest of their availability at fair-price to the consumer. The government of India reviews the sugar policy from time to time and steps are taken under the Provisions of the Essential Commodities Act, 1955 by issuance of sugarcane (control) order. The government of India since the year 1967-68 prescribed the policy of partial control of sugar. The levy of sugar quota released each month for internal consumption is a fixed quantity. The release of non-levy sugar is subject to regulation under the Provisions of the sugarcane (control) Order, 1966. With a view to check hoarding the central government has been prescribing stock-holding limits in respect of sugar and khandasari for the licenced dealers. The government also has fixed the period within which these stocks received by the dealers has to be disposed of and this precaution is taken to check hoarding. The government has issued sugarcane (control) orders from time to time fixing the time limits of 10 days or 7 days as the period within which the stocks received by the dealers should be disposed of. ( 3 ) WITH this background it will be convenient to refer to the order dated may 22, 1984. The order is issued in exercise of powers conferred by clause 5 of the sugarcane (control) Order, 1966 in supersession of the order dated 29th april, 1982. ( 3 ) WITH this background it will be convenient to refer to the order dated may 22, 1984. The order is issued in exercise of powers conferred by clause 5 of the sugarcane (control) Order, 1966 in supersession of the order dated 29th april, 1982. The order prescribes that no recognised dealer shall keep in stock at any time vaccum pan sugar in excess of 250 quintals in cities and towns with a population of 1 lakh or more. The limit applies also for khandasari (open pan sugar ). The proviso then sets out the following:"provided that no recognised dealer shall hold any stock of vaccum pan sugar or khandasari (open pan sugar) for a period extending ten days from the date of receipt by him of such stock of sugar or khandasari;"the respondents who are recognised dealers filed writ petitions before the learned single judge under article 226 of the Constitution claiming that the order passed by the central government is illegal and invalid. The respondents further claimed that the proviso is bad and void in law. The graveman of the complaint of the recognised dealers was that the proviso is unworkable and even if one quintal of sugar is not disposed of within the stipulated period then the dealers are liable to prosecution and arrest. As stated earlier, the grievance succeeded before the learned single judge and the order of the learned single judge is now under challenge in these appeals. ( 4 ) THE learned counsel appearing on behalf of the appellant submitted that the interpretation of the proviso by the learned single judge in ganeshmal jain's case, supra, is incorrect and in case that interpretation is accepted then the proviso becomes redundant. We find considerable merit in the submission of learned counsel. As mentioned hereinabove the order was issued with a view to regulate the holding of sugar or khandasari and the object of the proviso was to correct the hoarding tendency of the unscrupulous traders. The anxiety of the central government was that the stock of sugar or khandasari should be disposed of within a period of 10 days from the date of receipt of such sugar or khandasari. The anxiety of the central government was that the stock of sugar or khandasari should be disposed of within a period of 10 days from the date of receipt of such sugar or khandasari. Bearing in mind the object of prescribing the proviso, it would be incorrect to accept the contention urged on behalf of the respondent that the proviso is applicable only on the date when the order came into force. In other words the contention of the respondents is that the proviso is a one time affair and the recognised dealers are not bound to dispose of the stock of sugar or khandasari within a stipulated period, if the stock is received subsequent to the date of impugned order. The learned single judge in ganeshmal jain's case, supra, observed:"proviso to para 2 of the impugned order deals with the stock held by a recognised dealer on the date when the impugned order came into force. Since the impugned order fixed the upper limit of the storage of vaccum pan sugar and since it was possible and probable that a recognised dealer might be holding the stock of pan sugar in excess of 250 quintals on the date the impugned order came into force, it was necessary to grant him time to sell the stock held in excess of 250 quintals. Therefore, proviso to clause 2 of the impugned order provided that no recognised dealer should hold any stock of vaccum pan sugar of khandasari (open pan sugar) for a period of exceeding ten days from the date of receipt by him of such stock of sugar or khandasari. The words 'such stock' occurring in the proviso to clause 2 of the impugned order are referable to the stock held in excess of 250 quintals on the date the impugned order came into force". with respect we are unable to share the view of the learned single judge. It is futile to suggest that the proviso relates to holding of sugar or khandasari in excess of 250 quintals only on the date of the order. It would be artificial to read the proviso in such a manner. The object of issuance of the order was to correct the hoarding tendency with a desire that an essential commodity like sugar should be available to the consumer regularly. It would be artificial to read the proviso in such a manner. The object of issuance of the order was to correct the hoarding tendency with a desire that an essential commodity like sugar should be available to the consumer regularly. The respondents are recognised dealers and wholesalers and normally they sell the sugar or khandasari to the retailers and not directly to the consumer. The claim of the respondents that it may not be possible to dispose of the stock within the stipulated period cannot be accepted in absence of any data in that regard. None of the respondents had pointed out a single instance when the respondents were unable to dispose of the stock received within the stipulated period. The contention of the respondents that the proviso operates only on the date of order and not thereafter, if accepted, would render the proviso totally ineffective and the object of issuance of the order would stand defeated. Learned single judge was not right in placing reliance on the words 'such stock' in the proviso and assuming that the expression, 'such stock' refers to only the stock which was available with the dealers on the date of the order. The words, 'such stock' refers to the stock of sugar received by the dealer and has no relation whatsoever to the stock existing or available on the date of the order. In our judgment, the proviso is not a one time affair but must apply at all times while the impugned order is in force. For these reasons we are unable to accept the view taken by the learned single judge in ganeshmal jain's case, supra and which has been followed by the learned single judge in the present proceedings. ( 5 ) IT was contended on behalf of the respondents that giving effect to the proviso is likely to cause serious hardship to the recognised dealers. It was contended that it is possible that on some occasions the dealer may not be able to dispose of the entire stock of 250 quintals within the stipulated period. It was suggested that in cases where the market remains closed or where the markets cannot be operated due to floods or any other reason beyond the control of the dealer, it may not be possible to dispose of the entire quantity. It was suggested that in cases where the market remains closed or where the markets cannot be operated due to floods or any other reason beyond the control of the dealer, it may not be possible to dispose of the entire quantity. It was urged that even if one quintal of sugar remains undisposed then the recognised dealers are open for arrest and prosecution under the Essential Commodities Act. The counsel for the respondents sounded the apprehension that the interpretation of the proviso is likely to lead to mischief and the unscrupulous officers may take revenge against the traders. We are unable to find any merit in the apprehension. In the first instance the proviso cannot be struck down on the ground that it may lead to some unscrupulous officers misusing the provision. The validity of the Rule does not depend upon the apprehension that the Rule may be misused. Secondly, if any instance is brought to the notice of this court where powers of prosecution and arrest are sought to be misused by reference to the proviso, then such misuse or mala fide action will be immediately struck down. The traders need not have any apprehension that even if one quintal of sugar remains undisposed for reasons beyond the control of the dealer, still the authorities would be entitled to arrest and prosecute the dealer. In our judgment, such apprehension need not drive the respondents to claim that the operation of the proviso should be limited to only one time. The proviso, in our judgment, must be read down so as to remove the apprehension that arrest would follow even if a small quantity of stock remains unsold for reasons beyond dealer's control. In our judgment, the learned judge was in error in granting the relief sought for and consequently the impugned judgment is liable to be set aside. ( 6 ) ACCORDINGLY, all these appeals are allowed and the common order dated February 25, 1991 passed by the learned single judge is set aside and the petitions stand dismissed. In the circumstances of the case there will be no order as to costs. --- *** --- .