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1997 DIGILAW 44 (GAU)

Jenny Plywood Industries Ltd. v. State of Arunachal Pradesh

1997-03-17

D.N.CHOWDHURY, V.DUTTA GYANI

body1997
V. Dutta Gyani, C.J. (Acting)— This writ appeal is directed against the judgment and order dated 12.6.96 passed by a learned Single Judge of this Court in Civil Rule No.1609 of 1990, thereby dismissing the writ petition. 2. Heard Mr. AK Maheswari, learned counsel for the appellant as also the learned Govt Advocate for the respondent-State. The appellant is a company incorporated under the Companies Act, 1956. It is engaged in the business of manufacture of sawn timber, veneer and plywood. The petition was filed by the appellant company challenging the ban imposed by the respondents for sale and despatch of veneer from outside the State of Arunachal Pradesh and praying for quashing of letter dated 23.9.89 (Annexure 7) thereby refusing to issue Transpit & Pass for supply of veneer outside the State, and letter dated 5.1.89 which reads as follows: To, The Commercial Manager, Jenny Plywood Industries Ltd, Bogapani, PO Naharkatia, Dist Dibrugarh, (Assam) Sub: Movement of veneer without coverage of Transit Pass. Ref: Your letter No.JPI/982/89-90 dated 8.12.89. Sir, In referring to your letter cited above, I am to inform you that ban on movement of veneers outside AP is lifted in respect of veneer mills only. Your firm being a plywood industry for which specific annual quota of timber is allotted by the Govt for manufacture of plywood only, you cannot carryout sale of veneers, unless specific Govt orders to the contrary are issued. But under no circumstances you can carry out outside movement of veneers. Therefore, question of issuing TP for outward movement of veneers from your mill does not arise." 3. Learned counsel appearing for the appellant contended that the ban imposed intrferes with the petitioner's right of carrying on business as guaranteed under Article 19 of the Constitution. It is discriminatory in the serise that other units are allowed to sale veneers outside the State, the petitioner company is refused to issue TP. The learned Single Judge by the impugned order held that the action taken by the respondents is nothing but a regulatory measure for development and growth of industry, ft, is not a restriction on trade as contended by the petitioner appellant. The learned Single Judge by the impugned order held that the action taken by the respondents is nothing but a regulatory measure for development and growth of industry, ft, is not a restriction on trade as contended by the petitioner appellant. It was argued that the respondents-State having agreed to allow the appellant to sale and despatch veneer outside the State, as per agreement Annexure 5, was estopped from prohibiting the appellant company from sale and despatch of veneer outside the State. 4. Learned Govt Advocate referring to Annexure R/1, Memo dated 10.2.82 issued to all plywood units by the Chief Conservator of Forest, submitted that the ban for sale and despatch of veneer outside the State was imposed so as to cater to the needs of the plywood industries of the State and its local population, learned Single Judge has taking into consideration the object behind imposition of restriction, has held that it was in the larger interest of the community; It is evident from Annexure R/l as filed by the respondents that sufficient time was given to the manufacturers of veneer including the appellant to .convert their units into a tea chest plywood unit. For some reasons or other, they could not. They were to supply veneer to the existing tea chest/plywood units located within the State of Arunachal Pradesh and that too at the rate mutually agreed upon by the manufacturer and purchaser. This cannot be said to be an unreasonable restriction on the right of trade or business. 5. Learned counsel for the petitioner placing reliance on a judgment of the Supreme Court as reported in MJ Sivanivs. State of Kamataka, (1995)6 SCC 289 , contended that refusal to issue Transit Pass for sale of veneer outside the State amounts to total ban. This contention cannot be accepted. The Supreme Court in MJ Sivani's case (supra) has indicated the broad criteria in applying the test of reasonableness and observed that no hard and fast rule concerning of trade etc could be laid. What is required to be seen is, whether law strike the proper balance between social control at the one hand and the right of individual at the other hand. What is required to be seen is, whether law strike the proper balance between social control at the one hand and the right of individual at the other hand. In deciding the question of reasonability of restriction imposed, a Court is to take into account the factors like nature of the right, underlying purpose of the restriction imposed, evil sought to be remedied by the law, its extent and urgency. A Court cannot proceed on general motion of what is reasonable in the abstract or even on consideration what is reasonable from the point of view of person or class or persons on whom the restriction are imposed. The object behind the restrictions imposed has been quoted by the learned Single Judge. The Supreme Court in Khodai Distillaries Ltd vs. State of Karnataka, (1995) 1 SCC 574 , has categorically held that Article 19 (I) (g) confers only a qualified and not absolute right, and a citizen has no fundamental right of trade or business in liquor. The right protected by Article 19(1) are not absolute and unqualified, and the qualifications are stated in clause (2) to (6) Of Article 19.-Therefore the fundamental right guaranteed under Article 19 (1) (a) to 19 (1) (g) are to be read along with the said qualifications. 6. Applying the test as laid down in Sibani's case (supra) relied upon by the learned counsel for the appellant, the ban imposed on sale of veneer outside the State is in the larger interest of the community to cater to the needs of the local plywood industry. 'Assuming for the sake of argument, even if it affect an individual manufacturer, individual's interest must give in to the larger interest of the community, Sibani's case further pointed out that no extract or fixed principle can be laid down which may have universal application in all cases. In order to determine reasonableness of restrictions imposed, it is imperative for the Court to examine whether social control as envisaged under Article 19 is being affectuated. As rightly argued by the learned Govt Advocate, the restriction imposed is merely regulatory measure and has the effect of promoting larger interest of the community. In order to determine reasonableness of restrictions imposed, it is imperative for the Court to examine whether social control as envisaged under Article 19 is being affectuated. As rightly argued by the learned Govt Advocate, the restriction imposed is merely regulatory measure and has the effect of promoting larger interest of the community. The Supreme Court in Papnasam Labour Union vs. Madura Coads Ltd, AIR 1995 SO 2200, has gone to the extent of observing that after a restriction imposed has the effect of promoting directive principle, it can be presumed to be a reasonable restriction in public interest. There is no quarrel with the principles laid down in Oudh Sugar Mills Ltd vs. Union of India, AIR 1970 SC 1070 , that not only the law restricting the freedom should be reasonable, the order passed on the basis of the law should also be reasonable. 7. As already discussed above, the regulatory measures adopted by the State have been held to be in larger interest of the community, no grounds for interference with the order passed by the learned Single Judge have been made out. The appeal, therefore, fails. It is accordingly dismissed.