Kishan Deo Agarwal v. Union of India — 1999 DIGILAW 96 (CAL)

JUDGMENT : - Satyabrata Sinha, J.: These two appeals are directed against an order dated 2nd February, 1999 passed by a learned Single Judge of this court in Writ Petition No. 203 of 1999 whereby and where under the said learned Judge vacated an interim order passed by him. 2. The writ petitioners in their respective applications had questioned a notification dated 15th December, 1998 issued under section 3 (1) of the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987 (hereinafter referred to as 'the said Act'). The said notification had been issued by the Central Government in exercise of its powers conferred by section 3 of the said Act and supersedes earlier notifications dated 15th March, 1995 and 30th June, 1997 with effect from the date of publication in the Official Gazette thereof i.e. 23.12.1998. 3. The said Act was enacted to provide for the compulsory use of jute packaging materials under the supply and distribution of certain commodities in the interest of production of raw jute and raw packaging materials and of persons engaged in the production thereof and for matters connected therewith; as would appear from preamble thereof. 'Standing Advisory Committee' has been defined in section 2(e) to mean a committee constituted under section 4. Sections 3 and 4 which are relevant for the purpose of this case, read thus:- "3. 'Standing Advisory Committee' has been defined in section 2(e) to mean a committee constituted under section 4. Sections 3 and 4 which are relevant for the purpose of this case, read thus:- "3. (1) Notwithstanding anything contained in any other law for the time being in force, the Central Government may, if it is satisfied, after considering the recommendations made to it by the Standing Advisory Committee, that it is necessary so to do in the interests of production of raw jute and jute packaging material, and of persons engaged in the production thereof, by order published in the Official Gazette, direct, from time to time, that such commodity or class of commodities or such percentage thereof, as may be specified in the order, shall, on and from such date, as may be specified in the order, be packed for all purposes of its supply or distribution in such jute packaging material as may be specified in the order: Provided that until such time as the Standing Advisory Committee is constituted under section 4, the Central Government shall, before making any order under this sub-section, consider the matters specified in sub-section (2) of section 4, and any order so made shall cease to operate at the expiration of three months from the date on which the Standing Advisory Committee makes its recommendations. (2) Every order made under sub-section (1) shall be laid, as soon as may be after it is made, before each House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in making any modification in the order or both Houses agree that the order should not be made, the• order shall thereafter have effect only in such modified form or be of no effect, as the case may be; so, however that any such modification or annulment shall be without prejudice to the validity of anything previously (sic) that order. 4. 4. (1) The Central Government shall, with a view to determining the commodity or class of commodities or percentages thereof in respect of which jute packaging material shall be used in their packing, constitute a Standing Advisory Committee consisting of such persons as have, in the opinion of that Government the necessary expertise to give advice in the matter. (2) The Standing Advisory Committee shall, after considering the following matters, indicate its recommendations to the Central Government, namely:- . (a) the existing level of usage of jute materials; (b) the quantity of raw jute available; (c) the quantity of jute material available; (d) the protection of interests of persons engaged in the jut industry and in the production of raw jute; (e) the need for continued maintenance of jute industry; (f) the quantity of commodities which, in its opinion, is likely to be required for packing in jute material; (g) such other matters as the Standing Advisory Committee may think fit." 4. The impugned notification has been challenged on the ground that the earlier notifications granting a higher benefit could not have been superseded during the 'Jute Year' without complying with the statutory requirements as laid down in sections 3 and 4 (2) of the Act. It has been contended that no recommendations in fact had been made before issuance of the impugned notification and in any event the Standing Advisory Committee failed to take into consideration the factors enumerated in section 4 (2) of the Act. On the other hand, the stand of the respondents is that the said notification has been issued on the basis of the recommendations of the Standing Advisory Committee. 5. A bare perusal of the said Act would show that the same is a beneficient legislation. Such a beneficient legislation should normally be construed literally. See The Calcutta Jute Manufacturing Co. Ltd. & Anr. vs. Jute Manufacturers Development Council & Ors., reported in 1997 (1) CHN 308. Section 3 contains a non-obstinte clause. The said provision must also, therefore, be given its full effect. It may be that the recommendations of a Standing Advisory Committee is not binding upon the Central Government but the fact remains that such recommendation have to be made by the Standing Advisory Committee upon taking into consideration the factors enumerated in sub-section (2) thereof. 6. The said provision must also, therefore, be given its full effect. It may be that the recommendations of a Standing Advisory Committee is not binding upon the Central Government but the fact remains that such recommendation have to be made by the Standing Advisory Committee upon taking into consideration the factors enumerated in sub-section (2) thereof. 6. In the impugned notification it has been stated that the same had been issued after considering the recommendation by the Standing Advisory Committee. The writ petitioners-appellants in this appeal have alleged that in view of the aforementioned statement they have proceeded on the basis that such recommendation had been made, but when the same had been produced by the learned Additional Solicitor General before the learned Trial Judge, it transpired, that the said purported notification do not contain any recommendation as such and merely contains minutes of discussions, recording deliberations in relation to the subsequent jute year. 7. The learned Trial Judge has merely proceeded on the basis that the said Act has been declared intra vires by the Supreme Court of India in Dalmia Cement (Bharat) Ltd. and Anr. vs. Union of India & Ors., reported in (1996) 10 SCC 104 : JT 1996 (4) SC 555. The learned Trial Judge has further noticed that keeping in view the fact that the said notification has been laid before the Parliament in terms of sub-section (2) of section 3 of the Act, the court should not pass any interim order. It appears that a Division Bench of this court had passed an order of stay. The said interim order of stay is continuing from time to time. 8. The Statements of object and reason of said Act shows that the said Act was enacted with a view to protect the livelihood of 4 million rural agricultural families and 2.5 lacks of industrial workers. The Central Government thereafter in terms of the provisions of the said Act issued a notification on 30th June, 1988 upon compliance of the provisions of sub-section (2) of section 4 of the Act whereby and where under a direction was issued that the commodities mentioned in column 2 of the schedule appended thereto shall be packed in jute packaging material for their supply or distribution, in such minimum percentage as specified• in corresponding entries in column 3 of the said schedule which is to the following effect:- 1. Foodgrains Hundred per cent. 2. Sugar Hundred per cent. 3. Cement Seventy per cent. 4. Fertilizer Hundred per cent. (Urea only) 9. However, by reason of another notification dated 14th March, 1995, the following direction was made:- 1. Foodgrains Hundred per cent. 2. Sugar Hundred per cent. 3. Cement Fifty per cent. 4. Fertilizer Sixty five per cent (Urea only) 'during the jute year 1994-95 and fifty per cent during the jute year 1995-96." 10. A notification of exemption was issued by the Central Government in exercise of its power under section 16 of the Act on 16th March, 1995. However, by a notification dated 16th March, 1996 an exemption was granted in respect of the cement manufactured in mini cement plants. On 28th June, 1996 a direction had been issued in respect of Fertiliser (Urea) to the extent of 50% from 1.7.96 to 30.9.96. Similar other notifications had been issued from time to time. By a notification dated 30th June, 1997 it was directed: "SO 473 (E).- Whereas the Central Government is of the opinion that it is expedient to exempt export packaging and small consumer packs of sugar from the operation of order made under section 3 in the public interest. Now, therefore, in exercise of powers conferred by sub-section (1) of section 16 of the Jute Packaging Material (Compulsory Use in Packing Commodities) Act, 1987 (10 of 1987), the Central Government hereby directs that on and from the 1st day of July, 1997 that the export packaging and small consumer packs of 5 kgs. and below in respect of sugar shall be exempted from the operation of the order made in the Notification No. 13/13/96-Jute published on 1st day of July, 1997 in the Gazette of India, Extraordinary in respect of Jute Year 199798 and 1998-99." 11. However, it appears from the documents on the records that parties have proceeded on the basis that no notification had been issued withdrawing cement from the purview thereof. 12. Before this court the learned Counsels appearing on behalf of the appellants and Mr. Pal have taken us through various documents leading to the purported recommendations made by the Standing Advisory Committee. It is not disputed that pursuant to the directions of the Supreme Court of India, the Standing Advisory Committee was required to comply with the principles of natural justice. Pal have taken us through various documents leading to the purported recommendations made by the Standing Advisory Committee. It is not disputed that pursuant to the directions of the Supreme Court of India, the Standing Advisory Committee was required to comply with the principles of natural justice. A representation was made by the Indian Jute Mills' Association before the said Committee on 15.5.98 which is contained in Annexure 'K' to the stay application. It had also filed a memorandum which is contained at page 158 of the Paper Book raising various contentions therein. From the minutes of the First Phase of the 7th meeting of the Standing Advisory Committee, it appears that in the earlier four phases of the 6th meeting no consensus could be arrived at and the matter had been referred to CCEA, which had approved the continuation of reservation of mandatory use of jute packaging in respect of food grains, sugar and urea etc. However, it deferred consideration of the proposals pertaining to the use of jute in packaging of cement. In that situation a revised jute packaging order was issued on 30.6.97 for the years 1997-98 and 1998-99 in respect of the aforementioned three commodities. The order dated 30.6.97 was in modification of the order dated 15.3.95 and, thus, it was held that cement continues to be covered for packaging of 50% of the production under the earlier order dated 15.3.95. 13. Prima facie there is noting to show that the said meeting was held for the purpose of making any recommendations for the current jute year. The Committee noticed that it should give an opportunity of hearing to all parties in view of the decision of the Supreme Court. In the Second Phase of the 7th meeting held on 15.5.98 the requirements in relation to various sectors had been discussed. While discussing the matter relating to jute sector, however, it appears, that the memorandum submitted by the Indian Jute Mills' Association had not been considered at all. 'The matter of pith and substance does not appear to have been taken into consideration. The Chairman asked the representative of the Jute Sector to submit a detailed statement specified therein for the year 1987 to 1997. Such information had been given on 29.5.98. The Third Phase of meeting was held on 2nd June, 1998. 'The matter of pith and substance does not appear to have been taken into consideration. The Chairman asked the representative of the Jute Sector to submit a detailed statement specified therein for the year 1987 to 1997. Such information had been given on 29.5.98. The Third Phase of meeting was held on 2nd June, 1998. Clauses 7, 8(a) and 9 which are relevant for the purpose of this case, read thus:- '''7. It was generally agreed that in so far as the production of sacking is concerned the Committee could take the production during 1997-98 as a bench mark when 8.60 lakh MT of sacking was produced. In other words, overall availability of sacking would be within the range of 8.50 to 9.00 lakh MT. Therefore, the match between the supply and demand shall have to be worked out on this basis. During 1998-99 the projected requirement of foodgrains at 4.5 lakh MT and of sugar at 2.02 lakh tons would leave little more than 2 lakh tons surplus sacking which is required to meet the needs of cement and several other miscellaneous sectors like vegetable, oil seeds and sundry other commodities. This surplus availability of sacking, therefore, would not be adequate to meet the requirement of cement industry which is computed to be 3.68 lakh MT at the current level of reservation of 50%. The demand and supply situation in 1999-2000 would get further aggravated in terms of implementability of the reservation for these three sectors excluding urea. 8. Based upon the analysis of demand and supply scenario the following propositions may be 'considered : (a) In view of the inadequate surplus available after meeting the requirements of food grain, sugar, and urea, it will be difficult to enforce reservation on cement at the current level. In fact, the surplus capacity might just be able to meet only 25% reservation levels for the cement industry and that also with certain difficulties. Therefore, on suggestion could be to drop the reservation on cement altogether and give recommendations accordingly. 9. The members suggested that prior to finalization of the minutes of the meeting, draft minutes may be circulated to the members for additional comments, if any." 14. No other document had been produced to show that there had been any other recommendation. Therefore, on suggestion could be to drop the reservation on cement altogether and give recommendations accordingly. 9. The members suggested that prior to finalization of the minutes of the meeting, draft minutes may be circulated to the members for additional comments, if any." 14. No other document had been produced to show that there had been any other recommendation. No document bears the signatures of authorities concerned had been produced to show that in fact any recommendation had been made. A purported note for the Cabinet Committee of the Economic Affairs was circulated by the Secretary. Up till now there is nothing to show that any deliberation had been made as regard the current year by the Standing Advisory Committee. Apparently no fourth phase of the meeting had been held for consideration of the additional materials which might have been supplied by the members on the basis of the such draft which had been circulated for the consideration of the members of the committee. It was stated : "In view of the inadequate surplus available after meeting the requirements of foodgrain, sugar and urea, particularly if there is bunching of orders from the foodgrains side. It will be difficult to enforce reservation on cement at the current level. Therefore, one suggestion could be to drop the reservation on cement altogether and give recommendations accordingly." Paragraph 22 of the note for Cabinet Committee on Economic Affairs shows : "This note was circulated to Deptt. of Agriculture & Co-operation, Deptt. of Expenditure, Deptt. of Industrial Development, Deptt. of Supply, Deptt. of Environment and Forest, Deptt. of Industrial Policy and Promotion, Deptt. of Food and Consumer Affairs, Deptt. of Sugar and Edible Oils, Deptt. of Fertilizers, Deptt. of Legal Affairs, Ministry of Law and Ministry of Chemicals and Petro-Chemicals for comments. Except for the Deptt. of Food and Consumer Affairs and the Deptt. of Fertilizers, the remaining Ministers/Deptts. have agreed to the proposal." The comments of the concerned Ministries were annexed. Ultimately the following suggestions had been made which would appear at page 107 of the Paper Book. 15. From a perusal of the document, prima facie, it appears that the Government had taken a decision only on the views of the Joint Secretary. have agreed to the proposal." The comments of the concerned Ministries were annexed. Ultimately the following suggestions had been made which would appear at page 107 of the Paper Book. 15. From a perusal of the document, prima facie, it appears that the Government had taken a decision only on the views of the Joint Secretary. Keeping in view the fact that notifications had already been issued till June, 1999 prima facie there does not appear to be an earthly reason why the Standing Advisory that recommendation for reduction of the facilities be made during the currency of the jute year, in respect whereof a decision had already been taken. Committee would reconsider the matter. Nothing has been produced to show that the committee had in mind. Prima facie, therefore, it appears that it was reviewing the scenario beyond June, 1999. It further appears from the Joint Secretary's note that there does not exist any mention of the earlier recommendations given by the Joint Advisory Committee for the year 1998-99. 16. Thus a prima facie case appears to have been made out that the Standing Advisory Committee did not consider the matter for the current year at all. We are further of the view that having regard to the intrinsic evidence, the purported deliberations may, prima facie, be viewed to be one which was still at the stage of deliberation and did not attain finality. The relaxation in respect of sugar industry was to be determined by the Ministry of Textile which was one of the component of the Standing Advisory Committee but the same is not coming forth. 17. The learned Additional Solicitor General very fairly submitted that only because the said notification had been laid before the Parliament, the same by itself may not be a ground for this court in not exercising the power of judicial review, but according to the learned counsel the propriety demands that the same be not interfered with at this stage. 18. It is true that the Central Government has the power to revise the order in terms of sub-section (1) of section 3 of the Act as also grant exemption in terms of section 16. A power of judicial review, however, cannot be taken away by statute nor such a power can be thwarted only because the matter is pending before the Parliament. A power of judicial review, however, cannot be taken away by statute nor such a power can be thwarted only because the matter is pending before the Parliament. See L. Chandra Kumar vs. Union of India & Ors., reported in 1997 (3) 261. 19. The Parliament while exercising its power under sub-section (2) of section 3 of the Act will not consider the validity of the Act but will confine its jurisdiction, only for the purposes specified therein. Moreover, the matter relating to laying down of an Act or a notification before the Parliament may not be relevant for the purpose of considering the case as to whether unfettered and arbitrary power had been conferred on the authority acting under a delegated legislation, the Parliament cannot have any say as to whether such notification is ultra vires the Act or not. Such laying down of the notification before the Parliament is also not mandatory but merely directory. 20. Furthermore, the Parliament does not have •any adjudicatory function. In any event, the said notification, if not stayed, shall be operative forthwith and even if the Parliament modifies the order, the same would have only a prospective effect. Thus, it is not correct to contend as was sought to be done by the learned Additional Solicitor General that the Parliament has not taken up the matter only because it is sub-judice. 21. As prima facie, thus, it appears from the minutes of meetings itself that merely suggestions had been made. A distinction must be made between 'suggestion' and 'recommendation'. As would appear from paragraph 8 of the minutes which is to the following terms: "Therefore, one suggestion could be to drop the reservation on Cement altogether and give recommendations accordingly, it would be evident such distinction has been borne in mind by the members of the committee." From a bare perusal of the minutes of the third phase of the meeting, would show that the statements were to be based upon analysis of demand and supply scenario where after it was suggested that the propositions mentioned therein may be considered which goes to show that it was only at the stage of consideration. 22. Furthermore, it is expected that recommendations would be made by at least making a statement that the Standing Advisory Committee had taken into consideration the factors enumerated in sub-section (2) of section 4. 22. Furthermore, it is expected that recommendations would be made by at least making a statement that the Standing Advisory Committee had taken into consideration the factors enumerated in sub-section (2) of section 4. No such statement appears to have been made. The questions, thus, which have been raised before us are required to be considered by the court at the time of hearing the writ application. 23. Power of judicial review of this court can be exercised where a case has been made out that the delegatee under a statute has failed to comply with the mandatory requirements before making the delegated legislation and, thus, the same is ultra vires. We are, therefore, of the view that a strong, prima facie, case has been made out. 24. There cannot be any doubt that matter poses a difficult question as regard consideration of balance of convenience and inconvenience and irreparable injury which may be suffered by the parties. In view of the aforementioned prima facie finding and keeping in view the fact that abrupt stoppage of production of jute packs would not only be contrary to the object of the Act but also would adversely affect the workmen, agriculturists as also the persons connected with the business of jute bags, we are of the opinion that balance of convenience is also in favour of the appellant. 25. The word 'irreparable injury' means 'substantial injury' and not every injury which could be compensated in terms of money. In this case it will not even be possible to assess the quantum of damages which may be suffered by the appellants in the event ultimately the writ petition succeeds. 26. On the other hand, the concerned industries would not suffer if instead of plastic bags they use jute bags which, it has been noticed even by the members of the Standing Advisory Committee, can be used again and again, if necessary, upon stitching at few places. Furthermore, an order of stay had been continuing from the date filing of the writ application, except for the period during which the impugned order was passed and an order of stay was granted by a Division Bench of this court. The life of notification and the validity whereof has been questioned in the writ petition is valid only upto 30th June, 1999. The life of notification and the validity whereof has been questioned in the writ petition is valid only upto 30th June, 1999. We are, therefore, of the opinion that interest of all concerned shall be sub-served if the interim order of stay granted by this court be allowed to continue with the following directions :- 1. Mr. P.K. Roy's client viz. Complex Plastic Industries Pvt. Ltd. shall be impleaded as a party respondent herein as also in the writ application. 2. All the respondents must file their affidavit-in-opposition within 10 days from date. Affidavit-in-reply thereto must be filed within 3 days thereafter. 3. The writ application itself may be heard and disposed of within 3 weeks from date. 4. The interim order of stay shall continue for a period of 3 weeks. 5. If the writ application is not heard within the aforementioned period prayer for continuation, variation and/or modification of this order may be made without filing any further application. 6. Before parting with this case we may observe that any observations made by us must be held to have been made for the purpose of disposal of this appeal only and the same may not be construed to mean that we have arrived at a finding so as to bind the learned Trial Judge. 27. These appeals and the applications are disposed of with the aforementioned directions without any order as to costs. S.N. Bhattacharjee, J.: I agree. Appeals allowed with directions.