SURINDRA AGRICULTURE FERTILIZERS AGENCY v. UNION OF INDIA
2001-09-28
A.K.GOEL, C.K.THAKKER
body2001
DigiLaw.ai
JUDGMENT C.K. Thakker, J.:- All these petitions have been filed by the petitioners for an appropriate writ, direction or order quashing and setting aside a policy decision taken by the government of Himachal Pradesh and for an appropriate direction to the respondents to permit the petitioners to continue to distribute fertilizers and sugar in accordance with the earlier decisions and practice till the impugned decision was taken. Other reliefs have also been prayed. 2. To understand the controversy raised in the present group of petitions, it may be proper if the facts in the first petition (CWP No.727 of 2000) may be noted. It is the case of the petitioner that it is registered society with respondents under the Fertilizer Control order, 1985 and Fertilizer Movement Control Order, 1973. It is doing business as Sub Wholesalers under the above Control Orders since the date of its registration. It is asserted by the petitioner that its working is to the complete satisfaction of the authorities and there was no complaint against the work or conduct of the petitioner. According to the petitioner, the above Control orders were issued by the Central Government in exercise of powers under Section 3 of the Essential commodities Act, 1955. the underlying object of the said orders was to secure equitable distribution of fertilizers in several States in India. As per the say of the petitioner, it is a registered dealer and is functioning as such. A licence was issued in favour of the petitioner, which was renewed from time to time and even today it is operative. According to the petitioner Sub Whole Sale Dealer was appointed after application of mind by the authorities inasmuch as it would benefit general public and such agency would be appropriate for smooth distribution of fertilizers to the inhabitants of the society. It would also prevent chaos in distribution of essential commodity. 3. The grievance of the petitioner is that a communication was addressed to the Managing Director. HIMFED, Shimla by the Director of Agriculture on 17th August, 2000 (Annexure P-2) on the subject of Fertilizers Distribution System -Abolition of Second Tier i.e. Sub Whole Sale from the distribution system.
It would also prevent chaos in distribution of essential commodity. 3. The grievance of the petitioner is that a communication was addressed to the Managing Director. HIMFED, Shimla by the Director of Agriculture on 17th August, 2000 (Annexure P-2) on the subject of Fertilizers Distribution System -Abolition of Second Tier i.e. Sub Whole Sale from the distribution system. It was stated that as per the policy decision taken by the Government, the existing three tier system of the fertilizer distribution system had been modified and the middle tier i.e. sub whole sale dealer had been abolished from the fertilizer distribution system. It was observed that the distribution margin, which was admissible for sub whole sale shall now be passed on to HIMFED and farmers equally i.e. 50:5.0, thereby catising reduction in fertilizer price. With the said decision, the fertilizer distribution system would become efficient and unnecessary expenditure on loading/unloading and transport would also be avoided. The decision was to be implemented with immediate effect. Being aggrieved by the said communication/order, the petitioner has approached this Court. 4. In CWP No.735 of 2000, CWP No.882 of 2000 and CWP No.982 of 2000 also, the above policy decision is challenged. 5. In CWP No.734 of 2000, a similar decision dated 29th April, 2000, discontinuing sub wholesalers in distribution of Sugar is challenged. The Managing director of Himachal Pradesh State civil Supplies Corporation, respondent No.3 herein vide above letter informed the Area Managers of Himachal Pradesh State civil Supplies corporation Ltd. Shimla/Solan/Nar han/Mandi/Dharamshala/Chamba (annexure P/3) inviting their attention to an office telegram dated 24th April, 2000, wherein it had been intimated that no sub wholesalers margin be paid till further orders. It was also stated that the Corporation had received payment of sub wholesalers margin from the State government unto January, 1999 and from February, 1999 to April, 2000, it was recoverable from the Department, for which no budget had been kept by the State Government in the year 2000-2001. Then, it was stated; "In view of the above position, it has been decided that sub-wholesalers margin at the rate 6.39 per qtl. paid after January, 1999 be recovered from the wholesalers concerned immediately under intimation to this office". The said communication/order is challenged in the petition. 6. Notice was issued, pursuant to which the respondents appeared. Affidavits and further affidavits have been filed. 7. We have heard Mr.
paid after January, 1999 be recovered from the wholesalers concerned immediately under intimation to this office". The said communication/order is challenged in the petition. 6. Notice was issued, pursuant to which the respondents appeared. Affidavits and further affidavits have been filed. 7. We have heard Mr. Ajay Sharma, learned counsel for the petitioners in CWPs No.727, 734 and 735 of 2000 and Mr. L.C. Kapoor, learned counsel for the petitioners in CWP No.882 and CWP No.982 of 2000, Mr. Sanjay karol, learned Advocate General instructed by Mr. M.L. Chauhan, for respondents , No.2 to 4 in CWPs No.727,735,882 and 982 of 2000 and for respondents No. 1 and 2 in CWP No.734 of 2000 and Mr. D.D. Sood, learned Senior Advocate instructed by Mr. Sandeep Sharma, learned counsel for respondent No.3 in CWP No.734 of 2000. 8. Learned counsel for the petitioners raised several contentions. It was urged that the State Government has no power, authority or jurisdiction to take any decision in respect of essential commodity covered under the Central Act. It is only the Central Government which can take any decision and the action "of the respondents in taking policy decisions is clearly without power, authority or jurisdiction and cannot be upheld. It was also urged that even if it is assumed that a policy decision can be taken by the Government; such a decision must be legal, reasonable and rational. If it is in violation of the provisions of the Constitution or a statute is irrational, arbitrary or otherwise unreasonable, it is liable to be set aside. In the instant case, the so called policy decision is arbitrary, unreasonable and ultra vires the provisions of the Constitution and cannot be implemented. The counsel alleged that the action has been taken with a view to favour and benefit HIMFED such an action cannot be termed as bona fide. As it has been taken in colorable exercise of powers, it deserves to be quashed. There is non-application of mind on the the part of the respondents in ignoring relevant and germane consideration that three tier system had been introduced and followed with a view to providing equitable and efficient distribution of essential commodities. If middle tier i.e. sub wholesalers is abolished, it would create has in the society and consumers will not be able to get essential commodity.
If middle tier i.e. sub wholesalers is abolished, it would create has in the society and consumers will not be able to get essential commodity. A provision was also made that when the petitioners were acting as sub wholesalers effectively, efficiently and to the satisfaction of the Department, there was no earthly reason for the respondents to terminate their services, and that too, without issuing notice, calling for explanation and observing principles of natural justice. The respondents were estopped under the doctrine of equitable estoppel from taking the impugned action, which was also violative of the doctrine of legitimate expectations. The petitioners were, continuously doing the above work and they were expecting that the respondents would continue lo distribute essential commodities in the same manner. The action, thus, is liable to be set aside. 9. Mr. Sanjay Karol, learned Advocate General instructed by Mr. M.L. Chauhan, learned Deputy Advocate General and Mr. D.D. Sood, learned Senior Advocate instructed by Mr. Sandeep Sharma, learned, counsel, on the other hand, supported the action taken by the respondents According to them. the respondents have not violated any provisions, either of the Essential Commodities Act or Control Orders, issued thereunder, as alleged by the petitioners, the decision, which has been taken by the authorities, is a policy decision and such a decision can be taken in accordance with law provided the decision is not arbitrary, ultra vires or otherwise unreasonable. According to the counsel, considering one of the most relevant and material facts that the middle tier system which was in vogue resulted in payment of more price and doing away with such system was thought beneficial to remaining two tiers, namely, whole sale dealers and consumers, a policy decision was taken and the communications were addressed to that effect. According to counsel, such a decision cannot be termed as arbitrary, irrational or unreasonable. The decision has not been taken with a view to favour a particular agency, but has been taken in larger public interest. It was the State Government, which had taken a policy decision in past for creation of three tier system and it is the State Government, which now wants to change the said policy by abolishing the middle tier.
The decision has not been taken with a view to favour a particular agency, but has been taken in larger public interest. It was the State Government, which had taken a policy decision in past for creation of three tier system and it is the State Government, which now wants to change the said policy by abolishing the middle tier. It is open to the authorities to change the policy, which cannot be made subject matter of judicial review under Article 226 of the Constitution, if it is otherwise within the jurisdiction of the authorities. It was a sort of privilege conferred by the State authorities in favour of one class, which is now withdrawn and no grievance can be made by the middle agency that it cannot be done. It was, therefore, submitted that the petitions deserve to be dismissed. 10. Having heard the learned counsel for the parties, in our opinion, it cannot be said that by taking, the impugned policy decision, the respondents have committed any error of law and/or exceeded jurisdiction and the impugned orders are vulnerable. 11. It is true that the Essential Commodities Act, 1955 is a Central Act. It is also true that Control Orders have been issue by the Central Government in exercise of powers under Section 3 of the Act, but in our considered opinion, learned counsel for the petitioners are to right in submitting that the impugned actions have been taken either ignoring the provisions of the Central Act or Control Orders issued thereunder or in violation of the provisions contained therein. The distribution of essential commodity by the State Government is indeed within the power and jurisdiction of the State Government and an appropriate decision can always be taken by the Slate Government regarding distribution of such essential commodity, the contention of the petitioners that the State Government his no power is not well founded and cannot be upheld. 12. The next question is with regard to legality or otherwise of the policy decision of the respondents. It is no doubt the case of the petitioners that they were working as sub wholesalers since many years and in that capacity, they were doing work as middle tier. It is equally true that their licences were renewed from time to time and even today, the licences are operative.
It is no doubt the case of the petitioners that they were working as sub wholesalers since many years and in that capacity, they were doing work as middle tier. It is equally true that their licences were renewed from time to time and even today, the licences are operative. That, however, does not mean that the petitioners are also entitled to work as sub wholesalers and must be allowed to continue to act as middle tier. If the registration is cancelled and/or licences have been revoked or terminated, they can take appropriate proceedings in accordance with law. But whether to continue a particular distribution system or to stop it is within the "power of the respondents and no grievance can be made against such action. 13. Relying on decisions of the Supreme Court in Ramana Dayaram Shetty v. The International AirportAuthority ofIndia & ors. AIR 1979 SC 1628; MahabirAuto Stores & Ors. v. Indian Oil Corporation & Ors., AIR 1990 SC 1031; Kumari Shrilekha vidyarthi etc. etc. v. State of U.P. & ors. AIR 1991 SC 537 and other cases, it was contended by the for the petitioners that it is incumbent on the State Government to act within the four conrners of law and in consonance with the provisions of the constitution. Even in policy matters, every action of the Government must be informed by reason. While formulating, adopting and effecting a policy, it cannot act arbitrarily or unreasonably and judicial review of this Court cannot be ousted in such matters. 14. The question, however, is by giving go-bye to the earlier policy and by abolishing a middle tier system i.e. abolishing a class of sub wholesalers, can it be said that the respondent-authorities have acted arbitrarily, unreason- , ably or in violation of the provisions of the Constitution. Our reply is in the negative. 15. In several cases, the Honble Apex Court has held that it is not expected of a Court of Law to adjudicate upon the matters of Government policy. The question of policy.is essentially for the State to decide. Again, such policy depends upon several circumstances and it is neither appropriate nor advisable for the Courts to direct or sermonize the Government to adopt Advocate(s) particular policy, which the court thinks fit and proper. As observed by the Supreme Court in the leading case of Bennett Coleman and Co.Ltd. & Ors.
Again, such policy depends upon several circumstances and it is neither appropriate nor advisable for the Courts to direct or sermonize the Government to adopt Advocate(s) particular policy, which the court thinks fit and proper. As observed by the Supreme Court in the leading case of Bennett Coleman and Co.Ltd. & Ors. v. Union of India, AIR 1973 Sc 106, the "Court cannot be propelled into the un chartered ocean of Government policy". Similar view has been taken by the Apex Court in several other cases. Some of them are: Liberty Oil Mills & Ors. v. Union of India & Ors. AIR 1984 SC 1271; State ofM.P. & Ors. v. Nandlal Jaiswal & Ors. AIR 1987 SC 251; Vincent Panikurlangara v. Union of India & Ors. AIR 1987 SC 990; Shri Sitaram Sugar Co. Ltd. v. Union of India, AIR 1990 Sc 1277; Peerless General Finance and Investment Co. Ltd. & Anr. v. Reserve bank of India, AIR 1992 Sc 1033 and several other cases. 16. In the last mentioned case, the Supreme Court observed; "The function of the Court is not to advice in matters relating to financial and economic policies for which bodies like Reserve Bank are fully competent. The court can only strike down some or entire directions issued by the Reserve Bank in case the Court is satisfied that the directions were wholly unreasonable or violative of any provisions of the Constitution or any statute. It would be hazardous and risky for the courts to tread an unknown path and should leave such task to the expert bodies,” (emphasis supplied) 17. The courts have gone to the extent that the policy may be right or wrong, it may be wise or foolish, but it is not within the jurisdiction of the Court; to comment upon it unless it is beyond the jurisdiction of the authority. 18. In our considered opinion, whether to retain middle tier system of sub wholesalers or not is indeed within the power and jurisdiction of the authorities and if a policy decision is taken to abolish middle- tier, such a decision cannot be challenged on the ground of being arbitrary, unreasonable or irrational. 19. Again, it is open to the authorities to change the policy and it cannot be insisted that once a policy decision is taken, there should be no change in such policy. In Col.
19. Again, it is open to the authorities to change the policy and it cannot be insisted that once a policy decision is taken, there should be no change in such policy. In Col. A.S. Sangwan v. Union of India & ors. AIR 1981 Sc 1545, the Supreme Court observed that a policy once formulated is not good for ever and it is perfectly within the competence of the Government to change it, re-change it, adjust it and re-adjust it according to the compulsions of circumstances and the imperatives of material considerations. The Court cannot give directives as to how a particular Ministry should function except to state that the obligation is not to act arbitrarily or unreasonably and that functions must be done within the provisions of the Constitution. Still in another case, {Union of India & ors. v. S.L. Dutta & Anr. AIR 1991 SC 363), the Court observed that these are matters regarding which Judges and lawyers of Courts can hardly be expected to have much knowledge by reason of their training and experience. 20. From the above decisions, to us, the law appears to the quite well settled. To formulate a policy is for the Government. It is also open to the Government to stick to the policy or to change it or to re-change it. Such a decision cannot be challenged under Article 226 of the Constitution merely on the ground that by formulating a policy, changing or re-changing it, the Government has not acted in accordance with the provisions of a statute or constitutional provisions. The only obligation on the Government is that at; each and every level, the decision must be in consonance with law. 21. In the instant case, earlier, a decision was taken by the respondents that it would be having their system. Considering the fact, however, that it had resulted in more expenses arid it would not be beneficial to the consumers, a conscious decision was taken by changing the policy and by abolishing middle agency. 22. In the affidavit-in-reply to CWP No.727 of 2000, it has been stated that while reviewing the fertilizer distribution system, it was noticed that at several places, wholesalers and sub wholesalers were operating from the same place. There was no justification for physical transfer of fertilizer from one store to another at one and the same place.
22. In the affidavit-in-reply to CWP No.727 of 2000, it has been stated that while reviewing the fertilizer distribution system, it was noticed that at several places, wholesalers and sub wholesalers were operating from the same place. There was no justification for physical transfer of fertilizer from one store to another at one and the same place. Sub wholesaler, being middle channel, was not only causing delay in distribution but was also burdening State exchequer on account of unnecessary transportation charges and loading and unloading of fertilizers to the tune of about Rs.70 lacs per annum plus commission @10%. Since the sub wholesaler was simply adding the cost by shifting the fertilizer from HIMFED (wholesalers) godown to its own godowns and was partly adding the cost to the farmers, it was decided that such middle agency should be abolished by distributing margin to HIMFED and farmers on 50:50 basis, thereby lowering down the fertilizer price. 23. In our considered opinion, such a decision, apart from the fact that it cannot be termed arbitrary, irrational or unreasonable, it is in the larger interest of farmer community, who would be the real beneficiary and no objection can be raised against such a decision. 24. Similarly, in the matter of distribution of sugar (CWP No.734 of 2000), it has also been stated in the affidavit-in-reply filed by respondent No.3 that the State Government had not released the payment to be made to sub wholesalers margin and in these circumstances, the said class cannot be continued further. It was a relevant factor considered. 25. If the above objections of the petitioners cannot be held to be well founded, obviously, the other contentions cannot be accepted. The impugned action does not violate any right of the petitioners either fundamental or statutory and, hence, it would not be obligatory on the State authorities to issue notice, call for explanation or observe principles of natural justice Since it is in the realm of policy, it was open to the respondents to change it and the doctrine of equitable estoppel or legitimate expectations also cannot be pressed in aid by the petitioners. The learned counsel for the respondents, in our view, were right in submitting that the right had not been conferred upon the petitioners either by the Central Government or under the provisions of the Central Act or Control Orders issued thereunder.
The learned counsel for the respondents, in our view, were right in submitting that the right had not been conferred upon the petitioners either by the Central Government or under the provisions of the Central Act or Control Orders issued thereunder. A policy decision was taken by the State Government earlier and considering the larger public interest of the consumers and beneficiaries, middle agency is now sought to be abolished. Such a decision cannot be described arbitrary or unreasonable. No action of cancellation of registration or licences has been taken, and, hence the petitioners had no ground to make complaint and the grievance is ill founded. 26. For the reasons aforesaid, in our considered opinion, no ground has been made out by the petitioners to interfere with the policy decision taken by the respondents. All the petitions, therefore, deserve to be dismissed and are accordingly dismissed. In the facts and circumstances of the case, however, there shall be no order as to costs. CMP No. 1249 of 2000 in CWP No.727 of 2000, CMP No. 1262 of 2000 in CWP No.734 of 2000, CMP No. 1263 of 2000 in CWP No.735 of 2000, CMP No. 1518 of 2000 in CWP No.882 of 2000 and CMP No. 1696 of 2000 in CWPNo.982of2000: In view of the dismissal of the writ petitions, the present applications stand dismissed.