PETITIONER:
P.P. ENTTERPRISES ETC. ETC.
Vs.
RESPONDENT:
UNION OF INDIA & OTHERS ETC.
DATE OF JUDGMENT16/03/1982
BENCH:
MISRA, R.B. (J)
FAZALALI, SYED MURTAZA
CITATION:
1982 AIR 1016 1982 SCR (3) 510
1982 SCC (2) 33 1982 SCALE (1)184
ACT
Sugar (Control) order 1966, clause 5 read with order No. G.S.R. 410C E/Ess. Com./Sugar dated 14-7-1980-order prescribing maximum quantity of sugar (Vacuum Pan Sugar) and Khandsari (open Pan Sugar) to be kept in stock, whether violative of Articles 14 and 19(1)(g) of the Constitution and also ultra vires section 3 of the Essential Commodities Act. 1955.
HEADNOTE
In exercise of powers conferred by section 3 of the Essential Commodities Act, 1955, Sugar Control order 1966 was issued by the Government of India, Ministry of Agriculture Clause 5 of that order empowered the Central Government to issue directions, inter alia, to recognised dealers regarding production, maintenance of stock, storage, sale, grading, packing, making weighment, disposal, delivery and distribution of sugar.
By order No. GSR-410-E/Ess. Com/Sugar dated 14-7-1980, the Central Government issued directions to the effect that no recognised dealer shall keep in stock at any time (a) Vacuum pan sugar in excess of, (i) in Calcutta and other extended area recognised dealers who import sugar from outside West Bengal, 3500 quintals; other recognised dealers 250 quintals; (ii) in other places in cities and towns with a population of one lakh or more 250 quintals and with a population of less than one lakh 100 quintal and (b) Khandsari (open pan sugar) 250 quintals. Further no recognised dealer shall hold any stock of vacuum pan sugar or khandsari (open pan sugar) for a period exceeding 10 days from the date of receipt by him of such stock of sugar or khandsari.
The recognised dealers, there-fore, assailed the constitutional validity of the said order on three grounds: (I) the impugned order is not covered by section 3 of the Essential Commodities Act and is ultra vires (2) the impugned order imposes unreasonable restrictions on the right of the petitioners to carry on their trade and so it is violative of Article 19 (1) (g) of the Constitution: (3) the impugned order is also violative of Article 14 of the Constitution for two reasons: (a) the petitioners have been singled out for hostile treatment from other dealers of sugar at Calcutta: (b) the impugned order is unreasonable and impracticable.
Dismissing the petitions, the Court ^
HELD: 1, The order dated 14-7-1980 is not ultra vires section 3 of the Essential Commodities Act, 1955. The expression "to secure their equitable 511 distribution and availability at fair prices", is wide enough to cover the impugned order Likewise, the expression "storage and distribution" used in clause (d) of sub-section (2) of section 3 of the essential Commodities Act, 1955 should be given a liberal construction to give effect to the legislative intent of public welfare. Sugar, which term includes khandsari, is an essential commodity and over the years it has become a scarce commodity. In the public interest it became essential to pass the order to secure its equitable distribution and availability at fair prices. To that end it became ’necessary to prevent hoarding and blackmarketing. [515 F-H, 516 A-E]
2. Restrictions put by the impugned order can by no means be said to be unreasonable. It is only regulatory and not prohibitory. The direction enjoined recognized dealer not to keep sugar in stock at any time in excess of the quantity specified therein. It only seeks to regulate the limit of storage of sugar and does not prohibit its storage. By the Impugned order the Central Government sought to prevent hoarding and black-marketing, and to ensure equitable distribution and availability of sugar at fair prices in the open market.[516 E, 519 D]
A person has a right to carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of tho State to make a law imposing reasonable restrictions under clause (6). The expression reasonable restrictions’ signifies that the limitation imposed on a person in eojoyment of that right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. No cut and dry test can be applied to each individual statute impugned, nor an abstract standard or general pattern of reasonableness can be laid down as applicable in all cases. The Supreme Court in each case has to strike a proper balance between the freedom guaranteed by Article 19 (1) (g) and the social control permitted by clause (6) of Article - 19. [516 B-D]
State of Mysore v. H. Sanjeeviah, [1967] 2 SCR 360, explained and distinguished.
M/s. Laxmi Khandsari & Ors. v. State of U.P. & Ors., [1981] 2 SCC 609, followed.
3. The order is not violative of Article 14 of the constitution. The fixation of limits for storing sugar in Calcutta and other places is not arbitrary but is based on reasonable classification. The government is the best judge of the situation in a particular State and what quantity of sugar will meet the exigencies of the situation at a particular place is purely a governmental function. For one, Calcutta serves as a feeder line to meet the requirements of sugar to the eastern part of the country, and therefore, the stocks of sugar to be held by the dealers in Calcutta are not required for consumption in Calcutta alone. Besides, Calcutta being far away from the sugar manufacturing units in Bihar and Uttar Pradesh, from where bulk of supplies are obtained, sugar is transported by the wholesale dealers in railway wagons which take sometime unusually longer time in transit. These and various other factors have been taken into consideration by the Government while fixing the storage limits of sugar for the dealers in Calcutta. [519 F- H, 520 A] 512
The fact that over the years sugar has become a scarce commodity and people have to purchase it even at a prohibitive price, the dealers would be able to sell the sugar in their stock without difficulty at any time at the prevalent market price. In a rare exceptional case there may be some hardship on that score but it cannot be said, on that account, that the order is violative of Article 14 of the Constitution. In such cases, we hope and trust that the concern ed Government would allow a reasonable time within which the dealers could dispose of the excess quantity of sugar, if any. [520 G, 5 21 A-C]
Suraj Mal Kailash Chand & Ors. v. Union of India & Anr., Writ Petitions Nos. 8334-48 of 1981 decided on September 25, 1981 (unreported case): Bishambhar Dayal Chandra Moharl & ors, etc. v. State of Uttar Pradesh & Ors. etc. Writ Petitions Nos. 2907-2908 of 1981 and connected writ petitions (a group of SOS writ petitions) decided on November S, 1981, followed.
JUDGMENT
ORIGINAL JURISDICTION: Writ Petition Nos. 3846/81, 6454-55/80, 230-249, 502-510, 524, 726-27, 777-96, 803, 1069, 1207-09,1326,439-40,1607,1691-93,1702,1703-7,1734.36, 1737 40, 1759-72, 1789-90, 1879, 1946-47, 1948, 1959, 1972- 97, 2012-17, 2027-39, 2076, 2077-78, 2125-83, 2194-95, 2204- 11, 2284-2326, 2361-62,2363-64, 2365-2404,2405-26, 2444-58, 2459-88,2497-2501, 2503-05,2513-19, 2520-25,2542-73, 2597, 2616-41,2642-48, 2661-63, 2665-66,2698-2700, 2702-21, 2723- 26, 2730-44 2756-62, 2766-76, 2779-2802,2803-15, 2818-26, 2847-55, 2856-67, 2885-96, 2897 98, 2912-15,2917-26, 2968- 76, 2980-3001, 3002-46, 3047-52, 3070-87, 3088-3102, 3165- 3205, 3210-17, 3259-64, 3268-77, 3286, 3305-11, 3312- 22,3325,3346, 3355,3357-70, 3371-91, 3403, 3477-82,3484-88, 3492-3504,3505-15, 3516,3517-34,3560, 3572-79, 3637, 3693- 3730, 3732-36, 3757-75, 3899-3912,4053-69,4192-4229, 4261,4329, 4495, 4496-4508,4606-09, 4617-21,4622-69, 4846- 75, 4978-86, 5218,5349, 5533-43, 5597-5609, 5623, 5626-42, 5728, 5746, 6577-81, 6814, 6934-42,7203, ,217-20,7409,7454- 56,7484, 7641,7659,7773,7943, 7944, 8084,8089, 8090, 8192,8195, 8201, 8431, 8436, 8834, 8862, 8878-81, 8924 & 8979 of 1981.
(Under Article 32 of the Constitution)
Shanti Bhushan, V.M. Tarkunde, P.A. Francis and G.N. Dikshit.
R.K. Jain, P.B. Jain, Pankaj Kaira, S. Mittar, M.G. Gupta, J B.R. Kapoor, Miss, Bhajan Ram Rakhyani, S.R. Srivastava, B.V. Tawakley, Shobha Dikshit, B. Dutta, B.D. Sharma, Miss A. Subhashini, 513 N.N. Sharma, T.C Sharma, A. Ghosh, S.V. Tambwekar and Girish Chandra for the appearing parties. A
The Judgment of the Court was delivered by
MISRA J. In exercise of powers conferred by section 3 of the Essential Commodities Act, 1955, Sugar Control order 1966 was issued by the Government of India, Ministry of Agriculture. Clause S of that order empowered the Central Government to issue directions, inner alia, to recognised dealers regarding production, maintenance of stock, storage, sale, grading, packing, making weighment, disposal, delivery and distribution of sugar.
By Order No. GSR-410-E/Ess. Com./Sugar dated the 14th of July, 1980 the Central Government issued the following directions:
"In exercise of the powers conferred by clause 5
of the Sugar (Control) order, 1966, and in supersession
of the order of the Government of India in the Ministry
of ’Agriculture (Department of Food) No. GSR-60
(e)/Ess. Com./Sugar, dated the 26th February, 1980, the
Central Government hereby directs that no recognised
dealer shall keep in stock at any time-
(1) Vacuum pan sugar, in the places mentioned below,
in excess of the quantities mentioned against
each-
(i) in Calcutta and extended area-
(a) recognised dealers who import sugar from
outside West Bengal-3,500 quintals,
(b) other recognised dealers-250 quintals;
(ii) in other places-
(a) in cities and towns with a population of
one lakh or more-250 quintals;
(b) in other towns with a population of less
than one lakh-100 quintals. 514
(2) Khandsari (open pan sugar) in excess of 250
quintals.
Provided that no recognised dealer shall hold any
stock of Vacuum pan sugar or Khandsari (open pan sugar)
for a period exceeding ten days from the date of
receipt by him of such stock of sugar or Khandsari. . .
Provided further that nothing in this order shall
apply to the holding of stocks of sugar-
(i) on Government account; or
(ii) by the recognised dealers nominated by a State
Government or an officer authorised by it to hold
such stock for distribution through fair price
shops; or
(iii) by the Food Corporation of India.
Explanation:-For the purpose of this order,
"Calcutta and extended area" means the areas specified
in the Schedule to the notification of the Government
of West Bengal No. 7752 F.S./14-R-92/61, dated the 16th
December, 1964."
The petitioners in this groups of petitions, who are dealers in sugar, seek to challenge the constitutional validity of thesaid order on three grounds; (I) the impugned order is not covered by section 3 of the Essential Commodities Act and is Ultra vires; (2) the impugned order imposes unreasonable restrictions on the right of the petitioners to carry on their trade and so it is violative of Article 19(2)(g) of the Constitution; (3) the impugned order is also violative of Article 14 of the Constitution for two reasons: (as the petitioners have been singled out for hostile treatment from other dealers of sugar at Calcutta, (b) the impugned order is unreasonable and impracticable.
Shri Shanti Bhushan, senior counsel appearing in one of the petitions viz., Writ Petition No. 3846 of 1981, took up the first point. and urged that the impugned order is not covered by any of the clauses of section 3 of the Essential Commodities Act.
Section 3 of the Essential Commodities Act, 1955, insofar as it is material for the purposes of this case, reads: 515
"3. (1) If the Central Government is of opinion
that it is necessary or expedient so to do for
maintaining or increasing supplies of any essential
commodity or for securing their equitable distribution
and availability at fair prices, or for securing any
essential commodity for the defence of India or the
efficient conduct of military operations it may, by
order, provide for regulating or prohibition the
production, supply and distribution thereof and trade
and commerce therein
(2) With prejudice to the generality of the powers
conferred by sub-section (1), an order made
thereunder may provide-
(a) .......... (b) .......... (c)............
(d) for regulating by licences, permits or otherwise
the storage, transport, distribution, disposal,
acquisition, use of consumption of, any essential
commodity."
The language of section 3 (1) coupled with clause (d) of subsection (2) of section 3 is wide enough to cover the impugned order. Section 3 (1) authorises the Central Government to pass an order for regulating or prohibiting the production, supply and distribution of an essential commodity and trade and commerce therein if it is of opinion that it is necessary or expedient to do so for securing the equitable distribution and availability. at a fair price of the essential commodity. The same power has been made more specific by clause (d) of sub-section (2) of section 3, which provides for regulating by licences. permits or otherwise, the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity. Sugar, which term includes khandsari, is an essential commodity and over the years it has become a scarce commodity. In the public interest it became essential to pass the impugned order to secure its equitable distribution and availability at fair prices. To that end it became necessary to prevent hoarding and black-marketing. The expression "to secure their equitable distribution and availability at fair prices" is wide enough to cover the impugned order. Likewise, the expression "storage and distribution" used in clause (d) of sub-section (2) of section 3 should be given a liberal construction to give effect to the legislative intent of public welfare. So construed, the impugned order is fully pro- 516 tected and is not ultra vires section 3 of the Essential Commodities Act, 195 5.
This leads us to the second contention, namely, the impugned order being violative of Article 19 (1) (g) of The Constitution inasmuch as it imposed unreasonable restriction on the right of the petitioners to carry on trade or business.
A person has a right to carry on any occupation, trade or business and only restriction on this unfettered right is the authority of the State to make a law imposing reasonable restrictions under clause (6). The expression ’reasonable restrictions’ signifies that the limitation imposed on a person in enjoyment of that right should not be arbitrary or of an excessive nature beyond what is required in the interest of the public. No cut and dry test can be applied to each individual statute impugned, nor an abstract standard or general pattern of reasonableness can be laid down as applicable in all cases. The Court in each case has to strike a proper balance between the freedom guaranteed by Article 19 (1) (g) and the social control permitted by clause (6) of Article 19. By the impugned order the Central Government has only put an embargo on the dealers on keeping sugar in excess of the quantity specified. It was passed only with a view to prevent hoarding and black-marketing, and to ensure equitable distribution and availability of sugar at fair prices in the open market.
Reliance was placed by Shri Shanti Bhushan on State of Mysore v. H. sanjeeviah.(J) In that Case the State Government of Mysore had framed rules to regulate the transit of timber, firewood, charcoal and bamboos from all lands in exercise of powers conferred by section 37 of the Mysore Forest Act 11 of 1900. By rule 2 framed on October 13, 1952, it was provided that no person shall import forest produce into, export forest produce from, or move forest produce within, any of the areas specified in Schedule A unless such forest produce is accompanied by permit prescribed in rule 3. On April 15, 1959 the State of Mysore issued a notification adding a proviso to rule 2 which read as follows: 517
"Provided that no such permit shall authorise any
person to transport forest produce between SUN set and
sun-rise in any of the areas specified in Schedule A." By another notification dated September 14, 1960 the State Government introduced the second proviso to rule 2 which read:
"provided further that permission may be granted
to timber merchants on their request to transport
timber upto 10 p.m. (22 hrs) under the following
conditions:
(i) the party who wishes to avail of the concession
should pay a cash deposit of Rs. 1000 as security
for the compliance with the timber transit rules
as in force;
(ii) that the deposit may be forfeited to government
for breach of any of the conditions of the timber
transit rules." The dealers in timber challenged the two provisos on the grounds inner alia that they were beyond the rule making authority conferred upon the State Government by section 37 of the Mysore Forest Act 11 of 1900 and in any event the provisos imposed unauthorized restrictions on the freedom of trade, commerce and intercourse. The High Court held that the State Government while seeking to regulate the transport of timber stopped transport altogether. This Court upholding the order of the High Court observed:
"Power to impose restrictions of the nature
contemplated by the two provisos to r. 2 is not to be
found in any of the clauses of sub-s. (2) of s. 37. By
sub-s. (I) the State Government is invested with the
power to regulate trans port of forest produce "in
transit by land or water." The power which the Stale
Government may exercise is however power to regulate
transport of forest produce, and not the power to
prohibit or restrict transport. Prima facie, a rule
which totally prohibits the movement of forest produce
during the period between sun-set and sun-rise is
prohibitory or restrictive of the right to transport
forest produce. A rule regulating transport in its
essence permits transport, subject to certain
conditions devised to promote trans port." 518
This Court further observed:
"If the provisos are in truth restrictive of the
right to transport the forest produce, however, good
the grounds apparently may be for restricting the
transport of forest produce, they cannot on that
account transform the power conferred by the provisos
into a power merely regulatory." The facts of the present cases are materially different from the facts of H. Sanjeeviah’s case (supra). In that case the impugned provisos to rule 2 completely prohibited the transport of the forest produce between sun-set and sunrise. But in the cases in hand the direction enjoined a recognised dealer not to keep sugar in stock at any time in excess of the quantity specified therein. It only seeks to regulate the limit of storage of sugar and does not prohibit its storage. The case of H. Sanjeeviah, therefore, is not of much help to the petitioners herein.
In M/s. Laxmi Khandsari & Ors. v. State of U.P. & ors.(l) this Court made the following observations about reasonable restrictions on the right conferred by Article 19 (1) (g) of the Constitution in the following terms:
"As to what are reasonable restrictions would
naturally depend on the nature and circumstances of the
case, the character of the statute, the object which it
seeks to serve, the existing circumstances, the extent
of the evil sought to be remedied as also the nature of
restraint or restriction placed on the rights of the
citizen. It is difficult to lay down any hard and fast
rule of universal application but in imposing such
restrictions the State must adopt an objective standard
amounting to a social control by restricting the right
of the citizens where the necessities of the situation
demand. The restrictions must be in public interest and
are imposed by striking a just balance between the
deprivation of right and the danager or evil sought to
be avoided. If the restrictions imposed appear to be
consistent with the directive principles of State
policy they would have to be upheld as the same would
be in public 519
interest and manifestly reasonable. Further,
restrictions may be partial, complete, permanent or
temporary but they must bear a close nexus with the
object in the interest of which they are imposed.
Another important test is that restriction should not
be excessive or arbitrary. The court must examine the
direct and immediate import of - the restrictions on
the rights of the citizens and determine if the
restrictions are in larger public interest while
deciding the question that they contain the quality of
reasonableness. In such cases a doctrinaire approach
should not be made but care should be taken to see that
the real purpose which is sought to be achieved by
restricting the rights of the citizens is sub-served.
At the same time, the possibility of an alternative
scheme which might have been but has not been enforced
would not expose the restrictions to challenge on the
ground that they are not reasonable." Judged in that light and on an overall consideration of the various aspects of the matter, restrictions put by the impugned order can by no means be said to be unreasonable. It is only regulatory and not prohibitory.
We now take up the last contention, namely, the impugned order being violative of Article 14 of the Constitution. The learned counsel seeks to invoke Article 14 on two grounds: (1) the impugned order applies two standards, one for the dealers, at Calcutta, who had been authorised to keep 3,500 quintals at one time, while the dealers at other places have been authorised to keep only 250 quintals in cities with a population of one lakh or more, and only 100 quintals in other towns with a population of less than one lakh. F
The fixation of limits for storing sugar in Calcutta and other places is not arbitrary but is based on reasonable classification. The government is the best judge of the situation in a particular State and that quantity of sugar will meet the exigencies of the situation at a particular place is purely a governmental function. For one, Calcutta serves as a feeder line to meet the requirements of sugar to the eastern part of the country, and therefore, the stocks of sugar to be held by the dealers in Calcutta are not required for consumption in Calcutta alone Besides, Calcutta being far away from the sugar manufacturing units in Bihar and Uttar Pradesh, from where bulk of supplies are obtained, sugar is transported by the wholesale 520 dealers in railway wagons which take sometime unusually longer time in transit. These and various other factors have been taken into consideration by the Government while fixing the storage limits of sugar for the dealers in Calcutta.
His second ground for invoking Article 14 of the Constitution is that the impugned order is unreasonable and impracticable in that no dealer can be sure of the sale of sugar on any particular day. If per chance a dealer is not able to dispose of the excess sugar on a particular. day he would expose himself to punishment under the Act. No provision has been made in the order or in the rules for the purchase by the Government of the excess sugar. For the State it was contended that similar orders with regard to wheat came up for consideration in this Court in Suraj Mal Kailash Chand Ors. v. Union of India & Anr. and Bishambhar Dayal Chandra Mohan Ors. etc. v. State of Uttar Pradesh & ors. etc.(2) when this Court upheld the validity of these orders. In view of the decision of this Court in those cases it is not open to Shri Shanti Bhushan to challenge the constitutional validity of the impugned order.
Shri Shanti Bhushan, however, refutes the argument and says that those decisions do not stand in the way of the petitioners. The situation with regard to wheat was quite different inasmuch . s clause 25 of the impugned order in Sutlaj Mal’s case (supra) provided that the State Government or the Collector or the Licensing Authority may issue directions to any dealer with regard to purchase, sale, disposal, storage or exhibition of the price and stock list of all or any of the trade articles. But there is no such provision in the impugned order in the instant case and, therefore, the dealers can expose themselves to punishment merely because at any particular point of time the stock was in excess of the prescribed limits. Bishambhar Dayal’s case (supra) also related to wheat. There was a scheme for the procurement of wheat by the State Government but there is no such scheme in respect of sugar. This fact distinguishes the present case for the facts-of the aforesaid decision.
The argument though attractive cannot be accepted. Over the years sugar has become a scare commodity and people have to 521 purchase it even at a prohibitive price. In the circumstances it A cannot be expected that the dealers would not be able to sell the sugar in their stock. There is absolutely no difficulty in selling the sugar at any time at the prevalent market price. If in a rare case there is difficulty on that score we hope and trust that the concerned Government would allow a reasonable time within which the petitioners are permitted to dispose of the excess quantity of sugar, if any. In any case, in some given case there may be some hardship but it cannot be said on that account that the impugned order is violative of Article 14 of the Constitution.
For the foregoing discussion the writ petitions must fail. They are accordingly dismissed. In the circumstances of the case there shall, however, be no order as to costs. S.R. Petitions dismissed. 522