PETITIONER:
SYED AHMED AGA ETC.
Vs.
RESPONDENT:
STATE OF MYSORE & ANOTHER
DATE OF JUDGMENT02/05/1975
BENCH:
BEG, M. HAMEEDULLAH
KHANNA, HANS RAJ
CHANDRACHUD, Y.V.
CITATION:
1975 AIR 1443 1975 SCR 473
1975 SCC (2) 131
ACT
Constitution--Articles 19(1) (g), 304(b) & 32--Whether a 32 petition maintainable to challenge non--compliance with proviso to Article 304(b)--Mysore Silk Worm Seed & Cocoon (Regulation of Production, Supply & Distribution) Act. 1960--Amendments whether requires fresh sanction of the President under Article 304(b)--Increase in quantum of penalty whether amounts to additional restrictons--Nature of penalty.
HEADNOTE
The petitioners challenged the validity of ;amendments made to Mysore Silk Worm Seed and Cocoon (Regulation of Production, Supply and Distribution) Act, 1960, on the ground that the amendments imposed additional restrictions upon the rights of the petitioners to carry on trade and business without obtaining the Presidential sanction required by proviso to Art. 304(b) of the Constitution. The Principal Act had received the sanction of the President. The reasonableness of any restrictions either of the. principal Act or of the amendments has not been challenged. It is not disputed that the Presidential sanction was not obtained for the amendments. The respondents contended- (1)No petition under Article 32 of the Constitution can lie to challenge restrictions covered by Article 304(b), since the freedom of trade envisaged by Article 304(b) is different from freedom of trade guaranteed by Art. 19(1) (g) (2)The amendments did not impose additional restrictions on the petitioners’ right to carry on trade and business. Amendments merely introduced the restrictions which were contained in the principal Act and the statutory rules made thereunder and therefore did not impose any additional restrictions. Section 12 of the principal Act reads as under :
"12. Penalties-(1) Any person who contravenes
the provisions of section 3 or 4 shall be
punishable with fine which may extend to one
hundred rupees.
(2)any rearer who contravenes the
provisions of section 6 or 7 or any other
provision of this Act or any rule, order or
notification made thereunder, shall be
punishable with fine which may extend to fifty
rupees.
(3)Any licensed buyer who contravenes the
provisions of sections 7 or 8 or any other
provision of this Act or any rule, order or
notification made thereunder, shall be
punishable with fine which may extend to two
hundred and fifty rupees.
(4)Save as otherwise provided in sub-
section (1), (2) and (3), any person who
contravenes any of the provisions of this Act
or of any rule. order or notification
thereunder, shall be punishable with fine
which may extend to two hundred and fifty
rupees.
(5)(a) Without prejudice to any punishment
under the preceding sub-sections the Director
of Sericulture in Mysore may, after giving a
reasonable opportunity to the person concerned
to be heard, suspend or cancel the licence
granted to any person for preparing silkworm
seed if such person is convicted at least
twice for an offence under this Act.
474
(b)Any person aggrieved by the suspension
or cancellation of a licence under clause (a)
may appeal to the Government within such time
as may be prescribed and the decision of the
Government on such appeal shall be final and
shall not be called in question in any Court
of Law".
Amendments to section 12 were made by section
7 and 8 of the Amending Act which read as
under :-
"7. Amendment of section 12. In section 12 of
the principal Act,-
(1)in sub-section (1), for the words "one
hundred rupees", the words "two hundred
rupees" shall be substituted;
(2)in sub-section (2), for the words and
figures "section 6 or 7 or any other provision
of this Act or any rule, order or notification
made thereunder, the words, figures, brackets
and letter, "section 6" or clause (a) of sub-
section (1) of section 7" shall be
substituted;
(3)after sub-section (2), the following
subsection shall be inserted. namely :-
"(2A) Any person who contravenes the
provisions of clause (b) of sub-section (1) of
section 7 or sub-section (2) of that section
shall be punishable with imprisonment which
may extend to three months or with fine which
may extend to five hundred rupees or with
both" ;
(4)for sub-section (3), the following
subsection shall be substituted, namely :-
"(3) Any person who contravenes the provisions
of section 8 shall be punishable with fine
which may extend to two hundred and fifty
rupees"
(5)in subsection (4), for the words,
brackets and figure,% "subsections (1). 2) and
3)", the words, bracket-,, figures and letter
"subsections (1), (2), (2A) and (3) shall be
substituted".
" 8. Insertion of new sections 12A and 12B-
After section 12 of the Principal Act, the
following sections shall be inserted, namely
:-
" 12A. Abetment-Whoever abets any offence
punishable under this Act shall be punished
with the punishment provided in this Act for
such offence.
12B. Certain offenses to be cognizable-The
offenses under sub-section (2A) of section 12
shall be cognizable". HELD : A citizen is entitled to come to Court with the allegation that his fundamental right to carry on business or trade is affected adversely by a provision which does not legally exist. The restrictions contemplated by Article 304(b) may be of a character different from those of .in individual citizen’s right to trade, but it cannot be denied that their impact on individual’s right is very often direct. [477A-B] HELD FURTHER: Stringent regulations were already existing under the principal Act and the rules framed thereunder. No additional restriction is imposed by the Amending Act 4(1). Now section 7(2) merely makes evasion of the requirement to conduct business in the cocoon market of an area more difficult. [481C-D, 482-D] The amendments to section 12 increase the quantum of penalties. But the increase in the penalties is such, in view of the change of the value in money, as not to amount to an appreciable increase in restriction even from the point of view of a person who wants to break the restrictive laws. Penalties are 475 really part of the procedure for the enforcement of restrictions. They do not create new offenses. They only make violation of whatever restrictions on trade and commerce were there more onerous. They, therefore, cannot be looked upon as Additional restrictions upon freedom of trade and commerce. [484B-D] HELD FURTHER : Amendments requiring some more persons to take out licences who may not have been previously covered by provisions relating to licences does not constitute a real increase in restriction upon commerce. If the substance of the statutory rule is converted into a statutory provision. there can hardly be said to be additional restrictions imposed by the amending Law. What may be a restriction of his choice, from the point of view of an individual citizen engaged in a trade may not be a restriction on interstate or intrastate commerce viewed from the angle of the trade as a hole. It is only an additional restriction from the special point of view of Art. 304(b) which requires Presidential sanction. [487C-E] Petition dismissed.
JUDGMENT
ORIGINAL JURISDICTION : Writ Petitions Nos. 137 and 203 of 1971. Petitions under Art. 32 of the Constitution of India. A. K. Sen, K. R. Choudhuri and K. Rajendra Choudhary, for the petitioner (In Petition No. 137). K. K. Chaudhuri and K. Rajendra Chowdhary, for the petitioner (In petition No. 203). F. S. Nariman, Additional-Solicitor General of India and M. Veerappa, for the respondents (In petition No. 137). M. Veerappa, for respondents (In Petition No. 203). The Judgment of the Court was delivered by BEG, J. The two writ Petitions before us under Article 32 of the Constitution of India by persons carrying on the business of silk worm cocoon rearing and reeling challenge the validity of various amendments of the Mysore Silkworm Seed and Cocoon (Regulation of Production, Supply and Distribution) Mysore Act 5 of 1960 (hereinafter referred to as ’the Principal Act’) by the Mysore Silkworm Seed and Cocoon (Regulation of Production, Supply and Distribution) (Amendment) Act, 1969 (hereinafter called as the ’Amending Act’). The petitioners alleged that their fundamental rights guaranteed by Art. 19(1) (g) of the Constitution have been illegally interfered with by these amendments in so far as the amendments impose additional restrictions upon these rights without having secured the Presidential sanction required by the proviso to Article 304(b) of the Constitution. Article 304 of the Constitution reads as follows :
"304. Notwithstanding anything in Article 301
or article
303, the Legislature of a State may by law-
(a) impose on goods imported from other
States or the Union territories any tax to
which similar goods manufactured or produced
in that State are subject, so, however, as not
to discriminate between goods so imported
476
and goods so manufactured or produced ; and
(b) impose such reasonable restrictions on
the freedom of trade, commerce or intercourse
with or within that State as may be required
in the public interest :
Provided that no Bill or amendment for the
purposes of clause (b) shall be introduced or
moved in the Legislature of a State without
the previous sanction of the President". It will be seen that Article 301 of the Constitution provides "Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free". Article 302 limits the powers of Parliament to impose "restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India", to such restrictions "as may be required in the public interest". Restrictions falling under Art. 304(b) must not only be reasonable but are expressly required to be in public interest. It is in order to ensure that purposes of Art. 304(b) are satisfied that a bill in a State Legislature has to obtain the previous sanction of the President. It is worth remembering that Art. 255 of the Constitution provides for a retrospective curing of the defect of want of previous sanction by the president so that, where this requirement has been overlooked before an enactment,. public interest may not suffer by any want of sanction. The only question, on merits, which has been argued before its on. behalf of the petitioners is : Do the changes introduced by the Amending Act amount to such additional restrictions as to require the sanction of the President even though the Principal Act bad received such sanction at the appropriate stage ? The reasonableness of any restrictions, new or old, has not been challenged before us. All that is urged is that the additional restrictions introduced by the Amending Act were bound to obtain the previous sanction of the President before they are introduced in, the form of, a Bill in the Legislature of a State because that is the Constitutional mandate. As the restrictions covered by Article 304(b) have to be those on "freedom of trade and commerce", which is a broader and somewhat different concept than that of an individual citizen’s freedom to trade and carry on business, guaranteed by Article 19(1)(g), a preliminary objection has been raised, on behalf of the State of Mysore, that no petition under Article 32 of the Constitution can lie to challenge such restrictions as they could not be on rights guaranteed by Article 19(1) (g). Reliance was placed on Ram Chandra Pillai & Ors. v. State of Orissa & Ors., (1) where there is an observation indicating that the petitioner under Article 32 could not rely upon the guarantee of freedom of inter- State or intra-State trade, embodied in Article 301 of the Constitution. because it is not a fundamental (1)[1956] S.C.R. 28. 477 right conferred by Part III of the Constitution which can be enforced by a petition under Article 32". That was a case relating to a pre-Constitution enactment so that Article 305 of the Constitution was held to provide a complete answer to the petitioners’ claim. We do not think that the mere fact that thelegality of an enactment is challenged for noncompliance with the proviso to Article 304(b) of the, Constitution would take away the character or substance of a petitioner’s claim when a citizen comes to Court with the allegation that his fundamental right to carry on business or trade is affected adversely by a provision which does not legally exist. No doubt the restrictions contemplated by Article 304(b) may be of a character different from those on an individual citizen’s rights to trade but it cannot be denied that their impact on individual rights is often very direct. The stage for considering the reasonableness of a direct or indirect restriction of a fundamental right arises only where the restriction is otherwise valid. As this Court has repeatedly held, restrictions which have no authority or sanction of law to back them would, per se, be bad restrictions. The question of reasonableness of a restriction on individual rights to carry on trade could only arise where the purported law does not fail on other tests. Learned Counsel for the petitioners had relied upon the case of Himmatlal Harilal Mehta v. the State of Madhya Pradesh & Ors.,(1) where a reference was made to Mohd. Yasin v. The Town Area Committee Jalalabad & Anr.(2 ) He also urged, on the strength of District Collector of Hyderabad and Ors. v. M/s. Ibrahim & Co. etc., (3) that Article 301 of the Constitution guarantees not merely freedom of trade and commerce in the abstract. In other words, individuals affected by the violation of the guarantees under Articles 301 and 304 could also complain, at the same time, of infringement of their right guaranteed under Article 19(1) (g) of the Constitution provided a breach of the former involves violation of the latter also as it would ordinarily do. Therefore, we overrule the preliminary objection. The State of Mysore has tried to justify the want of Presidential sanction to amendments on the ground that they do not impose additional restrictions but are covered by the objects and the provisions of the Principal Act which had already obtained the Presidential sanction at the appropriate stage. Indeed, the amendments, it was urged, merely gave an enacted form to what were previously statutory rules validly made under the authority conferred by Section 18 of the Principal Act. This Section provides as follows :
" 1 8. Power of Government to make rules. . .
(1) The Government may subject to the
condition of previous publication, by
notification, make rule to carry out the
purposes of this Act.
(1) [1954] S.C.R. 1122.
(2) [1952] S.C.R. 572..
(3) [1970] 3 S.C.R. 498.
478
(2)In particular and without prejudice to
the generality of the foregoing power, such
rules may provide for-
(a) the duties and powers of officers
authorised to enforce the provisions of this
Act and the manner of constitution of market
committees and the powers and duties of such
committees;
(b) the qualifications of persons who
produce or prepare silkworm seed for rearing
of silkworms and other persons to whom
licences under this Act may be granted;
(c) the grant of licences and the imposing
of conditions in respect of the same and fees
for the grant of such licence;
(d) the sanitary and other conveniences that
should be provided for at the production and
distribution centers of silkworm seed ;
(e) the grant of duplicate licences and the
renewal of licences and fees for the same ;
(f) appeals from any order under this Act,
the authority to which such appeals shall lie,
the time within which such appeals should be
made and the procedure for dealing with such
appeals ;
(g) the forms of licences to be granted,
returns to be submitted and accounts to be
maintained under this Act;
(h) the fee payable by the licensed buyer in
respect of cocoons purchased by him in the
cocoon market, such fee not exceeding two per
cent of the purchase price;
(i) the particulars to be furnished by any
person of the occurrence of silkworm disease
in silkworm or silkworm seed, and the steps to
be taken for the prevention or eradication of
such disease;
(j) generally regulating the procedure to be
followed in proceedings under this Act;
(k) any other matter which may be prescribed
under this Act.
(3)All rules made under this Act shall he
laid as soon as may be after they are made
before each House of the State Legislature
while it is in session for a total period of
thirty days which may be comprised in one
session of in two or more sessions and if
before the expiry of the said period, either
House of the State Legislature makes any
modification in any rule or directs that any
rule shall not have effect and if the
modification or direction is agreed to
479
by the other House, the said rule 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 done under
that rule." The argument before us on behalf of the State is that no amendments falling beyond the purview of the Principal Act and the rules framed thereunder were made, and, therefore, no fresh restrictions could be said to have been introduced by change of form or even ,of some substance of those restrictions because they were all, in any due, within the purposes of the Principal Act which had already received Presidential sanction. According to the State, the Principal Act was introduced principally with the object of improving and maintaining the quality of silk which is manufactured and, in order to be able to do this, it was submitted, it was necessary to keep a record of all those who breed silkworms in the State of Mysore so that a watch may be kept over the genetic purity of silkworms. It was stated that there is no control over pierced cocoons which become useless for purposes of reeling. Hence, "cocoon" is defined in the Act as a product of mulberry silkworms "either green or stifled, dried or in any other state or condition, but does not include pierces cocoon". Anyone wanting to use silk for purposes other than reeling could use pierced cocoons. The " cocoon market" is defined in Section 2(b) of the Principal Act as a market established under Section 10 which provides that the Government may, for regulation and distribution of silkworm seed, by notification, specify the places at which cocoon markets, market yards, and stores may be located, fix the sericultural areas to be served by each cocoon market where silkworm cocoon produced by such areas may be sold, and assign zones and markets in which any licensed buyer may carry on his business. It is also provided in Section 10 that all transactions in the cocoon market shall be by open auction on payment of cash, Silkworm are defined as mulberry silkworms. Silkworms seeds are defined as cocoons of all kinds (excluding cross-breed cocoons) used or reared for purposes of production. A rearer is a person defined as engaged in rearing silkworms for the production of silkworm cocoons, whether for reproduction or reeling. The preamble of the Act shows that it is intended to consolidate the laws "providing for the regulation, of the production, supply, and distribution of silkworm seed and cocoon in the State of Mysore it is urged on behalf of the State that the whole object of this machinery of regulation and control of production, supply, and distribution of silkworm seed and cocoons was that, by ensuring the high standard of purity and quality of Mysore silk, to promote the business and trade of the Mysore State in silk products, and, thereby, to contribute to the growth and freer flow of trade. It is stated by the petitioner-, themselves that almost 7 per cent of the population of Mysore State is en-aged in various processes connected with the 480 rearing of silkworms and reeling of silk,and that over two lakh acres of land in Mysore State are under mulberry cultivation and mulberry is used exclusively to feed silkworms. The raising and maintenance of the quality of silk was, it was submitted, both in the interests of the trade insilk products and in public interest. In orderto carry out the purposes of the Principal Act, Sections 3 to 9 had,even before its amendments, laid down as follows
"3. Regulation of production, etc., of
silkworm seed .... No person shall produce,
prepare, store, transport, sell or otherwise
distribute or dispose of silkworm seed, except
under and in accordance with the terms and
conditions of a licence granted under this
Act.
4. Regulation of rearing .... (1) No person
shall rear silkworms from silkworm seed other
than silkworm seed obtained from a person who
holds a licence under this Act.
(2)The Government may by notification direct
that in any specified area no silkworm other
than silkworm of specified race shall be
reared and that such silkworm shall be reared
from silkworm seed obtained from specified
sources. On the issue of such notification,
no person shall rear in such specified area
any other race of silkworm or obtain silkworm
seed from any other source.
5. Regulation of possession of silkworm
seed .... No person shall be in possession of
silkworm seed unless-
(a) he is a rearer; or
(b) he holds a licence granted under this
Act; or
(c) he is authorised in writing by the
prescribed officer to possess silkworm seed.
6. Regulation of disposal of silkworm
cocoons.-No rearer shall dispose of or agree
to dispose of or in pursuance of an agreement
entered into, make delivery of silkworm
cocoons for reeling or for reproduction except
to persons holding a licence under this Act.
7. Regulation of sale or purchase of
silkworm cocoons for reeling. In any area in
which a cocoon market is established u nder this
Act, no rearer shall sell or agree to sell,
and no licensed buyer shall purchase or agree
to purchase silkworm cocoons, for reeling,
except in such cocoon market, and except in
accordance with such conditions and in such
manner as may be prescribed.
8. Regulation of reeling.-No person shall
carry on the business of reeling silkworm
cocoons unless he holds a licence granted
under this Act.
481
9. Application for licence.-Every person
who desires to obtain a licence under this Act
shall make an application to the Licensing
Authority in such form as may be prescribed."
We find that, as regards regulation of
rearing, Section 4(1) is reframed by the
Amending Act, so that now it reads as follows
No person shall engage in the rearing of
silkworms for the production of silkworm
cocoons except under and in accordance with
the terms and conditions of a licence granted
under this Act". On behalf of the State, it is pointed out that the amended Section 4(1) does not amplify the restrictions which had to be read with Section 3 of the Principal Act set out above and the detailed provisions of Rules 3, 4, and 5 read with definitions given. After going through these rules, the validity of which was not challenged, we are satisfied that no additional restriction is imposed by the Amending Section 4(1). We may here indicate the already stringent regulation or restrictions existing under the Principal Act and the rules framed thereunder which were not challenged. Rule 3(1) contained a prohibition against rearing silkworms by any person from silkworm seed other than silkworm seed obtained from a seed preparer licensed under these rules. Rule 3(2) imposed a duty upon a person who obtains silkworm seed from a licensed seed preparers to preserve the bill and the egg sheets issued by the licensed seed preparer in respect of the silkworm seed supplied by such seed preparers so that, when so required by an officer, it could be produced before him. Rule 4(1) prescribed the application form for licensing to be filled in and submitted by Rearers and seed preparers. Rule 5 provided for the grant of various licences after satisfying the licensing authorities of the qualifications of the applicant. It also enable the licensing authority to refuse licenses to limit the number of seed preparers in an area. The reason for the refusal of the grant of the licence by the licensing authority had to be communicated to the unsuccessful applicant. Buying of cocoons for reeling had to be licensed. Section 8 read with Rule 5(b) lays down that no person could carry on "the business of reeling silkworm cocoons" without a license. Section 6, set out above, prohibited disposals and deliveries of silkworm cocoons for reeling and for reproduction except to persons holding licences under the Act. Section 7 prohibited, in cocoon market areas, the rears of silkworm cocoons from selling or agreeing to sell and licensed buyers from purchasing or agreeing to purchase silkworm cocoon for reeling except in the cocoon market of the area. It is difficult for us to see bow the mere change of wording in Section 4(1) of the Act had really amplified or increased the restrictions already there. Section 4 of the Amending Act amends Section 6 of the Principal Act by omitting words : "for reeling or for reproduction." Section 5 of the Amending Act says 482
5. "Substitution of new section for section
7.For section 7 of the Principal Act, the
following section shall be substituted, namely
-
"7. Regulation of sale or purchase of silkworm
cocoons for reeling. (1) In any area in which
a cocoon market is established under this
Act,-
(a) no rearer shall sell or agree to sell ;
and
(b) no person shall purchase or agree to
purchase, silkworm cocoons except in such
cocoon market and except in accordance with
such conditions and in such manner as may be
prescribed.
(2)After a cocoon market is established for
any area, no person shall except in such
cocoon market, use or permit the use or assist
in the use of, any building, room, tent, en-
closure, vehicle, vessel or place in such area
for the sale or purchase of silkworm cocoons
or in any manner aid or abet the sale or
purchase of silkworm cocoons". Here also we are unable to find any substance in the grievance that there has been any significant increase in restrictions. The new Section 7(2) merely makes evasion of the requirement to conduct business in the cocoon market of an area more difficult. The only amendments complained of are those in Section 12 which, in the Principal Act, read as follows :-
"12. Penalties.-(1) Any person who
contravenes the provisions of Section 3- or 4
shall be punishable with fine which may extend
to one hundred rupees.
(2)Any rearer who contravenes the
provisions of Section 6 or 7 or any other
provision of this Act or any rule, order or
notification made thereunder, shall be
punishable with fine which may extend to fifty
rupees.
(3)Any licensed buyer who contravenes the
provisions of Section 7 or 8 or any other
provision of this Act or any rule, order or
notification made thereunder, shall be punish-
able with fine which may extend to two hundred
and fifty rupees.
(4)Save as otherwise provided in sub-
section (1), (2) and (3), any person who
contravenes any of the provisions of this Act
or of any rule, order or notification
thereunder, shall be punishable with fine
which may extend to two hundred and fifty
rupees.
(5)(a) Without prejudice to any punishment
under the preceding sub-sections, the Director
of Sericulture in Mysore may, after giving a
reasonable opportunity to the person concerned
to be heard, suspend or cancel the licence
granted to any person for rearing
483
silkworm seed if such person is convicted at
least twice for an offence under this Act.
(b) Any person aggrieved by the suspension
or cancellation of a licence under clause (a)
may appeal to the Government within such time
as may be prescribed and the decision of the
Government on such appeal shall be final and
shall not be called in question in any Court
of law".
Section 7 of the Amending Act lays down
"7. Amendment of Section 12. In Section 12 of
the Principle Act,-
(1)in subsection (1), for the word,, "one
hundred rupees". the words "two hundred
rupees" shall be substituted
(2)in sub-section (2), for the words and
figures "section 6 or 7 or any other provision
of this Act or any rule, order or notification
made thereunder", the words, figures, brackets
and letter. "section 6 or clause (a) of sub-
section (1) of section 7" shall be
substituted;
(3)after sub-section (2), the following
sub-section shall be inserted, namely (’-A)
All Person who contravenes the provisions of
clause (b) of sub-section (1) of section 7 or
sub-section (2) of that section shall be
punishable with imprisonment which may extend
to three months or with fine which may extend
to five hundred rupees or with both"
(4)for sub-section (3), the following sub-
section shall be substituted, namely :-
"(3) Any person who contravenes the provisions
of section 8 shall be punishable with fine
which may extend to two hundred a nd fifty
rupees"
(5)in sub-section (4), for the words,
brackets and figures "sub-sections (1), (2)
and (3)", the words brackets, figures and
letter "sub-sections ( 1), (2), (2A) and 3
shall be substituted",.
Section 8 of the Amending Act provides as
S. Insertion of new section 12A and
12B.--After Section 12 of the Principal Act,
the following sections shall be inserted,
namely :-
12A. Abetment.-Whoever abets any offence
punishable under this Act shall be punished
with the punishment provided in this Act for
such offence.
484
12B. Certain offenses to be cognizable.-The
offenses under sub-section (2A) of section 12
shall be cognizable". It was contended that the increase in the penalties would, in any event, be additional restrictions. Learned Counsel for the State replied that penalties are merely sanctions provided for enforcing restrictions and are not additional restrictions on freedom of trade or commerce. It is true that, even without a change in the nature of violations punished, those who contravene the provisions of the Act are subjected to somewhat severer punishment. But, the increase in the penalties is such, in view of the change in the value of money, as not to amount to an appreciable increase in restriction even from the point of view of a person who wants to break the restrictive laws. Penalties are really part of the procedure for the enforcement of restrictions. They do not create new offenses. They only make violation of whatever restrictions on trade and commerce were there more onerous. We therefore, doubt very much whether they could really be looked upon as additional restrictions upon freedom of trade and commerce. We may now refer to the cases cited by learned Counsel. In Atiabari Tea Co. Ltd. V. the State of Assam & Ors.,(1) this Court held the Assam Taxation (on goods carried by Roads and Inland Waterways) Act, 1954, to be void for not having secured the Presidential sanction under the proviso to Art. 304(b) before it was introduced in the form of a bill in the State Legislature. In the case before us, the Principal Act had the sanction of the President and enables orders to be passed which had the force of law enabling restrictions to be imposed by rules covered by the purposes of the Act. We have already cited Section 18 of the Principal Act to show the amplitude of the rule making power which bad the required Presidential sanction. And, we have found that the amendments before us only varied the form of restrictiveness without appreciably adding to its content. This case has, therefore, no application to the situation before us. The Automobile Transport (Rajasthan) Ltd. V. the State of Rajasthan & Ors. (2), was relied upon by both sides for the distinction between mere " regulation" and a restriction contemplated by Article 304(b) of the Constitution. It was held here that taxation of Motor Vehicles was a compensatory measure incidental to transport by Motor Vehicles which did not infringe the guarantee of freedom of trade and commerce conferred by Art. 301 of the Constitution. The effect of such taxation was held to be too remote in its effect upon freedom of trade and commerce to be a restriction contemplated by it. Subba Rao., J., who agreed with the conclusions of three other learned Judges of this Court so as to form a majority said that the nature and extent of taxation would have to be carefully scrutinized to determine whether it amounted to mere regulation or restriction. He observed (at p. 557) (1) [1961] 1 S.C.R. 809. (2) [1963] I S.C.R. 471. 485 .lm15 "Of all the doctrines evolved, in my view, the doctrine of ’direct and immediate effect’ on the freedom would be A reasonable solvent to the difficult situation that might arise under our Constitution. If a law, whatever may have been its source, directly and immediately affects the free movement of trade, it would be restriction on the said freedom". Subba Rao, J ., summarised the whole law by formulating the following propositions (at p. 564-565) :
"(1) Art. 301 declares a right of free
movement of trade without any obstructions by
way of barriers, interState, or intra-State or
other impediments operating as such barriers.
(2) The said freedom is not impeded, but, on
the other hand, promoted, by regulations
creating conditions for the free movement of
trade, such as, police regulations, provision
for services, maintenance of roads, provision
for aerodromes, Wharfs, etc., with or without
compensation (3) Parliament may by law impose
restrictions on such freedom in the public
interest ; and the said law can be made by
virtue of any entry with respect where-of
Parliament has power to make a law. (4) The
State also, in exercise of its legislative
power, may impose similar restrictions,
subject to the two conditions laid down in
Art. 304(b) and subject to the proviso
mentioned therein. (5) Neither Parliament nor
the State Legislature can make a law giving
preference to one State over another or making
discrimination between one State and another,
by virtue of any entry in the Lists,
infringing the said freedom. (6) This ban is
lifted in the ease of Parliament for the
purpose of dealing with situations arising out
of scarcity of goods in any part of the
territory of India and also in the case of a
State under Article 304(b), subject to the
conditions mentioned therein. And (7) the
State can impose a non-discriminatory tax on
goods imported from other States or the Union
territory to which similar goods manufactured
or produced in that State ’are subject". In Khyerbari Tea Co. Ltd. & Anr. V. The State of Assam, (1) the Assam Taxation (on goods carried by Road or on Inland Water ways) Act (Assam Act X of 1961), was held to be valid. It was pointed out here by Gajendragadkar, J., that, whereas, the ratio of the majority decision in the Automobile Transport (Rajasthan) case (supra) was that compensatory taxation would be outside Article 301, and, therefore, of Article 304(b) of the Constitution, in Atiabari Tea Co’s case (supra), the Court had adopted the view that the compensatory character of a tax may be taken into account in deciding whether it was a restrictionunder Article 304(b) which was, reasonable and in public interest.In Khyerbari Tea Co’s case (supra), the Court proceeding on the assumption that the tax was not compensatory upheld its validity, presumably because it was considered reasonable and in public interest as a restriction. No such question of reasonableness of any restriction imposed by the Amending Act before us (1) [1941] 5 S.C.R. 975. 486 has been raised by the petitioners. But, if the position of even taxation, from the point of view of "restrictions" contemplated by Article 304(b) of the Constitution could be doubtful and depended upon its nature and extent and purpose, we think that there could be no doubt that some additional licensing, at nominal fees charged presumably to defray the expenses of carrying out the objects of the Act, could not be held to be anything more than"regulation" in the cases before us. The question of regulatory character or otherwise of amending provisions has arisen only in the course of discussion of the question whether any new provisions, possibly resulting in requiring some more persons to take out licenses, who may not have been previously covered by provisions relating to licensing, would be a "restriction" as contemplated by Aritcle 304(b). The learned Additional Solicitor General has contended that such licensing, is necessary even for simply maintaining A record of those who carry on various activities in connection with the silk production industry and business so that their purely business and industrial activities may be watched and the quality and reputation of this industry and trade of Mysore may be maintained. Such "regulation", it is contended, ultimately contributes to greater flow and freedom of trade, even if it involves some inconvenience to those who have to take out license which, according to rules,. were granted to all those found qualified. We find considerable weight in these arguments. In any case, we are not satisfied that there has been a real increase in restriction upon commerce in silkworms and cocoons by the provisions of the Amending Act which mostly cover what was already laid down by the statutory rules. If the substance of statutory rules is converted into statutory provisions there could hardly be said to be an addition even in "regulation" imposed by the amending law. Learned Counsel for the petitioner cited Hughes and Vale Proprietary Ltd. v. State of New South Wales & Ors. (1), where provisions of the State Transport (Co-ordination) Act, of the State of New South Wales, requiring applications to be made for licences, which may be granted or refused by an official in the exercise of an uncontrolled discretion, and of all provisions consequential thereto, in so far as they were sought to be applied to public Motor Vehicles operating in the course of or for the purposes of inter-State trade, were held to be invalid for a contravention of Section 92 of the Constitution of Commonwealth of Australia. This section, as we know, provides that "trade, commerce and inter-course, among States whether by means of internal carriage or motor navigation shall be absolutely free". Here, the Privy Council discussed a large number, of cases which had a bearing on the interpretation of Section 92 of the Australian Constitution, including Commonwealth of Australia v. Bank of New South Wales (2) case, where it was observed at page 31 1)
" Every case must be judged on its own facts
and in its
own setting of time and circumstances and it
may be that
(1) [1955] A.C. 241. [1950] A.C. 235,311.
487
in regard to some economic activities and at
some stage of. social development it might be
maintained that prohibition with a view to
State monopoly was the only practical and
reasonable manner of regulation, and that
interstate trade, commerce and intercourse
thus prohibited and thus monopolized remained
Absolutely free".
The Privy Council after quoting this passage
said
"As to the passage in the judgment of the
Board in the Bank case upon which counsel for
the respondents particularly relied, their
Lordships accept-without qualification
everything that was said by the Board in the
Bank case, but they are not aware of any
circumstances in the present case giving rise
to the situation contemplated in that
passage". Thus, even if we were to apply the test of regulation to distinguish it from restriction which may be deduced from Hughes’ case (supra) it will be seen that a decision on it depends upon the circumstances to which a legislative measure is meant to apply and its consequences. In the case before us, the amendments did not, in our opinion, go beyond a regulation which was fully authorised by the language of the provisions of the Principal Act. Even any Additional licensing involved did not go beyond the purview of the provisions of the Principal Act and by the rules framed thereunder. The mere change in form, from statutory rules to statutory provisions, could hardly constitute even additional "regulation". It is only an additional "restriction" from the special point of view of Article 304(b) which requires Presidential sanction. Although, a petition under Article 32 alleging infringement of the fundamental right guaranteed under Article 19(1) (g) of the Constitution would lie, yet, it has to be remembered that it cannot be allowed until such an infringement, falling outside Article 19(6) of the Constitution, has been established. Now, as we have mentioned earlier, learned Counsel for the petitioners stated that no question about reasonableness of any restriction was being raised by them before us. They rested their case solely on the want of Presidential sanction to Additional "restrictions" on freedom of business, trade, and commerce which are not, as we have indicated earlier, to be equated with a mere reduction of the area of freedom of choice of those who arc engaged or who want to engage in a business or trade. The passage cited in Hughes’ case (supra), from the Bank of New South Wales case (supra) makes that clear. In other words, an allegedly additional restriction on trade and commerce is to be judged from a broader and more general angle of the freedom of a, particular trade. What may be a restriction of his choice, from the point of view of an individual citizen engaged in a trade, may not be a restriction on interstate or intra-State commerce viewed from the angle of the trade as a whole. Even if we could not, as we did not, find any additional restrictions on the silkworm and silk production business and industry in the amendments, the petitioners could show that they were unduly hampered by the impugned amendments from carrying on their business 10 SC/75-32 488 or trade by some unreasonable restrictions on their fundamental rights as individuals engaged in silk production industry or business. But, if that was their grievance, they had to demonstrate an unreasonableness of restrictions upon their activities falling outside Article 19(6) before they could succeed. They have not even attempted to do that. It is evident that they could not do so because the licensing fees for various activities to be licensed is quite nominal and they have not been denied any licences they wanted. Consequently, we dismiss these petitions with costs. C.M.P. No. 1929 of 1975 (in Writ Petition No. 137 of 1971) is also dismissed as not pressed. Petitions dismissed P.H.P. 489