of Uttar Pradesh & Anr Vs. M/S. Gulshan Sugar & Chemicals Ltd.  INSC
257 (5 May 1995)
B.L. (J) Hansaria B.L. (J) Kuldip Singh (J) Hansaria. J.
1996 AIR 62 1995 SCC (4) 529 JT 1995 (7) 382 1995 SCALE (3)600
5TH DAY OF MAY, 1995 Present :
Mr. Justice Kuldip Singh Hon'ble Mr. Justice B.L. Hansaria Mr. R.C. Verma, Adv.
for Mr. R.B. Misra, Adv. for the Appellant.
following Judgment of the Court was delivered:
SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION CIVIL
APPEAL NO.5330 OF 1995 (Arising out of SLP(C) No.12786 of 1987) State of Uttar Pradesh ...Appellant & Anr. Versus M/S.
Gulshan Sugar & Chemicals Ltd. ...Respondents
respondent, M/s. Gulshan Sugar & Chemicals Limited, is a company carrying
on the business of manufacturing of chemicals. For undertaking the
manufacturing work, it has to consume coal, which is an essential commodity and
attracts the provisions of the Uttar Pradesh Coal Control Order, 1977 (the
'Control Order'), which has been issued under Section 3 of the Essential
Commodities Act, 1955. The Government of Uttar Pradesh vide its Memo dated
6.6.1985 required the District Magistrate, Bulandshahar, to see if any
industrial unit was selling unused coal or coal dust improperly; and if so, to
take action, inter alia, under clause 15 of the Control Order. By Memo of
19.9.1985 all District Magistrates of the State were required to take action
against the industrial units if they sell or transfer unused coal/coal dust without
obtaining licence under the provisions of the Control Order.
respondent challenged the validity of these two Government Orders by filing a
petition under Article 226 of the Constitution before the Allahabad High Court.
A Division Bench of the High Court by its judgment, which has been impugned in
this appeal, held that the aforesaid Orders could not have been issued and it
was further held that the respondent was not required to obtain licence for the
transfer of the surplus or rejected coal or coal dust. The legality of the
judgment has been assailed by the State of Uttar Pradesh in this appeal.
There is no dispute on facts. The same are that the respondent consumes coal
for running its factory. Sometimes quality of coal supplied is not of the kind
required by the respondent. The same is therefore, rejected. Further, a huge
quantity of coal dust is collected during the storage, loading and unloading of
coal. Coal dust is also produced when coal is broken into pieces of required
sizes. The rejected coal and the coal dust being of no use to respondents it
disposes of the same without obtaining any licence under the Control Order.
the aforesaid facts the question for determination is whether licence as
mentioned in the aforesaid G.Os. is necessary. The High Court has answered this
question in negative for two reasons. First, the respondent cannot be said to
be "dealer" as defined in clause 2(d) of the Control Order; secondly,
the case of the respondent is squarely covered by clause 3(B) of the Control
Order. The High Court did not accept the contention of the State that because
of what has been provided in clause 3(A) the respondent is required to obtain licence
learned counsel for the parties have reiterated the stand which had been taken
by the contestants before the High Court.
may first note the relevant provisions of the Control Order, which are as
Definitions: In this Order unless there is anything repugnant in the subject or
context- xxx xxx xxx xxx xxx xxx (c) "Coal" means coal, coke and
other deravatives and includes slack coal, steam coal, soft coke, hard coke or
dust coal of various grades but does not include cinder and ashes and products
and by products of coal;
"Dealer" means a person carrying on as a principal or agent, whether
separately or in conjunction with some other business, the business of import,
purchase or storage for sale and sale of coal, in wholesale and granted a licence
in Form 'B' and commonly known and herein referred to as 'Coal Agent' or in
retail and granted a licence in Form 'C' and commonly called and referred to
herein as 'Coal Depot Holder', but does not include a consumer who imports,
purchases or stores coal for his own use."
"Nothing in this Order shall apply to-
movement of coal under the authority of the Coal Commissioner, Government of
India or any other officer acting on his behalf;
moved on Railway account;
of coal under and in accordance with a Military Credit Note on Defence Account;
of coal meant for the use of any Central Government Department or Corporation
or under Central Government quota or under sponsoring by any authority not
under the administrative control of the State Government;
that such coal is consumed entirely by the Industry, Railway, Central
Government Department or Corporation or any other person for whom it is moved;
as the case may be, for its own use;
further that except in sofar as transfer or sale of coal to any other consumer
of the same category, affected with the permission of the sponsoring authority
or competent departmental authority, is concerned, if any of the above
consumers wishes to sell any part of the coal, surplus to his requirement, to
other users thereof in Uttar Pradesh he shall do so only after obtaining the
permission from the District Magistrate of the District where coal is stored
and if the users or any user, to whom this coal is proposed to be sold, is
working in another district the District Magistrate of that district and
further shall intimate full particulars of such sale to the or both the
District Magistrates concerned immediately after, such sale.
The provisions of clauses 4 to 10,14 and 16 hereof, shall not apply to steam
coal and hard coke for industrial consumption.
High Court held the respondent not to be dealer for two reasons: (i) it does
not carry on the business of sale or storage for sale; and (ii) it being a
consumer of coal, it would not be a dealer because of what has been mentioned
in the last part of the definition of dealer. The contention of the appellant
before the High court that carrying on business of sale etc. is not necessary
to be regarded as a dealer because of the expression "in conjunction
with" finding place in the definition, was rejected by the High Court.
According to us, this expression as placed in the definition clause cannot mean
that to become dealer one need not carry on business, because mention has been
made about "in conjunction with" to make it clear that carrying on of
business may be either separately or along with some other business; but
business it has to be.
High Court, in taking the view it did, has referred to the decision of this
Court in Manipur Administration v.Nila Chandra, AIR 1964 SC 1533, in which,
while interpreting the meaning of the word business as finding place in Manipur
Foodgrains Dealer Licencing Order, it was held that mere selling of articles or
storing of the same would not make it a business, as this concept postulates
continuity of transaction. It was stated that a casual solitary transaction
would not make a person a dealer. There being nothing on record to show if
there was continuity in transactions of sale of coal dust or rejected coal by
the respondent, we agree with the High Court that the respondent was not in the
business of sale or storage for sale of coal.
has been stated in the concluding part of the definition of "dealer"
also lends assurance to the view taken by the High Court.
Having been satisfied that there is nothing on record to show if the respondent
was in the business of sale or storage for sale of coal, it is not necessary to
express our views on the second reason of the High Court in accepting the case
of the respondent. We dismiss the appeal on the limited ground that the
respondent could not be proved to be in the aforesaid business. We leave open
the legal question covered by the second reason.
the facts and circumstances of the case, we make no order as to costs.