K.Ramanathan Vs. State of Tamil Nadu
& ANR [1985] INSC 37 (27 February 1985)
SEN, A.P. (J) SEN, A.P. (J) VARADARAJAN, A.
(J) ERADI, V. BALAKRISHNA (J)
CITATION: 1985 AIR 660 1985 SCR (2)1028 1985
SCC (2) 116 1985 SCALE (1)510
ACT:
Constitution of India 1950, Arts 14, 19 (1)
(2) (p) and 301 Essential Commodities Act, 1955, ss. 3 (1) & (2) and
5-Power under sub-s. (2)-Whether general in nature-Sub-s.
(2)-Whether confers any fresh power-Whether
illustrative of power conferred by sub-s (1)-Cl. (d) of sub-s. (2)-Whether
contains specific power-Making of Orders by State Government under cls. (a) to
(f) of sub-s. 2-Source of power-Whether flows from sub-s. (1) - Delegation
of-By notification under s. 5 Essential Commodities-Tamil Nadu Paddy
(Restriction on Movement) Order. 1982-Cl. 3 (1A). issued by State Government
under s. 3 read with Ministry of Agriculture (Department of Food) Order, S. R.
800 dt. June 9 1978-Placing ban on transport, movement or otherwise carrying of
Paddy out of certain specified are as in the Stale-Whether in excess of
delegated powers -Whether violative of Articles 14, 19 (1) (g) and 301,
HEADNOTE:
Section 3 (2) (d)-Whether regulating includes
in the context prohibiting.
Interpretation of statutes-Whether some words
may be used in different senses in the Same sentence.
Words and phrases-Regulation and
Prohibiting-Meaning and scope of.
Due to failure of monsoon in the years
1981-82, there was a steep fall in production of paddy and it became necessary
for the State Government of Tamil Nadu to build up its buffer stocks for
distribution through the public distribution system throughout the State. ID
the circumstances, the State Government had no other alternative but to
introduce a monopoly procurement scheme with a view to procure the maximum
stock of paddy by banning purchase by traders. This was in addition to
compulsory levy on dealers of paddy and rice to the extent of 50% under cl. 5
(1) of the Tamil Nadu Paddy & Rice (Regulation of Trade) Order, 1974.
1029 In exercise of the powers conferred
under s. 3 of the Essential Commodities Act, 1955 read with the Government of
India, Ministry of Agriculture (Department or Food) Order GSR 800 dated Juno 9,
1978 issued under s. 5 of the Act with the prior concurrence of the Government
of India, the State Government accordingly promulgated the Tamil Nadu Paddy
(Restriction on Movement) Order, 1982 on October 22, 1982.
Clause 3 (1A) of the Order prohibited
transport, movement or otherwise carrying of paddy outside the State by road or
rail or otherwise except under and in accordance with the conditions of a
permit issued by an officer authorised in that behalf. By GOMS No. 293 dated
May 11, 1982 the State Government introduced sub-cl. (IA) to cl. 3 of the Order
which prohibited transport; movement or otherwise carrying of paddy outside
places notified by cl. 3 of the Order by road or rail or otherwise. Thereafter,
on June 20, 1983, the State Government made a further amendment to the newly
inserted cl. 3 (IA) which clamped a complete ban on transport, movement or
otherwise carrying of paddy outside the Thanjavur District, Chidambaram and
Kattumannarkoil Taluks in South Arcot District and Musiri, Kulithalai, Lalgudi
and Tiruchirapalli Talulks in Tiruchirapalli District.
The appellant along with other traders
assailed the constitutional validity of cl. 3 (IA) of the Order, as amended,
which placed a complete ban on transport, movement or otherwise carrying of
paddy outside the Thanjavur district and the aforesaid Taluks in South Arcot
and Tiruchirapalli districts as being violative of Arts. 14, 19(1)(g) and 301
of the Constitution The High Court repelled the contentions and dismissed the
writ petitions.
In the appeal, the appellant contended that
the impugned cl. 3 (IA) of the Order was ultra vires the State Government on
two grounds, namely: (1) The delegation of a specific power under s 3 (2) (d)
of the Act to State Government by the aforesaid notification dated June 9, 1978
issued by the Central Government under s. 5 of the Act to regulate storage,
transport, distribution, disposal etc. Of an essential commodity, in relation
to foodstuffs, does not carry with it The general power of the Central
Government under sub-s. (1) of s. 3 to regulate or prohibit the production,
supply and distribution thereof and trade and commerce therein. And (2) That
the word regulating' in cl.
(d) of s. 3 (2) of the Act does not take in
'prohibiting' and as such there cannot be a total prohicition on transport,
movement or otherwise carrying of paddy out of the areas in question under (d)
but only regulation of such activities in the course of trade and commerce by
grant of licences or permits.
Dismissing the appeal, ^
HELD: 1. Sub-s (2) of s. 3 of the Essential Commodities
Act, 1955 offers no fresh powers but is merely illustrative of the general
poweres by sub-s. (1) of s. 3 without exhausting the subjects in relation to
such powers can be exercised. Although cl. (d) of sub-s. (2) of s. 3 with a
specific power, the general power to issue the impugned 1030 order flows from
the provisions of sub-s. (1) of s.3 which stands delegated to the State
Government by virtue of the notification issued under s. S of the Act. [1042H;
1043B] Santosh Kumar Jain v. The State, [I951] SCR 303, and Emperor v. Sibnath
Banerjee, LR [1945]] 72 IA 241, followed.
Nanalal Navalnathji Yogi v. Collector of
Bulsar & Ors.
AIR 1981 Guj. 87. approved.
Atulya Kumar v. Director of Procurement &
Supply, AIR 1953 Cal. 548, approved. _ Tarakdas Mukherjee v. State of West
Bengal, [1978] 2 Cal. L.J. 398 and Lila Biswas v. State of West Bengal,
[1918-89] CWN 539, approved.
Sujan Singh v. State of Haryana, AIR 1998
Pun, 363, State of Uttar Pradesh v. Suraj Bhan, AIR 1972 All. 401 and Bejoy
Kumar Routrai v. State of Orissa AIR [1976] Orr. 138, overruled.
2. The word 'regulation' cannot have any
rigid or inflexible meaning as to exclude 'prohibiting'. It is difficult to
define the word 'regulate' as having any precise meaning. It has different
shades of meaning and must take its colour from the context in which it is used
having regard to the purpose and object of the legislation, and the Court must
necessarily keep in view the mischief which the legislature seeks to remedy.
The question essentially is one of degree and it is impossible to fix any
definite point at which 'regulation' ends and prohibition' begins. The power to
regulate does not necessarily include the power to prohibit, and ordinarily the
word 'regulate' is not synonymous with the word 'prohibit'. This is true in a
general sense and in the sense that mere regulation is not the same as absolute
prohibition. But the power to regulate carries with it full power over the
thing subject to regulation and in obsence of restrictive words, the power must
be regarded as plenary over the entire subject. It implies the power to rule,
direct and control and- involves the adoption of a rule or guiding principle to
be followed or the making of a rule with respect to the subject to be
regulated. The power to regulate implies the power to check and may imply the
power to prohibit under certain circumstances, as where the best or only
efficatious regulation consists of suppression.
[1045G-H; 1046E-F Narendra Kumar v. Union of
India, [1960] 2 SCR 361 Slaitery v. Naylor, LR [1888] AC 446 and Municipal
Corporation of the City of Toronto v. Virgo, LR [1896] AC 88, Corpus Juris
Secundum, vol. 76 at p. 611 and Webster s Third New International Dictionary,
vol II, p 1913 and Thorter Oxford Dictionary, vol. II, 3rd edn., p. 1784,
referred to State of Mysore v. H. Sanjeeviah, [1967] 2 SCR 361, distinguish and
limited.
1031 The source of power to issue an order
under cl. (d) of sub-s. (2) of A s. 3 of the Act being relatable to the general
powers of the Central Government under sub-s. (1) of s. 3, there is no
justification for giving a restricted meaning to the word 'regulating,' in cl.
(d) of sub-s. (2) of s. 3 of the Act so as not to take in 'prohibiting'. A word
may be used in two different senses in the same section. [1050B-C] The Act is a
piece of socio-economic legislation and its predominant object is to provide in
the interests of general public, for the control of the production, supply and
distribution of, and trade and commerce in, certain essential commodities. Such
control can be exercised in a variety of ways otherwise than by placing
compulsory levy on the producers, for example, by fixing a controlled price for
foodstuffs, by placing a limit on the stock of foodstuffs to be held by a
wholesale dealer, commission agent or retailer by placing sales except in
certain specified manners etc.
All these arc nothing but regulatory
measures. Placing a ban on inter-State or inter-State movement or export of
foodstuffs is one of the ways to regulate and control and such ban prevents the
spiral rise in prices of such foodstuffs by artificial creation of shortage by
unscrupulous traders. The various Control Orders issued by the Central
Government under sub-s. (1) of s- 3 of the Act or by the State Governments
under s. 3 read with s. 5 have introduced a system of checks and balances to
achieve she object of the legislation i.e. to ensure equitable distribution and
availability of essential commodities at fair prices. Special public interest
in an industry e. g. that it is engaged in the production of a commodity
vitally essential to the community, may justify the regulation of its
production, supply and distribution and its trade and commerce, provided such
regulation is not arbitrary and has a rational nexus with the object sought to
be achieved.
[1048C-D; 1047F-H; 1048A] If one part of the
country or of a State is faced with a famine or even acute shortage of
foodstuffs. it is not unreasonable for the Government to acquire foodstuffs
from the surplus areas and distribute the same in areas where they are most
needed. Since there was steep fall in production of paddy due to failure of
monsoons the State Government of Tamil Nadu was justified not only to reimpose
compulsory levy on the producers of paddy to the extent of 50% but also to
introduce a scheme for a monopoly purchase of paddy by the Government with a
view to build up its buffer stock for distribution through the public
distribution system throughout: the State. [1049E-G] State of Tamil Nadu v.
Hind Stone & Ors. [19811 2 SCC 205, C. K Krishnan v. State of Tamil Nadu
[1975] 2 SCR 715, Krishan Lal Praveen kumar & Ors. v. State of Rajasthan
& Ors., [1981 4 SCC 550, Suraj Mal Kailash Chand & Ors, v.
Union of India & Ors., [1981] 4 SCC 554
and Bishamber Dayal Chandra Mohan & Ors. v. State of U.P. & Ors.,
[1982] 1 SCR 1137, relied on.
1032
CIVIL APPELLATE JURISDICTION: Civil Appeal
No. 11417 of 1983 From the Judgment and Order dated 14. 9. 1983 of the High
Court of Madras in W. P. N. 4615 of 1983.
K. Ram Kumar for the Appellant.
A. V. Rangam for the Respondents The Judgment
of the Court was delivered by SEN, J. This appeal by special leave directed
against the judgment and order of the Madras High Court dated September 14,
1983 raises a question of some complexity. The question is as to whether cl. 3 (IA)
of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 issued by the
State Government under s 3 of the Essential Commodities Act, 1955 read with the
Government of India, Ministry of Agriculture (Department of Food) Order, a. s.
R, 800 dated June 9, 1978, with the prior concurrence of the Government of
India, was ultra vires the State Government being in excess of its delegated
powers. That depends on whether the delegation of a specific power under cl.
(d) of sub-s. (2) of s. 3 of the Act by the aforesaid notification issued by
the Central Government under s. 5 to regulate the storage, transport,
distribution, disposal, acquisition, use or consumption of an essential
commodity, in relation to foodstuffs, carries with it the general powers of the
Central Government under sub-s. (1) of s. 3 of the Act to regulate or prohibit
the production, supply and distribution of essential commodities and trade and
commerce therein.
There is a conflict OF opinion on this
question between different High Courts. Hence we thought it fit to grant
special leave and heard the appeal on merits. After hearing the parties, we
dismissed the appeal by an order dated December 5, 1983 for reasons to follow.
The reasons therefore are set out below .
Briefly stated, the facts are these. In the
State of Tamil Nadu, there has been a system of imposing levy on purchase of
paddy by traders in vogue since the year 1970.
This was imposed by cl. 3 (5) (i) of the
Tamil Nadu Paddy and Rice (Licensing, Regulation & Disposal of Stock)
Order, 1968 issued by the State Government under s. 3 of the Act with the prior
concurrence of the Government 1033 Of India. Cl. 3 (5) (i) empowered the State
Government to impose A and collect upto 50% of the stocks by way of levy on
purchases of paddy by traders on payment of price specified from time to time.
The said Order was replaced by the Tamil Nadu Paddy and Rice (Regulation of
Trade) Order, 1974 issued under s. 3 of the Act with the prior concurrence of
the Government of India. Cl. 5 (1) of this Order empowers the State Government
to impose and collect levy upto 50% of the purchase of paddy and rice by the
dealers other than retail dealers and they are paid prices notified by the
Government. This clause was subsequently amended in 1976.
The power to impose and collect levy on the
purchase of paddy and rice was exercised by the State Government under s. 3 of
the Act with a view to procure the stock for distribution of rice to about 118
lakhs family card-holders throughout the State through nearly 17, 800 fair
price shops. A review of the food situation in the latter half of 1980 and the
beginning of 1981 revealed that the stock of paddy and rice with the Government
was not adequate to meet the requirements under the public distribution system.
The State Government in the Food & Cooperation Department accordingly,
decided to enforce the levy on traders by G. O.
Ms. No. 33 dated January 1, 1981 and to
collect 40% levy on the purchases of paddy and rice by dealers even though it
had the power to impose levy upto 50% at prices fixed by it from time to time.
Thereafter, the Government in the Food & Cooperation Department by G. O.
MS. No. 765 dated October 1, 1981 increased the levy from 40% to 50% from
kuruvai season 1981.
There was a failure of monsoon in the State
in the years 1981-82 and the off take of rice in the fair price shops had
increased from 34,000 tonnes in April to 85,000 tonnes in December 1982. Due to
failure of south-west monsoon in the year 1982 and consequent poor rainfall,
the storage level in the Mettur reservoir fell. As a result of this there was a
steep fall in kuruvai cultivation of paddy.
In Thanjavur district alone, the acreage of
paddy cultivation was reduced from 4. 5 lakhs acres to 2.97 lakhs acres. Added
to this, the north-east monsoon in the State also failed causing a serious fall
in the production of paddy. In the circumstances, the State Government in the
Food & Cooperation Department had no other alternative but to introduce a
monopoly procurement scheme of paddy with a view to procure the maximum stock
of paddy by banning the purchases by traders.
1034 In exercise of the powers conferred
under s. 3 of the Essential Commodities Act, 1955 read with the Government of
India, Ministry of Agriculture (Department of Food) Order, G. S. R. 800 dated
June 9, 1978, with the prior concurrence of the Government of India, the State
Government promulgated the Tamil Nadu Paddy (Restriction on Movement) Order,
1982 on October 22, 1982. Cl. 3 (1) of the Order provides:
"No person shall transport, move or
otherwise carry or prepare or attempt to transport, move or otherwise carry, or
aid or abet in the transport, movement or otherwise carrying of paddy outside
the State by road/rail or otherwise except under and in accordance with the
conditions of a permit issued by an authorized officer." On January 22,
1983, the State Government Department issued G. O. MS. No. 42 for purchase of
the entire marketable surplus of paddy in Thanjavur District by the Government
through the Tamil Nadu Civil Supplies Corporation as an agent of the Government.
On February , 1982, the State Government in the Food & Co-operation
Department issued another G. O. Ms. No. 84 extending the provision made with
regard to Thanjavur district of Chidambaram and Kattumannarkoil taluks in South
Arcot district and Musiri, Kulithalai, Lalgudi and 7 Tiruchirapalli taluks in
Tiruchirapalli district.
On May 11, 1983, the State Government in the
Food & Co-operation Department issued G. O. Ms. No. 293 introducing sub-cl.
(1A) to cl. 3 of the Order. The newly inserted cl. (IA) is as follows:
"No person shall transport, move or
otherwise carry or prepare or attempt to transport, move or otherwise carry, or
aid or abet in the transport, movement or otherwise carrying of paddy outside
the places notified under Clause 3 of the Tamil Nadu Paddy & Rice
(Restriction of Rates) Order, 1974 by road/rail or otherwise." Thereafter,
on June 20, 1983, the State Government in the Food & Cooperation Department
by G. O. Ms. No 413 made a further amendment to the newly introduced sub-cl.
(1A) of cl. 3. The amended cl. (IA) of cl. 3 is follows:
1035 "No person shall transport, move or
otherwise carry or prepare or attempt to transport, move or otherwise carry, or
aid or abet in the transport, movement or other wise carrying of paddy outside
the Thanjavur District, Chidambaram and Kattumannarkoil Taluks in South Arcot
District and Musiri, Kulithalai, Lalgudi and Tiruchirapalli Taluks in
Tiruchirapalli District." These various orders were issued by the state
Government in exercise of the powers conferred by s. 3 of the Act read with the
Government of India, Ministry of Agriculture (Department of Food) Order, G. S.
R. 800 dated June 9, 1978 which is set out below: C "MINISTRY OF
AGRICULTURAL AND IRRIGATION (DEPARTMENT OF FOOD) ORDER New Delhi, the 9th June,
1978.
G. S. R. 800-In exercise of the powers
conferred by s. 5 of the Essential Commodities Act, 1955 (10 of 1955), and in
supersession of the Order of the Government of India in the late Ministry of
Agriculture (Department of Food) No. G. S. R. 316 (E) dated the 20th June,
1972, the Central Government hereby directs that the powers conferred on it by
sub-s. (1) of s. 3 of the said Act to make orders to provide for the matters
specified in cls. (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub-s.
(2) thereof shall, in relation to foodstuffs be exercisable also by a State
Government subject to the conditions- (1) that such powers shall be exercised
by a State Government subject to such directions, if any, as may be issued by
the Central Government in this behalf;
(2) that before making an order relating to
any matter specified in the said cls. (a), (c) or (f) or in regard to
distribution or disposal of foodstuffs to places outside the State or in regard
to regulations or transport of any foodstuffs, under the said cl (d), the State
Government shall also obtain the prior concurrence of the Central Government
and 1036 (3) that in making an order relating to any of the matter specified in
the said cl. (i) the State Government shall authorize only an officer of
Government.
Sd/-K. Balakrishnan, Dy. Secretary to the
Government of India (No. 3 (Genl) (1)/78-D&R (1) 59)." The appellant
and various other agriculturists of Thanjavur district and the aforesaid
traditionally rice growing areas of South Arcot and Thiruchirapalli districts
challenge the constitutional validity of cl. 3 (1A) of the Order placing a
complete ban on the transport, movement or otherwise carrying of paddy outside
Thanjavur district and the aforementioned taluks of South Arcot and Thiruchirapalli
districts by petitions under Art. 226 of the Constitution in the High Court.
There were as many as 300 writ petitions in the High Cort which were disposed
of by the judgment under appeal. The validity of cl 3 (IA) of the Order was
assailed on three main grounds: (1) Cl. 3 (1A) was wholly arbitrary and
irrational and thus violative of Art. 14 of the Constitution. (2) Cl. 3 (IA)
was in excess of the delegated powers conferred on the State Government under
s. 3 of the Act by the aforesaid G. S. R 800 dated June 9, 1978 issued by the
Central Government under s. 5 of the Act. And (3) The total ban on movement of
paddy from out of Thanjavur district and the aforesaid taluks of South Arcot
and Thiruchirapalli districts by cl. 3 (1A) of the Order was an unreasonable
restriction on the freedom of trade and commerce guaranteed under Art. 19 (l)
(g) and also infringes the freedom of inter-State trade, commerce and
intercourse under Art. 301 of the Constitution. The High Court repelled all
these contentions.
Shri P. Govindan Nair, learned counsel
appearing for the appellant argued the case with much learning and resource.
Learned counsel with his usual fairness did not advance some of the contentions
raised before the High Court as they were apparently misconceived. He has
confined his submissions to only two grounds, namely: (l)Cl. 3 (IA) of the
impugned Order issued by the State Government under s. 3 of the Act read with
G. S. R. 800 dated June 9, 1978 issued by the Central Government under s. 5 of
the Act with the prior concurrence of the Government of India placing a ban on
the transport, movement or otherwise carrying of 1037 paddy from out of
Thanjavur district, the two taluks of South Arcot district and the four taluks
of Thiruchirapalli district, was ultra vires the State Government being in
excess of the delegated powers. It is urged that the delegation of a specific
power under cl. (d) of subs. (2) of s. 3 of the Act by the aforesaid
notification issued by the Central Government under s. 5 of the Act to regulate
the storage, transport, distribution, disposal etc. Of an essential commodity,
in relaston to foodstuffs, does not carry with it the general power of the
Central Government under sub-s. (l) of s. 3 to regulate or prohibit the
production, supply and distribution thereof and trade and commerce therein. And
(2) The word 'regulating' in cl. (d) of sub- s. (2) of s. 3 of the Act does not
take in 'prohibiting' for the words 'regulating' and 'prohibiting' denote two
distinct and separate attributes of power and they are mutually exclusive
Otherwise according to learned counsel, there was no point in the Legislature
using both the words 'regulating' and 'prohibiting' in sub-s. (1) of s.
3 of the Act and the words 'regulating' and
'prohibiting' differently in various clauses of sub-s. (2) thereof. It is urged
that there cannot be a total prohibition on transport, movement or otherwise
carrying of paddy out of the areas in question under cl. (d) of subs. (2) of s
3 but only regulation of such activities in the course of trade and commerce by
grant of licences or permits The learned counsel is fortified in his
submissions by the decisions of the Punjab, Allahabad and Orissa High Courts in
Sujan Singh v State of Haryana,(1) State of Uttar Pradesh v. Suraj Bhan(2) and
Bejoy Kumar Routrai v. State of Orissa(3) and he questions the correctness of
the decision of the Gujarat High Court in Nanalal Navalnathji Yogi Collestor of
Bulsar& Ors.(4) taking a view to the contrary. We are afraid, we are unable
to accept any of the contentions advanced by him.
In order to appreciate the contentions
advanced, it would be convenient to set out the relevant statutory provisions.
Sub-s. (1) of s. 3 of the Act is in these terms:
"3 (1). Power to control production,
supply, distribution etc. Of essential commodities- (1). AIR [1968] Pun. 363
(2). AIR [.972] Al]. 401 (3). AIR [1976] Orr. 138 (4). [1981] . 87 1038 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 prohibiting
the production, supply and distribution thereof and trade and commerce
therein." Sub-s. (2) of s. 3 of the Act, insofar as material, lays down:
" 3. (2) Without prejudice to the
generality of the powers conferred by sub-s. (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 or consumption of any essential commodity." S. S of the
Act provides:
"5. Delegation of powers-The Central
Government may, by notified order, direct that (the power to make orders or
issue notifications under s. 3) shall in relation to such matters, and subject
to such conditions, if any, as may be specified in the direction, be
exercisable also by- (a) such officer or authority subordinate to the Central
Government, or (b) such State Government or such officer or authority
subordinate to a State Government.
as may be specified in the direction."
1039 The infirmity in the argument lies in the erroneous assumption A that the
source of power on authority to promulgate the impugned Order was derived by
the State Government under cl.(d) of sub-s (2) of s. 3 of the Act by virtue of
the delegation of powers by the Central Governmnent by the notification No G.
S. R. 800 dated June 9, 1978 under s 5 of the Act. The source of power to
promulgate an order of this description is derived from sub- s. (1 of s. 3 of
the Act, According to its plain language, the aforesaid notification No. G. S.
R. 800 provides that in exercise of the powers conferred by s. 5 of the Act,
and in supersession of the earlier order of the Government of India in the
Ministry of Agriculture, Department of Food, No. G. S R 316 dated June 20,
1972, the Central Government directs that 'the powers conferred on it by sub-s.
(1) of s. 3 of the Act' to make orders to provide for matters specified in
clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub-s. (2)
thereof shall, in relation to foodstuffs, 'be exercisable also by a State
Government subject to the conditions set out therein'. There must be some
meaningful effect given to the words 'the Central Government hereby directs
that the powers conferred on it by sub-s. (1) of s. 3 of the Act to make orders
etc.. shall be exercisable also by a State Government subject to the conditions
set out therein'. On a plain construction, the first part of the aforesaid
notification in specific terms provides for the delegation by the Central
Government under s. 5 of the Act of the powers conferred on it by sub-s. (1) of
s. 3 of the Act. That power is general in its terms and authorises inter alia
the promulgation of any order providing for regulating or prohibiting the
production, supply and distribution of, and trade and commerce in, any
essential commodity, insofar as it is necessary or expedient so to do for
maintaining or increasing supplies or for securing their equitable distribution
and availability at fair prices. The second part of the notification directs that
the power to make 'orders thereunder' i.e. the power under sub-s. (1) of s. 3
of the Act shall be exercisable also by a State Government, in relation to
foodstuffs, with respect to 'such matters' viz. for the matters specified in
clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub-s. (2)
thereof and subject to 'such conditions' set out therein. The aforesaid
notification G. S. R. 800 dated June 9, 1978 issued by the Central Government
was strictly in conformity with s. 5 of the Act. Of the three conditions, the
one that is material for our purpose is condition 2 It provides that before
making an order under cl. (d) of sub-s. (2) of s. 3 of the Act in regard to
1040 distribution or disposal of foodstuffs to places outside the State or in regard
to regulations or transport of any foodstuffs, the State Government shall also
obtain the prior concurrence of the Central Government. It is manifest on a
plain reading that the aforesaid notification No. G. S. R. 800 dated June 9,
1978 was strictly in conformity with the requirements of s. 5 of the Act.
Learned counsel for the appellant however
strenuously con tends that the delegation of powers by the Central Government
under s. 5 of the Act must necessarily be in relation to 'such matters' and
subject to 'such conditions' as may be specified in the notification. The whole
attempt on the part of the learned counsel is to confine the scope and ambit of
the impugned order to cl. (d) of sub-s ( .) of g. 3 of the Act which uses the
word 'regulating' and take it out of the purview of sub-s. (1) of s. 3 which
uses the words 'regulating or prohibiting'. That is not a proper way of
construction of sub-ss (l) and (2) of s. 3 of the Act in their normal setting.
The restricted construction of s. 3 contended for by learned counsel for the
appellant would render the scheme of the Act wholly unworkable. As already
indicated, the source of power to make an order of this description is sub-s.
(l) of s 3 of the Act and sub-s. (2) merely provides illustration for the general
powers conferred by sub-s. (l). Sub-s. (2) of s. 3 of the Act commences with
the words 'Without prejudice to the generality of the powers conferred by
sub-s. (1)'. It is manifest that sub-s. (2) of s 3 of the Act confers no fresh
powers but is merely illustrative of the general powers conferred by sub-s. (1)
of s. 3 without exhausting the subjects in relation to which such powers can be
exercised.
The matter is no longer res integra. The
question directly arose for consideration by this Court in Santosh Kumar Jain
v. The State (1). There, the Court was considering the validity of the Sugar
and sugar Products Control Order, 1947 issued by the then Provincial Government
of Bihar in exercise of the powers conferred on it by s. 3 of the Essential
Supplies (Temporary Powers) Act, 1946 by virtue of the delegation of powers by
the Central Government to make orders in relation to foodstuffs under cl. (j)
of sub-s. (2) of s. 3 of that Act. Patanjali Shastri, J., speaking for the
Court explaining the relevant functions of sub-ss. (1) and (2) of s. 3 of the
Act, said:
(1) [1951] S.C.R. 303.
1041 "It is manifest that sub-s. (2) of
s. 3 confers no fur. A the or other powers on the Central Government than what
are conferred under sub-s. (1), for it is "an order made thereunder"
that may provide for one or two other of the matter specifically enumerated in
sub-s.
(2) which are only illustrative, as such
enumeration is "without prejudice to the generality of the powers
conferred by sub-s. (1)". Seizure of an article being thus shown to fall
within the purview of sub-s. (l), it must be competent for the Central
Government or its delegate, the Provincial Government, to make an order for
seizure under that sub-section apart from and irrespective of the anticipated
contravention of any other order as contemplated in cl. (j) of sub-s.
(2)." The Court drew support for this view from the decision of the Privy
Council in Emperor v. Sibnath Banerjee.(') The Federal Court in that case held
r. 26 of the Defence of India Rules made under cl (j) of sub-s (2) of s. 3 of
the Defence of India Act, 1939 to be ultra vires, which decision was reversed
by the Privy Council, The Court quoted with approval the following observations
of Lord Thankerton, J.
delivering the judgment of Privy Council:
"In the opinion of their Lordships, the
function of sub s. (2) is merely an illustrative one;
the rule-making power is conferred by sub-s.
(1), and "the rules" which are referred to in the opening sentence of
sub-s. (2) are the rules which are authorized by, and made under, sub-s. (1);
the provisions of sub-s (2) are not restrictive of sub-s.
(1), as, indeed is expressly stated by the
words "without prejudice to the generality of the powers conferred by
sub-s (1)." This accords with our view of the purport and effect of
sub-ss. (1) and (2) of s. 3 of the Act.
In Atulya Kumar v. Director of Procurement
& Supply(a), the challenge was to the validity of West Bengal Foodgrains
(Intensive Procurement Order, 1952 issued under s. 3 (1) of the Essential Supplies
(Temporary Powers) Act, 1946 by virtue of delegation of powers by the Central
Government under s. 5 of the Act which was (1) LR [1945] 72 IA 241.
(2). AIR [1953] Cal. 548.
1042 almost in identical terms with s. 5 of
the Act. Sinha, J.
(as he then was) held that the powers to
promulgate the levy order was derived from sub-s. (1) of s 3 of the Act; and
that the power was general in terms and authorized inter alia the promulgation
of any order providing for regulating or prohibiting the production, supply and
distribution of, and trade and commerce in, any essential commodity, insofar as
it appears necessary or expedient to the State Government for maintaining or
increasing supplies or for securing their equitable distribution and
availability at fair prices. The learned Judge after referring to the Privy
Council decision in Sibnath Banerjee's case and that of this Court in Santosh
Kumar Jain's case, observed :
"Sub-s. (2) of s. 3, commences with the
words "without prejudice to the generality of the powers conferred by
sub-s. (1)....etc." This shows that sub-s.
(2) confers no fresh powers but provides
illustrations of the general powers conferred by sub-s. (1)......" The
learned Judge went on to observe:
"This is undoubtedly very incompetent
drafting.
But I think that the meaning is reasonably
clear. The 'Matters Specified' in sub-s. (2), being "without
prejudice" to the generality of the powers conferred by sub-s (1) must be
held to include such powers. Thus it cannot be said that the general powers
have not been conferred upon the State, but only those specified in cls. (a) to
(j) of sub-s. (2). The only limitation is with regard to the kind of essential
commodity concerned. The State has been given powers limited to 'foodstuffs'
only." Quite recently, the Calcutta High Court in Tarakdas Mukherjee v.
State of West Bengal(1) and Lila Biswas v.
State of West Bengal 12) following the dictum
of Sinha, J.
in Atulya Kumar's case, supra, have held that
the delegation of specific powers to issue an impugned order of this nature is
derived from sub-s. (1) of s. 3 and that the provisions of sub-s. (2) thereof
are merely illustrative. It has further held that the various clauses of sub-s.
(2) of s. 3 of the Act cannot be made operative independently by any notification
(1) [1978] 2 Cal. LJ 383 (2) [1978-9] 83 CWN 539 1043 under s. 5 of the Act
without deriving the general powers under sub-s. (1) of s. 3 of the Act. We are
of the considered opinion that the view of the Calcutta High Court accords both
with reason and principle. The view to the contrary taken by the Punjab,
Allahabad and Orissa High Courts in Sujan Singh's. Suraj Ban's and Bejoy Kumar
Routrai's cases, supra, dose not lay down good law. It must accordingly be held
that although cl. (d) of sub-s. (2) of s. 3 of the Act deals only with a
specific power, the general power to issue the impugned order flows from the
provisions of sub-h. (1) of s. 3 which stands delegated to the State Government
by virtue of the notification issued under s. S of the Act.
Upon that view, the question as to the
construction of the word 'regulating' occurring in cl. (d) of sub-s. (2) of
8.3 of the Act does not really arise.
However, since the question has been raised at the Bar we think it proper to
deal with it. As a matter of construction, Shri P- Govindan Nair, learned
counsel for the appellant contends that the words 'regulating' and prohibiting'
connote two distinct and separate attributes of power which are mutually
exclusive and therefore the word 'regulating' used in cl. (d) cannot be given
the same meaning as 'prohibiting'. He urges that is A sound rule of
construction to give the same meaning to the same word occurring in different
parts of an Act of Parliament. For the purpose of ascertaining the true meaning
of the word 'regulating' in the context of cl. (d) of sub-s.
(2) of s. 3, he has referred to us the
different clauses of that sub-section. A perusal of the various clauses (a) to
(j) indicates that while cls. (a), (d) and (g) speak of the power to prohibit,
and the remaining cls. (b), (c), (f), (h), (i), (ii) and (j) though they do not
mention that they are illustrative of the power to regulate impliedly partake
of the character of that power. If the contention of the learned counsel were
to be accepted, it would imply that the Central Government derives its power
under sub-s. (1) of s.
3 of the Act as the power to promulgate any
order providing for regulating or prohibiting the production, supply and
distribution of, and trade and commerce in, any essential commodity insofar as
it appears necessary or expedient so to do, for maintaining or increasing
supplies or for securing their equitable distribution and availability at fair
prices. If the Central Government were to make an order under sub-s. (1) in
respect of the matters specified in cl.
(d), it may not only regulate or control the
storage, transport, distribution etc. Of an essential commodity including the
1044 movement of such foodstuffs by grant of licenses, permits or otherwise,
but also place a ban on the movement of wheat from one place to another; but
the State Government under cl. (d) has only a regulatory power in relation
thereto i.e.
to make an order only for regulating the
movement of wheat from one place to another by issue of the permits, licenses
or otherwise as provided for by cl. 3 of the impugned Order but could not have
issued cl. 3 (IA) placing a ban on movement of wheat from one place to another.
Although by force of logic one may be driven to that conclusion that the State
Government has power to promulgate cl 3 of the impugned Order but not cl. 3
(IA), there is no reason for us to give such a restrictive meaning to the word
'regulating' appearing in cl. (d) of sub-s. (2) of s. 3 of the Act. it would
seem that the rule of construction is clearly y-well recognized that a word may
be used in two different senses in the same section of an Act.
The world 'regulation' has not that rigidity
of moaning as never to take in 'prohibition'. I must depend on the context in
which it is used in the statute and the object sought to be achieved by the
legislation. For a time different views were expressed on the question whether
the word 'regulation' in Art. 19(2) to 19(6) includes 'prohibition' till the
Court in Narendra Kumar v. Union of India(1) answered it in the affirmative.
Shri P. Govindan Nair, learned counsel for
the appellant however contends that the word 'regulation' should not be
confused with the expression 'reasonable restrictions' occurring in Art. 19(2)
to (6) of the Constitution and therefore the view t-taken in Narendra Kumar's
case is not applicable. According to him, the word 'regulation' in cl. (d) of
sub-. (2) of s. 3 of the Act does not take in 'prohibition'. He seeks to draw a
distinction between prohibition or prevention o-certain activities and their
regulation or governance. It is said that a power to regulate or govern would
imply continued existence of that which is to be regulated or governed; and to
be inconsistent with absolute prohibition. He therefore submits that cl. 3 (IA)
of the Order was ultra vires because the State Government had only power under
cl. (d) of sub-s, (2) of s.
3 of the Act to regulate production, supply
and distribution of, and trade and commerce in, essential commodities like
foodstuffs by (1) [1960] 2 SCR 361.
1045 grant of permits, licenses or otherwise,
in contradistinction to the A power of the Central Government under sub-s. (1)
of s. 3 to regulate or prohibit such production, supply and distribution of,
and trade and commerce in, essential commodities.
Learned counsel for the appellant placed
reliance on the decision of the Allahabad High Court in Suraj Bhan's case which
proceeds Upon a decision of this Court in State of Mysore v. Sanjeeviah(1)
holding that power to regulate does not include power to prohibit or restrict.
In Sanjeeviah's case, the question arose whether two provisos framed by the
State Government under s. 37 of the Mysore Forest Act, 1900 which empowered the
making of rules to regulate the transit of forest produce which placed absolute
prohibition against transportation of forest produce between sunset and sunrise
and a qualified prohibition in certain circumstances, was beyond the
rule-making power of the State Government. The contention on behalf of the
State was. that the two provisos were regulatory and prohibitory- In repelling
the contention, the Court observed:
"The power which the State Government
may exercise is the power to regulate transport of forest produce, and not the
power to prohibit or restrict transport. Prima facie, a rule which totally
prohibits movement of forest produce during the period between sunset and
sunrise is prohibitory or restrictive of the right to transport forest
produce." These observations do not lay down any rule of universal application.
The word 'regulation' cannot have any rigid
or inflexible meaning as to exclude 'prohibition'. The word 'regulate' is
difficult to define as having any precise meaning. It is a word of broad
import, having a broad meaning, and is very comprehensive in scope. There is a
diversity of opinion as to its meaning and its application to a particular
state of facts, some Courts giving to the term a somewhat restricted, and
others giving to it a liberal, construction. The different shades of meaning
are brought out in Corpus Juris Secundum, vol. 76 at p. 611:
(1) [1967] 2 S.C.R. 361, 1046
"Regulate" is variously defined as meaning to adjust; to adjust;
order, or govern by rule, method, or established mode; to adjust or control by
rule, method, or established mode, or governing principles or laws:
to govern to govern by rule; to govern by, or
subject to, certain rules or restrictions; to govern or direct according to
rule; to control, govern, or direct by rule or regulations.
"Regulate" is also defined as
meaning to direct; to direct by rule or restriction; to direct or manage
according to certain standards, laws, or rules;
to rule; to conduct; to fix or establish; to
restrain;
to restrict." See also: Webster's Third
New International Dictionary, vol. II, p. 1913 and Shorter Oxford Dictionary,
Vol. II, 3rd edn., p. 1784.
It has often been said that the power to
regulate does not necessarily include the power to prohibit, and ordinarily the
word 'regulate' is not synonymous with the word 'prohibit'. This is true in a
general sense and in the sense that mere regulation is not the same as absolute
prohibition. At the same time, the power to regulate carries with it full power
over the thing subject to regulation and in absence of restrictive words, the
power must be regarded as plenary over the entire subject It implies the power
to rule, direct and control, and involves the adoption of a rule or guiding
principle to be followed, or the making of a rule with respect to the subject
to be regulated. 'the power to regulate implies the power to check and may
imply the power to prohibit under certain circumstances, as where the best or
only efficacious regulation consists of suppression It would therefore appear
that the word 'regulation' cannot have any inflexible meaning as to exclude
'prohibition'. let has different shades of meaning and must take its colour
from the context in which it is used having regard to the purpose and object of
the legislation, and the Court must necessarily keep in view the mischief which
the legislature seeks to remedy.
The question essentially is one of degree and
it is impossible to fix any definite point at which 'regulation' ends and
'prohibition' begins. We may illustrate how different minds have differently
reacted as to the meaning of the word 'regulate' depending on the context in
which it is used and the purpose and object of the legislation 1047 In Slattery
v. Naylor,(l) the question arose before the Judicial Committee of the Privy
Council whether a bye-law by reason of its prohibition internment altogether in
a particular cemetry, was ultra vires because the Municipal Council had only
power of regulating internments whereas the bye-law totally prohibited them in
the cemetry in question, and it was said by Lord Hobhouse, delivering the judgment
of the Privy Council:
"A rule or bye-law cannot be held as
ultra vires merely because it prohibits where empowered to regulate, as
regulation often involved prohibition." In contrast in Municipal
Corporation of the City of Toronto v. Virgo,(2) where the question for decision
was whether a section or a bye-law prohibiting hawkers from plying their trade,
was competently and validity made, Lord Davey delivering the judgment of the
Privy Council while laying down that a power to make a bye law to 'regulate'
and 'govern' a trade does not authorize the prohibition of such trade, and
added:
"There is a marked distinction between
the prohibition or prevention of a trade and the regulation or governance of
it, and, indeed, a power to regulate' and 'govern' seems to imply the continued
existence of that which is to be regulated or governed." The predominant
object of the Act, as reflected in the preamble is to provide, in the interests
of the general public, for the control of the production, supply and distribution
of, and trade and commerce in, certain essential commodities. It is a piece of
socioeconomic legislation enacted in the national interest to secure control
over the production, supply and distribution of, and trade and commerce in,
essential commodities. The various Control Orders issued by the Central
Government under sub-s (1) of s. 3 of the Act or by the State Government under
s 3 read with s. 5 have introduced a system of checks and balances to achieve
the object of the legislation i.e. to ensure equitable distribution and
availability of essential commodities at fair prices. Special public interest
in an industry e.g. that it is engaged in the production of a commodity, (1) LR
[1888] AC 446 (2) LR [1896] AC 88 1048 vitally essential to the community, may
justify the regulation of its production, supply and distribution and its trade
and commerce, provided such regulation is not arbitrary and has a rational
nexus with the object sought to be achieved.
the power to regulate or prohibit the production,
supply and distribution of, and trade and commerce in, essential commodities
may be exercised in innumerable ways.
One of the ways in which such regulation or
control over the production, supply and distribution of, and trade and commerce
in, an essential commodity like foodstuffs may be exercised by placing a ban on
inter Slate or inter-State movement of foodstuffs to ensure that the excess
stock of foodstuffs held by a wholesale dealer, commission agent or retailer is
not transported to places outside the State or from one district to another
with a view to maximize the procurement of such foodstuffs from the growers in
the surplus areas for their equitable distribution at fair prices in the
deficit areas. The placing of such ban on export of foodstuffs across the State
or from one part of the State to another with a view to prevent outflow of
foodstuffs from a State which is a surplus State prevents the spiral in prices
of such foodstuffs by artificial creation of shortage by unscrupulous traders. But
such control can be exercised in a variety of ways otherwise than by placing
compulsory levy on the producers, for example, by fixing a controlled price for
foodstuffs, by placing a limit on the stock of foodstuffs to be held by a
wholesale dealer, commission agent, or retailer, by prohibiting sales except in
certain specified manner, etc. These are nothing but regulatory measures.
We find no lawful justification for giving a
restricted meaning to the word 'regulating' in cl. (d) of sub s. (2) of s. 3 of
the Act as not to take in prohibiting'. In State of Tamil Nadu v. M/S Hind
Stone and Ors.(') Chinnappa Reddy, J. referred with approval the observations
of Mathew, J. in G.K. Krishnan v. State of Tamil Nadu(2) laying down that the
word 'regulation' has no fixed connotation and that its meaning differs
according to the nature of that, thing to which it is applied. The learned
Judge also observed:
"In modern statutes concerned as they
are with economic and social activities, 'regulation' must, of necessity, (1)
[l981] 2 SCC 205 (2) [1975] 2 SCR 715 1049 receive so wide an inter-pretation
that in certain situations, A it must exclude competition to the public sector
from the private sector. More so in a welfare State. It was pointed out by the
Privy Council in Commonwealth of Australia v. Bank of New South wales [1949] 2
All. ER 755 (PC)-and we agree with what was stated therein-that the problem
whether an enactment was regulatory or something more or whether a restriction
was direct or only remote or only incidental involved, not so much legal as
political, social or economic consideration and that it could not be laid down
that in no circumstances could the exclusion of competition so as to create a
monopoly, either in a State or Commonwealth agency, be justified.'' In Krishan
Lal Praveen Kumar & Ors- v. State of Rajasthan & Ors.,(l) Suraj Mal
kailash Chand & ors. v. Union of India & Ors.,(a) and Bishamber Dayal
Chandra Mohan & Ors.
v. State of U.P. & Ors.(3) the Court has
held that a restriction placed on movement of wheat from one State to another
and/on movement of wheat from one district to another under cl. (d) of sub-s.
(2) of s. 3 of the Act, to be regulatory in character.
Surely when a part of the country is verging
on conditions of acute shortage or even famine, it is expected of the
government to procure foodstuffs from surplus areas and transport the same for
distribution in deficit areas. [D the State of Tamil Nadu like some other
States, the two things most essential for the sustenance of human life are rice
and paddy. It is amply borne out from the material on record that due to the
failure of the southwest and north- east monsoons in successive years, and the
consequent poor rainfall, there was a steep fall in production of paddy. In the
circumstances, the State Government had no other alternative not only to
reimpose compulsory levy on the producers of paddy to the extent of 50%%, but
also to introduce a scheme for a monopoly purchase of paddy by the Government
with a view to build up its buffer stock for distribution through the public
distribution (1) 11981] 4 SCC 550 (2) [1981] 4 SCC 554 (3) [1982] I SCR 137
1050 system throughout the State. If one part of the State is faced with a
famine or even acute shortage of foodstuffs, it is not unreasonable for the
Government to acquire foodstuffs from the surplus areas and distribute the same
in areas where they are most needed. The source of power to issue an order
under cl.. (d) of sub-s. (2) of s. 3 of the Act being relatable tot he general
powers of the Central Government under sub-s. (1) of s. 3, there is no reason
for us to give a restricted meaning to the word 'regulating' in cl. (d) of
sub-s. (2) of s. 3 of the Act so as not to take in prohibiting'.
For the reasons aforesaid, the appeal must
fail.
A.P.J. Appeal dismissed.
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