Orissa High Court
Man Mohan Das & Others vs State Of Orissa And Others on 26 November, 2014
Equivalent citations: AIR 2015 (NOC) 372 (ORI.)
Author: A.K.Rath
Bench: Amitava Roy, A.K.Rath
HIGH COURT OF ORISSA: CUTTACK.
W.P(C) No.12005 of 2014
In the matter of an application under Articles 226 and 277 of the Constitution of India.
Man Mohan Das & others ....... Petitioners
Versus
State of Orissa & others ....... Opp. Parties
For Petitioners : Mr. Chandrakanta Nayak, Advocate
For Opp. Parties : Mr.R.Mohapatra, Govt. Advocate
P R E S E N T:
THE HON'BLE CHIEF JUSTICE MR. AMITAVA ROY
AND
THE HON'BLE DR. JUSTICE A.K.RATH
Date of hearing & Judgment: 26.11.2014
____________________________________________________________________
Dr. A.K. Rath, J.The petitioners are the sub-wholesalers of Superior Kerosene Oil ("S.K Oil", in short) in different districts of Orissa. They are aggrieved by the Notification No.18749 dated 31.10.2013 issued by the Government of Odisha, Food, Supplies & Consumer Welfare Department, vide Annexure-1, whereby and whereunder the system of sub-wholesalership has been abolished.
2. Shorn of unnecessary details, the short facts of the case of the petitioners are that pursuant to the licence issued by the appropriate authority, the petitioners were appointed as sub-wholesalers of S.K Oil in different districts. They made applications for renewal of the licence, but the same was not renewed in view of the impugned notification, vide Annexure-1.
3. Pursuant to the issuance of notice, a counter affidavit has been filed by the opposite party no.1. The sum and substance of the case of the opposite 2 party no.1 is that the system of sub-wholesalership of S.K Oil has been abolished in respect of 25 districts of the State with effect from 1.6.2014. Presently, the S.K. Oil is being supplied directly by the wholesalers to the Fair Price Shops ("FPS", in short). The system of sub-wholesalership was abolished pursuant to the recommendation of the Justice Wadha Committee. The same was first implemented in five districts of the State on pilot basis with effect from 1.7.2013. It is further stated that the notification, vide Annexure-1, has been issued in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 read with paragraph 5 of the Annexure to the Public Distribution System (Control) Order, 2001 and notifications of Government of India issued from time to time. Since the process of election was started in respect of Lok Sabha and State Assembly, 2014, the validity date of renewal of licence had been extended upto 31.5.2014 as it was felt that for direct delivery of S.K. Oil by the wholesalers to retailers might create dislocations in middle of the election process and possibility of attracting model code of conduct. Therefore, the impact of the Odisha Public Distribution System (Control) Amendment Order, 2013 (hereinafter referred to as "the OPDS Amendment Order, 2013") was deferred by two months in respect of 25 districts of the State. Accordingly, instructions were issued on 28.2.2014 with clear direction for renewal of licence of S.K. Oil sub- wholesalers of 25 districts upto 31.5.2014 and also arrangement to be initiated for distribution of S.K. Oil directly by the wholesalers to the retailers. It is further stated that by order dated 13.3.2014 passed in WP(C) No.8202 of 2013 , it is held that extension of licence of S.K. Oil sub-wholesalers of 25 districts upto 31.5.2014 was due to impending election process and accordingly direction was issued to abolish S.K. Oil sub-wholesalership in 25 districts after election process was over. Accordingly, the State Government abolished the S.K. Oil sub- wholesalership in 25 districts. It is further stated that as per the report of the 3 Justice Wadhwa Committee, the intermediary system in the distribution chain, i.e. storage agent in respect of food grains has been abolished. Further, in consonance with the recommendation of the said Committee, the sub-wholesalers in respect of S.K. Oil has also been abolished, which has been confirmed by this Court vide order dated 24.4.2013 passed in WP(C) No.18522 of 2012.
4. Heard Mr.Nayak, learned Advocate for the petitioners and Mr.R.K.Mohapatra, learned Government Advocate.
5. Mr.Nayak, learned Advocate for the petitioners, submits that the impugned notification is violative of Article 14 as well as Article 19(1)(g) of the Constitution. To elaborate his submission, Mr.Nayak submits that the petitioners have legitimate expectations of carrying on their businesses. The system was abolished without affording any opportunity of hearing to the petitioners. He further submits that the impugned notification has no nexus with the object sought to be achieved inasmuch as the same is not based on intelligible differentia.
6. Per contra, Mr. Mohapatra, learned Government Advocate, submits that the impugned notification is a reasonable classification. The same cannot be constructed the violation of Article 14 as well as Article 19(1)(g) of the Constitution. He further submits that pursuant to the decision of the Justice Wadhwa Committee, the system of sub-wholesalership was abolished and accordingly, the Orissa Public Distribution System (Control) Order, 2008 (hereinafter referred to as "the OPDS Order, 2008") was amended by the Government of Odisha, Food Supplies and Consumer Welfare Department.
7. The State Government promulgated the OPDS Order, 2008 in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 read with paragraph 5 of the Annexure to the Public Distribution System (Control) Order, 2001 and the notifications of the Government of India from time 4 to time. Clause 2 of the OPDS Order, 2008 defines dealer, retailer, sub- wholesaler and wholesaler. The same are quoted below :
"2. Definitions - In this Order, unless the context otherwise requires-
(h) "Dealer" means any person, firm, association of persons, company, Panchayati Raj Institution, Urban Local Body, Co-
operative Society, Women Self Help Group, Forest Protection Committee, Self Help Group or any other institution carrying on business on wholesale or retail basis in the purchase, storage, sale and/or distribution of essential commodities meant for distribution under the Public Distribution System. The term "Dealer" includes wholesaler/sub-wholesaler/retailer and storage agents;
(p) "Retailer" means a dealer who purchases PDS commodities from a Wholesaler and stores and sells these commodities to consumers;
(r) "Sub-wholesaler" in Kerosene means a dealer other than agent wholesaler of Oil company and a retailer;
(s) "Wholesaler" means a dealer who stores and sells PDS commodities to another wholesaler or retailer, and includes a sub-wholesaler or a storage agent;"
8. While the matter stood thus, again the Government of Odisha, Food, Supplies & Consumer Welfare Department issued a notification no.18749 dated 31.10.2013, vide Annexure-1, making certain amendments in the OPDS Order, 2008. The word "Dealer" occurring in clause 2(b) has undergone an amendment. The same is quoted hereunder;
"(b) In sub-clause (h), for the words "the term "Dealer" includes wholesaler/sub-wholesaler/retailer and storage Agent", occurring at the end, the words "and includes wholesaler or handling and Transport Contractor level -I and level -II or Transport Contractor for sugar zonal Depot or State level Transport Contractor or retailer" shall be substituted;"
9. There is always a presumption in favour of the constitutionality of an enactment and that the burden is upon him, who attacks it, to show that there has been a clear violation of the constitutional principles. The Courts, it is accepted, must presume that the legislature understands and correctly appreciates the needs of 5 its own people, that its laws are directed to problems made manifest by experience and that its discriminations are based on adequate grounds as has been stated by the apex Court in the case of Mohd. Hanif Quareshi v. State of Bihar, AIR 1958 SC 731 (at pp. 740-741)
10. What should be the approach of the Court to test the reasonableness of a statute ? The apex Court in Joti Pershad v. Administrator for the Union Territory of Delhi, AIR 1961 SC 1602 at p.1613 observed as follows :
"Where the legislature fulfils its purpose and enacts laws, which in its wisdom, are considered necessary for the solution of what after all is a very human problem the tests of 'reasonableness' have to be viewed in the context of the issues which faced the legislature. In the construction of such laws and particularly in judging of their validity the courts have necessarily to approach it from the point of view of furthering the social interests which it is the purpose of the legislation to promote, for the Courts are not, in these matters, functioning as it were in vacuo, but as parts of a society which is trying by enacted law, to solve its problems and achieve a social concord and peaceful adjustment and thus furthering the moral and material progress of the community as a whole."
11. The first plank of argument by the learned counsel for the petitioners is that OPDS Amendment Order, 2013 is the violative of Article 19(1)(g) of the Constitution.
12. There can be no doubt that Article 19 guarantees all the six freedoms to the citizens of the country including to practise any profession, or to carry on any occupation, trade or business, but the same is conditioned by clause (6). Clause (6) of Article 19 runs thus;
"19. Protection of certain rights regarding freedom of speech, etc.-
(6) Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevent the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, [nothing in the said sub-
clause shall affect the operation of any existing law in so far as it relates to, or prevent the State from making any law relating to,-
6(i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or
(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise]."
The Constitution permits reasonable restrictions to be placed on the right in the interest of the general public. The State in the instant case claims protection under clause (6).
13. The apex Court has laid down several tests and guidelines to indicate what in a particular circumstance can be regarded as a reasonable restriction. The Constitution Bench of the apex Court in the case of Pathumma and others v. State of Kerala and others, AIR 1978 SC 771, after survey of the earlier decisions, held as follows :
(i) That restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public.
(ii) That in order to judge the quality of the reasonableness no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will have to vary from case to case and with regard to changing conditions, the values of human life, social philosophy of the Constitution prevailing conditions and the surrounding circumstances all of which must enter into the judicial verdict. In other words, the position is that the court has to make not a rigid or dogmatic but an elastic and pragmatic approach to the facts of the case and to take an overall view of all the circumstances.
(iii) That to judge the reasonableness of a restriction is to examine the nature and extent, the purport and content of the right, nature of the evil sought to be remedied by the statute, the ratio of harm caused to the citizen and the benefit to be conferred on the person or the community for whose benefit the legislation is passed, urgency of the evil and necessity to rectify the same. In short, a just balance has to be struck between the restriction imposed and the social control envisaged by clause (6) of Article 19.
(iv) That there must be a direct and proximate nexus or a reasonable connection between the restriction imposed and the 7 object which is sought to be achieved. In other words, the Court has to see whether by virtue of the restriction imposed on the right of the citizen the object of the statute is really fulfilled or frustrated. If there is a direct nexus between the restriction and the object of the Act then a strong presumption in favour of the constitutionality of the Act will naturally arise.
(v) That another test of reasonableness of restrictions is the prevailing social values whose needs are satisfied by restrictions meant to protect social welfare.
(vi) That so far as the nature of reasonableness is concerned it has to be viewed not only from the point of view of the citizen but the problem before the legislature and the object which is sought to be achieved by the statute. In other words, the Courts must see whether the social control envisaged in clause (6) of Article 19 is being effectuated by the restrictions imposed on the fundamental right. It is obvious that if the Courts look at the restrictions only from the point of view of the citizen who is affected it will not be a correct or safe approach inasmuch as the restriction is bound to be irksome and painful to the citizen even though it may be for the public good. Therefore, a just balance must be struck in relation to the restriction and the public good that is done to the people at large. It is obvious that, however important the right of a citizen or an individual may be, it has to yield to be the larger interests of the country or the community."
14. We would like to examine the facts and circumstances of the present case in the light of the principles enunciated above in order to find out whether or not the OPDS Amendment Order, 2013 is in violative of the rights of the petitioners enshrined under Article 19(1)(g) of the Constitution.
The Government of Odisha, in its Food Supplies and Consumer Welfare Department, took a policy decision to abolish the sub-wholesalership basing on the recommendation of Justice Wadhwa Committee which was constituted by the Hon'ble apex Court. The conscious policy decision was taken to abolish the intermediary system. On abolition of sub-wholesalers, the wholesalers are supplying SK Oil directly to the retailers without any intermediary system in the distribution chain.
815. Thus all the tests laid down by the apex Court for determining reasonableness of a restriction have been amply fulfilled in this case and we are unable to find any constitutional infirmity in this case on the ground that the OPDS Amendment Order, 2013 is violative of Article 19(1)(g) of the Constitution. We are of the clear opinion that the provisions of OPDS Amendment Order, 2013 are reasonable restrictions within the meaning of clause (6) of Article 19 of the Constitution.
16. This brings us to the second branch of argument relating to applicability of Article 14 of the Constitution. Article 14 forbids hostile discrimination and not reasonable restrictions. It is for the State to make a reasonable classification which must fulfill two conditions.
17. In Ram Krishna Dalmia v. Shri Justice S.R. Tendulkar, AIR 1958 SC 538 at p.547), the apex Court, after considering a large number of its previous decisions, observed as follows:
"It is now well established that while Article 14 forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. In order, however, to pass the test of permissible classification two conditions must be fulfilled, namely,
(i) that the classification must be founded on an intelligible differentia which distinguishes persons or things that are grouped together from others left out of the group; and
(ii) that that differentia must have a rational relation to the object sought to be achieved by the statute in question. The classification may be founded on different basis, namely geographical, or according to objects or occupations or the like. What is necessary is that there must be a nexus between the basis of classification and the object of the Act under consideration."
18. On the anvil of the decisions cited supra, let us see whether the OPDS Amendment Order, 2013 can be said to be permissible classification. While dealing with the first argument, we have already point out that pursuant to the recommendation of the Justice Wadha Committee, the system of sub-wholesalership was abolished.
919. In our opinion, both the conditions of reasonable classification, as indicated above, are fully satisfied in this case; for the reasons; we hold that the OPDS Amendment Order, 2013 is not violative of Article 14 of the Constitution.
20. The matter may be considered from another angle. The conscious policy decision was taken to abolish the intermediary system. Wisdom and advisability of economic policies are ordinarily not amenable to judicial review unless it can be demonstrated that the policy is contrary to any statutory provision or the Constitution. It is not for the Courts to consider relative merits of different economic polices and consider whether a wiser or better one can be evolved as has been held by the apex Court in the case of BALCO Employees Union (Regd.) v. Union of India and others, AIR 2002 SC 350.
The writ petition, being devoid of merit, is accordingly dismissed.
.............................
DR. A.K.RATH, J.
AMITAVA ROY, C.J. : I agree.
................................
AMITAVA ROY, C.J Orissa High Court, Cuttack.
The 26th November, 2014/pks