Punjab-Haryana High Court
Narain Dass Daulat Ram vs State Of Haryana And Anr. on 7 June, 1978
Equivalent citations: AIR 1978 PUNJAB AND HARYANA 310
ORDER
1. This order will dispose of four civil writ petitions, Nos. 2385, 2386, 2396 and 2514 of 1978, involving a similar point.
2. The petitioners in all these petitions are dealers in milk in the State of Haryana. They have challenged the legality of Notification NO. G. S. R. 57/C.A. 10/55/S.3/78, dated May 24, 1978, (hereinafter referred to as the Notification), issued by the Government of Haryana under S. 3 of the Essential Commodities Act, 1955(hereinafter referred to as the Act), prohibiting the use of milk for the manufacture of cream etc., as also its manufacture of cream etc., as also its export from the State of Haryana, as detailed 1978, to July 14, 1978. According to the petitioners, the Notification is ultra vires the authority of the State government and further liable to be struck down because it offends their fundamental rights under Arts. 14 and 19 of the Constitution of India. The Notification is also claimed to be bad being violative of Art. 301 of the Constitution.
3. The State of Haryana, in their written statement, denied that the Notification was ultra vires their authority inasmuch as the Central Government had made appropriate delegation to them for that purpose under S. 5 of the Act. It was also denied that the Notification conflicts with the fundamental rights of the petitioners under Arts. 14 and 19 of the Constitution or is violative of Art. 301.
4. The Act was enacted by Parliament and S. 3 thereof reads:--
"3. Powers to control production, supply, distribution etc. of essential commodities.
(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices or for securing any essential commodity for the defence of India or the efficient conduct of military operation it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.
(2) Without prejudice to the generality of the powers conferred by sub--section (1), an order made thereunder may provide-
* * * * * * * *
(d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity;
* * * * * * * *
(g) for regulating or prohibiting any class of commercial or financial transactions relating to foodstuffs or cotton textiles which, in the opinion of the authority making the order, are, or if unregulated are likely to be, detrimental to the public interest;
* * * * *."
Section 5 of the Act deals with the delegation of powers and it reads:--
"5. Delegation of powers. The Central Government may, by notified order, direct that the power to make orders or issue notification 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."
It is evident that apart from the Central Government, who is competent to issue orders under S. 3 of the Act, it can delegate its powers for that purpose to the State Government. The Notification dated May 24, 1978, has been issued by the Government of Haryana under S. 3 of the Act, exercising delegated powers from the Central Government. As the main attack is against the Notification dated May 24, 1978, it will be advantageous to reproduce below its relevant parts:--
"No. G. S. R. 57/C. A. 10/55/S. 3/78;--Whereas the Governor of Haryana is of the opinion that it is necessary so to do for the maintenance and increase of supplies and distribution in the State of Haryana of milk in fluid form, a commodity essential to the life of community.
Now, therefore, in exercise of the powers conferred by S. 3 of the Essential Commodities Act, 1955(Parliament Act 10 of 1955), read with Government of India, Ministry of Food and Agriculture, Order No. G.S.R. 1111, dated the 24th July, 1967, and all other powers enabling him in this behalf the Governor of Haryana, with the prior concurrence of the Central Government, hereby makes the following order, namely:--
1. "Short title, extent and commencement:--
(1) This order may be called the Haryana Milk and Milk Products Control Order, 1978.
(2) It extends to the whole of the State of Haryana.
(3) It shall come into force at once and shall cease to be operative at the expiry of the 14th day of July, 1978, except as regards, things done or omitted to be done before such cessation of operation;
2.* * * *
3. Prohibition of manufacture, sale, service, supply and export of milk and milk products-
No person shall-
(a) use milk of any kind for the manufacture of cream, casein, skimmed milk, khoa, rubree or any kind of sweets, in the preparation of which milk or any of its products except ghee is an ingredient; or
(b) sell, serve, supply or export or cause to be sold, served, supplied or exported any cream, casein, skimmed milk, khoa, rubree or any kind of sweets in the preparation of which milk or any of its products except ghee, is an ingredient;
(c) export milk from the State of Haryana, to any other State or Union Territory, and
(d) export Paneer from the State of Haryana to any other State of Union Territory; provided that nothing in this clause shall apply to the use of milk-
(i) for the manufacture, sale, service or supply of ice cream, kulfi, kulfa, or paneer in the preparation of which no khoa, rubree or cream is used.
(ii) for the manufacture, sale service or supply of such milk and milk products as the State Government may, having regard to the needs of the Defence Forces, by an order permit;
(iii) by such milk factories engaged in the processing of milk for consumption in fluid form or factories registered or licensed under the Industrial (Development and Regulation) Act, 1951, for the manufacture of condensed milk, milk powder, baby food or any other such products;
(iv) by the National Dairy Research Institute, Karnal, for the manufacture and sale of any milk products for the purposes of training and research;
Provided further that nothing in this clause shall apply to the export of milk-
(i) in any quantity by Delhi Milk Scheme, Mother Dairy Delhi through their well identified tankers and officers;
(ii) in a quantity up to one quintal by any one vendor to Delhi;
(iii) to Himachal Pradesh on permit issued by the Milk Commissioner, Haryana.
* * * * *"
The Notification clearly prohibits the export of milk by the petitioners from the State of Haryana for the period May 24, 1978, to July 14, 1978.
5. The first point to be considered is whether the Central Government has delegated the power to the Government of Haryana to issue the Notification dated May 24, 1978 or in other words, the Notification has been issued by a duly authorised authority. The main trust of the learned counsel for the petitioners is on this point. His contention is that the Central Government, vide Notification No. G. S. R. 1111, dated July 24, 1967, also mentioned in the Notification dated May 24, 1978 has restricted the delegation of authority to sub--cl.(d) of sub--section (2) of S. 3 of the Act, which only provides for regulating by licences etc. any essential commodity and not prohibition thereof. The ban on the export of milk by the petitioners from the State of Haryana vide the impugned Notification tantamounts to exercise of power of prohibition which was neither delegated to the State Government nor did it vest in it. The impugned Notification is, therefore, ultra vires the authority of the State Government.
6. The Notification No. G. S. R. 1111 dated July 24, 1967 does not delegate the authority to the State Government in relation to sub--cl.(g) of sub--section (2) of S. 3 of the Act. The power to regulate and prohibit any class of commercial or financial transactions relating to food--stuffs is contained in sub-cl.(g) and not in sub-cl.(d). The latter is restricted to regulating by licences etc. any essential commodity. The contention of the learned counsel for the petitioners that banning the export of milk from the State of Haryana by the petitioners will come within the mischief of prohibition and would not be a mere regulatory measure, is not without substance. In the event of the State Government holding the delegated power only in relation to sub--cl.(d) of sub--section (2) of S. 3 of the Act, it may have been rather difficult to repel the contention of the learned counsel for the petitioners. The factual position is, however, different. The Central Government, vide Notification No. G. S. R. 168(E) dated March, 13, 1973, delegated the power to the State Government to make orders in relation to cl.(g) of sub--section (2) of S. 3 of the Act as well. When faced with this situation, the learned counsel for the petitioners argued that the State Government cannot take advantage of the Notification dated March 13, 1973 in view of the fact that the authority under it was not exercised while making the impugned notification. For this purpose, he referred to the impugned Notification wherein specific mention has been made of Notification No. G. S. R. 1111 dated July 24, 1967 and not that of Notification No. G. S. R. 168(E), dated March 13,. 1973. I am not impressed by this argument. It is true that no specific mention of the Notification dated March 13, 1973, has been made in the impugned Notification but it is specifically mentioned therein that the order contained in the impugned Notification is being issued in exercise of all powers enabling the Governor of Haryana in this behalf to do so. The Notification dated march 13, 1973, authorised the State Goverenment to issue orders under sub--section (1) of S. 3 of the Act, in relation to clause (g) of sub--section (2) thereof. It is clear that the Government of Haryana, did exercise this power while issuing the impugned Notification dated May 24, 1978. In the first place, the mere omission to mention the Notification dated May 24, 1978. In the first place, the mere omission to mention the Notification dated March 13, 1973, in the impugned Notification is immaterial and will not render it ultra vires. And secondly, the specific mention in the impugned Notification that it was being issued in exercise of all powers enabling the Governor of Haryana in this behalf to do so will effectively negative the objection raised.
7. The learned counsel for the petitioners has then argued that under sub--clause (g) of sub--section (2) of S. 3 of the Act, the orders can be made for regulating or prohibiting any class of commercial transactions relating to foodstuffs if required to be done in public interest. The argument further is that in the instant case, the banning of export of milk by the petitioners cannot be termed as a class of commercial transactions relating to foodstuffs and it is not in public interest as well. I see no force in this contention. The preamble of the impugned Notification brings out that the Governor of Haryana is of the opinion that it is necessary to issue it for the maintenance and increase of supplies and distribution in the State of Haryana of milk in fluid form, a commodity essential to the lief of community. The object of the Notification as contained in its preamble cannot be stamped as not in public interest. For achieving the object contained in the Preamble of the Notification, the petitioners have been stopped from exporting milk from the State and Haryana for a limited period, that is, from May 24, 1978 to July 14, 1978. It is a matter of common knowledge that the yield of the milch cattle stands reduced considerably in this part of the year due to heat and dry weather. The export of milk from the State of Haryana during this period would naturally cause hardship to the people. The operative part of the Notification has a direct nexus with its object. The petitioners are exporters of milk from the State of Haryana to other States. Their transactions relating to the supply of milk to other States are of commercial nature. Milk is admittedly a food--stuff. It is, therefore, difficult to conceive that the export of milk by the petitioners from the State of Haryana to other States will not be covered by the term "class of commercial transactions relating to foodstuffs" in terms of sub-clause (g) of sub-section (2) of S. 3 of the Act. The prohibition contained in the Notification in relation to the export of milk by the petitioner from the State of Haryana to other States is clearly covered by sub--clause (g) ibid.
8. Another point in this connection canvassed by the learned counsel for the petitioners is that the State Government being subordinate to the State Legislature cannot exercise such authority which cannot be exercised by the latter. Otherwise, it would tantamount to a servant exercising more authority than its master. This contention is devoid of substance. The State Government has exercised the validly delegated authority of the Central Government under S. 5 of the Act for issuing the Notification. It hardly matters whether the State Legislature, in exercise of its inherent powers, can do so or not.
9. The power to issue order under sub--section (1) of S. 3 of the Act in relation to cl.(g) of sub--section (2) thereof stands delegated to the State Government and the latter exercised this authority for issuing the Notification dated May, 24, 1978. The impugned Notification is, therefore, intra vires the authority of the State Government.
10. Now remain the points pressed with rather subdued vehemence. It has been argued that the Notification exempts Delhi Milk Scheme and Mother Dairy, Delhi, from the ban on the export of milk from the State of Haryana, thereby infringing the right of the petitioners to equality under Art. 14 of the Constitution. The contention is that these two organisations purchase milk from the State of Haryana and take it to Delhi and the same right should have been conceded to the petitioners as well. The fact that the petitioners and the two organisations, named above have been treated differently in the Notification, Art. 14 of the Constitution stands attracted and renders it bad. The learned Advocate General, Haryana has argued that Delhi Milk Scheme and Mother Dairy, Delhi, are not no equal footing with the petitioners, and, therefore, the question of the Notification offending Art. 14 of the Constitution does not arise. He has cited M/s. Vrajlal Manilal and Co. v. State of Madhya Pradesh, AIR 1970 SC 129, wherein it has been held that a mere literal or mechanical construction would not be appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards thereunder are concerned. In cases of such a kind, two rules of construction have to be kept in mind: (1) that courts generally lean towards the constitutionality of a legislative measures impugned before them upon the presumption that a legislature would not deliberately flout a constitutional safeguard or right, and (2) that while construing such an enactment the court must examine the object and the purpose of the impugned Act, the mischief it seeks to prevent and ascertain from such factors its true scope and meaning.
11. Another ruling relied upon is Madhya Bharat Cotton Association Ltd. v. Union of India, AIR 1954 SC 634, where it was found that 'hedging' in cotton trading like insurance and banking requires experience and stability; also, it so vitally affects the welfare of a large section of the people of India and India's economic stability in world markets that it cannot be lightly entrusted to inexperienced hands. Where therefore the Textile Commissioner in his discretion exempts certain Association which had been dealing with such contracts for twenty years from the prohibition un1der the Cotton Control Order 1950, a recently formed association cannot complain that it is discriminated against within the meaning of Art. 14 of the Constitution. Further, when the two associations cannot be said to be on a footing of equality, no question of discrimination under Art. 14 can arise.
12. In the background of the ratio of these two Supreme Court authorities, the learned Advocate General has contended that Delhi Milk Scheme and Mother Dairy, Delhi are two State controlled organisations. They are manned by the Government officials and they supply milk to the people in the capital at subsidised rates. As against this the petitioners are private persons and their sole object of exporting milk from the State of Haryana is pecuniary gain. Keeping in view the fact that the duration of the ban is for a short period, that is, from May 24, 1978, to July 14, 1978, it is obvious that the petitioners cannot be treated on equal footing with Delhi Milk Scheme and Mother Dairy, Delhi. After having carefully considered the points highlighted by the learned counsel for the parties, the view canvassed by the learned Advocate General must prevail. There can be no manner of doubt that in view of the salient features of distinction between the petitioners and the two Delhi organisations, they cannot be clubbed in the same class or category. As the Delhi organisations constitute a class in themselves, distinct from the petitioners, the question of the Notification violating Art. 14 of the Constitution does not arise.
13. Another argument of the learned counsel for the petitioners is that Art. 19(1)(g) of the Constitution guarantees to all citizens, including the petitioners, the right to practice any profession, or to carry on any occupation, trade or business. The petitioners, therefore, have a sacred right to carry on their business to sell milk throughout India irrespective of the State barriers. As the Notification negatives this right of the petitioners, it is liable to be quashed being violative of Art. 19(1)(g). I am not impressed by the argument. Sub--clause (6) of Art. 19 of the Constitution reads:--
"19(6). Nothing in sub-c-l. (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:--
(i) * * * *
(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."
It is clear that the right to practise any profession, trade or business in terms of Art. 19(1)(g) of the Constitution, is subject to the provisions contained in sub--clause (6) thereof. The right under Art. 19(1)(g) can be negatived by law by imposing reasonable restrictions in the interests of general public. The Notification has been issued in public interest and there can be no manner of doubt about it. In M/s. Chanan Ram Jagan Nath v. The State of Punjab, AIR 1965 Punj 74 the Punjab Khandsari and Gur Dealers Licensing Order (1963), made under S. 3 of the Essential Commodities Act, was challenged being violative of Art. 19 of the Constitution. It was found that merely because an order has the effect of restricting a particular business to certain persons who are already in that business will not by itself necessarily render the order to be unconstitutional. The Court will have to look into the circumstances in which the order is made, the commodity to which it relates, the situation which is sought to be remedied and the object which is desired to be achieved. Once it is found on the conspectus of all these factors that there is a rational connection between the provisions of the order and the object sought to be achieved, the order will not be struck down. Applying the test laid in this authority, the restriction imposed on the petitioners banning the export of milk for a limited period, from May, 24, 1978 to July 14, 1978 shall have to be certified as reasonable. The duration of the Notification is very short. The petitioners have not been completely stopped from doing their business in milk. They are at full liberty to sell milk within the State of Haryana which is the sole object of the Notification. The Notification, therefore, cannot be termed as violative of Art. 19(1)(g) of the Constitution.
14. The learned counsel for the petitioners has also tried to take shelter under Art. 301 of the Constitution which provides that subject to the other provisions of Part XIII of the Constitution, trade, commerce and intercourse throughout the territory of India shall be free. The argument is that the ban imposed on the petitioners for export of milk from the State of Haryana during the stipulated period violates the guarantee of freedom of trade contained in Art. 301. This contention again has no force. Under Art. 302, Parliament can by law impose such restrictions on the freedom of trade, commerce and intercourse in the public interest. In Shobha v. State, AIR 1963 All 29, where U. P. Paddy (Restriction on Movement) Order (1958) issued under S. 3 of the Essential Commodities Act, was under challenge, it was held that the freedom of trade, commerce and intercourse guaranteed under Art. 301 is subject to any law framed by Parliament under Art. 302. The impugned order having been framed under S. 3 of the Essential Commodities Act, and passed by Parliament, was a piece of legislation contemplated under Art. 302 and was fully protected by it. The impugned Order merely carried out the purposes of the Act and was in the nature of delegated legislation. It was further held that the position of the impugned Order and other orders passed under S. 3 of the Act was analogous to that of rules or regulations framed under the statute which were to be treated as part of the statute itself. The Notification in the instant case has passed the test of Arts. 14 and 19(1)(g) of the Constitution. In view of the rule laid down in Shobha v. State (supra) and the reasons given already, it cannot be held to be bad being violative of Art. 301 of the Constitution.
15. The last contention of the learned counsel for the petitioners is that the petitioners deal in pasteurised milk and the same is not covered by the definition of 'milk' as contained in the Notification with the result that it is not applicable to them. This contention is also without force. Pasteurization is a process widely employed in all branches of the dairy industry including milk to eliminate bacteria and further to prevent its formation. The process consists in heating milk to a temperature which destroys nearly all the micro--organisms present without seriously affecting its composition or properties. Milk is then immediately cooled to a temperature sufficiently low to check the growth of micro--organisms resistant to the temperature used. It is hardly possible to hold that milk after being subjected to such process will cease to be milk.
16. In the result, all the four writ petitions are without merit and are dismissed with costs.
17. Petition dismissed.