Calcutta High Court
West Bengal M. R. Dealers' Association & ... vs State Of West Bengal And Others on 26 October, 2017
Author: R. K. Bag
Bench: Ranjit Kumar Bag
Form No. J(2)
IN THE HIGH COURT AT CALCUTTA
CONSTITUTIONAL WRIT JURISDICTION
APPELLATE SIDE
Present:
Hon'ble Justice Ranjit Kumar Bag.
W. P. No.33258(W) of 2013
West Bengal M. R. Dealers' Association & Another
V.
State of West Bengal and Others
With
W.P. No.35302(W) of 2013
All Bengal Fair Price Shop Dealers' Welfare Association & Others
V.
State of West Bengal & Others
With
W.P. No.1132 of 2016
With
G.A.1882 of 2017
G.A.1542 of 2017
West Bengal M. R. Distributors Association & Another
V.
State of West Bengal & Others
Mr. Shyamal Sarkar, Senior Advocate
Mr. Ram Anand Agarwala,
Mr. Kumar Gupta,
Mr. Rajesh Gupta,
Ms. Nibedita Pal,
Mr. Ramesh Dhara,
Mr. Anand Gopal Mukherjee,
......For the Petitioners in W.P. 33258(W) of 2013
Mr. Shakti Nath Mukherjee, Senior Advocate
Mr. Debabrata Saha Roy,
Mr. Pingal Bhattacharyya,
Mr. Indranath Mitra,
Mr. Subhankar Das,
.......For the Petitioners in W.P. 35302(W) of 2013
Mr. Kishore Datta, Ld. Advocate General
Mr. Sushovan Sengupta,
Mr. T. M. Siddiqui,
Mr. Sirwanya Bandopadhyay,
Mr. Subir Pal,
..............For the State
Hearing concluded on : 18.08.2017
Judgment on : 26.10.2017
R. K. Bag, J.
The first petitioner of W.P. No.33258(W) of 2013 is a registered association of M. R. Dealers in West Bengal. The first petitioner of W.P. 35302(W) of 2013 is a registered association of Fair Price Shop Owners of urban areas of West Bengal. The first petitioner of W.P.1132 of 2016 is a registered association of M. R. Distributors of West Bengal. The petitioners of W.P. 33258(W) of 2013 and the petitioners of W.P. 1132 of 2016 have challenged the legality and validity of West Bengal Public Distribution System (Maintenance and Control) Order, 2013 (hereinafter referred to as "State Control Order of 2013"), whereas the petitioners of W.P. 35302(W) of 2013 have challenged the legality and validity of West Bengal Urban Public Distribution System (Maintenance and Control) Order, 2013 (hereinafter referred to as "State Urban Control Order of 2013"). The petitioners are, thus, representing the subsisting dealers and distributors who are carrying on business under the provisions of the impugned State Control Orders of 2013. The common question involved in these three writ petitions is the vires of the impugned State Control Orders of 2013.
2. The Parliament enacted the Essential Commodities Act, 1955 in the interest of the general public for the control of the production, supply and distribution of, and trade and commerce in certain commodities which are enumerated as Essential Commodities in Section 2(a) of the said Act. The object of the Act is to secure availability of essential commodities to the general public at fair prices and to protect their interest by way of equitable distribution of essential commodities. The legislature has delegated the power to the Central Government under Section 3 of the Essential Commodities Act, 1955 for issuance of orders to provide for regulating or prohibiting the production, supply and distribution of essential commodities and trade and commerce therein, if the Central Government is of the opinion that it is necessary or expedient so to do for maintaining or increasing supplies of essential commodities 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. The Central Government can delegate the power to make orders or issue notifications under Section 3 of the Essential Commodities Act, 1955 in relation to such matters and subject to such conditions as may be specified in the direction by any officer or authority subordinate to it or by the State Government or such officer or authority subordinate to the State Government. By virtue of Section 5 of the Essential Commodities Act, 1955 the State Government can make orders or issue notifications under Section 3 of the said Act in relation to such matters and subject to such conditions as may be specified in the direction given by the Central Government and such power can be exercised by the State Government or any officer or authority subordinate to the State Government. In exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955, the Central Government made the Public Distribution System (Control) Order, 2001 (hereinafter referred to as "Central Control Order of 2001") for maintaining supplies and securing availability and distribution of essential commodities under Public Distribution System, which came into force on August 31, 2001. The State Government made the West Bengal Public Distribution System (Maintenance and Control) Order, 2003 (in short "State Control Order of 2003") and the West Bengal Urban Public Distribution System (Maintenance and Control) Order, 2003 (in short "State Urban Control Orders of 2003") in exercise of powers delegated by the Central Government. The said State Control Order of 2003 and State Urban Control Order of 2003 were repealed by the impugned State Control Orders of 2013, which were made by the State Government in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 read with the Government of India, Ministry of Consumer Affairs, Food and Public Distribution (Department of Food and Public Distribution) Order No.GSR 630(E) dated August 31, 2001, and the same came into force on August 8, 2013 and on August 12, 2013 respectively. While the State Urban Control Order of 2013 is applicable to specified urban areas of West Bengal, the State Control Order of 2013 is applicable to the rest of the State of West Bengal. Both the above two impugned State Control Orders of 2013 have been challenged as ultra vires the provisions of the Essential Commodities Act, 1955, and beyond the authority delegated to the State Government under section 5 of the Essential Commodities Act, 1955 and in violation of Notification vide GSR 800 dated June 9, 1978 issued by the Department of Food, Ministry of Agriculture, Government of India and also violative of Articles 14 and 19(1) (g) of the Constitution of India.
3. Mr. Shyamal Sarkar, Learned Senior Counsel appearing on behalf of some of the petitioners has advanced his argument on the following four counts: (i) the State Control Order of 2013 being delegated legislation does not enjoy the immunity as a statute and is more vulnerable as the entire field in this regard is occupied by the Central Government, (ii) the said impugned State Control Order is beyond delegated power as prior concurrence of the Central Government was not obtained by the State Government in compliance with the Notification, GSR 800 dated June 9, 1978 issued by the Department of Food, Ministry of Agriculture, Government of India, (iii) the said impugned State Control Order is beyond legislative competence of the State Government as many provisions are contrary to and inconsistent with the provisions of the Central Control Order of 2001 and in excess of delegated power under paragraph 7 read with paragraph 5 of annexe of the Central Control Order of 2001, and (iv) the said impugned State Control Order is unworkable, vague, impossible to implement and thereby manifestly arbitrary and violative of Article 14 of the Constitution of India. By referring to the provisions of paragraphs 6, 9, 16, 17, 18, 19, 23, 24, 25, 29, 30, 31, 34, 36 and 37 of the State Control Order of 2013, Mr. Sarkar submits that those provisions are beyond the power delegated to the State Government under Section 3(2) of the Essential Commodities Act, 1955 as prior concurrence of the Central Government was not obtained in compliance with the direction contained in Notification GSR 800 dated June 9, 1978 issued by the Department of Food, Ministry of Agriculture, Government of India. By comparing the provisions of paragraphs 2(e), 6, 12, 16, 19(6), 17, 19(17), 21(i), 23, 24, 30, 2(u) (v), 31, 36, 37 of the State Control Order of 2013 with the corresponding provisions of the Central Control Order of 2001, Mr. Sarkar has demonstrated how the State Government has made various provisions of the State Control Order, which are contrary to and inconsistent with the provisions of the Central Control Order of 2001 and thereby those provisions are beyond the delegated power under section 5 of the Essential Commodities Act, 1955. By referring to various provisions of the State Control Order of 2013, Mr. Sarkar has also demonstrated that the said provisions cannot be implemented and worked out and as such those provisions are manifestly arbitrary and violative of Article 14 and Article 19(1)(g) of the Constitutions of India. He has relied upon series of authorities of the Supreme Court and various High Courts, which I would like to deal with in the appropriate stage of this judgment.
4. Mr. Shaktinath Mukherjee, Learned Senior Counsel assisted by Mr. Debabrata Saha Roy, Learned Counsel representing some of the petitioners has referred to the provisions of Sections 3, 5, 7 of the Essential Commodities Act and paragraph 31 of the State Control Order of 2013 and submitted that the District Controller of Food and Supplies being the licensing authority cannot adjudicate on the issues of contravention of provisions of State Control Order for the purpose of imposition of fine, as specific provisions are made in the Essential Commodities Act for the said adjudication and imposition of penalty by the competent Court of law. Mr. Saha Roy has also made comparison of the provisions of the impugned State Control Order of 2013 and the Central Control Order of 2001 in order to demonstrate how the State Government has acted in excess of the power delegated to the State Government by the Central Government under Section 5 of the Essential Commodities Act, 1955. The authorities cited in support of the above contentions will be dealt with subsequently.
5. Mr. Krishore Dutta, Learned Advocate General representing the state respondents in all the writ petitions has made categorical submission that the State Government enjoys plenary power under Section 3(1) of the Essential Commodities Act for making any order to regulate or prohibit the production, supply and distribution of essential commodities and trade and commerce therein. He further submits that the provisions of sub-section (2) of Section 3 of the Essential Commodities Act, 1955 are merely illustrative of the power conferred by sub-section (1) of Section 3 of the said Act. By referring to the various provisions of the impugned State Control Orders of 2013, Mr. Dutta has tried to demonstrate that the State Control Orders have been made by the State Government strictly within the ambit of powers delegated to the State Government by the Central Government under Section 5 read with Section 3(1) of the Essential Commodities Act, 1955. He has also tried to demonstrate that the provisions incorporated in the State Control Order of 2013 are not contrary to or inconsistent with the provisions of the Central Control Order of 2001. Mr. Dutta has cited various authorities which I would like to discuss before dealing with the submissions made on behalf of the petitioners in seriatim.
6. Now, I would like to deal with the various authorities cited on behalf of the petitioners in order to comprehend the principles to be invoked for striking down any delegated legislation as beyond the ambit of delegated power or violative of the provisions of the Constitution of India. The principles for challenging the validity of delegated legislation are laid down by the Supreme Court in "State of Kerala V. UNNI" reported in (2007) 2 SCC 365, "Bharatidasan University V. All India Council for Technical Education" reported in (2001) 8 SCC 676 and "Kerala Samsthana Chethu Thozhilali Union V. State of Kerala"
reported in (2006) 4 SCC 327. The Supreme Court has laid down in paragraphs 34, 36 and 39 of "State of Kerala V. UNNI" (supra) as follows:
"34. Unreasonableness is one of the grounds of judicial review of delegated legislation. Reasonableness of a statute or otherwise must be judged having regard to the various factors which, of course, would include the effect thereof on a person carrying on a business. ..........
36. When a statute provides for a condition which is impossible to be performed, unreasonableness of a statute shall be presumed. It would be for the State in such a situation to justify the reasonableness thereof.....
39. Workability of a statute vis-a-vis the question as to whether it is vague or otherwise must also be considered having regard to the question as to whether it is at all practical."
7. It is held by the Supreme Court in paragraph 14 of "Bharatidasan University V. All India Council for Technical Education" (supra) that the regulations framed under the statute must be held to be void and unenforceable, if anyone or more of the provisions are found to be inconsistent with the specific provisions of the Act. The grounds for judicial review of delegated legislation are laid down in paragraphs 31 and 32 of "Kerala Samsthana Chethu Thozhilali Union V. State of Kerala" (supra) which are as follows:
"31. In Craies on Statute Law, 7th Edition, it is stated at page 297-298:
"The initial difference between subordinate legislation (of the kind dealt with in this chapter) and statute law lies in the fact that a subordinate law-making body is bound by the terms of its delegated or derived authority, and that courts of law, as a general rule, will not give effect to the rules, etc., thus made, unless satisfied that all the conditions precedent to the validity of the rules have been fulfilled. The validity of statutes cannot be canvassed by the courts, the validity of delegated legislation as a general rule can be. The courts therefore (1) will require due proof that the rules have been made and promulgated in accordance with the statutory authority, unless the statute directs them to be judicially noticed; (2) in the absence of express statutory provision to the contrary, may inquire whether the rule-making power has been exercised in accordance with the provisions of the statute by which it is created, either with respect to the procedure adopted, the form or substance of the regulation, or the sanction, if any, attached to the regulation : and it follows that the court may reject as invalid and ultra vires a regulation which fails to comply with the statutory essentials."
"32. In G.P. Singh's Principles of Statutory Interpretation, 10th Edition, it is stated at page 916:
"Grounds for judicial review: Delegated legislation is open to the scrutiny of courts and may be declared invalid particularly on two grounds: (a) Violation of the Constitution; and
(b) Violation of the enabling Act. The second ground includes within itself not only cases of violation of the substantive provisions of the enabling Act, but also cases of violation of the mandatory procedure prescribed. It may also be challenged on the ground that it cannot be said to be in conformity with the statute or Article 14 of the Constitution or that it has been exercised in bad faith. The limitations which apply to the exercise of administrative or quasi-judicial power conferred by a statute except the requirement of natural justice also apply to the exercise of power of delegated legislation. Rules made under the Constitution do not qualify as legislation in true sense and are treated as subordinate legislation and can be challenged in judicial review like delegated legislation. Compliance with the laying requirement or even approval by a resolution of Parliament does not confer any immunity to the delegated legislation but it may be a circumstance to be taken into account along with other factors to uphold its validity although as earlier seen a laying clause may prevent the enabling Act being declared invalid for excessive delegation."
8. Both parties have relied upon the decisions of the Supreme Court in "State of Tamil Nadu V. P. Krishnamurthy" reported in (2006) 4 SCC 517 and "Cellular Operators Association of India V. TRAI" reported in (2016) 7 SCC 703 in order to demonstrate the parameters of judicial review of subordinate legislation. In "State of Tamil Nadu V. P. Krishnamurthty" (supra) the Supreme Court has laid down the following criteria for challenging subordinate legislation in paragraph 15 of the judgment:
"15. There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognized that a sub-ordinate legislation can be challenged under any of the following grounds:-
(a) Lack of legislative competence to make the sub-ordinate legislation.
(b) Violation of fundamental rights guaranteed under the Constitution of India.
(c) Violation of any provision of the Constitution of India.
(d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling Act.
(e) Repugnancy to the laws of the land, that is, any enactment .
(f) Manifest arbitrariness/unreasonableness (to an extent where court might well say that the legislature never intended to give authority to make such rules).
In "Cellular Operators Association of India V. TRAI" (supra) the parameters of judicial review of subordinate legislation are laid down in paragraph 34 by quoting paragraph 15 of "State of Tamil Nadu V. P. Krishnamurthy" (supra) which has already been quoted above. It is held by the Supreme Court in paragraph 41 of the judgment that the Telecom Consumers Protection Regulations, 2015 is ultra vires the Act, as the impugned regulation does not carry out the purpose of the Act.
9. Mr. Sarkar has relied upon the following four authorities in support of his contention that some paragraphs of State Control Order of 2013 are liable to be struck down on the ground that the prior concurrence of the Central Government was not obtained by the State Government before issuance of the State Control Order of 2013 which is the condition precedent for exercise of delegated power. In "M/s Sohan Lal Loonkaran V. State of Rajasthan" reported in AIR 1975 Raj 215, Learned Single Judge of Rajasthan High Court struck down paragraph 5A of the Rajasthan (Display of Prices of Essential Commodities) Order, 1966 as ultra vires and void for having been made without prior concurrence of the Central Government in compliance with the notification vide S.O. No.1844 dated June 18, 1966 issued by the Central Government in exercise of the powers conferred by Section 5 of the Essential Commodities Act, 1955 and consequently the order of confiscation and prosecution issued by the collector under the said paragraph 5A of the Control Order was also struck down as void . In "M/s Shibshankar Dokania Oil, Rice and Flour Mills V. State of Bihar" reported in AIR 1981 Patna 855, the Division Bench of Patna High Court held the Bihar Rice and Paddy Procurement Order, 1980 as invalid for having been made beyond delegated power of the State Government for failure to obtain prior concurrence of the Central Government in compliance with the notification GSR 800 dated June 9, 1978 issued by the Central Government in exercise of the power conferred on it by Section 5 of the Essential Commodities Act, 1955 and consequently the notices issued under the State Control Order were also struck down as invalid.
10. In "District Collector Chittoor V. Chittoor District Groundnut Traders Association" reported in (1989) 2 SCC 58, the Supreme Court upheld the order of the High Court striking down the direction contained in the Government Order placing restriction on transport of the edible oil and oil seeds on the ground that the said circular of the Government was issued in contravention of the power delegated to the State Government by Notification GSR 800 dated June 9, 1978 by which prior concurrence of the Central Government was required. It is also held by the Supreme Court that the Andhra Pradesh Scheduled Commodities Dealers' (Licensing and Distribution) Order, 1982 which was made after obtaining prior concurrence of the Central Government in compliance with the Notification GSR 800 dated June 9, 1978 issued under Section 5 of the Essential Commodities Act, 1955, does not contain any provision placing restriction on the transport of edible oil or oil seeds and thereby the State Government acted beyond its delegated power.
11. In "Akhil Bharatiyo Dhan Utpadak Kisan Bachao Samity V. State of Maharashtra" reported in 1992 Mh. L. J. 1599, the Division Bench of Bombay High Court held that the State Government cannot suspend the operation of the Maharashtra Rice (Levy on Rice Millers) Order, 1989 without prior concurrence of the Central Government and thereby the suspension of levy in the entire state was found to be bad in law.
12. Mr. Sarkar has relied upon the following three authorities in support of his contention that the Central Government has occupied the entire field of distribution and supply of essential commodities on the basis of the Central Control Order of 2001 made in exercise of powers conferred by Section 3 of the Essential Commodities Act, 1955 vide notification GSR 630(E) dated August 31, 2001 and only limited functions are delegated to the State Governments and in case of inconsistency or repugnancy between the two Control Orders, the provisions of impugned State Control Orders will be beyond legislative competence of the State Government. In "State of Orissa V. M/s M.A. Tulloch" reported in AIR 1964 SC 1284 and "Orissa Cement Ltd. V. State of Orissa" reported in 1991 Supp (1) SCC 430, the Supreme Court dealt with the effect of central legislation enacted under its exclusive legislative power which covers the entire field of an earlier state legislation which was also competent and valid on the date of its enactments. It is held that the parliamentary enactment supersedes the state law which is impliedly repealed, but the effect of repeal is subject to the saving as found in Section 6 of the General Clauses Act. It is relevant to quote paragraph 14 of the judgment in "State of Orissa V. M/s M. A. Tulloch" (supra) wherein the Supreme Court has laid down the effect of repugnancy between two enactments made by the legislatures within their competence. The relevant portion of paragraph 14 is quoted below:
"14. .....Repugnancy arises when two enactments both within the competence of the two Legislatures collide and when the Constitution expressly or by necessary implication provides that the enactment of one Legislature has superiority over the other then to the extent of the repugnancy the one supersedes the other. But two enactments may be repugnant to each other even though obedience to each of them is possible without disobeying the order. The test of two legislations containing contradictory provisions is not, however, the only criterion of repugnancy, for, if a competent legislature with a superior efficacy expressly or impliedly evinces by its legislation an intention to cover the whole field, the enactment of the other legislature whether passed before or after would be overborne on the ground of repugnance. Where such is the position, the inconsistency is demonstrated not by a detailed comparison of provisions of the two statutes but by the mere existence of the two pieces of legislation. ......"
13. In "Thirumuruga Medical Educational and Charitable Trust V. State of Tamil Nadu" reported in (1996) 3 SCC 15 the question arose before the Supreme Court whether Section 10A of the Indian Medical Council (Amendment) Act, 1993 will prevail over the proviso to Section 5(5) of Dr. M. G. R. Medical University, Tamil Nadu (Amendment and Validation) Act, 1989 for the purpose of establishment of new medical college. It is held by the Supreme Court that the Central Act will prevail over the State Act in case of conflict and the State Act would be void to the extent of repugnancy. By virtue of Article 254 of the Constitution of India, if the State Act is a subsequent enactment and has received the assent of the President, it would prevail over the central legislation in the State, whereas if the State Act is a prior enactment, the subsequent Central Act creating repugnancy would prevail over the State Act. The ratio of this authority has no manner of application in the present case where the Central Control Order and State Control Order can co-exist, if the State Control Order is made by the State Government within the ambit of the power delegated by the Central Government.
14. Mr. Sarkar has also cited the following four authorities in support of his argument that the impugned State Control Orders of 2013 are in direct conflict with the Central Control Order of 2001 and as such the impugned State Control Orders must be struck down as ultra vires the Central Control Order of 2001 and the Essential Commodities Act, 1955. In "Petrol Dealers' Association V. State of Maharashtra"
reported in 2013 SCC Online Bom. 1601, the Division Bench of Bombay High Court considered (i) whether the orders of the Central Government issued under the Essential Commodities Act covered the whole field of sale, distribution, transport, storage etc. of petroleum products and, therefore, the State Government as a delegate of the Central Government cannot enter the field at all and make any provision on the subject and (ii) whether the State Government Order issued as delegate of the Central Government under the Essential Commodities Act or any provisions thereof are in any way inconsistent with the Central Government Orders on the subject and therefore, unauthorised and illegal. Relying on the decisions of the Supreme Court in "Deep Chand V. State of Uttar Pradesh" (AIR 1959 SC 648) and "State of Orissa V. M.A. Tulloch" (AIR 1964 SC 1284), it is held by the Division Bench that in view of the clear inconsistency between the State Control Order and the Central Control Order, the State Control Order cannot be sustained. The criteria laid down in paragraph 10 of the judgment for deciding how the Central Control Order will prevail over the State Control Order are as follows:
"10. ... Thus, repugnancy would arise where there is a direct collision between the two enactments so that the two cannot stand together or even where one enactment occupied the whole field so that the mere existence of the other enactment amounts to repugnancy. In either case, the statute of the legislature having superiority over the other, i.e. the one expressly colliding in the first case and that which occupies the whole field in the second, will prevail."
15. In "Tata Iron and Steel Company Ltd. V. State of Kerala" reported in 1971 SCC Online Ker 122, the Division Bench of Kerala High Court relied upon the principles enumerated by the Supreme Court in "Deep Chand" (supra) and "M.A. Tulloch" (supra) for coming to the conclusion that Iron and Steel (Control) Order 1956 made by the Central Government under Section 3 of the Essential Commodities Act will prevail over Kerala Iron and Steel (Declaration of Stocks and Maintenance of Accounts) Order, 1968 made by the State Government in pursuance of delegation of powers made by the Central Government under Section 5 of the Essential Commodities Act in view of the conflict between the two Control Orders. The observations made by the Division Bench in paragraph 10 and 14 of the judgment are relevant:
"10... it appears to us that this is a case where the Central Government has laid down an exhaustive Code or evinced an intention to cover the whole field in exercise of its powers under Section 3 of the Act in respect of iron and steel. ... the inconsistency is demonstrated not by a detailed examination of the provisions of the two statutes but by the mere existence of the two pieces of legislation.
14. ... the law is well-established that if power is vested in two authorities, one subordinate to the other, to act in respect of a certain matter, the subordinate authority has no scope to act, if the superior authority has already acted. It would be all the more so, if the subordinate authority makes different and more stringent provisions. ....."
16. In "Sujan Singh Matu Ram V. State of Haryana" reported in 1967 SCC Online P & H 35, the Division Bench of Punjab and Haryana High Court has held that Punjab Essential Commodities (Regulation of Sale) Order, 1966 is ultra vires Section 3 of the Essential Commodities Act and is beyond the scope of the authority of the State Government delegated to it by the Central Government under Section 5 of the said Act. It is further held that the State Control Order does not admittedly fall within any of the clauses of sub-Section(2) of Section 3 referred to in the Notification dated June 9, 1966 issued by the Central Government under Section 5 of the Essential Commodities Act and as such the State Control Order is liable to be struck down.
17. In "Ajoy Kumar Banerjee V. Union of India" reported in (1984) 3 SCC 127 the Supreme Court quashed the General Insurance (Rationalisation and Revision of Pay Scales and Other Conditions of Service of Supervisory, Clerical and Subordinate Staff) 2nd Amendment Scheme, 1980 as it is beyond the scope of the authority of the Central Government and not related to the object envisaged under Section 16 of the General Insurance Business (Nationalisation) Act, 1972. The facts of this reported case are clearly distinguishable from the facts of the present case wherein the court will consider whether the State Government has the authority to make control order by virtue of power delegated to it by the Central Government. So the ratio of this report cannot be applicable in the present case.
18. Mr. Mukherjee has relied on the following authorities to impress upon the court that the licensing authority cannot adjudicate on the issues of contravention of the provisions of the control orders for imposition of fine, as the power of adjudication can be exercised only by the competent court of law. In "Academy of Nutrition Improvement V. Union of India" reported in (2011) 8 SCC 274, the Supreme Court declared Rule 44-1 of the Prevention of Food Adulteration Rules, 1955 as amended in 2005 as ultra vires the Prevention of Food Adulteration Act, 1954 on the ground that the said rule is contrary to the objects and provisions of the Act and travels beyond the scope of the Act. It is held that the Act does not empower the Central Government to make rule banning manufacture, sale or distribution of common salt in order to promote consumption of iodised salt, unless common salt is adulterated or injurious to health.
19. In "Union of India V. Raman Iron Foundry" reported in AIR 1974 SC 1265, the Supreme Court has interpreted clause 18 of the General Conditions of Contract entered into by the Central Purchase Organisation of the Government of India for purchase of stores from third parties described as contractors. I don't find that this report has any relevance in the present case.
20. In "State of Karnataka V. Shree Rameshwara Rice Mills" reported in AIR 1987 SC 1359, the validity of the terms of the contract entered into by the State Government with a private party came up for consideration of the Supreme Court. The terms of contract provided for payment of damages to the Government by the contractor for any breach of condition of the contract. It is held by the Supreme Court that the adjudication of quantum of damages by an officer of the Government regarding breach of terms of the contract cannot sustain under the law, because a party to the contract cannot be an arbiter in his own cause. It is further held that where a party to the contract disputes the committing of any breach of conditions, the adjudication should be done by an independent person or body and not by the party to the contract.
21. In "Satwant Singh Sawhney V. Assistant Passport Officer, New Delhi"
reported in AIR 1967 SC 1386, the majority view of the Supreme Court is that the act of respondent in refusing to issue passport infringes the petitioner's fundamental right under Article 14 of the Constitution. It is held in paragraph 34 of the judgment that the doctrine of equality before the law is a necessary corollary to the high concept of the rule of law guaranteed by our Constitution. It is further held that one of the aspects of the rule of law is that every executive action, if it is to operate to the prejudice of any person, must be supported by some legislative authority.
22. In "S.K. Roy Chowdhury V. The Collector of Calcutta" reported in 1985(1) CLJ 332, Learned Single Judge of Calcutta High Court has considered whether the State Government being a party to the contract can adjudicate the liability of any other party to the contract and enforce its rights to sell the securities deposited by the other party to the contract. The petitioner and his parents entered with the Governor of Bengal into contract to save the latter from the loss that might be caused by the conduct of the petitioner. It is held that the immunity bond did not arm the Government with power to adjudicate and dispute concerning the liability of the petitioner arising under the bond, as a party to the contract cannot decide whether the other party had committed any breach and thereby liable to compensate. It is further held that the Government may proceed to enforce its rights to sell the securities deposited by the petitioners only after the question of liability is adjudicated by the civil court in favour of the Government.
23. In "Reshmi Metaliks Ltd. V. Union of India" (unreported MAT 1970 of 2014 decided on 24.12.2014) the Division Bench of Calcutta High Court held that the jurisdiction to impose penalty by way of blacklisting for giving false declaration cannot be exercised by the railway authority on the basis of its self assessment, when the civil court is in seisen over the identical cause of action. This report has no relevance in the present case as the facts of the present case are clearly distinguishable from the facts of the reported case.
24. Mr. Dutta has cited the following decisions in support of his contention that the State Government has made the State Control Order of 2013 and the State Urban Control Order of 2013 strictly within the ambit of power delegated by the Central Government under Section 5 of the Essential Commodities Act, 1955. "In re:
Article 143, Constitution of India" (AIR 1951 SC 332), the President of India referred to the Supreme Court three questions in respect of delegation of legislative power at three different stages of development of the constitutional law for its opinion under Article 143 of the Constitution of India. The unanimous view of the Supreme Court is that the legislature cannot part with its essential legislative function, as the same would virtually amount to abdication of its power and would be in excess of the limits of permissible delegation. It is not the contention of the petitioners in these writ applications that the legislature has abdicated its power by delegating its essential legislative function. On the contrary, the contention of the petitioners is that the State Government has acted in excess of the power delegated by the Central Government under the provisions of the Essential Commodities Act, 1955. The ratio of this authority has, thus, no bearing on the facts of the present case.
25. By referring to paragraph 9 of the judgment in "Hari Shankar Bagla V. State of Madras" reported in AIR 1954 SC 465, Learned Advocate General contends that the Supreme Court negated the argument advanced on behalf of the appellants that the legislature delegated excessive legislative power under Section 3 of the Essential Supplies (Temporary Powers) Act 1946. It is held by the Supreme Court that the legislature must declare the policy of the law and formulate the legal principles and the details of the policy and principles can be worked out by delegating them to a subordinate authority within the framework of that policy. It is not the case of the petitioners in the present writ petitions that the delegating notification is bad for excessive delegation. The ratio of this authority is of no assistance to the State respondents as the issue to be decided in these writ petitions is whether the State Government has made the impugned State Control Orders beyond the power delegated by the Central Government under the provisions of the Essential Commodities Act, 1955.
26. In "Union of India V. Tulsiram Patel" reported in AIR 1985 SC 1416 the Supreme Court interpreted the provisions of Articles 309, 310, 311 of the Constitution of India for deciding whether the civil servant holding permanent post can be dismissed or removed or reduced in rank without department inquiry. The ratio of the decision has no manner of application in the present case.
27. In "K. Ramanathan V. State of Tamil Nadu" reported in AIR 1985 SC 660, the question which arose for consideration of the Supreme Court, is whether clause 3(1A) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 issued by the State Government under Section 3 of the Essential Commodities Act, 1955 read with Notification GSR 800 dated June 9, 1978 issued by the Department of Food, Ministry of Agriculture, Government of India with prior concurrence of the Government of India, was ultra vires the State Government being in excess of its delegated powers. The Supreme Court has laid down that the delegation of specific power under clause (d) of sub-Section (2) of Section 3 of the Essential Commodities Act by the aforesaid notification issued by the Central Government under Section 5 to regulate the storage, transport, distribution, disposal and acquisition, use or consumption of an essential commodity relating to foodstuffs, carries with it the general powers of the Central Government under sub-Section (1) of Section 3 of the Essential Commodities Act to regulate or prohibit the production, supply and distribution of essential commodities and trade and commerce therein. The observation of the Supreme Court in paragraphs 11 and 13 of the judgment are quoted below:
"11. ... It is manifest that sub-section (2) of section 3 of the Act confers no special powers, but is merely illustrative of the general powers conferred by sub-Section (1) of Section 3 without exhausting the subjects in relation to which such powers can be exercised.
13. ... It must accordingly be held that although clause (d) of sub-section (2) of Section 3 of the Act deals only with a specific power, the general power to issue the impugned order flows from the provisions of sub-section (1) of Section 3 which stands delegated to the State Government by virtue of the Notification issued under Section 5 of the Act."
By upholding the authority of the State Government to issue the impugned order, the Supreme Court held that the word "regulating" appearing in clause (d) of sub-Section (2) of Section 3 of the Essential Commodities Act would not exclude prohibiting as the word "regulate" has different sets of meaning depending on context in which it is used having regard to the purpose and object of the legislation particularly the mischief which the legislature seeks to remedy. The ratio of this authority cannot have any relevance in the present case as the impugned State Control Orders were made by the State Government without obtaining prior concurrence of the Central Government, but in this report prior concurrence of the Central Government was obtained by the State of Tamil Nadu before making Tamil Nadu Paddy (Restriction on Movement) Order, 1982. Moreover, this authority does not support the proposition sought to be advanced by the State respondents that all the powers under Section 3(1) of the Essential Commodities Act, 1955 are delegated to the State Government for making the impugned State Control Orders. The relevance of this report is in connection with interpretation of the word "regulating", which includes "prohibiting."
28. In "V.S. Rice and Oil Mills V. State of Andhra Pradesh" (AIR 1964 SC 1781) the supreme court has held that the word "regulate" appearing in section 3(1) of the Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949 is wide enough to confer power on the State Government to regulate either by increasing rate of supply of electricity energy or by decreasing the rate of supply of electricity energy for securing supply, equitable distribution and availability at fair prices. Similarly, in "Deepak Theatre V. State of Punjab" (1992 Supp(1) SCC 684), the Supreme Court held that the power of licensing authority under the Punjab Cinemas (Regulation) Act, 1952 to regulate includes imposition of restriction for entry into the theatre hall and fixation of rates of admission to the respective seats in the hall. The issue of delegation of power is not the subject matter of the above two decisions and as such the ratio of the said reports has no relevance in the present case.
29. In "C.T.A. Pillai V. H.P. Lohia" reported in AIR 1957 Cal 83, the Division Bench of Calcutta High Court considered whether contravention of a condition imposed by a licence issued under the Imports and Exports (Control) Act, 1947 or issued under a statutory order made under the said Act, is an offence under section 5 of the Imports and Exports (Control) Act, 1947. It is held by the Division Bench that the breach of a condition imposed by the licence cannot amount to an offence under Section 5 of the Imports and Exports (Control) Act, 1947. This authority also has no relevance in deciding the issues involved in the present case.
30. In "Commissioner of Commercial Tax V. T.T.K Health Care" reported in (2007) 11 SCC 796, the question which calls for determination of the Supreme Court is whether "Fryums" being under cooked or semi- cooked food falls within the ambit of residual entry of Part VII of Schedule II of the M.P. Commercial Tax Act, 1994 or falls under item 2 of Part I of Schedule II of the said Act, which refers to "cooked food." It is held by the Supreme Court that the Fryums falls under the residuary item of Part VII of Schedule II of M.P. Commercial Tax Act, 1994 for which rate of tax is 8% as imposed by the Department of Revenue. The ratio of this report has no manner of application in the present case.
31. In "State of U.P. V. Daulat Ram Gupta" reported in (2002) 4 SCC 98, the question which came up for consideration of the Supreme Court is whether the State Government or the licensing authority can issue direction under clause 16(6) for refusal to renew licence granted to petty dealers under the U.P. High Speed Diesel and Light Diesel Oil (Maintenance of Supplies and Distribution) Order, 1981 (in short "statutory order"), if their places of business are within a radius of 5 kilometres of retail outlet run by a Government Oil Company. The licence of the respondent was not renewed on the ground that his retail outlet fell within a radius of 5 kilometres from the outlet run by Government Oil Company and appointed by the Government of U.P. by issuing direction. Clause 16(6) of the statutory order empowers the State Government, the Commissioner of Food and Civil Supplies or the Collector to issue a general or special direction to any dealer which is not inconsistent with the provisions of the statutory order, but only for giving effect to the provisions of the statutory order. The apex court has observed in paragraphs 14 and 15 of the judgment as follows:
"14. ... Thus, there are two restrictions on the power of the State Government or a Licensing Authority while issuing a general or special direction - firstly, such a direction should not be inconsistent with the Statutory Order and secondly, such direction can be issued only for purposes of giving effect to the provisions of the Statutory Order. .....
15. .... In Black's Law Dictionary the expression 'inconsistent' means lacking consistency; not compatible with. Viewed in this light, the nature and extent of power the State Government or a Licensing Authority possessed under sub-clause (6) is to issue directions only in conformity with the Statutory Order."
By dismissing the appeals the Supreme Court held that the licensing authority cannot amend the conditions of renewal of licence granted under the statutory order as the same is not permissible under clause 16(6) of the statutory order. The ratio of this authority has no relevance in the present case, except the interpretation of the word "inconsistency" which I would like to follow.
32. In "M. Karunanidhi V. Union of India" reported in (1979) 3 SCC 431 a former Chief Minister of Tamil Nadu was prosecuted under Section 161, 468, 471 of Indian Penal Code and under Section 5(2) read with Section 5(1)(d) of the Prevention of Corruption Act on the allegation of abusing his official position in the matter of purchase of wheat from Punjab. The prayer for discharge of the accused was rejected by the special judge and the said order is affirmed by the High Court. The prosecution done under the provisions of Tamil Nadu Public Men (Criminal Misconduct) Act,1973(in short "the said Act") was repealed by the time the appeal challenging the order of the High Court came up for consideration before the Supreme Court. By dismissing the appeal it is held by the Supreme Court that there is no repugnancy between the State Act and the Central Act particularly when Section 29 of the State Act clearly expressed the intention that the State Act would only be in addition to and not in derogation of any other law such as the Central Act. The ratio of this authority has no manner of application in the present case, as the issue to be decided in these writ petitions is whether the State Government has acted beyond the delegated power.
33. in "Shyam Telelink Ltd. V. Union of India" reported in (2010) 10 SCC 165, the controversy arose in connection with liquidated damages which was computed at Rs.8 crore out of which Rs.7.3 crore were paid by the appellant without objection followed by payment of Rs.70 lakh. It is held by the Supreme Court that the appellant accepted on its part of the obligation to pay by making payment of the amount demanded on rejection of prayer of seeking waiver of the liquidated damages. The maxim qui approbat non reprobat (one who approbates cannot reprobate) applicable in this report cannot be made applicable to the present case where the vires of the delegated legislation is under challenge. Moreover, the Court is not oblivious of the trite law that there cannot be any estoppel against law.
34. In "Kusum Ingots and Alloys V. Union of India" reported in (2004) 6 SCC 254 the appellant company challenged the vires of the Securitization and Reconstruction of Official Assets and Enforcement of Security Interest Act, 2002 by filing writ petition before the Delhi High Court after receiving a notice under the said Act for non- payment of loan obtained from Bhopal. The writ petition was dismissed on the ground of want of territorial jurisdiction of Delhi High Court. On appeal the Supreme Court upheld the order of Delhi High Court by observing that the facts pleaded in the writ petition did not give rise to a cause of action which would confer jurisdiction on the court. The ratio of this report is in connection with the territorial jurisdiction of the High Court to entertain application under Article 226 of the Constitution of India. Accordingly, this ratio has no manner of application in the present case.
35. In "Hinsa Virodhak Sangh V. Mirzapur Moti Kuresh Jamat" reported in (2008) 5 SCC 33, the Supreme Court upheld the validity of resolution of Municipal Corporation in Gujarat for closure of municipal slaughter houses for a small period of 9 days of Jain festival. The Supreme Court has made incidental observation in page 39 of the judgment that there is a presumption in favour of the constitutionality of statutes as well as delegated legislation and it is only when there is a clear violation of a constitutional provision, (or of the parent statute in case of delegated legislation) beyond reasonable doubt that the Court should declare it to be unconstitutional.
36. The tests of arbitrariness for declaring delegated legislation ultra vires Article 14 of the Constitution of India are laid down in paragraph 13 of "Khoday Distilleries V. State of Karnataka" reported in (1996) 10 SCC 304, which are as follows:
"13.... A subordinate legislation may be questioned under Article 14 on the ground that it is unreasonable; unreasonable not in the sense of not being reasonable, but in the sense that it is manifestly arbitrary."
The ratio of this decision will be followed in deciding the issue involved in these writ petitions.
37. In "Sushil Kumar Sharma V. Union of India" reported in (2005) 6 SCC 281 the petitioner moved the Supreme Court to declare the provisions of Section 498A of Indian Penal Code to be unconstitutional and ultra vires on the ground of misuse of the said provision of law. By dismissing the writ petition the Supreme Court held that mere possibility of abuse of a provision of law does not per se invalidate a legislation. It is further held that it must be presumed, unless the contrary is proved, that administration and application of a particular law would be done not with an evil eye and unequal hand. In the present writ petitions the validity of the impugned State Control Orders have been challenged as fine was imposed on the members of the petitioners Association for violation of the said orders.
38. In "West Bengal M.R. Dealers Association V. State of West Bengal"
reported in 2015 SCC online Cal 7449, Learned Single Judge of Calcutta High Court upheld the validity of two notifications/administrative orders issued by the Food and Supplies Department, Government of West Bengal for increasing storage capacity of food grains in the godown for 45 days by the M.R. dealers and fair price shop owners. The argument advanced on behalf of the petitioners in the present writ petitions is similar to the argument advanced on behalf of the petitioner in the reported case, but the impugned State Control Orders were not under challenge in the said reported case.
39. Mr. Dutta has relied on unreported case of "Rama Pada Maity V. State of West Bengal" in support of his contention that the omission to incorporate the provision of Section 100 of Code of Criminal Procedure in the impugned State Control Orders is within the ambit of delegated power of the State Government. In Rama Pada Maity V. State of West Bengal" (unreported - WB 1516(W) of 2014 decided on 03.07.2014) the petitioners challenged the order of cancellation of licence issued under the State Control Order of 2003 on the ground of misappropriation of large quantities of essential commodities. By dismissing the writ petition Learned Single Judge of Calcutta High Court held that the requirement of search and seizure of the fair price shop in presence of independent and respectable persons of the locality is not mandatory and the same is to be judged on the anvil of prejudice caused to the owner of the fair price shop. The above order of Leaned Single Judge was affirmed by the Division Bench on August 20, 2014 in connection with AST 346 of 2014. It is relevant to point out that the evidence collected by the investigating agency during search and seizure in the absence of the independent witnesses was accepted by the Supreme Court in "Manish Dixit V. State of Rajasthan" (2001 SCC(Cri) 235). By accepting the evidence collected by way of search and seizure in presence of driver of police vehicle and another stock witness of the police, the Supreme Court observed in "State of U.P V. Zakaullah" (JT 1997 (10) SC 54) that every citizen of India must be presumed to be an independent person until it is proved that he was dependent on the police for any purpose.
40. By following the decisions of the Supreme Court and the High Courts discussed above I would like to address the issue whether the Central Government has delegated plenary power to be exercised by the State Government under Section 3(1) of the Essential Commodities Act, 1955 by notification GSR 800 dated June 9, 1978 issued by the Department of Food, Ministry of Agriculture, Government of India under Section 5 of the Essential Commodities Act. By referring to paragraphs 11 and 13 of "K. Ramanathan V. State of Tamil Nadu"
(AIR 1985 SC 660) Mr. Dutta has tried to impress upon the court that sub-Section (2) of Section 3 of the Essential Commodities Act confers no special power but is merely illustrative of the general powers conferred by sub-Section (1) of Section 3 of the said Act without exhausting the subjects in relation to which such powers can be exercised. He has further urged that the delegation of specific power under sub-section (2) of Section 3 of the Essential Commodities Act by the aforesaid notification dated June 9, 1978 issued by the Central Government under Section 5 of the Essential Commodities Act carries with it the general power of the Central Government under sub-Section (1) of Section 3 of the Essential Commodities Act and thereby the State Government has the authority to issue the impugned State Control Orders under challenge. I have already observed in paragraph 27 (supra) how the Supreme Court has interpreted the word "regulating" appearing in clause (d) of sub- Section (2) of Section 3 of the Essential Commodities Act depending on the context in which it is used having regard to the purpose and object of the legislation. In this report the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 was issued by the State Government with prior concurrence of the Government of India, whereas in the present case the State Government did not obtain prior concurrence of the Central Government in compliance with the notification GSR 800 dated June 9, 1978 and as such the facts of the present case are clearly distinguishable from the facts of "K. Ramanathan V. State of Tamil Nadu." The ratio of the said report cannot be, thus, made applicable in the present case.
41. The contention made on behalf of the petitioners in the present case is that the Central Government has delegated limited power to the State Government for making orders under Section 3(1) of the Essential Commodities Act and prior concurrence of the Central Government is required on some specific aspects as notified in GSR 800 dated June 9, 1978. The Notification GSR 800 dated June 9, 1978 issued by the Department of Food, Ministry of Agriculture, Government of India relied on by the petitioners is as follows:
"Published in the Gazette of India (Part-II) Section 3 sub-section(1) dated June 17, 1978/27th Jyaistha 1900 (Saka).
Department of Food Order New Delhi, the 9th June, 1978 GSR. 800 - In exercise of the powers conferred by Section 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.GSR 316(E), dated the 20th June, 1972, the Central Government hereby directs that the powers conferred on it by sub-section (1) of section 3 of the said Act to make orders to provide for the matters specified in clauses (a), (b), (c), (d),
(e), (f), (h), (i), (ii) and (j) of sub-section (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 clauses (a), (c) or (f) of in regard to distribution or disposal of foodstuffs to places outside the State or in regard to regulation of transport of any foodstuff, under the said clause (d), the State Government shall also obtain the prior concurrence of the Central Government; and (3) that in making an order relating to any of the matters specified in the said clause (j) the State Government shall authorise only an officer of Government."
42. The above Notification dated June 9, 1978 issued by the Central Government was taken into consideration by the Supreme court in "District Collector Chittoor V. Chittor District Groundnut Traders Association" ((1989) 2 SCC 58) wherein prior concurrence of the Central Government was obtained for issuing the impugned control order, but the impugned order did not contain any provision placing restriction on the transport of edible oil or oil seeds and thereby the State Government acted beyond its delegated power. The Supreme Court interpreted the above notification of the Central Government in paragraph 4 of the judgment which is worth quoting:
"4. ... By clause(2) of the notification the Central Government while delegating its power under section 3 of the Act to the State Government for issuing orders in respect of the mattes specified therein, expressly placed restriction on the State Government relating to any matter specified in clauses (a), (c), (d) and (f) of sub-section (2) of section 3 of the Act to the extent that while making an order pertaining to any matter specified in the aforesaid clauses the State Government shall obtain prior concurrence of the Central Government. The notification is manifestly clear that the Central Government did not delegate to the State Government its general power to pass any order under section 3(1) of the Act for regulating or prohibiting the production, supply and distribution of the specified essential commodities and trade and commerce therein. On the other hand, the State Government was delegated the limited power to make orders in relation to foodstuffs subject to certain conditions specified in the notification after obtaining prior sanction of the Central Government. Any order made by the State Government regulating matters specified in clause (2) of the Notification without obtaining prior sanction of the Central Government would be in contravention of the delegated power. A delegate is not entitled to exercise powers in excess or in contravention of the delegated powers. If any order is issued or framed in excess of the powers delegated to the authorities, such order would be illegal and void."
43. By following the above interpretation of the notification dated June 9, 1978 issued by the Central Government under section 5 of the Essential Commodities Act, I would like to hold that the Central Government has not delegated to the State Government its general power to pass any order under section 3(1) of the Essential Commodities Act for regulating or prohibiting the production, supply and distribution of the essential commodities and trade and commerce therein. I would further like to hold that the Central Government has delegated limited power to the State Government to make orders in relation to foodstuffs, subject to certain conditions specified in the notification. In view of my above observation I am unable to accept the contention made by Learned Advocate General that the State Government can exercise plenary power under Section 3(1) of the Essential Commodities Act by virtue of delegation of power under Section 5 of the Essential Commodities Act, 1955.
44. The next issue which I would like to address is whether any provision of the impugned State Control Orders is made beyond delegated power of the State Government for not obtaining prior concurrence of the Central Government and for being inconsistent with the directions already issued by the Central Government in the Central Control Order of 2001. On perusal of notification GSR 800 dated June 9, 1978 issued by the Central Government I find that the Central Government has delegated the powers conferred on it by sub- section (1) of Section 3 of the Essential Commodities Act to make orders for the matters specified in clauses (a), (b), (c), (d), (e), (f), (h),
(i), (ii) and (j) of sub-section (2) thereof in relation to foodstuffs subject to the following conditions: (i)State Government shall exercise the delegated power subject to such directions as may be issued by the Central Government and the said directions are contained in the Central Control Order of 2001, and (ii) State Government shall make order relating to any matter specified in clauses (a), (c) and (f) or in regard to distribution or disposal of foodstuffs to places outside the state or in regard to regulation of transport of any foodstuff under clause(d) after obtaining prior concurrence of the Central Government.
45. On perusal of the said notification GSR 800 dated June 9, 1978 it appears that the State Government shall have to obtain prior concurrence of the Central Government for making any order relating to any matter specified in the following clauses of sub-section (2) of Section 3 of the Essential Commodities Act: (1) for regulating by licences, permits or otherwise the production or manufacture of any essential commodity; or (2) for controlling the price at which essential commodity may be bought or sold; or (3) for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity - (i)to sell the whole or a specified part of the quantity held in stock or produced or received by him; or (ii) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him; or (4) for distribution or disposal of foodstuffs to places outside the state; or (5) for regulation of transport of any foodstuff under clause (d) of sub- section (2) of Section 3 of the Essential Commodities Act. So, prior concurrence of the Central Government is required for making any order by the State Government in connection with matters specified not only in clauses (a), (c), (f) of sub-section (2) of section 3 of the Essential Commodities Act, but also in connection with regulation of transport of foodstuff appearing in clause (d) of sub-section (2) of section 3 of the said Act and also in connection with distribution or disposal of foodstuffs to places outside the state. In view of clear omission of matters relating to storage, distribution, disposal, acquisition, use or consumption of any essential commodity including foodstuff from the Notification GSR 800 dated June 9, 1978, the State Government may issue order for regulating by licences, permits or otherwise, distribution, disposal, acquisition, use or consumption of any essential commodity appearing in clause (d) of sub-section(2) of Section 3 of the Essential Commodities Act, 1955 without prior concurrence of the Central Government, but those matters must not be in violation of the directions contained in the Central Control Order of 2001. In my view prior concurrence of the Central Government is required for making any order by the State Government only in connection with transport of any essential commodity including foodstuff and also in connection with matters relating to distribution or disposal of foodstuff to places outside the state and also in connection with matters enumerated in clauses (a),
(c) and (f) of sub-section (2) of Section 3 of the Essential Commodities Act, 1955.
46. In view of the delegated power under section 5 of the Essential Commodities Act read with notification dated June 9, 1978 issued by the Central Government, the State Government can make order subject to the directions contain in the Central Control Order of 2001 in connection with the matters specified in the following clauses of sub-section (2) of Section 3 of the Essential Commodities Act: (a) for regulating by licences, permits or otherwise the production or manufacture of any essential commodity, (b) for bringing under cultivation any waste or arable land, whether appurtenant to a building or not, for the growing thereon of food crops generally or of specified food crops, and for otherwise maintaining or increasing the cultivation of food crops generally, or of specified food crops, (c) for controlling the price at which essential commodity may be bought or sold, (d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of, any essential commodity, (e)for prohibiting the withholding from sale of any essential commodity ordinarily kept for sale, (f) for requiring any person holding in stock, or engage in the production, or in the business of buying or selling, of any essential commodity - (i) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or (ii) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him,
(h) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters, (i) for requiring persons engaged in the production, supply or distribution of, or trade and commerce in , any essential commodity to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto, as may be specified in the order, (ii) for the grant or issue of licences, permits or other documents, the charging of fees thereof, the deposit of such sum, if any, as may be specified in the order as security for the due performance of the conditions of any such licence, permit or other document, the forfeiture of the sum so deposited or any part thereof for contravention of any such condition , and the adjudication of such forfeiture by such authority as may be specified in the order, and (j) for any incidental and supplementary matters, including, in particular, the entry, search or examination of premises, aircraft, vessels, vehicles or other conveniences and animals and the seizure by a person authorised to make such entry search or examination -
(i) of any articles in respect of which such person has reason to believe that a contravention of the order has been, is being or is about to be, committed and any packages, coverings or receptacles in which such articles are found; (ii) of any aircraft, vessel, vehicle or other conveyance or animal used in carrying such articles, if such person has reason to believe that such aircraft, vessel, vehicle or other conveyance or animal is liable to be forfeited under the provisions of this Act; (iii) of any books of accounts and documents which in the opinion of such person, may be useful for, or relevant to, any proceeding under this Act and the person from whose custody such books of accounts or documents are seized shall be entitled to make copies thereof or to take extracts therefrom in the presence of an officer having the custody of such books of accounts or documents. So, the State Government can make order in connection with the above matters subject to the directions already made by the Central Government in the Central Control Order of 2001.
47. By following the decisions of "District Collector Chittoor V. Chittoor District Groundnut Traders Association" (supra), M/s Sohan Lal Loonkaran V. State of Rajasthan" (supra), "M/s Shibshankar Dokania Oil, Rice and Flour Mills V. State of Bihar" (supra) and "Akhil Bharatiyo Dhan Utpadak Kisan Bachao Samity V. State of Maharashtra" (supra) I would like to decide whether some provisions of the impugned State Control Orders are made by the State Government beyond delegated power for not obtaining prior concurrence of the Central Government. It is contended on behalf of the petitioners that paragraphs 16, 17 and 18 of the State Control Order of 2013 and paragraphs 23 and 24 of State Urban Control Order of 2013 fall within the ambit of section 3 (2) (f) of the Essential Commodities Act, but prior concurrence of the Central Government was not obtained for making the same and as such the said provisions are invalid. On perusal of the said provisions of the impugned State Control Orders, I find that the said provisions fall within the ambit of acquisition, distribution and disposal of the essential commodities covered under section 3 (2)(d) of the Essential Commodities Act for which prior concurrence of the Central Government is not required as the same are absent from the Notification GSR 800 dated June 9, 1978.
48. The further contention made on behalf of the petitioners is that the provisions of paragraph 19(7) of the State Control Order of 2013 and paragraph 26(7) of the State Urban Control Order of 2013 fall within the ambit of section 3(2)(f), but prior concurrence of the Central Government was not obtained for making the said order and as such the said provisions are invalid. I am unable to accept this contention made on behalf of the petitioners as in my view the said provisions fall within the ambit of section 3(2)(e) of the Essential Commodities Act for which prior concurrence of the Central Government is not required. It is also contended on behalf of the petitioners that the provisions of paragraph 29(2)(3) and (4) of the State Control Order of 2013 and the provisions of paragraph 26(6)(7) and paragraph 27(2)(3) of the State Urban Control Order of 2013 fall within the ambit of section 3(2)(f) of the Essential Commodities Act, and the prior concurrence of the Central Government was not obtained and as such those provisions are invalid. On perusal of the said provisions I find that the said provisions fall either under section 3(2)(d) or under section 3(2)(e) of the Essential Commodities Act and prior concurrence of the Central Government is not required as the said provisions covered under section 3(2)(d) of the Essential Commodities Act do not relate to transport for which prior concurrence would have been required. Similarly, I don't find any merit in the submission made on behalf of the petitioners that the provisions of paragraphs 34 and 36 of the State Control Order of 2013 and the provisions of paragraph 31 and 33 of the State Urban Control Order of 2013 are invalid for not obtaining prior concurrence of the Central Government on the ground that the same are covered under section 3(2)(f) of the Essential Commodities Act, as, in my view, those provisions are covered under section 3(2)(d) of the Essential Commodities Act and the same are not in connection with transport of essential commodities and thereby prior concurrence of the Central Government is not required.
49. However, I find justification in the submission made on behalf of the petitioners that the provisions of paragraph 37 of the State Control Order of 2013 and the provisions of paragraph 34 of the State Urban Control Order of 2013 fall within the ambit of section 3(2)(a) of the Essential Commodities Act for which prior concurrence of the Central Government should have been obtained by the State Government in compliance with the notification GSR 800 dated June 9, 1978 issued by the Central Government. In the absence of the prior concurrence of the Central Government those two provisions of the impugned State Control Orders must be invalid as those provisions have been made in excess of the power delegated to the State Government by the Central Government.
50. Now, I would like to address the issue whether the provisions of the State Control Order of 2013 and the State Urban Control Order of 2013 are made by the State Government in violation of the directions contained in the Central Control Order of 2001. In other words, I have to decide whether the provisions of the impugned State Control Orders are inconsistent with or contrary to the provisions of the Central Control Order, as the Central Government has delegated limited power to the State Government, subject to directions contained in the Central Control Order of 2001. The meaning of "inconsistent" appearing in page 834 of Black's Law Dictionary (9th Edn.-2009) is "lacking agreement among parts; not compatible with any other fact or claim". Again, "compatible" means (according to Oxford Advanced Learners Dictionary, 6th Edition. 2000 page 245) "able to exist or be used together without causing problems". By following the meaning of the word "inconsistency" as interpreted by the Supreme Court in "State of U.P. V. Daulat Ram Gupta", I would like to decide whether any provision of the impugned State Control Orders is found to be inconsistent with thve provisions already made in the Central Control Order of 2001, and if the inconsistency is established the said provisions of the impugned State Control Order must be held to be made beyond delegated power of the State Government. My above view is fortified by the decisions of "Petrol Dealers' Association V. State of Maharashtra" (supra), "Deep Chand V. State of Uttar Pradesh" (supra), "State of Orissa V. M. A. Tulloch"
(supra), "Tata Iron and Steel Company Ltd. V. State of Kerala" (supra) and "Sujan Singh Matu Ram V. State of Haryana" (supra).
51. The contention of the petitioners is that the provisions of paragraph 6 of the State Control Order of 2013 and the provisions of paragraph 7 of the State Urban Control Order of 2013 are contrary to and inconsistent with the provisions of paragraph 2(7) of the annexe to the Central Control Order of 2001 and as such those provisions are beyond delegated power of the State Government. While the Central Control Order provides that a ration card shall be valid for a period of 5 years from the date of its issue unless it is suspended or cancelled and a fresh ration card is to be issued or renewed after verification of antecedents, the provisions in the impugned State Control Orders lay down that the ration card once issued will remain valid till the holder of the card resides at the given address for which the card has been issued. In my view these provisions of the impugned State Control Orders are contrary to and inconsistent with the provisions of the Central Control Order of 2001 and as such these are beyond the purview of the delegated power of the State Government. However, the provisions for cancellation of ration cards incorporated in paragraph 9 of the impugned State Control Order of 2013 and State Urban Control Order of 2013 are not found to be inconsistent with or contrary to the provisions to paragraph 2(7) of the annexe to the Central Control Order of 2001 as contended on behalf of the petitioners.
52. The next contention made on behalf of the petitioners is that the provisions with regard to duties and responsibilities of dealers incorporated in paragraph 19 of the State Control Order of 2013 and the provisions with regard to duties and responsibilities of dealers and wholesellers incorporated in paragraphs 26 and 27 respectively of the State Urban Control Order of 2013 are contrary to the provisions incorporated in paragraph 5 of annexe to the Central Control Order of 2001 and as such the provisions of the impugned State Control Orders are liable to be struck down as having been made beyond delegated power of the State Government. On perusal of the provisions of paragraph 5 of annexe to the Central Control Order of 2001 I find that the Central Government has delegated the power to the State Government to lay down the duties and responsibilities of the fair price shop owners for the purpose of regulating sale and distribution of essential commodities. The duties and responsibilities of fair price shop owners enumerated in paragraph 5 of the annexe to the Central Control Order of 2001 are merely illustrative in nature and those cannot be construed as exhaustive as the object of such delegation of power to the State Government is for regulating sale and distribution of essential commodities. Accordingly, the duties and responsibilities of the dealers and wholesellers prescribed by the State Government under the respective provisions of the impugned State Control Orders are not inconsistent with the provisions of paragraph 5 of the annexe to the Central Control Order of 2001. Accordingly, I don't find any merit in the submission made in this regard on behalf of the petitioners.
53. The provisions for inspection, search and seizure for collection of information, accounts etc. incorporated in paragraph 30 of the State Control Order of 2013 and in paragraph 28 of the State Urban Control Order of 2013 are challenged as having been made contrary to the provisions incorporated in paragraph 5 of the annexe to the Central Control Order of 2001. I don't find that the provisions incorporated in paragraph 5 of the annexe to the Central Control Order of 2001 are contrary to or inconsistent with the provisions incorporated in paragraph 30 of the State Control Order of 2013 and paragraph 28 of the State Urban Control Order of 2013 as contended on behalf of the petitioners. I have already observed that the Central Government has delegated the power to the State Government for issuance of the order by laying down the duties and responsibilities of the fair price shop owners to regulate the sale and distribution of the essential commodities and the provisions with regard to duties and responsibilities incorporated in the said paragraph 5 are merely illustrative in nature and as such I don't find any merit in the submission that the provisions of the impugned State Control Orders are invalid or ultra vires the delegated power of the State. The provisions of paragraph 31 of the State Control Order of 2013 and the provisions of paragraph 29 of the State Urban Control Order of 2013 have been challenged on two grounds: first, those provisions are contrary to the provisions incorporated in paragraph 5 of the annexe to Central Control Order of 2001 and secondly, the provisions of imposition of penalty including fine by the licensing authority are against the principles of natural justice incorporated in the latin maxim "nemo judex in causa sua" (no one should be a judge in his own cause). The categorical submission made on behalf of the petitioners is that the licensing authority cannot adjudicate the issue of the violation of provisions of the impugned State Control Orders for the purpose of imposition of penalty including fine, as the adjudication in this regard must be done by a competent court of law. Since the power is delegated to the State Government for fixing the duties and responsibilities of the fair price shop owners in order to regulate sale and distribution of essential commodities under paragraph 5 of the annexe to the Central Control Order of 2001, I am of the view that the State Government has acted well within the delegated power to deal with the irregularities committed by a licensee by way of suspension and cancellation of licence particularly when the procedure is laid down in conformity with the principles of natural justice. However, the power to regulate, sale and distribution of essential commodities delegated to the State Government by the Central Government under paragraph 5 of the annexe to the Central Control Order of 2001 cannot include the power to adjudicate for imposition of fine. The licensing authority can very well suspended the licence, terminate the licence and recover financial loss suffered by the licensor or the State Government from the licensee for violation of conditions of licence, but penalty by way of fine can be imposed only after adjudication by competent court of law or by a quasi-judicial authority which will act in accordance with the principles of natural justice. My view gets support from the propositioin laid down in "State of Karnataka V. Shree Rameshwara Rice Mills" (supra) and "S. K. Roy Chowdhury V. The Collector of Calcutta" (supra). Thus, in my view the provisions for imposition of fine in paragraph 31(c) of the State Control Order of 2013 and in third paragraph of para 29 of the State Urban Control Order of 2013 must be declared as invalid and ultra vires the Essential Commodities Act, 1955.
54. The provisions incorporated in paragraph 34 of the State Control Order of 2013 and in paragraph 31 of the State Urban Control Order of 2013 indicate that the State Government shall have the power to declare any essential commodity as public distribution commodity and issue separate orders for regulating storage, sale and distribution in respect of such public distribution commodities not covered by the provisions of the said impugned State Control Orders of 2013. Since the essential commodity can be declared only by the Central Government as laid down in paragraph 2(i) of the Cental Control Order of 2001 and since this field is totally occupied by the Central Government and this power is not delegated to the State Government, I am of the view that the State Government cannot declare the essential commodity as public distribution commodity for the purpose of regulating storage, sale and distribution even when the same are not covered by the provisions of the impugned State Control Orders. In my view the provisions incorporated in paragraph 34 of the State Control Order of 2013 and in paragraph 31 of the State Urban Control Order of 2013 are ultra vires the Essential Commodities Act, 1955. The provisions incorporated in paragraph 36 of the State Control Order of 2013 and in paragraph 33 of the State Urban Control Order of 2013 are corollary to the previous respective paragraphs of the impugned State Control Orders and as such those provisions must be struck down as having been made beyond delegated power of the State Government. With regard to definition of "Annapurna beneficiaries" in paragraph 2(e) of the State Control Order of 2013 and in paragraph 2(c) of the State Urban Control Order of 2013, I accept the contention made on behalf of the petitioners that those provisions are also contrary to and inconsistent with the provisions of paragraph 4 read with paragraph 2 of the annexe to the Central Control Order of 2001 and as such the said provisions are also liable to be struck down as being made beyond the delegated power of the State Government.
55. By following the decisions of "State of Kerala V. UNNI" (supra), "Khoday Distilleries V. State of Karnataka" (Supra) and "Bharatidasan University V. All India Council for Technical Education" (supra), I would like to address the last issue whether some provisions of the impugned State Control Orders are not only inconsistent with or contrary to the provisions of the respective Central Control Order of 2001, but also totally unworkable and manifestly arbitrary and thereby violative of Article 14 of the Constitution of India. The submission is made on behalf of the petitioners that omission of the provisions of Section 100 of the Code of Criminal Procedure from the impugned State Control Orders for the purpose of carrying out inspection, search and seizure in the premises of fair price shop owners is contrary to the provisions of inspection, search and seizure incorporated in the Central Control Order of 2001. The presence of independent and respectable persons of the locality at the time of conducting search and seizure by an investigating officer under the Code of Criminal Procedure has not been considered as mandatory provision of law. The prejudice caused to an individual for making inspection and conducting search and seizure in the fair price shop in violation of the provisions of Section 100 of the Code of Criminal Procedure can be judged by the concerned authority on the basis of the circumstances of a particular case. However, the omission of the provisions of Section 100 of the Code of Criminal Procedure for the purpose of making inspection or carrying out search and seizure by an authorised officer from the impugned State Control Orders of 2013 cannot be the ground for striking down the impugned State Control Orders as arbitrary and violative of Article 14 of the Constitution. The provision for compassionate appointment of the legal heirs of the fair price shop owners within a period of 60 days from the date of death of the original owners under the provisions of the State Control Order of 2013 and within a period of 30 days from the date of death of the original owners under the provisions of the State Urban Control Order of 2013 cannot be held to be arbitrary only because it will be extremely difficult for the legal heirs to collect necessary papers for submission of the application within specified period of time. The period of time fixed for consideration of compassionate appointment may cause inconvenience to the legal heirs, but the same cannot be branded as unworkable and thereby manifestly arbitrary as contended on behalf of the petitioners. The provisions for giving preference to the self help group, co-operative society, semi- government bodies and other public agencies for appointment as fair price shop owner cannot be a ground to brand the said provisions as arbitrary only because the said provisions were absent from the Central Control Order of 2001. The increase in the volume of security deposit for the dealers and wholesellers and increase of the amount of licence fees and the application fees cannot be construed as unjustified merely because the same provisions were either absent from the Central Control Order of 2001 or the amount was lesser in the said Central Control Order of 2001. I am unable to accept the contention made on behalf of the petitioners that the provisions incorporated in the impugned State Control Orders are unworkable or impossible to implement and thereby the said provisions cannot be branded as unreasonable or manifestly arbitrary and thereby violative of Articles 14 and 19(1) (g) of the Constitution of India.
56. In view of my above observations, I have no hesitation to hold that the provisions of the impugned State Control Order of 2013 and the provisions of the State Urban Control Order of 2013 are legal and valid, except the provisions incorporated in paragraph 2(e), 6, 34, 36, 37 and imposition of fine in paragraph 31(c) of the State Control Orders of 2013 and the provisions incorporated in paragraphs 2(c), 7, 31, 33, 34 and imposition of fine in paragraph 29 of the State Urban Control Order of 2013 which are struck down as ultra vires the Central Control Order of 2001 and beyond the power delegated to the State Government by the Central Government under Section 5 of the Essential Commodities Act, 1955 read with notification GSR 800 dated June 9, 1978 issued by the Department of Food, Ministry of Agriculture, Government of India. Accordingly, the provisions incorporated in the above paragraphs of the impugned State Control Orders are struck down as invalid and inoperative. The State respondents are directed not to give any effect to the said provisions contained in the impugned State Control Orders of 2013. All the three writ petitions and connected applications are, thus, disposed of. The urgent xerox certified copy of the judgment and order, if applied for, be given to the parties on priority basis after compliance with all necessary formalities.
(R. K. Bag, J.)