Himachal Pradesh High Court
Puri Oil Mills Ltd. And Another vs State Of Hp And Others on 1 December, 2017
Bench: Sanjay Karol, Ajay Mohan Goel
IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA
CWP No. 71 of 2011.
Decided on 1.12.2017.
.
Puri Oil Mills Ltd. And another ....Petitioners.
Versus
State of HP and others. ... Respondents.
................................................................................................
Coram
The Hon'ble Mr. Justice Sanjay Karol, Acting Chief Justice.
The Hon'ble Mr. Justice Ajay Mohan Goel, Judge.
Whether approved for reporting?1 Yes.
For the petitioners : Ms. Vandana Kuthiala, Advocate.
For respondents : M/s. Anup Rattan, Romesh Verma Addl.
Advocate Generals, for respondent-State.
Mr. Ramesh Sharma, Advocate, for respondent
No.3.
Mr. Desh Raj Thakur, Central Government
Counsel for respondent No.4.
Ajay Mohan Goel, J.(Oral).
Moot issue subject matter of the present writ petition is as to whether subsidized scheme on mustard oil notified by respondents No.1 and 2 vide letter dated 2.4.2007, Annexure P-2, letter dated 2nd/4th April, 2007, Annexure P-3 and letter dated 6.8.2007, Annexure P-4 is violative of the statutory provisions of the Essential 1 Whether reporters of the local papers may be allowed to see the judgment?
::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 2Commodities Act, 1955 as well as Part-III and XIII of the Constitution of India as also the Industrial Policy of the State of Himachal Pradesh.
Petitioner No.1 is stated to be an ISO 9001 certified Company engaged .
in the business of manufacture and sale of mustard oil under the trademark/brand name 'P Mark'. It owns and operates three manufacturing units, i.e., one each in Damtal (Himachal Pradesh) Moga (Punjab) and Bahadurgarh (Haryana). Respondents No.1 and 2 primarily deal with demand and supply of various essential commodities in the open market as well as through public distribution system and the basic responsibility of respondent-department is to enforce various control orders issued under the Essential Commodities Act, 1955 for price stabilization and matter relating to weights and measures. Respondent No.3 which is a fully government owned Corporation stands assigned the task of acting as a central procurement agency for all controlled and non controlled essential commodities as identified by the Central/State Government under public distribution system at the wholesale level and further to distribute these commodities through District Cooperative Federations or the Tehsil Cooperative Unions, Fair Price Shops.
2. Vide letter dated 2.4.2007 respondent No.1 forwarded to respondent No.2 certain budgetary announcement made by Hon'ble ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 3 the Chief Minister for the year 2007-08 for providing subsidized food grains dals and edible oils etc. to all 14 lac ration card holders of the State. In response respondent No.2 wrote a letter to the concerned .
officials for implementation of the said announcement vide letter dated 2nd/4th April, 2007, Annexure P-3. As per said announcement, edible oil including mustard oil were to be made available to all 14 lac ration card holders @ `50/- per liter per month. Respondent No.2 vide letter dated 6.8.2007 (Annexure P4) informed all Deputy Commissioners in Himachal Pradesh, Resident Commissioner, Pangi at Killar/Addl. Dy.
Commissioner, Kaza, Sub Divisional Officer (Civil), Killar, Bharmour and Dodra Kawar, Deputy Director, FCS & CA, Dharamshala and all District Controllers, FCS & CA, Himachal Pradesh that w.e.f. 1.8.2007 scale of edible oil stands increased from one liter to two liters per ration card for all categories and the rate of mustard oil was approved @ `45/- per liter. This was followed by respondent No.3 floating tenders for procurement of 15 lac liters of mustard oil per month to be distributed through public distribution system to all the economic segments of society in the State of Himachal Pradesh. Petitioners represented against this, vide letter dated 6.9.2007 explaining therein as to how State subsidized schemes would adversely affect petitioners' business. As no response was received, accordingly petitioners again ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 4 made a representation dated 7.11.2008. Case of the petitioners is that the State under the State subsidized scheme was to distribute mustard oil at a subsidized rate of `50/-/45/- per liter per month to all 14 lac .
ration card holders w.e.f. 1.4.2007 and the same stood implemented by respondent No.2 vide notification dated 2.4.2007. As per petitioners on account the Subsidized Scheme of respondent-State, whereby it was making available 15 lac liters of mustered oil per month @ `50/- per liter the same was adversely affecting their business, as the entire demand of edible oil stood met through the public distribution system (hereinafter referred to as 'PDS'). Thus by way of writ petition, petitioners assailed the State subsidized scheme of the government of Himachal Pradesh which had subsidized mustard oil @ `50/- (45/-) per month to 14 lac ration card holders w.e.f. 1.4.2007. As per petitioners, the State subsidized scheme not only directly interfered with the freedom of trade and business of the petitioners in the State of Himachal Pradesh which was also violative of Article 19 of the Constitution of India and had also rendered Article 301 of the Constitution of India to be illusory. The same was also violative of Industrial Policy of the State whereby incentives were provided to the industry by the State. Further as per petitioners, the impugned act of the respondent-State was also illegal as it was the Central Government ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 5 which was having power under Section 3 of the Essential Commodities Act to control production, supply to distribution etc. of all essential commodities and the Central Government though could .
delegate its power to the State Government, however, in the present case no such delegation had been done by the Central Government in favour of the State under the Essential Commodities Act with regard to mustard oil for the purpose of subsidized rate.
3. Respondents No.1 and 2 in their response filed by respondent No.2 stated in the preliminary submissions that in view of price rise in the open market in respect of pulses, edible oil and salt etc., the State Government decided to provide six items, i.e., three kinds of pulses, two types of edible oil i.e., mustard and refined oil and iodized salt at subsidized rates to the ration card holders in the State for which budget of hundred crore was announced as subsidy. Initially mustard oil was provided w.e.f. 1.4.2007 at the rate of `50/- per liter, however the price was further reduced to `45/- per liter w.e.f. 1.8.2007 along refined oil @ `40/- per liter. As per said respondents, the scheme was introduced in public interest on essential rates to the consumers for which State Government was bearing the burden of price in the shape of subsidy. It was denied by respondents that procurement and distribution of mustard oil through fair price shops ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 6 had adversely affected the business of the petitioners. It was also mentioned in the preliminary submissions that if this was the case then petitioners should have participated in the tender process, as the .
procurement of mustard oil was by floating open tenders per month. It was further mentioned in the reply that Central Government under Section 3 of the Essential Commodities Act, 1955 had issued Public Distribution System (Control) Order 2001 (in short "PDS (Control) Order 2001") for the purpose of maintaining and distribution of specified articles as per which State Government was empowered under Section 5 of the Essential Commodities Act, 1955. It was also mentioned in the reply that it was incorrect on the part of petitioners to state that their representations were not responded to.
4. Averments specifically made with regard to delegation of power to the State Government in para 5 (1) of the reply are being quoted herein below for ready reference:-
"That the contents of this sub-para are partly admitted being facts on record. As regards to Section 5 of Essential Commodities Act, the State Govt. is authorized to exercise aforementioned powers only after the Central Govt. delegates these powers by issuance of a notification and without such notification being made in the r4ecord, the State Govt. does not have any authority, power or jurisdiction to perform the function enumerated in Section 3, it is submitted that the Central Govt. under Section 3 of the Essential Commodities Act, 1955 has issued the Public Distribution System (Control) Order, 2001 for the purpose of maintaining and distribution of Specified Articles in which State Govt. is empowered under Section 5 of the Essential Commodities Act, 1955. It is also submitted that in exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 read with the Govt. of India in ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 7 the late Ministry of Agriculture and Irrigation (Department of Food) Order G.S.R.-800, dated 9th June, 1978 and Ministry of Industries and Civil Supplies (Department of Civil Supplies and Co operation) Order S.O. 681(E) and 682(E) dated 30th November, 1974 and in pursuance of directions given in Clause 5 of Annexure .
to the Public Distribution System (Control) Order, 2001 issued by the Govt. of India, Ministry of Consumer Affairs, New Delhi vide G.S.R. 630(E), dated 31st August, 2001, the State Govt. Has made the Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2003 for maintenance of supplies and for securing equitable distribution and availability of some of the essential commodities at fair prices. This order has been published in the State Govt. Extraordinary Rajpatra on dated 3.2.2004. Copy of G.S.R. No. 800 dated 9.6.1978 is already enclosed with the Civil Writ Petition as Annexure P-12. Copies of S.O. 681(E) and 682(E) dated 30.11.1974 are enclosed as Annexure R-1 and Annexure R-2 with its true typed copies as Annexure R-1/A and Annexure R-2/A respectively. Copy relevant portion of the Public Distribution System (Control) Order, 2001 issued by the Government of India is also enclosed as Annexure R-3 for kind perusal of this Hon'ble Court. Hence plea taken by the petitioners are wrong."
5. Respondent No.3 vide a separate reply also denied the allegations made in the writ petition. It was mentioned in the reply that sole aim of the petitioners was their profitability and they were least concerned about the benefits of general public at large which stood taken care of by the respondents. It was further mentioned in the reply that petitioners intended to create a monopoly by stating that supply of mustard oil at subsidized rate was illegal.
6. On record there is an affidavit dated 3.1.2017 filed by Under Secretary (Food, Civil Supplies & Consumer Affairs) to the Government of Himachal Pradesh, relevant portion of which is quoted here-in-below:-
::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 8"4. That the Central Government made "the Public Distribution System (Control) Order, 2001 under the powers conferred by Section 3 of the Essential Commodities Act, 1955 and Annex 5 Licensing of this order provides that State Governments shall issue an order under Section 3 of the Act for regulating the sale and .
distribution of the essential commodities.
5.That prior to promulgation of the Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2002, the matter was taken up with the Government of India vide letter No. FDS-
F(10)3/92-11 dated 8.05.2002 stating therein that the Department of Food, Civil Supplies & Consumer Affairs, H.P. intends to promulgate the H.P. Specified Articles (Regulation of Distribution) Order, 2002 under Section 3 of the Essential Commodities Act, 1955 and as per directions given in clause 5 of Annex to the Public Distribution System (Control) Order, 2001 issued by the Government of India in order to regulate the smooth functioning of the 'Public Distribution System. A copy of the draft H.P. Specified Articles (Regulation of Distribution) Order, 2002 was also supplied to the Government of India. A copy of the letter dated 8.05.2002 is annexed as Annexure S-1.
6. That the Under Secretary, Government of India, Ministry of Consumer Affairs, Food and Public Distribution, (Department of Food & Public Distribution) Krishi Bhawan, New Delhi vide letter No. F.No. 9(10)2001-PD-11 dated 29.11.2002 has conveyed as under:-
"......that the concurrence of this department for notification of the proposed Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2002, is not required. However, in para 2 of the Order immediately preceding Part. I Preliminary, it may be mentioned that the Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2002 is being issued in pursuance of directions given in clause 5 of Annexe to the PDS (Control) Order, 2001".
A copy of Government of India letter dated 29.11.2002 is annexed as Annexure S-2.
7. That the Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2003 has been notified and implemented by the State Government only after having the consent/clarifications as above received from the Government of India."
::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 97. There is also on record a supplementary affidavit of the said officer dated 27.4.2017, contents whereof are quoted hereinbelow:-
.
"1.That the above mentioned CWP is pending adjudication before this Hon'ble Court.
2. That this Hon'ble Court while hearing the matter on 24.04.2017 has issued directions to the replying respondents/Deponent to place on record the copies of Public Distribution System (Control) Order, 2001, H.P. Specified Articles (Regulation of Distribution) Order, 2003, the copy of the letter/proposal sent to Govt. of India before issuance of H.P. Specified Article (Regulation of Distribution) Order, 2003, the letter of concurrence/clarification received from the Government of India, order/notification declaring Food Stuff as Essential Commodity and the order/notification declaring the Specified Articles by the State Government in the aforesaid Order by filing supplementary affidavit on or before 01.05.2017.
3. That the Central Government made "the Public Distribution System (Control) Order, 2001 under the powers conferred by Section 3 of the Essential Commodities Act, 1955 and Annex 5 Licensing of this order provides that State Governments shall issue an order under Section 3 of the Act for regulating the sale and distribution of the essential commodities. Copy of Public Distribution System (Control) Order, 2001 is annexed as Annexure S-1 for kind perusal of this Hon'ble Court.
4.That prior to promulgation of the Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2002, the matter was taken up with the Government of India vide letter No. FDS-
F(10)3/92-11 dated 8.05.2002 stating therein that the Department of Food, Civil Supplies & Consumer Affairs, H.P. intends to promulgate the H.P. Specified Articles (Regulation of Distribution) Order, 2002 under Section 3 of the Essential Commodities Act, 1955 and as per directions given in clause 5 of Annex to the Public Distribution System (Control) Order, 2001 issued by the Government of India in order to regulate the smooth functioning of the 'Public Distribution System. A copy of the draft H.P. Specified Articles (Regulation of Distribution) Order, 2002 was also supplied to the Government of India. A copy of the letter dated 8.05.2002 is annexed as Annexure S-2 for kind perusal of this Hon'ble Court..
5. That the Under Secretary, Government of India, Ministry of Consumer Affairs, Food and Public Distribution, (Department of Food & Public Distribution) Krishi Bhawan, New Delhi vide letter ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 10 No. F.No. 9(10)2001-PD-11 dated 29.11.2002 has conveyed as under:-
"......that the concurrence of this department for notification of the proposed Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2002, is not .
required. However, in para 2 of the Order immediately preceding Part. I Preliminary, it may be mentioned that the Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2002 is being issued in pursuance of directions given in clause 5 of Annexe to the PDS (Control) Order, 2001".
A copy of Government of India letter dated 29.11.2002 is annexed as Annexure S-3.
6.That after the receipt of the concurrence/clarification from the Government of India vide letter dated 29.11.2002 the Himachal Pradesh Specified Articles (Regulation of Distribution) Order, 2003 has been notified and implemented by the State Government. Copy of the H.P. Specified Articles (Regulation of Distribution) Order, 2003 is annexed as Annexure S-4 for kind perusal of this Hon'ble Court.
7. That the Deponent Department declare the Specified Articles in exercise of the power conferred under clause 2(v) of H.P. Specified Articles (Regulation of Distribution) Order, 2003 vide Notification No. LA(F&S) 10/80-II-8640-8790 dated 23.03.2007 in which the Edible/Mustard Oil was notified as a Specified Article at Serial No.5 Copy of Notification dated 23.03.2007 is annexed as Annexure S-5 for kind perusal of this Hon'ble Court.
8. That as regards the Order/Notification regarding declaring food stuff as essential commodity is concerned, the food stuff, including oilseeds and oils are included in the schedule of Essential Commodities Act at serial No.3 read with Section 2A. Copy of the relevant portion of the Section 2A and the schedule of the Act ibid is annexed as Annexure S-6 for kind perusal of this Hon'ble Court."
8. Before we address the issue as to whether the impugned act of the State is in violation of the Essential Commodities Act or not, we shall first answer as to whether the impugned act of respondent-
State is violative of Article 19 and 301 of the Constitution of India or not.
::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 119. In the present case, respondent-State came up with a scheme whereby through public distribution system for the year in issue it undertook to provide mustard oil to its ration card holders at a .
subsidized rate of `50/- (45/-) per liters per month. It is clear from the reply so filed by respondents No 1 and 2 to the writ petition that mustard oil was being provided by government to the ration card holders in the State of Himachal Pradesh by way of subsidy meaning thereby that the burden of the subsidized rate of sale as compared to the sale of price of procurement of the mustard oil was being borne by the State. We fail to understand as to how this act of the respondent-
State infringes Article 19 of the Constitution of India. It is not the case of the petitioners that they were debarred from selling their product in the State of Himachal Pradesh or the respondent-State had issued a direction that no one shall purchase mustard oil in the State of Himachal Pradesh which was being manufactured by the petitioners.
Incidentally, it has come in the reply of respondent-State that the mustard oil was being procured by the State by way of open tenders every month and the petitioners have not even chosen to participate in the process of procurement of mustard oil.
10. India is a socialist country. In its endeavour to meet its constitutional obligations, respondent-State undertook to provide six ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 12 items on subsidized rates. This also included mustard oil. Now if respondent-State undertook the exercise of supplying one or two liters of mustard oil per month at a subsidized rate to all ration card holders .
of the State, in our considered view, this act of the State in no manner infringes Article 19 of the Constitution of India. In our considered view, freedom granted under Article 19 of the Constitution of India is not so fragile so as to be shattered by an act of grant of subsidy by a State to its ration card holders in the matter of Essential Commodities.
Article 19 of the Constitution of India confers a right to practice any profession, or to carry on any occupation, trade or business and the petitioners have not been able to make out that the act of the respondent-State violates Article 19 of the Constitution of India in any manner. Similarly Article 301 of the Constitution of India confers a constitutional right that subject to other provisions of part XIII of the Constitution of India trade, commerce and intercourse within the territory of India shall be free. Now this constitutional right conferred upon the petitioners has also not been demonstrated to have been infringed by the State. The State has in no manner abridged the right of trade, commerce conferred upon the petitioners by its act of providing subsidy on a few essential items including the mustard oil. Therefore, in our considered view there is no merit in the contention of the ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 13 petitioner that the impugned act of the respondent-State violates Part III and XIII of the Constitution of India.
11. Now we will address the issue as to whether the act of .
respondent-State is in violation of the statutory provisions of Essential Commodities Act or not. On record there is an order dated 28.11.2003 issued by Food, Civil Supplies and Consumer Affairs Department, Government of Himachal Pradesh published in Extraordinary Rajpatra of Himachal Pradesh dated 3.2.2004 which has been issued in the name of the Governor of Himachal Pradesh in exercise of powers conferred under Section 3 of the Essential Commodities Act, 1955 read with the Government of India Order dated 9.6.1978 and Ministry of Industries and Civil Supplies (Department of Civil Supplies and Co-
operation) Order dated 30.11.2014 and in pursuance of directions given in clause 5 of Annexure to the Public Distribution System (Control) Order, 2001 issued by the Government of India, Ministry of consumer Affairs, New Delhi dated 31.8.2001. This order has been issued by the State for the maintenance of supply and for equitable distribution and availability of some of the essential commodities at fair price shops. Distribution and supply of specific articles finds mention in para 2 of this order. Thus the same demonstrates that in the State of Himachal Pradesh there is in force Public Distribution System ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 14 (Control) Order 2001 which stands issued under the provisions of essential commodities act.
12. Section 5 of the Essential Commodities Act provides as .
under:-
"Delegation of powers.- the Central Government may, by notified order, direct that [the power to make orders or issue notifications under section3] 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."
13. Allegations of the petitioners are that no delegation of power as is envisaged under Section 3 of the Essential Commodities Act has been made by the Central Government in favour of the State Government. To substantiate this, petitioners relies upon communication dated 26.4.2010 provided under Right to Information Act by Deputy Secretary to the Government of India & CPIO, which reads as under:-
"No. 19/3/2010-ECR&E Government of India Ministry of Consumer Affairs, Food & Public Distribution Department of Consumer Affairs Krishi Bhavan, New Delhi Dated 26 April 2010.
To M/s. Puri Oil Mills Ltd., 302, Jyoti Sikhar Building, 8, District Centre, Janakpuri, New Delhi-110058 ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 15 Subject: Furnishing information under the provision of Right to Information Act, 2005.
Sir, I am directed to refer to your letter number Nil dated .
26.03.2010 on the subject cited above and to inform the reply of Point No.1 to 3 as under:-
Vide Central Order No. G.S.R.800 dated 9th June, 1978 (copy enclosed), the Central Government delegated powers under the Essential Commodities Act, 1955 to the State Governments.
However, as per the information provided by Directorate of Vanaspati, Vegetable Oils and Fats, Department of Food & Public Distribution in respect of point No.2 and 3, the Government of Himachal Pradesh has not been delegated powers for procuring mustard oil from the open market.
As regards point No4, Department of Food and Public Distribution has been requested to provide the information direct to you.
Yours faithfully, Sd/-
r (G.N.Singh)
Deputy Secretary to the
Govt. of India & CPIO
Tel No.2338 8317"
14. Communication dated 26.3.2010 in response to which this information was provided to the petitioner is not on record.
15. Be that as it may, the contention of the petitioners that no delegation of powers by the Central Government under the Essential Commodities Act stood made in favour of the respondent-State stands belied from above communication itself, wherein it is categorically mentioned that Central G.S.R.800 dated 9.6.1978 Central Government has delegated powers under the Essential Commodities Act to the State Government. Distribution and supply of specified articles has been issued by the respondent-State in exercise of powers, inter alia, ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 16 conferred upon the State vide order GSR 800 9.6.1978. Therefore, the contention of the petitioners that the supply of mustard oil by the State on subsidized rates through public distribution system was in violation .
of the provisions 3 and 5 of the Essential Commodities Act is without any basis. Incidentally respondent No.4, i.e., Union of India though has not filed any reply to the writ petition, but during the course of arguments learned Assistant Solicitor General of India has not supported the version of the petitioners nor it has been submitted on behalf of Union of India that the State Government had acted in the matter of providing mustard oil on subsidized rates without any delegation of power in this regard upon the State by the Central Government under the Essential Commodities Act. Therefore, we find no merit in the said contention of the petitioners.
16. We find that the petitioners have challenged the act of the respondent-State of providing mustard oil at a subsidized rates also on a ground that the State subsidy is being granted to the undeserving and affluent sections of society irrespective of the fact whether they require the same or not. Now in our considered view this is not a public interest litigation which stood filed by the petitioners as a pro bono publico against the pros and cons of providing essential commodities by the State at a subsidized rate. Besides this, even otherwise the ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP 17 petitioners who are the manufacturer of edible mustard oil have no locus to otherwise also to question the State government over a policy decision as to who are entitled for subsidized commodities which the .
State intends to provide to its ration card holders.
17. The allegation of impugned act of the State being in violation of its Industrial Policy could also not be substantiated during the course of arguments. Learned counsel for the petitioners could not draw our attention to any Industrial Policy so framed by the State whereby any assurance was given by the State to mustard oil manufacturers in the State that the State shall not provide mustard oil on subsidy under the Essential Commodities Act.
Therefore, in view of above discussion, in our considered view there is no merit in the present writ petition. Writ petition is accordingly dismissed. No order as to costs.
(Sanjay Karol) Acting Chief Justice (Ajay Mohan Goel) Judge 1st December, 2017 (Guleria) ::: Downloaded on - 05/12/2017 23:05:00 :::HCHP