Andhra HC (Pre-Telangana)
Andhra Pradesh Oil Millers Association ... vs Commissioner Of Civil Supplies & ... on 10 September, 1998
Equivalent citations: 1998(5)ALD704, 1998(5)ALT433
ORDER
1. The question that arises for consideration is whether the dealers in edible oil seeds or edible oils are still required to obtain licence under the A.P. Scheduled Commodities Dealers' (Licensing and Distribution) Order, 1982 in view of amendment deleting the edible oil seeds and edible oils from the purview of Pulses, Edible Oil seeds and Edible Oils (Storage Control) Order, 1977.
2. In both the Writ Petitions common questions of law arise for consideration. Therefore, they are disposed of by a common judgment
3. The petitioner is an Oil Millers Association and the members of the association are the manufacturers and dealers of edible oils. The edible oil seeds as well as edible oil are declared as essential commodities under Section 2(a)(v) of the Essential Commodities Act (for short 'the Act') if the Central Government is of the opinion that it is necessary or expedient so to do for maintaining or increasing supply of any essential commodity or for securing their equitable distribution and available at fair price or for securing any essential commodities for the defence of India or for the efficient conduct of the Military operations, it may issue any order prohibiting or regulating the production, supply and distribution thereof in trade and commerce therein. Under Section 3 of the Act the Central Government is empowered to make the order. Under sub-section (2) of Section 3, the Central Government may also make an order of regulating licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any of the essential commodities. Under Section 5 of the Act, the Central Government by a notification delegate any power exercisable by it to the State Government of such conditions as it may impose. Thus, it is stated that it is only when the Central Government forms an opinion under Section 3, it may issue an order in terms of the opinion. Under Section 5 also, the State Government can issue the order in consonance with the order of the Central Government.
4. In exercise of the power under Section 3, the Central Government issued Pulses, Edible Oil Seeds, and Edible Oils (Storage Control) Order, 1977 published in the Gazette of India dated 21-11-1977. As per clause 3 of the said Control Order, no person shall carry on any business as a dealer, or as a purchaser in pulses or in edible oil seeds or edible oil except in accordance with the terms and conditions of the licence granted under the State Order of the stock or pulses of the edible oil seeds or edible oil exceeds the quantities specified therein. The maximum quantity of edible oil is also restricted in clause 4. The Central Government issued notification GSR No.800 dated 9-6-1978 delegating the power under Section 5 of the Act to the State Government to make control orders relating to the food stuff subject to the conditions laid down therein. Accordingly, the State Government made control order known as A.P. Scheduled Commodities Dealers' Licensing and Distribution Order, 1982 after obtaining the concurrence of the Central Government. Clause 3 of the A.P. Control Order obligates a person to obtain a licence and observer certain other conditions. Therefore, it is incumbent on the part of the dealer to obtain a licence in view of the orders issued by the Central Government. It is the case of the petitioner that they have obtained licence under the relevant control orders in edible oil seeds and edible oils and have been following the conditions of licence from time to time. But, however, the Central Government has issued the Pulses Edible Oil Seeds and Edible Oils (Storage Control) Amendment Order, 1997 in exercise of the powers conferred in Section 3 of the Act, in order to amend the Central Control Order, 1977. By the said amendment, the words 'edible oil seeds and edible oils' wherever occurring in Control Order, 1977 were deleted. The effect of the said amendment is that under the Central Control Orders, no licence is necessary and that the said Order, 1977 is only now confined to Pulses. Thus, it is stated that under Clause 3 of the Central Control Order, requires a person dealing in edible oil seeds and edible oils to obtain a licence in accordance with the terms and conditions of the Control Orders made by the State Government and therefore the State Control Order as far as relates to edible oil seeds and edible oils, also stands amended not only with regard to the maximum storage capacity, but also with regard to the obtaining of the licence and following other conditions of licence. Since the State Government has not taken any action, the petitioner association addressed a letter to the Commissioner of Civil Supplies requesting him to issue suitable instructions to the authorities not to insist on licence for dealing with the edible oils and edible oil seeds. As there was no response, a representation was made to the Central Government to clarify the issue. The Central Government by a letter dated 20-2-1998 stated that the State Government has already been advised to bring about the amendment with regard to the edible oil seeds and edible oils. But, however, the 1st respondent issued proceedings dated 8-1-1998 stating that though theCentral Government amended the Storage Control Order 1977 it applied only to the quantity that can be stored in respect of the edible oil seeds and edible oils and the requirement to obtain a licence under said Control Order still continues. The said order is assailed in these writ petitions.
5. It is contended that after the amendment brought about by the Central Government, the power of the State Government to insist on licence, is wholly illegal and arbitrary. Since the power of the State Government to issue control order is by virtue of delegation under Section 5 and, therefore, whenever, the Central Control Order is amended, the same shall be deemed to be applicable to the said Control Order also. It is also contended that the Central Government has already issued directions to amend the State Control Orders and hence the said direction is binding on the State Government. Thus, it is submitted that the insistence of licence for dealing with the edible oil seeds and edible oils is violative of the Article 19(1)(g) of the Constitution of India.
6. In the counter filed on behalf of the State Government, it is stated that A.P. Scheduled Commodities (Licensing and Distribution) Order, 1982 requires a licence to deal in edible oil seeds and edible oils rescinding certain control orders including A.P. Edible Oil Seeds and Edible Oils Regulation of Trade and Licensing Order, 1978. It is a composite order and the same was issued after obtaining the concurrence from the Government of India. It not only covered the edible oil seeds and edible oils, but also pulses and sugar. The Central Control Order, 1977 only prescribed the quantity of stocks to be maintained by the dealer to have a uniform system through out the country and it did not prescribe the licence. It is also stated that prior to Central Order of 1977, the dealers who were doing business in ground nut were also required to take licence from the State Government under the A.P. Groundnut and Groundnut Products Regulation of Trade and Licensing Order, 1977. Therefore, the Licensing of dealers was in vogue even prior to Central Storage Order. In 1978, the A.R Edible Oil Seeds and Edible Oil Regulation of 1978 was issued wherein the stock limits were introduced in conformity with the provisions of the Central Control Order. It is stated that the introduction of licences was not sequal to the issue of 1977 Central Storage Control Order, as by that time the Groundnut Oil Seeds and Groundnut Oil Storage Control Order was in vogue, which requires a dealer to obtain licence. It is stated that the deletion of Storage limits did not dispense with the issue of licences. The said Order was issued under Section 3 with the prior concurrence of the Government of India duly taking into account, the stock limits under the Central Storage Control Order, i 977. Therefore, it is contended that in the event of any conflict between the State Order and Central Order, the latter will prevail, but in this case, the licence is required only under the State Order. State Order still subsists notwithstanding repeal of the Central Order. Thus, the amendment brought about in 1997 by the Central Government, did not expressly or by implications dispense with the licensing system in the State Order. What is dispensed with under 1997 Order is only maximum stock limits. Deletion of such limits does not dispense with the system of licensing of the details. This was clarified to the petitioner association on 8-1-1998 and subsequently G.O.Ms. No.6 Food and Agriculture Department. The Government has been issued order dated 4-2-1998 deleting the storage limits under the State Order of 1982 in view of Central amendment. It is stated that under 1982 State Order, if the stock in possession of the dealer exceeds the quantities specified under clause 3 he is required to obtain licences. With the Central amendment of 1997, there is no Central Order dealing with the edible oil seeds and edible oils. But, however, the requirement of licence under the State order is not dispensed with. It is further stated that ths licence is necessary to have the regulation of availability of supply etc. so that edible oil is available to the consumer at an affordable price through the means of monitoring receipt and supply and ensuring that there is no hoarding of stock. Thus, it was submitted that the insistence on the part of the State Government for a licence is quite legal and valid.
7. The Central Government also filed a counter. It is stated that the Ministry examines the details of the availability of the edible oil seeds and edible oils in the domestic market and after consultation with the respective State Governments omitted the words 'edible oil seeds and edible oils' wherever occurred in the Central Storage Control Order, 1977. The State Governments including the Government of Andhra Pradesh were requested to send their considered views about the proposed amendment of the Central Storage Control Order in respect of the edible oil seeds and edible oils and the State of Andhra Pradesh by letter dated 1-11-1977 stated that the State Government agreed to the proposal. Thereafter, the matter was considered by the Ministry and amendment was issued in 1997 deleting from 1977 Central Storage Control Order, edible oil seeds and edible oils from the purview of the order. It is also stated that the State Government by letter dated 3-1-1998 informed the Central Government that the instructions were issued in view of the amendment to the Cental Storage Control Order to follow the amendment. It was also stated that the action is being taken to carry out necessary amendment to the State Licensing Order. It was further stated that under 1977 Storage Control Order the words edible oil seeds and edible oils were omitted by amendment in November, 1997. Therefore, so far as the licence for edible oil seeds and edible oils under the said Order of Central Storage Control Order, 1977 is concerned, the licence for the same was not required.
8. Mr. Srinivas, the learned Counsel appeared for the petitioners and the learned Addl. Advocate General appeared for the State.
9. The issue that arises for consideration is as to the effect of 1997 Central Storage Control Order amendment on the State Licensing and Distribution Order, 1982 with regard to obtaining of licence for dealing in edible oil seeds and edible oils.
10. For proper appreciation of the case it is necessary to extract certain statutory provisions and also refer to the Control Orders issued by the Central Government and the State Government.
11. Section 3 of the Essential Commodities Act (hereinafter called as 'the Act') empowers the Central Government to issue an order for maintaining or increasing the supplies of essential commodities or securing their equal distribution and availability at fair price etc. It reads thus:
"3. Powers to control production, supply, distribution, etc. of essential commodities:
(1) If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce mere in.
(2) Without prejudice to the generality of the powers conferred by sub-section (1) an order made thereunder may provide-
(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 any 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.
xxxx xxxx xxxx (not necessary for the purpose of this case)"
The Pulses Edible Oil Seeds And Edible Oil Storage Control Order, 1977 (hereinafter called the 'Central Storage Control Order, 1977) was issued by the Central Government. The Central Government issued SO No.780(E) dated 21-12-1977 by virtue of the powers conferred under Section 3 of the Essential Commodities Act, 1955. The preamble of the Order reads:
"Whereas the Central Government is of the opinion that it is necessary and expedient so to do for maintaining supply and for securing equitable distribution available at fair price of pulses, edible oil seeds and edible oils."
Clause 3 deals with the Licensing of dealers and Producers, which is extracted below:
"3. Licensing of dealers and Producers:
Notwithstanding anything contained in any State Order no person shall carry on business, as a dealer, after the expiration of a period of fifteen days from the date coming into force of this clause or, as a producer after the expiry of a period of fifteen days from the date of coming into force of the Pulses Edible Oil seeds and Edible Oils (Storage Control) Amendment Order, 1987, in pulses or in edible oil seeds and edible oil except under and in accordance with the terms and conditions of a licence granted under a Stale Order if the stocks of pulses or edible oil seeds or edible oils in his possession exceeds the quantities specified below:
(i) Pulses 10 quintals for all pulses taken together.
(ii) Edible oils including hydro-genated vege-table oils 5 quintals of all edible oils including hydrogene-rated vegetable oils taken together.
(iii) (Edible oil seeds including ground-nut in shell.
30 quintals of all edible oil seeds."
Clause 4 deals with pulses, edible oil seeds and edible oils. Clause 5 enjoins upon the dealer to submit the returns to the authorities notified by the Slate Government in respect of the stocks of edible oil seeds and edible oils. Clause 6 states that the provisions of the State Orders relating to Storage of pulses, edible oil seeds and edible oils shall apply in respect of any matter for which no provision has been specifically made in the Central Order. Under the said Order, the Pulses, Edible Oil Seeds and Edible Oil Control Order, 1977 was repealed. In pursuance of the said Central Order, the Government issued notification in G.O.Ms. No.23, Food and Agriculture, dated 11-1-1978 notifying the authorities to whom the returns have to be submitted as required under clause 5 of the Central Storage Control Order.
12. The A.P. Edible Oil Seeds and Edible Oils Regulation of Trade and Licensing Order, 1978 was issued by the Government of Andhra Pradesh in G.O.Ms. No.455, dated 20-7-1978 wherein it is stated that in exercise of the powers conferred under Section 3 of the Act, and the notification of the Government of India in GSR No.316E dated 20-6-1972 and with the prior concurrence of the Central Government, the said order was made. Under clause 3 of he said order, no person is permitted to carry on the business of edible oil seeds and edible oils as a dealer without obtaining the licence. Any person who stores quantities in excess of 5 Qtls. of edible oils shall be presumed to be carrying on the business as a dealer. Similarly the restriction was also mentioned with regard to the maximum possession of the oil. But, however, that order was rescinded in 1982 and a consolidated order was issued by the State Government viz., the A.P, Scheduled Commodities Dealers' (Licensing and Distribution) Order, 1982 (hereinafter called 'A.P. Order, 1982') rescinding the following orders:
"1. The Andhra Pradesh sugar Dealer's Licensing Order, 1963;
2. The Andhra Pradesh Food grain Dealers Licensing Order, 1964; and
3. The Andhra Pradesh Edible Oil Seeds and Edible Oils (Regulation of Trade and Licensing) Order, 1978."
Clause (d) of Section 2 defines dealers as far as the dealer in edible oils and edible oil seeds are concerned, a person who engages himself in the business of purchase, sale or storage for sale of edible oil seeds or oil in quantity of more than 5 quintals of anyone or all edible oils including hydrogenated vegetable oils taken together or x x x and includes a manufacturer of edible oils, but does not include a person who stores the oil seeds produced by his personal cultivation. Clause 3 deals with the Licensing of the dealers, which reads as follows:
"3. Licensing of dealers: (1) No person shall carry on business as a dealer or a commission agent dealing in paddy except under and in accordance with the terms and conditions of a licence issued in this behalf by the licensing authority:
Provided that a licence obtained under any of the relevant licensing Orders in force on the date of coming into force of this Order shall be valid till the date of its expiry and a fresh licence shall be obtained under this Order before expiry of the date of such licence;
Provided further that bulk consumers of sugar as defined in sub-clause (o) of Clause 2 who store more than five quintals of sugar at any one time shall also be required to obtain licences under this order.
(2) For the purpose this clause, any person who stores in quantity of 5 (five) quintals or more of Sugar, 20 (twenty) quintals or more of any one of the food grains or 50 (fifty) quintals or more of all food grains taken together, more than 10 (ten) quintals of any one or more of pulses put together, more than 5 (five) quintals of any one or more of edible oils including hydrogenated vegetable oil or more than 30 (thirty) quintals of any one or more of oil seeds including groundnut in shell, put together, at any one time, shall unless the contrary is proved be deemed to be carrying on business as a dealer or a commission agent dealing in paddy, under this order."
The form of licence is prescribed in Form 'B' to the Schedule stipulating various conditions. Under Clause 11 the restriction is imposed on possession of scheduled commodities namely sugar, pulses, edible oil seeds and edible oils. Under clause 12, the Government and the Commissioner, the Collector or the Licensing authority is empowered to issue instructions or directions on the matters covered by the provisions of the Order and Dealers are required to comply with the same. Such power may also include directions to any dealer that of or any of the scheduled commodities may be sold to only such persons or institutions in such quantities and at such intervals as the authorities may direct.
13. The Central Government in exercise of power under Section 5 of the Act, issued an Order GSR No.800, dated 9-6-1978 delegating the power to the State Government to make orders to provide for the matters specified in Sections. The said order reads thus:
"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 Ministry of Agriculture, (Department of Food) No.GSR, 315(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 he said Act to make orders to provide for the matters specified in clauses (a), (b), (c), (d), (e), (f), (h), (i) and (j) of sub-section (2) thereof shall in relation to food-stuffs 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 clause (a), (c) or (f) or in regard to distribution or disposal of food-stuffs to place 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 the Government.
Sd/-
K. Balakrishnan, Deputy Secretary to the Government of India.
No.3(Genl.) (1) -D & R(1) -59."
14. The learned Counsel for the petitioners submit that the Central Control Order of 1977 was issued by the Central Government by virtue of the powers vested under Section 3 of the Act. Clause 3 of the said Order stipulated licence to be issued by the appropriate State Government under the State Orders. In 1982, the State Government issued a consolidated Scheduled Commodities Order, in which the requirement as contained in 1977 for obtaining a licence was stipulated. Even with regard to the restriction on possession of maximum quantities were also mentioned which are in para materia with the Central Order. To enable the State to regulate essential commodities by means of issuing licence or permits, it is necessary that the Central Government should delegate its power to issue such an order as required under Section 3. Therefore, 1982 Order issued by the State Government is only the product of the delegated authority to enable the State Government to effectively implement the orders already issued by the Central Government in 1977. It was incumbent on all the dealers dealing in edible oil seeds and edible oils to obtain licence from the State Authorities as it became mandatory by virtue of Central Order clause 4 and as contained in the State Order of 1982. But, however, when the item "edible oil seeds and edible oils" was sought to be deleted by the Cenlral Government after consulting the State Governments by virtue of the amendment issued to 1977 Order in 1997 its effect on the State Order has to be considered. The learned Counsel for the petitioners submits that even though the State Order was issued by virtue of the delegation made by the Central Government by invoking Section 5, but yet, State Government cannot usurp the jurisdiction and exercise the power more than what the Central Government could have exercised. On the other hand, the learned Addl. Advocate General submits that 1982 State Order is an independent order and when it is issued by virtue of delegated power, it is not incumbent on the State Government to go in tune with the Central Order. In the interest of maintenance of transport, distribution etc. of the edible oil seeds and edible oils in the State, it is always open for the State to impose certain restrictions including permissible stock both minimum and maximum and also licensing of the dealers. He further submits that even though the Central Government has deleted the edible oil seeds and edible oils from the Central Control Order totally in 1997, yet, it has no effect on the State Order and State could continue the 1982 Order without any amendment and thus insist for licence to deal in edible oil seeds and oils.
15. As already narrated earlier, the Central Government is empowered to issue Order under Section 3 providing for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Under sub-section (2) apart from exercising the general powers, it is also open for the Central Government to make an order providing for various regulatory measures and in this case, we are concerned with clause (d) of sub-section (2) of Section 3 namely for regulating by licence or permits or otherwise, the Storage transport, distribution, disposal, acquisition, use or the consumption of any essential commodities. By virtue of this provision, Storage Control Order was issued by the Central Government in 1977 regulating storage limits and insisting obtaining licence if the person stores the edible oil seeds and edible oils over and above the quantity prescribed under clause 3, and the restriction was also placed on possession of maximum oils and oil seeds. But, however, no State Order was issued in respect of the edible oil seeds and edible oils. As per the counter of the Government, only a State Order relating to Groundnut and Groundnut oil seeds under which a licence was required for any person to deal with the said commodity. In 1978, the State Government issued A.P. Edible Oil Seeds and Edible Oils Regulation of Trade and Licenses Order, 1978 by virtue of the delegation of power in the notification issued by the Government on 20-6-1978. The said order came into effect from 20-7-1978. Therefore, for the first time, the edible oil seeds and edible oils came to be covered under the said Order in 1978. This is only a sequel to the order issued by the Central Government in 1977 as the licenses and other terms and conditions have to be covered by the State Order. If 1977 Order is to be given effect to by the State Government, it is necessary that the State Government should have a power to issue an order under delegated power. But, however, as on the date of the issue of 1978 Order, already the Central Government issued another Order in GSR No.800, dated 9-6-1978 wherein the Central Government in exercise of the powers conferred under Section 5 directed the State Government to exercise such powers which includes the power to issue orders under clause (D) of sub-section (2) of Section 3 of the Act subject to condition that such power shall be exercised by the State Government subject to such directions if any as may be issued by the Central Government in this behalf. Further before making an order, a specific permission of the Central Government was necessary in respect of the orders relating to matters specified in clause (a), (c) or (f) or in regard to distribution or disposals of food stuff outside the State or in regard to regulation of transport any food stuff under clause (d). Therefore, by virtue of power delegated to the State in GSR No.800, A.P. Scheduled Commodities Order, 1982 was issued by the State Government. As on 1982, there were two orders holding the field in respect of the edible oil seeds and edible oils are concerned. But, however, it has to be seen that 1977 is the Parent Order which was issued by the Central Government under Section 3, wherein a restriction was imposed prohibiting the dealer to deal in pulses, edible oil seeds, edible oils except under and in accordance with the terms and conditions of the licence granted under State Order. Therefore, as far as the Licensing aspect was concerned, it is required to be taken care of by the State Government. Unless the State issues an order with regard to licence and other conditions, the Central Order of 1977 cannot be effectively implemented. Hence, to effectuate 1977 Central Order, the State Government issued 1982 Order stipulating various conditions for obtaining licence for dealing in edible oil seeds and edible oils. In fact, in the counter also it is clearly admitted that 1982 Order was made so as to ensure conformity with the stock limits etc. as prescribed in 1977 Order. It is also conceded in the counter that whenever a conflict arises between the Central Order and State Order, the Central Order will prevail thus recognising the primacy of the Central Order.
Moreover the object of both these orders is to maintain supply and secure equitable distribution at fair price of the essential commodities. The State Order is in relation to the commodities mentioned in the schedule namely sugar, pulses, oil seeds and oils and such other commodities as may be added at later stage. Thus, it is in the nature of the general order whereas Central Order exclusively deals with pulses, oil seeds and oils. Further, under clause 6 of the Central Order, it was stipulated that the provisions of the State Orders relating to storage of pulses, edible oil seeds and edible oils, shall apply in respect of any matter, for which no provision has been specifically made in this order, thereby restricting the power of the State Government to confine to the limits specified in the Central Order wherever fixed. Under Section 7-A of the Central Order, the State Government is empowered to grant exemption from the operation of the Central Order with the previous approval of the Central Government. Under Clause 7-B of the Central Order State Government was also empowered to fix the stock limits other than those fixed in the Central Order with the previous approval of the Central Government. Thus, it is manifest that the State Order is always subject to Central Order. Similar issue relating to conflict of Central Order and State Order under the Essential Commodities Act came up before the Division Bench of the Orissa High Court in M/s. Shri Laxmi Trading Co. v. The Additional District Magistrate (Civil Supplies Section), Rourkela, 1989 Crl. LJ 659. The Division Bench observed in para 5 as follows:
"Article 254 of the Constitution makes it abundantly clear that when the Parliament legislates the law on a particular subject, the same must prevail over any State law on the field. The State law so far as it is repugnant to the Central law must be held to be void and the two cannot stand together. Even if there may not be any direct conflict between the Central Legislation and the State Legislation, but if it is evident that the Parliament intended its legislation to be a complete and exhaustive one relating to the subject, then it shall be taken that the union law has replaced the State legislation relating to the subject. But it must be first decided that the Central Law and the State Law occupy the same field. If, however, they deal with separate and distinct matters though of a cognate and allied character, the question of repugnancy does not arise and in that event Article 254 will have no application. When the two Orders are examined from the aforesaid standpoint, we find that both the Orders have been made in exercise of power conferred under Section 3 of me Essential commodities Act. The object of both the Orders is to maintain supply and secure equitable distribution at fair price of the foodstuffs in question. Whereas the State Order is in relation to the essential foodstuffs as specified in col.(1) of the First Schedule, but the Central Order is in relation to pulses, edible oilseeds and edible oils. In the premises, as aforesaid, the Central Order providing specifically for edible oils and pulses must prevail over the general order made by the State Government for essential foodstuffs which include also the edible oils and edible oilseeds. The two orders being on the same subject, and in view of what has been stated earlier with regard to Article 254 of the Constitution, in the present case, it is the Central Order that would be operative."
Thus, I hold that the Central Order will prevail over the State Order in case of any conflict between these two orders.
16. After delegation of powers on 9th June, 1978 the State Government was empowered only to issue appropriate orders. But, it cannot be said that the State can issue any order disregarding the directions of the Central Government. The Order delegating the power itself circumscribed the authority of the State Government to issue orders subject to the prior concurrence and also subject to such directions, if any, as may be issued by the Central Government from time to time. If it has to be construed that 1982 State Order is an independent Order by itself, the Central Order has become non est and the very purpose of introducing 1977 Central Order will be frustrated. Thus, I have to necessarily reject the contention of the learned Additional Advocate General that 1982 State Order holds the field de hors the Central Order, 1977.
17. The learned Additional Advocate General further contends that what was contemplated under the 1997 amendment was only with regard to the dispensation of stock limits and issue of licence and other terms and conditions of licence are not been dispensed with. He further submits that apart from the stock limits other controls have been brought in 1982 Order such as distribution and transport can be seen from clause 12 of the Order. These submissions also devoid of merits. 1982 State Order is relatable to 1977 Central Order to cover the licensing of dealers and other terms and conditions. It has no independent existence, but for 1977 Central Order and the powers delegated by the Central Government on 9th June, 1978. Further, 1982 Order predominently concentrated on the licensing of the dealers and prescribing the stock limits in tune with 1977 Central Order and other allied conditions. It cannot be construed as an Order covering transport, disposal, distribution, acquisition, use or consumption of edible oil seeds and edible oils as contained in clause (d) of sub-section (2) of Section 3. In fact, no restriction was made in the said Order with regard to the transport, distribution, sale, and consumption.
18. The learned Counsel for the petitioner submits that the State Government is not at all concerned with the maintenance of supplies and to secure equitable distribution and availability of fair prices of essential commodities. It is the Central Government who is primarily invested with this power and to issue the Orders for achieving the said object.
He relies on the Judgment of the Supreme Court reported in The District Collector, Chittoor v. The Chittoor District Groundnut Traders Association, Chittoor, . The said case arose out of the judgment of the Division Bench of this Court reported in The District Collector, Chittoor v. The Chittoor District Groundnut Traders Association and others, . The Stale Government purporting to exercise the power under Clause-12 of 1982 State Order issued directions regulating the transport and export of groundnut seeds and oil outside the State. The said Order was challenged by the Oil Millers as being violative of Articles 19(1)(g) and 301 of the Constitution of India and also Section 3(2)(f), Section 3(3-B) and Section 3(5) of the Essential Commodities Act. The Division Bench held that the said directions are outside the purview of the State Government under clause-12 of the 1982 Order. The State carried the matter to the Supreme Court. While dealing with 1982 State Order, the Supreme Court observed at para 6 as follows:
"The policy decision taken by the State Government and enforced under the aforesaid circular letter placed restriction on the transport and movement of edible oil and oil seeds and it further imposed compulsory levy requiring the millers and traders to supply oil to the State Government at the price fixed by it. There is no doubt that these steps were taken bona fide to ensure availability of the edible oil and oil seeds for public distribution at fair price but the steps taken by the State Government were not permissible in law as the 1982 Order did not confer power on the Government to place such restrictions. Section 3(2)(d) provides for regulating by licence, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity. Clause (f) of Section 3(2) of the Act confers power for making an order requiring any person holding in stock or engaged in the production or in the business of buying or selling of any essential commodity to self the whole or specified part of quantity held in or produced or received by him to the Government or to an officer or agent of the Government. Clause (d) among other things provides for regulating transport and movement of an essential commodity while clause (f) confers power to impose compulsory levy on a person holding the essential commodity in stock by selling the same to the Government. Section 3(3) provides that a person selling any essential commodity to the Government in compliance with the Order made with reference to clause (f) of sub-section (2) shall be paid controlled price if any fixed by the Government or agreed between the parties and in the absence of agreement the price payable would be at the market rate prevailing in the locality on the date of sale. The 1982 Order which was framed by the State Government in exercise of the delegated powers does not contain any provision placing any restriction on the transport or movement of the edible oil or oil seeds nor it provides for imposition of compulsory levy, further it does not fix any price. The directions issued by the Government placing restriction on the movement of oil seeds and oil and imposing compulsory levy and requiring miters and traders to sell oil seeds and oil at a price fixed by it are outside the purview of the 1982 Order. Those directions have no saction of law. If the State Government was facing any problem it could have made: amendments in the 1982 Order regulating matters specified in clauses (d) and (f) of Section 3(2) of the Act after obtaining the prior concurrence of the Central Government. No such course was followed. There is therefore no escape from the conclusion that the directions contained in the impugned Government Order are illegal and void as the same have been issued in exercise of and in contravention of the power delegated to the State Government under the Notification dated 9-6-1978."
In the said case the issue related to the transport of edible oil seeds and edible oils only and obtaining of licence was not the subject-matter. Obviously, because at the relevant time, the licence was mandatory. It was only in 1997 the amendment was brought to 1977 Order deleting edible oil seeds and edible oil from the Storage Control Order. The Supreme Court had categorically stated that 1982 State Order did not contain any provision placing any restriction on the transport or movement of the edible oil seeds or oils or imposition of compulsory levy nor did it fix any price. Commenting on the requirement of obtaining prior concurrence the Supreme Court observed that the purpose and object for obtaining prior concurrence is to ensure availability of essential commodity throughout the country. The State Governments are not authorised to impose restrictions on the movement of the essential commodities as it would have reflection in other States both in regard to the price and in regard to the availability of the commodity for distribution. The Central Government has the responsibility of maintaining a balance between the interest of the various States and it has to ensure the availability of essential commodities for distribution at a fair price in other States also. All relevant aspects are necessary to be scrutinised by the Central Government in giving or refusing its concurrence not merely from the point of view of the State imposing restrictions but bear in mind the conditions of trade and industry and the demand and supply of the concerned commodities in other States. Unless the Central Government is satisfied that it would be in the interest of all concerned, it may withhold concurrence for imposing restrictions on free movement of essential commodities. Further, referring to clause 12 of the Order, the Supreme Court observed that the power of the authorities specified in sub-clause (1) to issue instructions and directions was limited to the subject-matter of 1982 Order. Such directions and instructions cannot pertain to regulate matters which are not covered or dealt with by the 1982 Order. The contention of the learned Additional Advocate General that in the interest of the State it was necessary to continue the licensing system that it is regulating transport, distribution etc. has to be negatived as the Supreme Court itself said that it is the responsibility of the Central Government.
19. It is also pertinent to note that the Central Government has reserved its powers while delegating its powers to the State Government in the Notification dated 9th June, 1978 to issue such directions as may be necessary from time to time. Thus, making it clear that if any directions are issued by the Central Government, they are binding on the State Government. The learned Additional Advocate General submits that even though 1982 Order was issued in pursuance of the delegated power under Notification dated 9th June, 1978 subject to such directions as may be issued by the Central Government yet the effect of deletion of edible oil seeds and edible oils from 1977 Central Order is that there is no restriction on storage of oil seeds and oils, and therefore, to that extent the State Government has obeyed such directions and removed the restriction of possession of quantity of oil seeds and oil. Accordingly, G.O.Ms. No.6 was issued deleting clause 11 relating to restriction on storage of oil seeds and oil from 1982 Order. I have called for the file from the State Government, in which the amendment was issued in G.O.Ms. No.6 dated 4-2-1998, As observed from the file, the Central Government after issuing amendment in S.O.772(E) dated 10th November, 1997 to the Central Storage Order deleting the words "edible oil seeds and edible oils" wherever occurring, the State was directed to take action in compliance of the amendments. A letter was issued on 13th November, 1997 to all the State Governments to the following effect:
"Sub:--Amendments to the Pulses, Edible Oil seeds and Edible Oils (Storage Control) Order, 1977-reg.
I am directed to send herewith a copy of the amendment Order S.O.772(E), dated 10-11-1997 relating to deletion of certain clauses of the Pulses, Edible Oil seeds and Edible Oils (Storage Control) Order, 1977 insofar as they relate to edible oil seeds and edible oils, for your information and compliance."
Further reminder was also issued on 23rd December, 1997. The following is the text of the letter:
"Please refer to my D.O. of even number dated 3rd October, 1997, seeking your view about the proposal for keeping relevant provisions of the Pulses, Edible Oil seeds and Edible Oils (Storage Control) Order, 1977 in abeyance in respect of Edible Oil seeds and Edible oils.
2. The matter has been examined and accordingly amendments to the Pulses, Edible Oil seeds (Storage Control) Order, 1977 have been issued vide Order No.S.O.772 (E) dated 10th November, 1997 deleting the clauses in respect of Edible Oil seeds and Edible oils from the purview of the said order.
3. A copy of the said amendment Order S.O. 772(E) dated 10-11-1997 both in Hindi and English was sent to you by Dr. M.K. Kundu, Chief Director of the Directorate of Vanaspati, Vegetable Oils and Fats in this Ministry vide letter of even No. dated 13th November, 1997 for your information and necessary action. So far, no follow up report has yet been received in this regard.
4. I am again sending a copy of the printed version of the amended Storage Control Order No.S.O.772 (E), dated 10-11-1997 along with its printed version of the Corrigendum number S.O.859(E) dated 11th December, 1997 with the request for its immediate compliance within your State/ U.T. insofar as it relates to Edible Oil seeds and Edible Oils."
Thus, in the said orders it has been categorically directed to take action to comply with the amendment in the States insofar as it relates to edible oil seeds an edible oils. But, however, it was understood by the State that the result of 1997 Central Amendment was that the stock limits prescribed in State Order of 1982 stands deleted and with such mistaken impression, the amendment was issued to 1982 State Order deleting restriction of possession of edible oil seeds and edible oils only. The amendment of 1997 cannot be construed as an amendment with regard to the stock limits only, but the amendment brought to 1997 Order completely deletes the item edible oil seeds and edible oils from the purview of 1977 Order. Right from the Preamble till the end of the Order wherever the word 'edible oil seeds and edible oil' was occurring was deleted. If really the amendment related to the lifting of restriction on storing the oil seeds and oils, the Central Government could' have only deleted Clause-4. But the fact that it has deleted the said item from the entire Storage Control Order, 1977 itself indicates that the Central Government did not think it necessary to keep 1977 Order in operation as far as the edible oil seeds and edible oils were concerned. Therefore, the presumption of the State Government that in the Central Order only the restriction of the storage limits was removed is absolutely misconceived. This is not only a restriction on storage limits, but the entire dealings with regard to the edible oil seeds and edible oils was lifted. Even in the Counter of the Central Government it was stated that the State Governments were consulted before issuing 1997 Amendment. Paras 3 and 4 of the Counter covering this issue reads thus:
"It is submitted that this Ministry examined in detail the availability of edible oil-seeds and oils in domestic market and after consultation with the respective State Governments omitted the words Edible Oil seeds and Edible Oil wherever occurred in the Pulses, Edible Oil Seeds and Edible Oils (Storage Control) Order, 1977. The State Governments included Government of Andhra Pradesh as well who were requested to send their considered views about the proposal for the amendment of the said Storage Control Order, 1977 in respect of edible oil seeds and edible oils. In response to the above referred proposal of this Ministry, Government of Andhra Pradesh vide their letter dated 1-11-1997 stated that the State Government of Andhra Pradesh agreed to the proposal of the Government of India to certain provisions of the Pulses, Edible Oil seeds and Edible Oils (Storage Control) Order, 1977 in respect of edible oil seeds and edible oils.
It is further submitted that the matter had been examined in this Ministry and accordingly amendment to the Pulses, Edible Oil Seeds and Edible Oil (Storage Control) Order, 1977 have been issued vide order Number SO 772 (E) dated 10th November, 1997 deleting the clauses in respect of edible oil seeds and edible oils from the purview of the said order."
Further, in para 6 of the Counter, it is clearly stated thus:
"It is submitted that so far the licence for the Edible Oil Seeds and Edible Oil under the said order (Storage Control) Order, 1977 is concerned the licence of the same is not required. With respect to the grant of licence or issuance of licence, the State Government (1st respondent) has to answer and it is specifically stated in the counter filed by the 1st respondent i.e. State Government."
The notification delegating the power to State Government is that the State Government shall exercise the power subject to the directions issued by the Central Government from time to time. Therefore, the delgatee State Government is not entitled to exercise powers in excess or in contravention of the delegated powers. Admittedly, the amendment was issued after consulting the State Governments. As already observed by the Supreme Court, the responsibility for ensuring the availability of essential commodities throughout the country is that of Central Government and having found that no more restrictions were necessary in respect of edible oil seeds and oils it thought it fit to introduce the amendment and that too after consulting the States. Thus, if any direction is issued by the Central Government in pursuance of the amendment it is binding on the State Government as per notification dated 9-6-1978 and necessarily it has to implement the same by making necessary amendments in the State Order in tune with the directions of the Central Government. In the instant case, the Central Government while forwarding 1997 amendment had categorically directed to comply with the order. The effect of said direction is that the existing State Order issued by virtue of delegated power should be properly amended. In effect, the State Government ought to have deleted the words 'edible oil seeds and edible oils' completely from 1982 Order wherever it was occurring.' But, for the reasons best known to the State Government, it has chosen to only delete the Storage limit. Thus, I find the direction has not been fully implemented. The State Government cannot disown the directions nor can it implement the directions only in part. The directions were not confined to the stock limits only, but the directions were specific to take action consequent on the amendment of 1997 Order, wherein edible oil seeds and edible oils were completely removed from 1977 Central Order. When the Central Government has categorically stated that insofar as the licence for edible oil seeds and edible oils under Central Storage Order, 1977 was concerned, the licence for the same was not required. If such a licence was not required in the Central Order, 1977 it could not be also insisted by the State by virtue of 1982 Order. What cannot be done directly by the State Government cannot be permitted to be done indirectly. The directions issued by the Central Government are binding on the State Government and it have to be implemented in toto. I hold accordingly.
20. The learned Counsel for the petitioner relied on the judgment of the Supreme Court reported in T. Barai v. Henry Ah Hoe, , wherein the scope of Article 254 of the Constitution of India with reference to Union and a State law was discussed. In the instant case, we are not faced with such a situation. We are only concerned with the effect of 1997 Amendment and the directions issued by the Central Government
21. The learned Counsel for the petitioner submits that insistence on licence is violative of Article 19(1)(g) of the Constitution of India. I need not go into this issue in view of my findings supra.
22. For the foregoing reasons, I hold that when once the edible oil seeds and edible oils are deleted from Central Storage Order, 1977 by virtue of Pulses, Edible Oils seeds and Edible Oils (Storage Control) Amendment Order, 1997, the same also is liable to be carried out by the State as per the directions issued by the Central Government on 13 -11 -1997 and 23rd December, 1997. Consequently, the commodities "edible oil seeds and edible oils" wherever occurring in A.P. Scheduled Commodities, Dealers (Licensing and Distribution) Order, 1982 stand deleted. Thus, not only the restriction on stock limits, but also the licensing of dealer and all other requirements stand dispensed with.
23. The writ petitions are accordingly allowed. The impugned orders dated 8-1-1998 are quashed. No costs.