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Union Of India (Uoi) And Ors. And State Of ... vs Bhanamal Gulzarimal Ltd. And Ors. on 16 December, 1959

Canalisation orders have been upheld by this Court as reasonable within Article 19(6) of the Constitution. The recent unreported decision in M/s Daruka & Co. v. Union of India Writ Petition No. 94 of 1972 dated 31 August, 1973 referred to the earlier decisions in Glass Chaton case [1962] 1 S.C.R. 862, Devasan of Bhimji Gobil case [1963] 2 S.C.R. 73 and upheld the distributing channels of imports and exports of different commodities and goods. The petitioners contend that though the order obliges producers of yarn to sell to persons named there is no obligation on those persons to buy, and, therefore, it is an unreasonable restriction. The petitioners supported this contention by instances where those persons or bodies failed to lift the stock of yarn. It is said that producers, therefore, suffered losses. There were cases where the allottees did not lift the goods when the voluntary scheme was in operation. The allotment order on record shows that the allotment of yarn is made subject to the conditions that the allotted yarn would be lifted within 15 days of receipt of intimation from the mill after making necessary payments. If any portion of the yarn is not paid for and lifted within the stipulated time, the State Government may intimate the same to the Cotton Corporation of India and the mills\concerned. The Cotton Corporation will effect 428 payment and take charge of the yarn. The Textile Commissioner on receipt of such intimation will issue the reallotment orders and in respect of such reallotted yarn the allottee State Government will make necessary payments to the Cotton Corporation of India. The conditions of allotment ensure lifting of yarn by the nominees of the State Government within a reasonable time. In the past at the initial stages of the voluntary control scheme the State Government nominees were not adequately financially equipped and that is why there were cases of non-lifting of yarn. It cannot happen now. The Distribution Control Scheme does not impose an unreasonable restriction on the producer's right to carry on his business.
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