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Chanan Ram Jagan Nath Vs. the State of Punjab and ors. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtPunjab and Haryana High Court
Decided On
Case NumberCivil Writ No. 2031 of 1963
Judge
Reported inAIR1965P& H74
ActsConstitution of India - Articles 226 and 227; Essential Commodities Act, 1955 - Sections 3
AppellantChanan Ram Jagan Nath
RespondentThe State of Punjab and ors.
Cases Referred and Collector of Customs Madras v. Sampathu Chetty
Excerpt:
.....decided upon in implementing the decision of canalisation may well be challenged as infringing article 14 of the constitution or some other fundamental right. 1516 of the report very clearly brings out both the principle laid down there and the distinction on facts between that and the present case. sivarajan's case, air 1959 sc 556 is also concerned with its own facts and the special approach in holding the classification impugned there to be rational and based on intelligent different appears to me distinguish that case from the present one. it is true that the impugned order before us is an emergency measure and may therefore, demand somewhat liberal approach in favour of the administration but it is precisely in such contingencies that the responsibility of this court becomes all..........1963 (hereinafter referred to as the order), issued by the governor of punjab under s. 3 of the essential commodities act. 1955 (act 10 of 1955).(2) according to the allegations of the petitioner-firm it was previously carrying on the business of preparing gold ornaments but was thrown out of the business due to gold control order. the petitioner-firm thereupon started business of khandsari and gur at tarn taran with effect from june 24 1963. on july 18, 1963 the punjab government issued the order. according to clause 3 of the order no person shall carry on business as a dealer of kandsari and gur after fifteen days of the publication of the order in the official gazette except under and in accordance with the terms and conditions of a licence issued in that behalf by the licensing.....
Judgment:

Khanna, J.

(1) The petitioner-firm Chanan ram Jagan Nath of Mandi Tarn Taran, District Amristar seeks by means of this petition under Articles 226 and 227 of the Constitution of India to challenge the validity of the Punjab Khandsari and Gur Dealers Licensing Order, 1963 (hereinafter referred to as the Order), issued by the Governor of Punjab under S. 3 of the Essential Commodities Act. 1955 (Act 10 of 1955).

(2) According to the allegations of the petitioner-firm it was previously carrying on the business of preparing gold ornaments but was thrown out of the business due to Gold Control Order. The petitioner-firm thereupon started business of khandsari and gur at Tarn Taran with effect from June 24 1963. On July 18, 1963 the Punjab government issued the Order. According to clause 3 of the Order no person shall carry on business as a dealer of kandsari and gur after fifteen days of the publication of the Order in the official Gazette except under and in accordance with the terms and conditions of a licence issued in that behalf by the licensing authority. Clause 4 of the Order dealt with the issue of license and sub-clause (3) of that clause was to the following effect:

'No person shall be issued a licensed under this Order unless he satisfies the licensing authority that he has been engaged in the business of purchase sale or storage for sale of kandsari or gur or both during the year commencing from 1st November 1961 and ending on 31st October 1962 and has made during that period not less than twelve transactions of the purchase or sale or both of kandsari or gur or both each transaction being of being of more than fifty quintals.'

This sub-clause was subsequently substituted as per order dated October 9, 1963 by the following sub-clause:

'No person shall be issued a license under this Order unless he satisfies the licensing authority that he has been engaged in the business of purchase sale or storage for sale of Kansari or Gur or both and has transacted during the period commencing from 1st November 1961, and ending on 31st March 1963, the business of purchase or sale or both of at least 500 quintals of Kandsari or Gur or both each transactions being of not less than ten quintals.'

Clause 5 of the Order deals with the period of licence and fees chargeable therefor. Clause 7 gives the power to the licensing authority to cancel or suspend a license while clause 8 gives a right of appeal to any person aggrieved by any order of the licensing authority the Director of Food and Supplies Punjab.

(3) According to the petitioner-firm it applied to the District food and Supplies Controller Amritsar for the grant of a license under the above Order but the application was rejected on August 14, 1963. Appeal filed by the petitioner-firm against that order was also dismissed by the Director of Food and Supplies. The petitioner-firm thereupon filed the present writ petition seeking to assail the validity of the order.

(4) The petition has been resisted by the State of Punjab the Director Food and Supplies and the District Food and Supplies Controller, Amritsar, who have been impleaded as respondents in the petition and they aver that the order in question is inter vires legal and constitutional.

(5) At the hearing of the petition Mr. Tirath Singh learned counsel for the petitioner-firm has not disputed that the petitioner does not fulfill the requirements of the order which are essential for being entitled to the licence under the Order but he contends that the order is violative of Art. 19 of the Constitution. The contention in the form in which it is advanced cannot prevail because view of the existence of emergency which was declared by the President as per notification No. GSR 1415 dated October 26, 1962, the rights under Article 19 of the Constitution get suspended on account of the provisions of Article 358 of the Constitution. The aforesaid Article provides that while a Proclamation of Emergency is in operation, nothing in Article 19 shall restrict the power of the State to make any law or to take any executive action which the State would but for the provisions contained in Part III be competent to make or to take but any law so made shall to the extent of the incompetence cease to have effect as soon as the Proclamation ceases to operate except as respects things done or omitted to be done before the law so ceases to have effect. Dealing with Article 358, it was observed in Makhan Singh Tarsikka v. The State of Punjab, AIR 1964 SC 381:

'It would be noticed that as soon as Proclamation of Emergency has been issued under Article 325 and so long as it lasts, Article 19 is suspended and the power of legislatures as well as the executive is to that extent made wider. The suspension of Article 19 during the tendency of the proclamation of emergency removes the fetters created on the legislative and executive powers by Article 19 and if the legislative and executive powers by Article 19 and if the legislative make laws or the executive commits acts which are inconsistent with rights guaranteed by Article 19 their validity is not open to challenge either during the continuance of the emergency or even thereafter. As soon as the Proclamation ceases to operate the legislative enactment passed and the executive actions taken during the course of the said emergency shall be inoperative to the extent to which they conflict with the rights guaranteed under Article 19 which was suspended during the emergency is automatically revived and begins to operate. Article 358 however makes it clear that things done or omitted to be done during the emergency cannot be challenged even after the emergency is over. In other words the suspension is Article 19 is complete during the period in question and legislative and executive action which contravenes Article 19 cannot be questioned even after the emergency is over.'

(6) Mr. Tiranth Singh then contends that the impugned order is outside the scope of S. 3 of Essential Commodities Act as interpreted by the Supreme Court. Sub-section (1) of S. 3 reads as under.

'(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 there equitable distribution and availability at fair prices it may by order provide for regulating or prohibiting the production supply and distribution thereof and trade and commerce therein.'

Relevant part of sub-section (2) reads as under:

'Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide:--

* * * * * *

* * * * * *

(d) for regulating by licenses permits or otherwise the storage transport distribution disposal acquistion, use or consumption of any essential commodity.'

Dealing with section 3 of the Essential Commodities Act, Das Gupta, J., who spoke for the Court observed in Narendra Kumar v. Union of India A. I. R, 1960 S. C. 430.

'It is fair and proper to presume that in passing this Act the Parliament could not possibly have intended the words used by it, viz., ' may by order provide for regulating or prohibiting the production supply and distribution thereof and trade and commerce in' to include a power to make such provisions even though they may be in contravention of the Constitution. The fact that the word 'in accordance with the provisions of the Articles of the Constitution ' are not used in the section is of no consequence. Such words have to be read by necessary implication in every provision and every law made by the Parliament on any day after the Constitution came into force. It is clear therefore that when section 3 confers power to provide for regulation or prohibition of the production supply and distribution of any essential commodity it gives such power to make any regulation or prohibition in so far as such regulation and prohibition do not violate any fundamental rights granted by the Constitution of India'.

(7) In reply Mr. Kaushal on behalf of the respondents urges that as the rights under Art. 19 of the respondents urges that as the rights under Art. 19 of the Constitution have been suspended during the emergency the limitation in the interpretation of S. 3 of Essential Commodities Act in so far as it was held to be in consonance with Art. 19, should be deemed to have been removed.

(8) After giving the matter my consideration I am of the view that the above contention of Mr. Kaushal cannot be accepted. Section 3 of the Essential Commodities Act was enacted before the coming into force of the emergency and while dealing with its provisions it was held that they did not violate any fundamental rights granted by the Constitution.

According to Article 141 of the Constitution the law declared by the Supreme Court shall be binding on all Courts within the territory of India. The Supreme Court having interpreted S. 3 of Essential Commodities Act to be in consonance with Article 19 of the Constitution, this Court cannot now put a different interpretation on the language so S. 3 so as to hold that the section should be constructed in a way as is violative of Article 19 of the Constitution. The language of s. 3 of Essential Commodities Act remains the same what it was before the emergency was declared there has been no change or amendment in that section. In the circumstances it is not possible to hold that the words of S. 3 had one meaning before the emergency was declared and they acquire a different meaning after the declaration of the emergency. Emergency has no doubt far reaching effects and certain consequences flow from its declaration but it certainly has not effect of altering an interpretation which has been placed upon a statutory provision.

I would, accordingly, hold that in spite of the declaration of emergency section 3 of Essential Commodities Act should be interpreted in the manner it has been done by their Lordships of the Supreme Court in Narendra kumar's case. AIR 1960 SC 430 (supra). As the impugned order was made under section 3 of Essential Commodities Act, limitations, which have been placed while interpreting section 3, must, in the nature of things fasten on the impugned order. It would thus follow that though the validity of the impugned order cannot directly be questioned on the ground that it is violative of Article 19 of the Constitution, there is no bar to questioning its validity on the score of being outside the scope of section 8 of Essential Commodities Act as interpreted in Narendra Kumar's case AIR 1960 SC 430.

Looked at in this light the Court cannot ignore the provision of Art. 19 of the Constitution while determining the validity of the order. Indeed, it was open to the Government to make an order for the supply and distribution of essential commodities under Rule 125 of the Defence of India Rules and such an order might, in that event, have not been liable to be even indirectly assailed on ground of being violative of Act. 19 of the Constitution, but the Government has chosen to make the impugned order under S. 3 of the Essential Commodities Act in spite of the fact that the aforesaid section had received a particular interpretation. The impugned order cannot, in the circumstances, avoid challenge to its validity on ground of Article 19 because such a challenge is inherent in the argument that the order is beyond the scope of S. 3 of Essential Commodities Act as interpreted by the Supreme Court.

(9) Question consequently arises whether the impugned order is violative of Article 19 of the Constitution. It is not disputed that khandsari and gur being stuffs are essential commodities as defined in clause (a) of S. 2 of Essential Commodities Act but it is contented by Mr. Tirath Singh that the order places unreasonable restrictions on the right to carry on the business of kandsari and gur. According to sub-clause (g) of clause (1) of Article 19 of the Constitution all citizens shall have the right to practice any profession or to carry on any occupation trade or business. Clause (6) of that Article however provides that nothing sub-clause (g) of clause (1) shall effect the operation of any existing law in so far as it imposes or prevents the State from making any law imposing in the interests of the general public reasonable restrictions on the exercise of the right conferred by the said sub-clause.

It, therefore, becomes necessary to see whether the restrictions imposed by the impugned order are reasonable in the interests of the general public. In this respect it is pertinent to bear in mind the principles enunciated by the Supreme Court in Ram Krishna Dalmia v. Justice S. R. Tendolkar, AIR 1958 SC 538 that in order to sustain the presumption of constitutionality the Court may take into consideration matters of common knowledge matters of common report the history of the times and may assume every state of facts which can be conceived existing at the time of legislation.

It is well known that there is at present shortage of kandsari and gur. Khandsari and gur are essential articles of daily use and in the circumstances need arises to ensure their equitable distribution at reasonable prices. Keeping those factors in view the Government issued the impugned order for the supply of khandsari and gur only throughout licenced dealers upon whom some measure of control could be exercised. So far no exception can be or is taken to the impugned order but it is urged that the Government has arbitrarily fixed a period during which a period should have carried on business of khandsari and gur before he can get a licence.

In this respect I am of the view that once the necessity of issuing licences is recognized for carrying on the business of kandsari and gur, it becomes imperative to lay down certain criterion for the issue of licences and the Government in the present case has chosen the requirement of a certain amount of business during a specified period before a person can become entitled to obtain a licence under the order. The criterion of the wholesale business during the period mentioned in the order is related to the object of equitable distribution of kandsari and gur and as such cannot be deemed to be unreasonable. The order shows that the Government wanted the distribution to be only through those dealers who had previous experience some period had in the very nature of things to be selected and the period of November 1 1961 to March 31 1963 which was prior to the date of the order cannot be deemed to be arbitrary.

(10) It is however, contended on behalf of the petitioner that the order has the effect of shutting out newcomers like the petitioner from being licensed as dealers and therefore it is violative of Article 19.

In this respect I am of the view that merely because an order has the effect of restricting a particular business to certain persons who are already in that business would not by itself necessarily render the order to be unconstitutional. The Court would have to look to the circumstances in which the order was made the commodity to which it related the situation which was sought to be remedied and the object which was desired to be achieved. Once it is found on the conspectus of all these factors that there is a rational connection between the provisions of the order and the object sought to be achieved the order would not be struck down. In Glass Chatons Importers and Users Association v. Union of India, A.I.R. 1961 S. C. 1514 the Supreme Court upheld the constitutional validity of clause 6(h) of the Export Control Order in so far it permitted the canalising or channelling of the export trade.

In Daya v. Joint Chief Controller of Imports and Exports, A. I. R 1962 S. C. 1796 the Court dealt with notification issued under Exports Control Order 1958 about the export of manganese ore. The effect of the notification was that new-comers, who had entered the field subsequent to 1953 were excluded from the grant of export quotas and those quotas were given only to established exporters who had been exporting from 1953 onwards. The validity of that notification was challenged by a petitioner who sought a licence to export manganese ore and it was urged on his behalf that the notification imposed unreasonable restriction on his fundamental right of trade under Article 19(1)(g) of the Constitution. This contention was repelled in spite of the fact that it was felt that the notification caused hardship to the petitioner and it was conserved:

'In this state of circumstances the elimination of the class to which the appellant belongs viz., new comers who had no previous experience of the export trade during the basic year or earlier was the result of enforcing a permitted method of control and a type of restriction which it was legally competent to be imposed under clause 6(h)'

In Sivarajan v. Union of India, A.I.R. 1959 S. C. 556 their Lordships of the Supreme court has occasion to consider the constitutional validity of the Rules made under the Coir Industry Act, 1953. Those Rules provided that only persons who had exported in the preceding three years not less than a prescribed minimum quantity of coir yarn or coir products would be registered as exportes of coir yarn or coir products. It was contended that the qualitative test would extinguish the small traders and tend to establish a monopoly in the export trade. It was held that the Court could not interfere with the determination of the rule-making authority which had taken into consideration the conditions of the trade and imposed a quantitive rather than a qualitative test because that was according to the rule making authority most conducive to the public interest.

(11) Mr. Tirath Singh has referred to Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh 1954 SCR 803 : (AIR 1954 SC 224) in which the Court struck down clause 4(3) of the Uttar Pradesh Coal Control Order 1953 on the ground that it vested uncontrolled discretion in the matter of granting or withholding licences. There was in that order no standard to guide the exercise of the discretion nor any check upon improper exercise of the same. In the impugned order in the present case the principle for the grant of licence has clearly been laid down and there is also a right of appeal to the Directed of Food and Supplies. In the circumstances the case of Dwarka Prasad Laxmi Narain 1954 SCR 803: (AIR 1954 SC 224)(supra) can have no bearing on the present case the petitioner can derive no benefit from it.

(12) After giving the matter my earnest consideration I am of the view that the restrictions placed by the impugned order cannot be deemed to be unreasonable and order is within the scope of S. 3 of Essential Commodities Act.

(13) The petition accordingly fails and is dismissed. In this circumstances of the case I leave the parties to bear their own costs.

Dua, J.

(14)The facts on which the controversy is raised need not be re-stated ; not is it necessary to repeat the rival contentions of the parities. They are sufficiently clear from the judgment of any learned brother Khanna J.

(15) The test of reasonable whenever prescribed has according to the law settled and repeatedly affirmed by the Supreme Court to be applied to each individual stature impugned and no abstract standard or general pattern can be laid down as applicable to all cases. The nature of the right alleged to have been infringed the underlying purpose of the restriction imposed the extent and urgency of the evil sought to be remedied thereby the disproportion of the imposition the prevailing conditions at the time must all enter into the judicial verdict see State of Madras v. V. G. row AIR 1952 SC 196; Mineral Development Ltd v. State of Bihar, AIR 1960 SC 468 and Collector of Customs Madras v. Sampathu Chetty AIR 1962 SC 316.

It is scarcely necessary to reproduce the of quoted passages from these judgments. Suffice it to say that the Court deciding whether a particular instrument of law satisfies the objective test of reasonableness is duty bound to have regard to the aforesaid considerations and such other. The difficulty which frequently confronts the Court is not the principle which is fairly well settled but when it is called upon to apply this test to a concrete case before it, for, one or the other factors may happen to attract more or less importance by individual judicial minds in their respective judicial thinking.

(16) In the case of Glass Chatons Importers' case AIR 1961 SC 1514; Daya's case, AIR 1962 SC 1796 and Sivarajan's case AIR 1959 SC 556 the Court had to consider the statutes concerned with exports and import and the consideration weighing with it, while grappling with the problem posed by the evil sought to be removed by those statutes, were necessarily materially different.

(17) In Daya's case, AIR 1962 SC 1796 the background in which the constitutional challenge called for consideration and scrutiny is stated nine paragraph 16 of the judgment at p. 1803 of the report. Briefly put the vital necessity of export earnings for sustaining national economy (which was not in controversy) weighed with the Government in considering how best to ensure the optimum earning from export of manganese ore. Canalising export trade was thus considered imperative. The criterion applied for selecting the State Trading Corporation was in the said background considered reasonable on the facts of that case. Paragraph 8 of the judgment at p. 1800 of the report and paragraphs 17 and 18 at pp. 1803-04 among others clearly bring out the distinguishing features of that case.

In Glass Chaton's case, AIR 1961 SC 1514 it has been observed that while the decision that import of a particular commodity will be canalised is difficult to challenge the selection of the particular channel or agency decided upon in implementing the decision of canalisation may well be challenged as infringing Article 14 of the Constitution or some other fundamental right. No other question was raised in the reported case. Paragraph 6. of the judgment at p. 1516 of the report very clearly brings out both the principle laid down there and the distinction on facts between that and the present case.

Sivarajan's case, AIR 1959 SC 556 is also concerned with its own facts and the special approach in holding the classification impugned there to be rational and based on intelligent different appears to me distinguish that case from the present one. Rational relation with the objects sought to be achieved was expressly found in the reported case to exist. Small traders were found to have been encouraged to form co-operative societies. Paragraphs 7 and 8 of the judgment at p. 559 of the report appears to illustrate the distinguishing features.

(18) I, therefore, entertain grave doubts if the ratio decided or the principle of law of those decisions would cover the case in had. Equitable and fair distribution of khandsari and gur to the common consumer in the country would appear to me to call for consideration, materially different factors in a different background from those which confronted the Court in the cases cited.

It is true that the impugned order before us is an emergency measure and may therefore, demand somewhat liberal approach in favour of the administration but it is precisely in such contingencies that the responsibility of this Court becomes all the greater and more solemn for democratic vigilance demands that the pretext of emergency however tempting for the administrator is not allowed to serve as a cloak for constitutional breaches and violations for that may constitute abuse and misuse of the national emergency. The Court has a sacred duty to keep a balance between the requirements of the larger interests of the nation and the fundamental rights guarnateed to the citizens. The authoritarian tendencies of the administrator during emergency requires a judicial sobering check for it is to be remembered that Government by decree once made is difficult to unmake and emergency once it has taken hold is a somewhat tough plant to uproot.

(19) As the foregoing discussion suggests, I have and I speak with respect serious doubts about the constitutionality of the impugned order, but in view, I would fell reluctant as at present advised and on the arguments addressed to press my doubt to the point of positive dissent. The point would perhaps have on some other occasion to be more deeply examined and more authoritatively determined. With these observations I agree with the order proposed but not without hesitation and reluctance.

(20) Petition dismissed.


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