1. The petitioner is a partner of the firm of the name and style of M/s. Desi Dwa Khana, Chemists, Chauri Sarak, Ludhiana. The said firm is carrying on the business of sale and distribution of Ayurvedic drugs. The premises of the firm were inspected by respondent No. 4 in the company of Shri K. S. Bedi, Divisional Inspector of Drugs Central, Faridkot, and Shri Bhagwan Singh Drugs inspector, Ludhiana. The firm was found to possess certain Ayurvedic drugs which were not manufactured by a licensed manufacturer as required by S. 33E of the Drugs and Cosmetics Act, 1940 (hereinafter called the Act). After obtaining the necessary orders for the custody of the seized drugs, respondent No. 4 who is Inspector Ayurveda, Punjab, Chandigarh, under the Act, took them into possession. The firm was served with a show-cause notice in reply to which it sent six attested copies of the purchase vouchers to respondent No. 4 but failed to explain its position in regard to contravention of Section 33E of the Act.
2. The Punjab Government had earlier on 25-2-1971 issued a notification which had the effect of prohibiting the sale or stocking or distribution, or exhibition for sale of any Ayurvedic or Unani drug other than that manufactured by a manufacturer licensed under Chapter IV-A of the Act. By a subsequent notification dated 15-1-1975, that date was specified as the date of the publication of the said notification for the purposes of Section 33E of the Act. On the basis of the aforementioned facts, respondent No. 4 filed a complaint on July 9, 1976 in the Court of the learned Chief Judicial Magistrate, Ludhiana against the petitioner and his two partners.
3. The petitioner filed the instant petition on the grounds that the aforementioned notification interfered with the provision relating to the freedom of trade, commerce and intercourse throughout the territory of India contained in Articles 301 to 304 of the Constitution, as also his right to carry on trade as envisaged by Article 19(1) (f) and (g) of the Constitution. The other objection raised was that the impugned notification was in the nature of an ex post facto law for the contravention of which he could not be tried and punished as laid down in Article 20 of the Constitution.
4. Separate written statements have been filed on behalf of the State Government, the State Drug Controller, Punjab, Chandigarh respondent No. 3 and the Inspector Ayurveda, Punjab, Chandigarh, respondent No. 4. In none of the three written statements, the material facts have been controverted. The only common legal objection against the intervention by this Court is taken which is to the effect that the sale of goods produced by an unlicensed manufacturer was an offence under Section 33E, of the Act.
5. Before taking up the constitutional issues raised by the petitioner against his prosecution, it becomes necessary to notice the scheme of the relevant provisions of the Act. The provisions relating to Ayurvedic and Unani drugs are contained in Chapter IV-A of the Act. Section 33C lays down the constitution of a Ayurvedic and Unani Drugs Technical Advisory Board. Section 33D prohibits the manufacture for sale of Ayurvedic and Unani drugs under certain conditions, and reads as under:--
'33D. Phohibition of manufacture for sale of Ayurvedic (including Sidha) and Unani Drugs:
From such date as may be fixed by the State Government by notification in the Official Gasette in this behalf, no person shall himself or by any other person on his behalf, manufacture for sale any Ayurvedic (including Sidha) or Unani drug-
(a) except under prescribed hygenic conditions:
(b) except under the supervision of a person having the prescribed qualifications;
(c) except under and in accordance with the conditions of a licence issued for such purpose under this Chapter;
(d) unless the raw materials used in the preparation of such drug are genuine and are properly identified;
(e) unless such drug is labelled with the true list of all the ingredients contained in it and with such other particulars as may be prescribed; and
(f) in contravention of any of the provisions of this Chapter or any rule made thereunder:
Provided that nothing in this section shall apply to Vaidyas and Hakims who manufacture such drugs for the use of their own patients:
Provided further that nothing in clauses (a), (b) and (c) shall apply to the manufacture, subject to prescribed conditions of small quantities of any such drug for the purpose of examination, test or analysis,'
6. Section 33E places a restriction on the sale of such drugs and reads as under:--
'33E: Restriction on sale, etc., of Ayurvedic (including Sidha) and Unani drugs:
From such date as may he fixed by the State Government by notification in the Official Gazette in this behalf no person shall himself or by any other person on his behalf, sell, or stock or exhibit for sale, or distribute, any Ayurvedic (including Sidha) or Unani drug other than that manufactured by a manufacturer licensed under this Chapter.'
7. Section 33G empowers the Central Government oe a State Government to appoint persons having prescribed qualifications to act as Inspectors. Under Section 33I, a person who contravenes Section 33E is liable to be punished with imprisonment for a term which may extend to 3 months or with fine which may extend to Rs. 500/- or with both. Such Inspectors have been authorised to file complaints against the persons who contravene the provisions of the Act. Section 33P appearing in Chapter V, empowers the Central Government to give such directions to any State Government as may appear to it to be necessary for carrying into execution in the State any of the provisions of the Act. Section 34 lays down that when an offence under the Act has been committed by a company, anybody who at the time the offence was committed was in charge of the company for the conduct of business as also the company shall be liable to be proceeded against and punished accordingly. Under Section 36 of the Act, the jurisdiction to take cognizance of the offences has been invested in the Presidency Magistrates or the Magistrates of the Ist Class.
8. In nutshell, with effect from the date a notification under Section 33D is published in the Official Gazette a manufacturer of Ayurvedic drugs can manufacture such drugs only under a licence and under other conditions mentioned in that section. However, Vaidyas and Hakims who manufacture such drugs for the use of their own patients are exempted from the operation of this provision. With effect from the date when a notification under Section 33E of the Act is issued, no dealer can sell, stock or exhibit for sale or distribute any Ayurvedic drug other than that manufactured by a manufacturer licenced under this section. If he is found doing so, an Inspector appointed under Section 33G of the Act can prosecute him by filing a complaint in the Court of a Magistrate Ist Class who may in turn punish him with imprisonment for a term of three months and a fine of Rs. 500/- or with both.
9. The gravamen of the first objection raised by Mr. Chhibbar is that the petitioner was carrying on the sale of Ayurvedic And Unani drugs manufactured by manufacturers of international repute like Daburs (Dr. S. K. Burman) Limited, Gurukul Kangri Pharmacy, Jaggi Pharmacy, Charak Ayurvedic Pharmacy, etc. etc. It is claimed that these firms have been manufacturing Ayurvedic drugs of pure quality for the last so many years and the State Governments within the jurisdiction of which their factories are located have not called upon these firms to take out licences under Section 33D of the Act. It is further claimed that since the State Government cannot impose upon the outside manufacturers a restriction regarding the obtainment of the licences, it cannot validly restrain the petitioner from selling the Ayurvedic drugs manufactured by them strictly in accordance with the requirements of the Ayurvedic Pharmacopoeia.
10. I may now make brief survey of the constitutional provisions in the background of this argument raised. Article 301 of the Constitution lays down that subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free. Article 302 empowers the Parliament to impose by law such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest. Article 303 prevents the Parliament or the Legislature of the State from giving of preferential treatment to one State over the other. It also prevents the making of any laws which have the effect of discriminating one State from the other. There is, however, one exception to these principles. The Parliament could make any law giving or authorising the giving of preferential treatment to a State or discriminating against another by declaring in such law that it is necessary to do so for the purpose of dealing with the situation arising from the scarcity of goods in any part of the country. Sub-clause (a) of Article 304 of the Constitution empowers a State Legislature to impose by law tax on goods imported from other States subject to the condition that while doing so it would not discriminate between goods so imported and goods manufactured or produced in the State itself. Sub-clause (b) of this Article authorises the State Legislature to impose by law such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest. However, no bill relating to such law can be moved in the Legislature of the State without the previous sanction of the President. The. term ''law'' used in Articles 302 and 304 of the Constitution admits, in its ambit and scope, delegated legislation and executive action also; for, what the Constitution prevents a legislation from doing it cannot be taken to allow an authority charged with the mandate of giving effect to its command, to do.
11. Similar provisions regarding the freedom of intercourse in trade and commerce appearing in Amedican Constitution have received judicial interpretation in some cases to which references may now be made.
12. In Pure Oil Co. v. Minnesota, (1918) 248 US 158, it was held that in the exercise of its police power a State may enact inspection laws which are valid if they tend in a direct and substantial manner to promote the public safety and welfare, or to protect the public from frauds and imposition when dealing in articles of general use as to which Congress has not made any conflicting regulation, and a fee reasonably sufficient to pay the cost of such inspection may constitutionally he charged, even though the property may be moving in inter-State commerce when inspected.
13. In Ed. H. Reid v. People of the State of Colorado, (1902) 187 US 137, the Court was concerned with the interpretation of Colo. Sess Laws 1885 P. 335, prohibiting the importing of cattle from south of the 36th parallel of north latitude between April Ist and November Ist, unless first kept for ninety days at some place north of that parallel or unless a certificate of freedom from contagious or infectious disease has been obtained from the State Veterinary Sanitary Board. It held that the privileges and immunities of citizens in the several States were not denied by the impugned legislation because it tended to protect the domestic cattle against the communication of disease by cattle from other States.
14. In United States of America v. Fred W. Darby, (1940) 312 US 100, the Court upheld the validity of Fair Standard Act, 1938, by which the Congress prohibited the transportation in the inter-State commerce of goods manufactured with the help of child labour. It held-
'The motive and purpose of the present regulation are plainly to make effective the Congressional conception of public policy that inter-State commerce should not be made the instrument of competition in the distribution of goods produced under sub-standard labour conditions, which competition is injurious to the commerce and to the States from and to which the commerce flows.'
15. The freedom of intercourse in trade and commerce like any other freedom does not imply an absolute absence of restraint or control, for, individual action has to give way to the larger interests of the community as a whole. While determining whether a restriction on freedom of trade as contemplated in Article 304 of the Constitution is in the public interest or not a Court has to take into consideration a variety of factors like the manner in which the restrictions are imposed, the nature of the commercial activity and the potential effect of the commodity forming the subject-matter of intercourse of trade on the health and moral conscience of the receiving State which imposes such restrictions. Such a State cannot be expected to carry the enthusiasm of non-discrimination to the extent of self-annihilation. it would be open to it to protect the legitimate interests of its own citizens; but while doing so it has also to act in a reasonable manner. One way of doing it is to make a prior assessment of the impact of the restriction and to make it as soft as it can be. Further, it makes no difference to a citizen if his freedom of intercourse of trade and commerce is put in jeopardy partly because of the neglect of the agency of the Union of India and partly that of the State Government. If the cumulative effect of the actions taken by the two agencies mentioned above produces a result which is prima facie discriminatory it shall be open to a citizen to contend that the entire action should be struck down unless of course the State proves that the resultant restrictions are reasonable:--
16. In Khyerbari Tea Co. Ltd. v. State of Assam AIR 1964 SC 925, it was observed-
'The position with regard. to the onus would be the same in dealing with the law passed under Article 304(b). In fact, in the case of such a law, the position is somewhat stronger in favour of the citizen, because the very fact that a law is passed under Article 304(b) means clearly that it purports to restrict the freedom of trade. That being so, we think that as soon as it is shown that the Act invades the right of freedom of trade it is necessary to enquire whether the State has proved that the restrictions imposed by it by way of taxation are reasonable and in the public interest within the meaning of Article 304(b). This enquiry would be of a similar character in regard to clause (6) of Article 19.'
17. I may now examine the restriction imposed in the instant case in the light of the aforementioned observations.
18. The plea raised in the petition that the petitioner stocks and sells Ayurvedic drugs of pure quality manufactured by the firms of repute has not been expressly denied in the written statement. No evil consequence inheres in the manufacture of such drugs, if their purity is not disputed; it would perhaps he in the interest of the receiving State to have them in large quantities so that people who have faith in the efficacy of Ayurvedic medicines are able to get them more freely. If the receiving State were to impose restrictions regarding their analysis for determining their purity, such restrictions would, no doubt, be held as reasonable. But the petitioner is not being charged for selling adulterated drugs. The gravamen of the charge against him is that the drugs stocked and sold by him have been produced by a manufacturer who should have obtained a licence under Section 33D of the Act even though the State in the territory of which such drugs are being manufactured has. not issued any notification making it incumbent upon such manufacturers to obtain a licence as required under Section 33D of the Act. The action complained of by him is prima facie discriminatory and apart from the averment that a manufacturer is under an obligation to obtain a licence under the provisions of the Act, no other plea justifying the restriction has been taken in the written statement.
19. There is no averment in the written statement to show that the Central Government either on its own or on the asking of the receiving State issued any directions under. S. 33P of the Act to the States within the territories of which such drugs were being manufactured to take necessary steps for carrying into execution the provisions of the Act. In other words, it can be justifiably agrued on behalf of the petitioner that before the notification under Section 33E of the Act was issued by the Punjab Government, no steps were taken under S. 33P of the Act for ensuring the uniform application of the provisions of the statute in all the States. The resultant effect of the impugned provision is that whereas Ayurvedic drugs of purity are being allowed to be stocked and sold in some of the States without any restrictions, the petitioner is being accorded discriminatory treatment for indulging in the same activity. As far as he is concerned the difficulty experienced by the Punjab State, if any, about the proper execution of this statute on account of the non-enforcement of its provisions by some other States is of no consequence. He is aggrieved of the end result and in my considered opinion the grievance made by him appears to be legitimate.
20. As laid down in Khyerbari Tea Company's case (supra) the enquiry about the reasonableness of the restrictions under Art. 304 of the Constitution has to be of a similar character in regard to Clause (6) of Art. 19. The State Government could not impose any condition re: license on the outside manufacturers. The Government of the territory in which such units are located has not considered it fit to impose such a condition. The purity of drugs stocked for sale can be properly ensured by their chemical analysis which can be validly enforced by the Statute. The condition re: licence has no relevance vis-a-vis scarcity of, raw materials, over-crowding of the Industry or any other reason of the like nature. The prohibition imposed on the petitioner, in the peculiar circumstances of the case, obviously impinges on his right to possess and sell commodities. The impugned notification is clearly violative of his rights under Art. 19(1) (f) and (g) and I hold accordingly.
21. The argument advanced on the basis of Art. 20 may he summarised thus, sub-section (3) of S. 5 of the General Clauses Act, 1897, lays down that a Central Act or a Regulation shall be construed as coming into operation immediately on the expiration of the day preceding its commencement, which implies that even if a notification is issued during day time, by a legal fiction it would be deemed to have commenced after the mid-night of the preceding day. So considered, an innocent action of the petitioner about stocking and sale of Ayurvedic drugs had become illegal from the morning of the day on which the impugned notification was issued. On the basis of the principle laid down in Tara Chand Gopi Chand v. State, AIR 1951 Punj 27, it was submitted that if some action which was constitutional and valid and some of it which was unconstitutional could be taken under the same provision, the whole of it should be declared unconstitutional. On the authority of Rao Shiv Bahadur Singh v. State of Vindhya Pradesh, AIR 1953 SC 394, it was argued that Art. 20(1) in its broad import has been enacted to prohibit convictions and sentences under ex post facto laws.
22. However, on a careful examination of the submissions made by Mr. Chhibbar, I am of the view that this argument does not advance the case of the petitioner in any manner. If the notification is assumed to have been validly issued, it prohibits the stocking and sale of goods not only on the date of its issue but for future sale also. The act of possessing a contraband or a prohibited article constitutes a continuing offence. Even if the petitioner could validly put forth the defence of Art. 20 against his prosecution for possession of drugs on the date of the issue of notification, he could not do so for his acts of possession of such drugs during any period following the date of the issue of notification and thereafter. In Behram Khurshid Pesikaka v. State of Bombay, AIR 1955 SC 123, it was held that the American rule that if a statute is repugnant to the Constitution it becomes void from its birth, had not, been adopted in this country. Consequently, I am unable to give any relief to the petitioner on this ground.
23. For the foregoing reasons, I hold that the impugned notification violates the rights of the petitioner under Articles 304(b) and 19(1) (f) and (g) of the Constitution. The complaint dated July 9, 1976 filed by respondent No. 4 against the petitioner and pending in the Court of the learned Chief Judicial Magistrate, Ludhiana, is, therefore, quashed, with no order as to costs. The goods seized from the petitioner be restored to him.
24. Order accordingly.