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K. Ramanathan Vs. State of Tamil Nadu and anr. - Court Judgment

LegalCrystal Citation
SubjectConstitution
CourtSupreme Court of India
Decided On
Case NumberCivil Appeal No. 11417 of 1983
Judge
Reported inAIR1985SC660; 1985(1)SCALE510; (1985)2SCC116; [1985]2SCR1028
ActsEssential Commodities Act, 1955 - Sections 3, 3(1), 3(2) and 5; Tamil Nadu Paddy (Restriction on Movement) Order, 1982; Constitution of India - Article 19(2) to (6)
AppellantK. Ramanathan
RespondentState of Tamil Nadu and anr.
Cases Referred and Bishamber Dayal Chandra Mohan v. State of U. P.
Prior historyFrom the Judgment and Order Dated September 14, 1983 of the High Court of Madras in W.A. Nos. 579 to 591 and 4420 of 1983
Books referredCorpus Juris Secundum, vol. 76; Webster's Third New International Dictionary, VoL II; Shorter Oxford Dictionary, Vol. II, 3rd edn.
Excerpt:
constitution - constitutional validity - sections 3, 3 (1) and 5 of essential commodities act, 1955, tamil nadu paddy (restriction on movement) order, 1982 and articles 19 (2) to (6) of constitution of india - appeal challenging constitutional validity of government order placing ban on transport and movement of scarce product out of state - appellant claimed that government order violative of article 14 - government passed order increasing levy due to shortage of food product - such increase valid because of shortage and emergency situation - held, government order not violative of article 14. - [] by s. 3 of the imports and exports (control) act, 1947 the central government was given power, by means of an order published in the gazette, to provide for prohibiting restricting or.....ordernew delhi, the 9th june, 1978.g.s.r. 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 late ministry of agriculture (department of food) no. g.s.r. 316(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 the said act to make orders to provide for. the matters specified in cls; (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of sub-section (2) thereof shall, in relation to foodstuffs 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.....
Judgment:
ORDER

New Delhi, the 9th June, 1978.

G.S.R. 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 late Ministry of Agriculture (Department of Food) No. G.S.R. 316(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 the said Act to make orders to provide for. the matters specified in Cls; (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of Sub-section (2) thereof shall, in relation to foodstuffs 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 Cls. (a), (c) or (f) or in regard to distribution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, 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 (i) the State Government shall authorize only an officer of Government.

Sd/- K. Balakrishnan,

Dy. Secretary to the Govt. of India

(No. 3 (Genl)(D/78-D&R;(I)-59).

7. The appellant and various other agriculturists of Thanjavur district and the aforesaid traditionally rice growing areas of South Arcot and Thiruchirapalli districts challenge the constitutional validity of Cl, 3(1 A) of the Order placing a complete ban on the transport, movement or otherwise carrying of paddy outside Thanjavur district and the aforementioned taluks of South Arcot and Thiruchirapalli districts by petitions under Article 226 of the Constitution in the High Court. There were as many as 300 writ petitions in the High Court which were disposed of by the judgment under appeal. The validity of Clause 3(1 A) of the Order was assailed on three main grounds : (1) Clause 3(1 A) was wholly arbitrary and irrational and thus violative of Article 14 of the Constitution. (2) Clause 3(1 A) was in excess of the delegated powers conferred on the State Government under Section 3 of the Act by the aforesaid G.S.R. 800 dated June 9,1978 issued by the Central Government under Section 5 of the Act. And (3) The total ban on movement of paddy from out of Thanjavur district and the aforesaid taluks of South Arcot and Thiruchirapalli districts by Clause 3(1 A) of the Order was. an unreasonable restriction on the freedom of trade and commerce guaranteed under Article 19(l)(g) and also infringes the freedom of inter-State trade, commerce and intercourse under Article 301 of the Constitution. The High Court repelled all these contentions.

8. Shri P. Govindan Nair, learned Counsel appearing for the appellant argued the case with much learning and resource. Learned Counsel with his usual fairness did not advance some of the contentions raised before the High Court as they were apparently misconceived. He has confined his submissions to only two grounds, namely : (1) Clause 3(1 A) of the impugned Order issued by the State Government under Section 3 of the Act read with G.S.R. 800 dated June 9, 1978 issued by the Central Government under Section 5 of the Act with the prior concurrence of the Government of India placing a ban on the transport, movement or otherwise carrying of paddy from out of Thanjavur district, the two taluks of South Arcot district and the four taluks of Thiruchirapalli district, was ultra vires the State Government being in excess of the delegated powers. It is urged that the delegation of a specific power under Clause (d) of Sub-section (2) of Section 3 of the Act by the aforesaid notification issued by the Central Government under Section 5 of the Act to regulate the storage, transport, distribution, disposal etc. of an essential commodity, in relation to foodstuffs, does not carry with it the general power of the Central Government under Sub-section (1) of Section 3 to regulate or prohibit the production, supply and distribution thereof and trade and commerce therein. And (2) The word 'regulating' in Clause (d) of Sub-section (2) of Section 3 of the Act does not take in 'prohibiting' for the words 'regulating' and 'prohibiting' denote two distinct and separate attributes of power and they are mutually exclusive. Otherwise according to learned Counsel, there was no point in the Legislature using both the words 'regulating' and 'prohibiting' in Sub-section (1) of Section 3 of the Act and the words 'regulating' and 'prohibiting' differently in various clauses of Sub-section (2) thereof. It is urged that there cannot be a total prohibition on transport, movement or otherwise carrying of paddy out of the areas in question under Clause (d) of Sub-section (2) of Section 3 but only regulation of such activities in the course of trade and commerce by grant of licences or permits. The learned Counsel is fortified in his submissions by the decisions of the Punjab, Allahabad and Orissa High Courts in Sujan Singh v. State of Haryana , State of U.P. v. Suraj Bhan : AIR1972All401 and Bijoy Kumar v. State of Orissa : AIR1976Ori138 and he questions the correctness of the decision of the Gujarat High Court in Nanalal Navalnathji Yogi v. Collector of Bulsar : AIR1981Guj87 taking a view to the contrary. We are afraid, we are unable to accept any of the contentions advanced by him.

9. In order to appreciate the contentions advanced, it would be convenient to set out the relevant statutory provisions. Sub-section (1) of Section 3 of the Act is in these terms :

3(1) Powers to control production, supply, distribution etc. of essential commodities -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 therein.

Sub-section (2) of Section 3 of the Act, insofar as material, lays down :

3.(2) Without prejudice to the generality of the powers conferred by Sub-section (1), an order made thereunder may provide -

(a) to (c)....

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

Section 5 of the Act provides :

5. Delegation of Powers - The Central Government may, by notified order, direct that (the power to make orders or issue notifications under Section 3) shall in relation to such matters, and subject to such conditions, if any, as may be specified in the direction, be exercisable also by :

(a) such officer or authority subordinate to the Central Government, or

(b) such State Government or such officer or authority subordinate to a State Government.

as may be specified in the direction.

10. The Infirmity in the argument lies in the erroneous assumption that the source of power or authority to promulgate the impugned Order was derived by the State Government under Clause (d) of Sub-section (2) of Section 3 of the Act by virtue of the delegation of powers by the Central Government by the notification No. G.S.R. 800 dated June 9, 1978 under Section 5 of the Act. The source of power to promulgate an order of this description is derived from Sub-section (1) of Section 3 of the Act. According to its plain language, the aforesaid notification No. G.S.R. 800 provides that in exercise of the powers conferred by Section 5 of the Act, and in supersession of the earlier order of the Government of India in the Ministry of Agriculture, Department of Food, No. G.^.R. 316 dated June 20, 1972, the Central Government directs that 'the powers conferred oh it by Sub-section (1) of Section 3 of the Act' to make orders to provide for matters specified in Clauses (a), (b), (c). (d), (e), (f), (h), (i), (ii) and (j) of Sub-section (2) thereof shall, in relation to foodstuffs, 'be exercisable also by a State Government subject to the conditions set out therein'. There must be some meaningful effect given to the words 'the Central Government hereby directs that the powers conferred on it by Sub-section (1) of Section 3 of the Act to make orders etc...shall be exercisable also by a State Government subject to the conditions set out therein.' On a plain construction, the first part of the aforesaid notification in specific terms provides for the delegation by the Central Government under Section 5 of the Act of the powers conferred on it by Sub-section (1) of Section 3 of the Act. That power is general in its terms and authorises inter alia the promulgation of any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity, insofar as it is necessary or expedient so to do for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. The second part of the notification directs that the power to make 'orders thereunder' i.e. the power under Sub-section (1) of Section 3 of the Act shall be exercisable also by a State Government, in relation to foodstuffs, with respect to 'such matters' viz. for the matters specified in Clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j) of Sub-section (2) thereof and subject to 'such conditions' set out therein. The aforesaid notification G. S. R. 800 dated June 9, 1978 issued by the Central Government was strictly in conformity with Section 5 of the Act, Of the three conditions, the one that is material for our purpose is condition 2. It provides that before making an order under Clause (d) of sub-s, (2) of Section 3 of the Act in regard to distribution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, the State Government shall also obtain the prior concurrence of the Central Government. It is manifest on a plain reading that the aforesaid notification No. G. S. R. 800 dated June 9, 1978 was strictly in conformity with the requirements of Section 5 of the Act.

11. Learned Counsel for the appellant however strenuously contends that the delegation of powers by the Central Government under Section 5 of the Act must necessarily be in relation to 'such matters' and subject to 'such conditions' as may be specified in the notification. The whole attempt on the part of the learned Counsel is to confine the scope and ambit of the impugned order to CL (d) of Sub-section (2) of Section 3 of the Act which uses the word 'regulating' and take it out of-the purview of Sub-section (1) of Section 3 which uses the words 'regulating or prohibiting'. That is not proper way of construction of Sub-section (1) and (2) of Section 3 of the Act in their normal setting. The restricted construction of Section 3 contended for by learned Counsel for the appellant would render the scheme of the Act wholly unworkable as already indicated, the source of power to make an order of this description is Sub-section (1) of Section 3 of the Act and sub's. (2) merely provides illustration for the general powers conferred by Sub-section (1). Sub-section (2) of Section 3 of the Act commences with the words 'Without prejudice to the generality of the powers conferred by Sub-section (1)'. It is manifest that Sub-section (2) of Section 3 of the Act confers no fresh powers but is merely illustrative of the general powers conferred by Sub-section (1) of Section 3 without exhausting the subjects in relation to which such powers can be exercised.

12. The matter is no longer res Integra. The question directly arose for consideration by this Court in Santosh Kumar Jain v. The State : 1951CriLJ757 . There, the Court was considering the validity of the Sugar and Sugar Products Control Order, 1947 issued by the then Provincial Government of Bihar in exercise of the powers conferred on it by Section 3 of the Essential Supplies (Temporary Powers) Act, 1946 by virtue of the delegation of powers by the Central Government to make orders in relation to foodstuffs under Clause (j) of Sub-section (2) of Section 3 of that Act. Patanjali Shastri, J., speaking for the Court explaining the relevant functions of Sub-section (1) and (2) of Section 3 of the Act, said :

It is manifest that Sub-section (2) of Section 3 confers no further or other powers on the Central Government than what are conferred under Sub-section (1), for it is 'an order made thereunder' that may provide for one, or the other of the matters specifically enumerated in Sub-section (2) which are only illustrative, as such enumeration is 'without prejudice to the generality of 'the powers conferred by Sub-section (1)'. Seizure of an article being thus, shown to fall with-in the purview of Sub-section (I), it must be competent for the Central Government or1 its delegate, the Provincial Government, to make an order for seizure under that Sub-section apart from and irrespective of the anticipated contravention of any other order as contemplated in Clause (j) of Sub-section (2).

The Court drew support for this view from the decision of the Privy Council in Emperor v. Sibnath Banerjee . The Federal Court, in that case held R. 26 of the Defence of India Rules made under CL (j) of Sub-section (2) of Section 3 of the Defence of India Act, 1939 to be ultra vires, which decision was reversed by the Privy Council. The Court quoted with approval the following observations of Lord Thankerton, J. delivering the judgment of Privy Council:

In the opinion of their Lordships, the function of Sub-section (2) is merely an illustrative one; the rule-making power is conferred by Sub-section (1), and 'the rules' which are referred to in the opening sentence of Sub-section (2) are the . rules which are authorized by, and made under, Sub-section (1); the provisions of Sub-section (2) are not restrictive of Sub-section (1), as, indeed is expressly stated by the words 'without prejudice to the generality of the powers conferred by Sub-section(l).

This accords with our view of the purport and effect of Sub-section (l)and(2)of Section 3 of the Act.

13. In Atulya Kumar v. Director of Procurement & Supply : AIR1953Cal548 the challenge was to the validity of West Bengal Foodgrains (Intensive Procurement) Order, 1952 issued under Section 3(1) of the Essential Supplies (Temporary Powers) Act, 1946 by virtue of delegation of powers by the Central Government under Section 5 of the Act which was almost in identical with Section 5 of the Act. Sinha, J (as he 'then was) held that the power to promulgate the levy order was derived from Sub-section (1) of Section 3 of the Act; and that the power was general in terms and authorized inter alia the promulgation of any order providing for regulating or prohibiting the production, supply and distribution, and trade and commerce in, any essential commodity, insofar as it appears necessary or expedient to the State Government. for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. The learned Judge after referring to the Privy Council decision in Sibnath Banerjee's case and that of this Court in Santosh Kumar Jain's case, observed :

Sub-section (2) of Section 3, commences with the words 'without prejudice to the generality of the powers conferred by Sub-section (1)...etc.' This shows that Sub-section (2) confers no fresh powers but provides illustrations of the general powers conferred by Sub-section (1)...

The learned Judge went on to observe :

This is undoubtedly very incompetent drafting. But I think that the meaning is reasonably clear. The 'Matters specified' in Sub-section (2), being 'without prejudice' to the generality of the powers conferred by Sub-section (1) must be held to include such powers. Thus it cannot be said that the general powers have not been conferred upon the State, but only those specified in Cls. (a) to (j) of Sub-section (2). The only limitation is with regard to the kind of essential commodity concerned. The State has been given powers limited to 'foodstuffs' only.

Quite recently, the Calcutta High Court in Tarakdas Mukherjee v. State of West Bengal (1978) 2 Cal LJ 383 and Lila Biswas v. State of West Bengal 83 C WN 539 following the dictum of Sinha, J. in Atulya Kumar's case, supra, have held that the delegation of specified powers to issue an impugned order of this nature is derived from Sub-section (1) of Section 3 and that the provisions of Sub-section (2) thereof are merely illustrative. It has further held that the various clauses of Sub-section (2) of Section 3 of the Act cannot be made operative independently by any notification under Section 5 of the Act without deriving the general powers under Sub-section (1) of Section 3 of the Act. We are of the considered opinion that the view of the Calcutta High Court accords both with reason and principle. The view to the contrary taken by the Punjab, Allahabad and Orissa High Courts in Sujan Singh's , Suraj Bhan's : AIR1972All401 and Bejoy Kumar Routrai's : AIR1976Ori138 cases, supra, does not lay down good law. It must accordingly be held that although CL (d) of Sub-section (2) of Section 3 of the Act deals only with a specific power, the general power to issue the impugned order flows from the provisions of Sub-section (1) of Section 3 which stands delegated to the State Government by virtue of the notifications issued under Section 5 of the Act.

14. Upon that view, the question as to the construction of the word 'regulating' occurring in Clause (d) of Sub-section (2) of Section 3 of the Act does not really arise. However, since the question has been raised at the Bar we think it proper to deal with it. As a matter of construction, Shri P. Govindan Nair, learned Counsel for the appellant contends that the words 'regulating' and 'prohibiting', connote two distinct and separate attributes of power which are mutually exclusive and therefore the word 'regulating' used in Clause (d) cannot be given the same meaning as 'prohibiting'. He urges that it is a sound rule of construction to give the same meaning to the same word occurring in different parts of an Act of Parliament. For the purpose of ascertaining the true meaning of the word 'regulating' in the context of Clause (d) of Sub-section (2) of Section 3, he has referred to us the different clauses of that Sub-section. A perusal of the various Clauses (a) to (j) indicates that while Cls. (a), (d) and (g) speak of the power to prohibit, and the remaining Cls. (b), (c), (f), (h), (i), (it) and (j) though they do not mention that they are illustrative of the power to regulate impliedly partake of the character of that power. If the contention of the learned Counsel were to be accepted, it would imply that the Central Government derives its power under Sub-section (l)of Section 3 of the Act as the power to promulgate any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity insofar as it appears necessary or expedient so to do, for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. If the Central Government were to make an order under Sub-section (1) in respect of the matters specified in Clause (d), it may not only regulate or control the storage, transport, distribution etc. of an essential commodity including the movement of such foodstuffs by grant of licences, permits or otherwise, but also place a ban on the movement of wheat from one place to another; but the State Government under Clause (d) has only a regulatory power in relation thereto {&. to make an order only for regulating me movement of wheat from one place to another by issue of the permits, licenses or otherwise as provided for by Clause 3 of the impugned Order but could not have issued CL 3(1 A) placing a been on movement of wheat from one place to another. Although by force of logic one may be driven to that conclusion that the State Government has power to promulgate Clause 3 of the impugned Order but not Clause 3(1A), there is no reason for us to give such a restrictive meaning to the word 'regulating' 'appearing in Clause (d) of Sub-section (2) of Section 3 of the Act. It would seem that the rule of construction is clearly well recognized that a word may be used in two different senses in the same section of an Act.

15. The word 'regulation' has not that rigidity of meaning as never to take in 'prohibition' must depend on the context in which it is used in the statute and the object sought to be achieved by the legislation. For a time different views were expressed on the question whether the word 'regulation' in Articles 19(2) or 19(6) includes 'prohibition1 till the Court in Narendra Kumar v. Union of India : [1960]2SCR375 answered it in the affirmative.

16. Shri P. Govindan Nair, learned Counsel for the appellant however contends that the word 'regulation' should not be confused with the expression 'reasonable restrictions' occurring in Articles 19(2) to (6) of the Constitution and therefore the view taken in Narendra Kumar's case is not applicable. According to him, the word 'regulation' in Clause (d) of Sub-section (2) of Section 3 of the Act does not take in 'prohibition'. He seeks to draw a distinction between prohibition or prevention of certain activities and their regulation or governance. It is said that a power to regulate or govern would imply continued existence of that which is to be regulated or governed; and to be inconsistent with absolute prohibition. He therefore submits that Clause 3(1A) of the Order was ultra vires because the Slate Government had only power under Clause (d) of Sub-section (2) of Section 3 of the Act to regulate production, supply and distribution of, and trade and commerce in, essential commodities like foodstuffs by grant of permits, licences or otherwise, in contradistinction to the power of the Central Government under Sub-section (1) of Section 3 to regulate or prohibit such production, supply and distribution of, and trade and commerce in, essential commodities.

17. Learned Counsel for the appellant placed reliance on the decision of the Allahabad High Court in Suraj Bhan's case : AIR1972All401 which proceeds upon a decision of this Court in State of Mysore v. H. Sanjeeviah : [1967]2SCR673 holding that power to regulate does not include power to prohibit or restrict. In Sanjeeviah's case, the question arose whether two provisos framed by the State Government under Section 37 of the Mysore Forest Act, 1900 which empowered the making of rules to regulate the transit of forest produce which placed absolute prohibition against transportation of forest produce between sunset and sunrise and a qualified prohibition in certain circumstances, was beyond the rule-making power of the State Government. The contention on behalf of the State was that the two provisos were regulatory and prohibitory. In repelling the contention, the Court observed :

The power which the State Government may exercise is the power to regulate transport of forest produce, and not the power to prohibit or restrict transport. Prima facie, a rule which totally prohibits movement of forest produce during the period between sunset and sunrise is prohibitory or restrictive of the right to transport forest produce.

These observations do not lay down any rule of universal application.

18. The word 'regulation' cannot have any rigid or inflexible meaning as to exclude 'prohibition'. The word 'regulate' is difficult to define as having any precise meaning. It is a word of broad import, having a broad meaning, and is very comprehensive in scope. There is a diversity of opinion as to its meaning and its application to a particular state of facts, some Courts giving to the term a somewhat restricted, and others giving to it a liberal, construction. The different shades of meaning are brought out in Corpus Juris Secundum, vol. 76 at p. 611 :

Regulate' is variously defined as meaning to adjust; to adjust, order, or govern by rule, method, or established mode; to adjust or control by rule, method, or established mode, or governing principles or laws; to govern; to govern by rule; to govern by, or subject to, certain rules or restrictions; to govern or direct according to rule; to control, govern, or direct by rule or regulations.

'Regulate' is also defined as meaning to direct; to direct by rule or restriction; to direct or manage according to certain standards, laws, or rules; to rule; to conduct; to fix or establish; to restrain; to restrict.

See also: Webster's Third New International Dictionary, VoL II, p. 1913 and Shorter Oxford Dictionary, Vol. II, 3rd edn., p. 1784.

19. It has often been said that the power to regulate does not necessarily include the power to prohibit, and ordinarily the word 'regulate' is not synonymous with the word 'prohibit'. This is true in a general sense and in the sense that mere regulation is not the same as absolute prohibition. At the same time, the power to regulate carries with it full power over the things subject to regulation and in absence of restrictive words, the power must be regarded as plenary over the entire subject. It implies the power to rule, direct and control, and involves the adoption of a rule or guiding principle to be followed, or the making of a rule with respect to the subject to be regulated. The power to regulate implies the power to check and may imply the power to prohibit under certain circumstances, as where the best or only efficacious regulation consists of suppression. It would therefore appear that the word 'regulation' cannot have any inflexible meaning as to exclude 'prohibition'. It has different shades of meaning and must take its colour from the context in which it is used having regard to the purpose and object of the legislation, and the Court must necessarily keep in view the mischief which the legislature seeks to remedy.

20. The question essentially is one of degree and it is impossible to fix any definite point at which 'regulation' ends and 'prohibition' begins. We may illustrate how different minds have differently reacted as to the meaning of the word 'regulate' depending on the context in which it is used and the purpose and object of the legislation. In Slattery v. Naylor (1888) 13 AC 446, the question arose before the Judicial Committee of the Privy Council whether a bye-law by reason of its prohibiting internment altogether in a particular cemetery, was ultra vires because the Municipal Council had only power of regulating internments whereas the bye-law totally prohibited them in the cemetery in question, and it was said by Lord Hobhouse, delivering the judgment of the Privy Council:

A rule or bye-law cannot be held as ultra vires merely because it prohibits where empowered to regulate, as regulation often involved prohibition.

21. In context, in Municipal Corporation of the City of Toronto v. Virgo 1896 AC 88, where the question for decision was whether a section or a bye-law prohibiting hawkers from plying their trade, was competently and validly made, Lord Davey delivering the judgment of the Privy Council while laying down that a power to make a bye-law to 'regulate' and 'govern' a trade does not authorize the prohibition of such trade, and added:

There is a marked distinction between the prohibition or prevention of a trade and the regulation or governance of it, and, indeed, a power to 'regulate' and 'govern' seems to imply the continued existence of that which is to be regulated or governed.

22. The predominant object of the Act, as reflected in the preamble is to provide, in the interests of the general public, for the control of the production, supply and distribution of, and trade and commerce in, certain essential commodities. It is a piece of socio-economic legislation enacted in the national interest to secure control over the production, supply and distribution of, and trade and commerce in, essential commodities. The various Control Orders issued by the Central Government under Sub-section (1) of Section 3 of the Act or by the State Governments under Section 3 read with Section 5 have introduced a system of checks and balances to achieve the object of the legislation i.e. to ensure equitable distribution and availability of essential commodities at fair prices. Special public interest in an industry e.g. that it is engaged in the production of a commodity vitally essential to the community, may justify the regulation of its production, supply and distribution and its trade and commerce, provided such regulation is not arbitrary and has a rational nexus with the object sought to be achieved.

23. The power to regulate or prohibit the production, supply and distribution of, and trade and commerce in, essential commodity may be exercised in innumerable ways. One of the ways in which such regulation or control over the production, supply and distribution of, and trade and commerce in, an essential commodity like foodstuffs may be exercised by placing a ban on inter-State or intra-State movement of foodstuffs to ensure that the excess stock of foodstuffs held by a wholesale dealer, commission agent or retailer is not transported to places outside the State or from one district to another with a view to maximise the procurement of such foodstuffs from the growers in the surplus areas for their equitable distribution at fair prices in the deficit areas. The placing of such ban on export of foodstuffs across the State or from one part of the State to another with a view to prevent outflow of foodstuffs from a State which is a surplus State prevents the spiral rise in prices of such foodstuffs by artificial creation of shortage by unscrupulous traders. But such control can be exercised in a variety of ways otherwise than by placing compulsory levy on the producers, for example, by fixing a controlled price for foodstuffs, by placing a limit on the stock of foodstuffs to be held, by a wholesale dealer, commission agent, or retailer, by prohibiting sales except in certain specified manner, etc. /These are nothing but regulatory measures.

24. We find no lawful justification for giving a restricted meaning to the word 'regulating' in Clause (d) of Sub-section (2) of Section 3 of the Act as not to takes in 'prohibiting'. In State of Tamil Nadu v. Hind Stone : [1981]2SCR742 , Chinnappa Reddy, J. referred with approval the observations of Mathew, J. in G. K. Krishnan v. State of Tamil Nadu : [1975]2SCR715 laying down that the word 'regulation' has no fixed connotation and that its meaning differs according to the nature of the thing to which it is applied. The learned Judge also observed:

In modern statutes concerned as they are with economic and social activities, 'regulation' must, of necessity, receive so wide an interpretation that in certain situations, it must exclude competition to the public sector from the private sector. More so in a welfare State. It was pointed out by the Privy Council in Commonwealth of Australia v. Bank of New South Wales (1949) 2 All ER 755 - and we agree with what was stated therein - that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration and that it could not be laid down that in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or Commonwealth agency, be justified.

25. In Krishan Lai Praveen Kumar v. State of Rajasthan : AIR1982SC29 , Suraj Mal Kailash Chand v. Union of India : AIR1982SC130 , and Bishamber Dayal Chandra Mohan v. State of U. P. : [1982]1SCR1137 the Court has held that restriction placed on movement of wheat from one State to another and on movement of wheat from one district to another under Clause (d) of Sub-section (2) of Section 3 of the Act, to be regulatory in character.

26. Surely when a part of the country is verging on conditions of acute shortage or even famine, it is expected of the government to procure foodstuffs from surplus areas and transport the same for distribution in deficit areas. In the State of Tamil Nadu like some other States, the two things most essential for the sustenance of human life are rice and paddy. It is amply borne out from the material on record that due to the failure of the southwest and north-east monsoons in successive years, and the consequent poor rainfall, there was a steep fall in production of paddy. In the circumstances, the State Government had no other alternative not only to reimpose compulsory levy on the producer of paddy to the extent of 50%, but also to introduce a scheme for a monopoly purchase of paddy by the Government with a view to build up its' buffer stock for distribution through the public distribution system throughout the State. If one part of the State is faced with a famine or even acute shortage of foodstuffs, it is not unreasonable for the Government to acquire foodstuffs from the surplus areas and distribute the same in areas where they are most needed. The source of power to issue an order under Clause (d) of Sub-section (2) of Section 3 of the Act being relatable to the general powers of the Central Government under Sub-section (1) of Section 3, there is no reason for us to give a restricted meaning to the word 'regulating in Clause (d) of sub-s, (2) of Section 3 of the Act so as not to take in 'prohibiting'.

27. For the reasons aforesaid, the appeal must fail.


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