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S. Alphone Vs. District Supply Officer, Nagarcoil and ors. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Case NumberW.A. Nos. 1069 and 1121 to 1215 etc. of 1983
Judge
Reported inAIR1986Mad20
ActsTamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984; Tamil Nadu Paddy and Rice (Regulation of Trade) Order, 1974
AppellantS. Alphone
RespondentDistrict Supply Officer, Nagarcoil and ors.
Excerpt:
.....tamil nadu paddy and rice (regulation of trade) order, 1974 - appellant sought to quash order of licensing authority under direction from district supply officer (dso) reducing quantity of rice he can possess - said modification not in accordance with quantity fixed by under order of 1984 - licensing authority liable to modify holding limits to give effect to government order - modification not in accordance with government's fixation cannot said to be for giving effect to government order - licensing authority incompetent to override holding limit which commissioner has fixed - held, modification contrary to government fixation set aside. - - however, the order covers wider field because it is intended to achieve the purpose, of maintaining supplies of not only paddy and rice,..........the commissioner and the collector or the licensing authority power to issue directions from time to time for the purpose of maintaining the supplies of paddy and rice, and for securing their equitable distribution and availability at fair prices to give effect to the provisions of the order and all dealers and persons were obliged to comply with such directions. in addition to the general power to issue directions, specific subjects were mentioned in r. 14(2) of 1974 order, the relevant portion of which reads as follows : -'14(2). without prejudice to the generality of sub-clause (1) of this clause, such directions may provide for all or any of the following matters, namely (a)to (d) ............ ........... ............. ........... (e) alteration, amendment, or variation of the.....
Judgment:

M.N. Chandurkar, C.J.

1. This appeal is directed against the judgment of Ramanujam. J. by which the learned Judge has held that the direction contained in the Order F.2. 77901/81, issued by the District Supply Officer Nagarcoil as the licensing authority, dt. 10-2-1981, was justified and that it was within the powers of the licensing authority to give the said direction which had the effect of reducing the quantum of rice which the appellant was entitled to possess and store.

2. The State Government had promulgated an order called the Tamil Nadu Paddy and Rice (Regulation of Trade) Order, 1974, hereinafter referred to as the 1974 Order. Under Cl. 8 of the said Order, retail trade in paddy or rice could not be carried on unless a person registered himself as a retailer with the licensing authority. The licensing authority under the order was the District Supply Officer. Cl. 14 of this 1974 Order vested in the Government, the Commissioner and the Collector or the licensing authority power to issue directions from time to time for the purpose of maintaining the supplies of paddy and rice, and for securing their equitable distribution and availability at fair prices to give effect to the provisions of the order and all dealers and persons were obliged to comply with such directions. In addition to the general power to issue directions, specific subjects were mentioned in R. 14(2) of 1974 Order, the relevant portion of which reads as follows : -

'14(2). Without prejudice to the generality of sub-clause (1) of this clause, such directions may provide for all or any of the following matters, namely

(a)to (d) ............ ........... ............. ...........

(e) alteration, amendment, or variation of the maximum or minimum limits for purchases, and sale of paddy and rice at any one time or during any period of time.'

((f) to (i) excluded).'

3. Admittedly, under the licence issued to the petitioner appellant, he was entitled to store for sale rice to the extent of 50 quintals. However, by the impugned direction the licensing authority purporting to act in exercise .of the power under Cl. 14(2)(e) of the 1974 order, made an order fixing a ceiling of 10 quintals of rice for retail registration certificate holder per week. This order, it is claimed, became necessary because of the scarcity position of the paddy and rice in taluks, namely, Kalkulam and Vilavancode of Kanyakumari district.

4. When this direction was challenged, it was not disputed by the licensing authority that it was he who issued the said direction. According to him, the direction became necessary because-when 1974 Order was issued, the levy in force was only 40 per cent, but was raised to 50 per cent, the price position in the adjacent Kerala State was very high and rice was being smuggled to Kerala State because long stretch of land in Tamil Nadu was adjacent to the border of Kerala and it was with a view to avoid the smuggling of rice into Kerala that the quantity restriction was imposed with reference to the provisions in the order. The stand taken by the licensing authority was that, if no restriction was imposed for the storage of paddy and rice in the border area of the State of Tamil Nadu, there was every possibility of smuggling of rice to the adjacent State of Kerala, because the price of rice in Kerala State was very high. It is to be remembered that this restriction was not imposed on the retail registration certificate holders in the whole of district of Kanyakumari, but only in the two taluks of Kalkulam and Vilavancode, because they were deficit areas in paddy production and the number of retail dealers who were registered was disproportionate to the area and the population of the two taluks. It was asserted by the licensing authority that he had the power to give necessary directions for maintaining the supply of rice and for securing the equitable distribution and its availability at fair price and to give effect to the provisions of the order.

5. Dealing with the question of power to issue such direction, the learned Judge found that there was express power in C1. 14(2)(e) for modification of the holding limit and the learned Judge relied upon the decision of this Court reported in W. P. 3257 to 3259 of 1972, in which the learned Judge who decided those writ petitions had upheld such power under a similar clause in the Tamil Nadu Paddy and Rice Dealers (Licensing and Regulation) Order, 1968. The learned Judge then proceeded to consider the challenge of the direction of the licensing authority on the ground of violation of Art. 14 of the Constitution of India. The learned Judge found that there was nothing to disbelieve the averments made in the counter affidavit that there was considerable activity of smuggling of rice and paddy from the two taluks (Kalkularn and Vilavancode) into Kerala State, and that it was not possible to reject the statements made in the counter-affidavit unless concrete materials were placed before the Court to doubt the correctness of the statements contained in the counter-affidavit. The learned Judge accepted the case of the respondents that paddy was a scarce commodity for Kalkulam and Vilavancode taluks and these facts, according to the learned Judge, could not be ignored. The learned Judge also found that it was not necessary for the respondents to produce actual evidence of smuggling. Considering the argument that the limit of 10 quintals was arbitrary, the learned Judge found that there was enough guideline in C1. 14 of the 1974 Order itself which requires directions to be made for securing the equitable distribution and availability of rice and paddy at fair prices. Accordingly, the learned Judge dismissed the writ petition.

6. By the time these appeals and writ petitions came up for hearing, the 1974 Order has been replaced by the State Government by a new Order called the Tamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984. The material provisions of this Order are substantially a reproduction of most of the clauses of the 1974 Order. However, the Order covers wider field because it is intended to achieve the purpose, of maintaining supplies of not only paddy and rice, but other essential articles, like wheat, and wheat products, pulses, edible oils, chillies (dry), jaggery tamarind and such other essential commodities as may be notified by the State Government. The Order is made in exercise of the powers conferred by Sec. 3 of the Essential Commodities Act, 1955, It provides for licensing all dealers who may be a wholesaler or a retailer. Cl. 5 of the 1984 Order provides for grant and renewal of licences. Cl. 14 of the 1984 Order is almost in identical terms as Cl. 14 of the 1974 Order, except that in place of 'paddy and rice' the words used are 'essential trade articles'. The power to issue a direction with regard to maximum or minimum limits for purchase, store and sale of essential trade articles is contained in Cl. (e) of sub-cl. (2) of Cl. 14 of the 1984 Order. The relevant Cl. 14(2)(e) reads as follows : -

'14. Power to issue direction:

(1) to (2)...... ..... .... ........... .

(a) to (d)........ ....... ....... ........

(e) alteration, amendment, or variation of the maximum or minimum limits for purchases storage and sale of essential trade articles at any one time or during any period of time;

(f) to (i).......... ......... ........... .........'

It is necessary to reproduce Cl. 16, which independently deals with restriction in regard to purchase and storage. It reads as follows :

'16. Restriction in regard to purchase and storage; -- No dealer shall purchase, store or sell at any one time any quantity of any essential trade article in excess of the limit that may be specified by the Government by a notification from time to time.'

Admittedly in the exercise of the power under Cl. 16, the Government has issued G. 0. along with 1984 Order itself, by which the quantity of rice which a retail dealer was entitled to purchase, store or sell, was fixed at 50 quintals. This G. 0. Ms. No. 280 Food, 31st March 1984 reads as follows : -

'In exercise of the powers conferred by Cl. 16 of the Tamil Nadu Essential Trade Articles (Regulation of Trade) Order, 1984, the Governor of Tamil Nadu hereby specifies that a dealer mentioned in column (1) of the Table below shall not purchase, store or sell paddy or its rice equivalent at any one time in excess of the limits mentioned in column (2), thereof

I....... ..... .... ...... ....... ....... ...... ..........

II. Retailer .. .. .. 50 quintals of rice. Explanation : (1) Two quintals of rice shall be treated as equivalent to three quintals of paddy for purposes of determining paddy equivalent of rice.

(2) The above ceiling limits on holding shall not apply to co-operative societies doing wholesale or retail trade.'

The effect of this Government Order, therefore, is that after the coming into force of the 1984 Order, a retail dealer in rice can purchase, store, or sell rice at any one point of time up to 50 quintals.

7. When this appeal came up for hearing Mr. R. Antony Xavier, learned counsel for the appellant, has contended that it is not necessary to go into the grounds on which the learned single Judge sustained the validity of the direction given on 10-2-1981, because, according to the learned counsel, on the coming into force of the 1984 Order, the direction given on 10-2-1981 must cease to be effective and, therefore, the Government having now specified 50 quintals as the limit for purchasing, storing and selling at any one time, the appellant would be entitled under the terms of the Government Order dt. 31st March 1984, to purchase, store and sell rice to the extent of 50 quintals at any one point of time. The learned Government Pleader however vehemently contended that there is a saving provision in Cl. 31 of the 1984 Order, which has the effect of continuing the direction dated 10-2-1981. C1. 31(l) of the 1984 Order repeals several regulations and orders, out of which 1974 Order is one. Sub-cl. (2) of Cl. 31, reads as follows : -

'(2) Notwithstanding such repeal, anything done or any action taken under the said orders including any order or direction issued shall be deemed to have been made or issued under this order.'

Relying on this clause and emphasising the fact that the non obstante clause is to be found in sub-cl. (2) of C1. 31 of the 1984 Order, the learned counsel contended that, because of the saving C1. 31(2) of the 1984 Order, the direction dt. 10-2-1981 continues to be valid and effective.

8. Clause 31(2) of the 1984 Order is like the usual saving clause which is intended to save anything done or any action taken or any order or direction issued under a repealed provision of law. But while giving effect to a saving provision, when it provides that something which is done or issued under the repealed provision must be treated as having been treated or issued under the newly enacted provision, an earlier order can be saved only if such a direction or order could be effectively and validly made under the new provisions of law, which had repealed the earlier provisions. If it is found that a licensing authority was entitled even under the terms of the 1984 Order, to make a direction regulating the purchase, store, or sale, of rice, then there could not be much difficulty in giving effect to the saving provision in Cl. 31(2) of the 1984 Order, and holding that the direction dt. 10-2-1984, continues to be effective, valid and binding even after the repeal. The learned Government Pleader contends that the Cl. 14(2)(e) of the 1984 Order is identical to Cl. 14(2)(e) of the 1974 Order, in exercise of the power under which the direction dt. 10-21981, was issued by the licensing authority. Therefore according to the learned Government Pleader, a direction like the one dt. 10-2-1981 could be validly issued in the exercise of the powers of the licensing authority under Cl. 14(2)(e) of the 1984 Order, and, therefore, the direction dt. 10-2-1981 will have to be given effect to.

9. Now there is no doubt that the power to issue direction under Cl. 14 of the Order is vested in the Commissioner, the Collector and the licensing authority. There is also no doubt that under sub-cl. (e) this power car be exercised with a view to give a direction regarding alteration or variation of the maximum or minimum limits for purchase, storage and sale of rice which is an essential trade article at any period of time. It appears to us, however, that the object of restriction in regard to purchases, storage and sale of essential trade articles is also expressly covered by Cl. 16 of the 1984 Order, which is a special provision dealing with such restriction. It is a restrictive provision and must therefore be construed strictly. Cl. 16 requires that the limit with regard to purchasing, storing and selling at one time any quantity of essential trade articles has to be specified by the Government by notification from time to time. Thus, the power to place a restriction with regard to the right to purchases, store and sale is vested by Cl. 16 only in the Government. The power has to be exercised by issuing a notification. There is no doubt that this power can be exercised from time to time. The question which falls for consideration however is, when there is express power vested in the Government to issue direction from time to time by notification specifying the limits of the quantity to be purchased, stored and sold at any one time can the same power be exercised by an authority subordinate to the Government. As already pointed out, the power under Cl. 14 can be exercised, apart from the Government by the Commissioner and the Collector or the licensing authority. Since the subject of restrictions in the matter of purchasing, storing and selling of essential trade article is specifically dealt with in Clause 16, notwithstanding the provisions in sub-cl. (e) of Cl. 14(l), unless it is held that an authority subordinate to the Government can modify the order made by the Government, the only conclusion can be that the power to issue a notification in respect of matters specified in R. 16 is exclusively vested with the Government to the exclusion of the other subordinate authorities referred to in R. 14(2)(e). It cannot even be imagined that the Government contemplated that in the exercise of the power under C1, 14(2)(e), of the 1984 Order, even a subordinate authority, like the licensing authority, should change or should be authorised to modify the limits which are declared by notification by the government in the exercise of specific power under Cf. 16 of the 1984 Order. It is to be remembered that Cl. 14(l), is a general power, which has to be exercised for purposes of giving effect to the provisions of the Order. In other words, the power under Cl. 14 is a power to implement the requirements of the Order and to see that they are effectively implemented. When the several authorities specified in CL 14 are under an obligation to give effect to the provisions of the Order, it is also their duty to see that the directions issued by the Government under Cl. 16 are implemented. Therefore when the State Government has by the notification dt. 31-10-1981, specified certain limits, then the limited scope of the direction under Cl. 14 in respect of matters covered by Cf. 16 will be to ensure that the limits set by the State Government by the aforementioned notification are observed. A power vested in the authorities to be exercised for the purpose of giving effect to what is done under the Order, cannot be exercised so as to undo what has been done by the State Government in exercise of its specific power under C1. 16. If the power under Cl. 14(2)(e) has the effect of either undoing or modifying what has been done by the Government, then such exercise of power cannot be said to be for the purpose of giving effect to the Order, which includes Cl. 16.

10. It appears to us that, when the 1984 Order was issued while reproducing verbatim the provisions of Cl. 14 from 1974 Order, it was lost sight of that a separate provision was being independently made under Cl. 16 vesting the power to put restrictions with regard to purchasing, storing and selling of the essential trade articles only in the Government. It is 'necessary to reconcile the provisions in Cl. 14(2)(e) with Cf. 16; and where such a conflict arises, in our view, the provisions in, Cl. 16 will have to prevail to the exclusion of Cl. 14(2)(e) to the extent that the topic is already covered by Cl. 16. Then the direction dt. 10-2-1981, could not be enforced subsequent to 1.984 Order. Consequently the direction issued under the Cl. 14(2)(e) of the 1974 Order, which stands repealed, cannot be treated as a direction issued under the 1984 Order. The right of the appellant will now be governed by, Cl. 16, read with the Government Order dt. 31st March, 1984 which directs the retailer not to purchase and sell rice in excess of the limit of 50 quintals at any one time.

11. Even otherwise, it appears to us that merely because there is a power under the 1974 Order in Cf. 14(2)(e), under which the licensing authority could issue directions in the matter of purchasing, selling and storing rice, that would not be sufficient to uphold the validity of the direction dt. 14-10-1981, because it appears to us that the original limit of 50 quintals was fixed not by the licensing authority but by the Commissioner.

12. The learned Judge has upheld the validity of the direction issued by the licensing authority on the terms of Cf. 14 of the 1974 Order read with Cl. 7 in the registration Certificate issued to a retailer. Cl. 7 in the Registration Certificate is as follows-

'7. The retailer shall comply with any directions that may be given to him in regard to the purchase, sale or storage for sale or distribution of paddy/rice under the provisions of the Tamil Nadu Paddy and Rice (Regulation of Trade) Order, 1974.'

The learned Judge held that the retailer, who has got the certificate of registration is bound to comply with the directions that may be issued by the licensing authority in regard to the purchase, sale or storage and distribution of paddy and rice. Therefore, according to the learned Judge in view of the specific and express power under Cl. 14(2)(e) of the Order and the obligation under C1. 7 of the Registration Certificate, it could not be said that the licensing authority had no power to reduce the holding limit.

13. Now, undoubtedly, the licensing authority is one of the authorities mentioned under Cl. 14 of the 1974 Order, who are empowered to issue the necessary directions for purposes of maintaining supplies of paddy and rice and for securing their equitable distribution and availability at fair prices. Such directions were undoubtedly intended to give effect to the provisions of the Order. It is also true that Cl. 7 of the Registration certificate makes it obligatory on the retailer to comply with any directions that may be issued to him in exercise of the power under Cl. 14(2). That, however, does not fully answer the challenge made to the legality of the directions issued by the licensing authority. The contention of the petitioner appellant is that, a limit of 50 quintals of rice having been fixed by the Commissioner, the licensing authority is not entitled to issue any direction contrary to what the Commissioner had done. The learned Government pleader had produced before us the Order of the Commissioner of Civil Supplies dt. 5-5-1979 in which the Commissioner has ordered that the retailers can make purchases both from producers and wholesalers, and sell to consumers, and that it has been decided to raise the limit from 25 quintals to 50 quintals in terms of rice. This order of the Commissioner shows that prior to 5-5-1979, the limit in respect of rice was 25 quintals, which was raised by the Commissioner to 50 quintals. This Order also shows that the Commissioner overruled the view of the department that the limit for purchases holding of stocks by retailer, may be fixed at 10 quintals in terms of rice. This order was operative throughout the State. The power under Cf. 14, as already pointed out, can be exercised by the Government, the Commissioner and the Collector or the licensing authority. As we have already indicated, this clause does not enable a subordinate authority to make any order or issue any directions, contrary to an order or direction which has already been made by an authority higher to the licensing authority. Necessarily, when it was mentioned in Cl. 14. that the Government, the Commissioner, the Collector or the licensing authority may issue directions from time to time, the obvious intention was that, any modification of a direction earlier issued, would be only by the authority which has made the earlier direction or by an authority which would be higher in rank to the authority which made the direction. It is difficult to imagine that when the Commissioner has applied his mind to the question as to how such limit should be enforced in respect of rice, the licensing authority could interfere with that decision, and reduce that limit only in a part of the area of the district. Undoubtedly, it would be open to the Commissioner to modify the limit of 50 quintals of rice, but we are unable to find any different power in the licensing authority, which would enable him to modify the limit which is already fixed by the Commissioner. The mere fact that the licensing authority is one of the authorities empowered to issue the necessary direction for giving effect to the Order and the further fact that the retailer is bound to comply with the directions, does not mean that the licensing authority can modify the directions given by his higher authorities. If this is permitted, the licensing authority could set at naught the order passed not only by the Commissioner but even of the Government of Tamil Nadu which can never be the intent or purpose of Cl. 14 of the 1974 Order. We are therefore, of the view that the learned Judge was not justified in holding that the direction issued by the licensing authority modifying the limit of 50 quintals to 10 quintals of rice, was a valid direction. Accordingly the order of the learned Judge is liable to be set aside, on that short ground.

14. In the view which we have taken that the direction itself is invalid, it is not necessary to decide whether the direction of the licensing authority violated Art. 14 of the Constitution of India.

15. For the foregoing reasons, all the writ appeals will stand allowed, on both the grounds, namely, that the original direction issued by the authority modifying the limit of 50 quintals of rice to 10 quintals is invalid, and even otherwise such an Order must be deemed to have lapsed after the commencement of the 1984 Order, under which the Government has now exercised its power, and fixed the limit of 50 quintals of rice.

16. The writ petitions filed by the petitioners are allowed to the limited extent that a Mandamus will issue to the respondents not to interfere with the licence issued by the licensing authority by imposing a restriction of 10 quintals as being the quantity of rice permitted to be held in accordance with the licence. They are not entitled to any other relief. The appellants shall be entitled to costs. Counsel fee Rs. 400 in each set.

17. Appeal allowed


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