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S. Kuppuswami Chettiar, Proprietor, Krishnananda Rice Mill Vs. Smt. Kamalammal and anr. - Court Judgment

LegalCrystal Citation
SubjectCommercial
CourtChennai High Court
Decided On
Reported in(1968)1MLJ265
AppellantS. Kuppuswami Chettiar, Proprietor, Krishnananda Rice Mill
RespondentSmt. Kamalammal and anr.
Cases ReferredIn Rdmanathdn Chettiar v. Board of Revenue
Excerpt:
- .....an application for certiorari and he should not be considered to be a person aggrieved by the grant. learned counsel urged that on both these points differing views have been expressed by learned judges of this court. my attention was drawn to the decision of kailasam, j. in kuppuswami pillai v. the state of madras, etc. w.p. nos. 2332, 2854 etc. of 1966 where the learned judge posing for consideration the question whether an existing rice mill-holder is entitled to be heard by the authority in granting a new permit to another person in the locality and whether the order was quasi-judicial in nature, on a consideration of the authorities, has held that an existing rice mill-holder would not be an aggrieved person entitled to maintain a writ petition challenging the grant of a new.....
Judgment:
ORDER

M. Natesan, J.

1. The petitioner herein seeks to get quashed by a writ in the nature of certiorari the grant of a permit for the establishment of a rice mill to the first respondent by the second respondent, the Commissioner of Civil Supplies, under Section 5 of the Rice Milling Industry (Regulation) Act, 1958.

2. The petitioner is running a rice mill in Semmedu village, Gingee Taluk, South Arcot district, since 1962. The first respondent, wife of the erstwhile partner of the petitioner applied for permit under the Act for establishing a new rice mill in R.S. No 208/3 of the said Semmedu village. The application was made on 13th November 1963. The petitioner herein preferred objections, in the main asserting that location of a new mill would affect his business, that there was not enough paddy available in the area to feed the new rice mill besides providing for the existing rice mills in the area, that in the locality hand pounding was widely prevalent, and that rarely large quantities of paddy were brought to the mills for hulling. The petitioner's rice mill was about 1 1/2 miles off the site of the proposed rice mill of the first respondent and notwithstanding the objections of the petitioner, permit for a rice mill was granted. The petitioner questions the validity of the grant urging that the proceedings are quasi-judicial in character, and that the order in question has not given any reasons for the grant of the permit. The failure to set out any reason in the order, according to the petitioner, by itself vitiates the order. The order does not show that the authority granting the permit had taken into consideration the relevant matters under the provisions of the Act before granting it. It is pleaded that if the second respondent had applied his mind to the various objections raised by the petitioner, he would have been forced to come to the conclusion that there was no necessity for another rice mill in the area. The affidavit in support of the petition sets out location of two other existing rice mills in the area-one at about a mile from the suit village and another rice mill, Venkateswara Rice Mill, about 6 furlongs from the petitioner's rice mill.

3. In the counter-affidavit of the first respondent, besides meeting the objections of the petitioner to the grant of permit, on the merits it is pleaded that the grant of a permit to the first respondent does not affect the personal or individual rights of the petitioner for him to invoke the jurisdiction of this Court under Article 226 of the Constitution, and that the petitioner has no legal right to prevent another person from carrying on business by establishing a rice mill. It is emphasised that the first respondent has a fundamental right to carry on business subject to reasonable restrictions and the provisions of the Act in question are intended only to regulate the running of mils in the interests of the public and not for creating a vested interest or monopoly in favour of the petitioner. The first respondent would state that the Venkateswara Rice Mill was at a distance of more than two miles from the proposed mill and the mill at Satyamangalam at a distance of more than three miles.

4. On behalf of the second respondent, the Additional Assistant Secretary to the Commissioner of Civil Supplies has filed counter-affidavit. A perusal of the counter-affidavit makes out that all the requirements of the Rice Milling Industry (Regulation) Act and the Rules thereunder have been borne in mind when ordering the grant. The requisite investigation provided for under Section 5 is stated to have been carried out. Section 5(4) of the Act requires a full and complete investigation to be made in the manner prescribed before the grant of a permit. The investigation should have due regard to the number of rice mills operating in the locality, the availability of paddy in the locality, the availability of power and water supply for the rice mill in respect of which permit is applied for, types of the rice mill-the huller type, sheller type or combined sheller-huller type-whether the functioning of the rice mill would cause substantial unemployment in the locality and similar relevant particulars. The authority has to be satisfied that it is necessary to grant the permit for ensuring adequate supply of rice. The rules made under the Act bring out more clearly the object of the regulation. Information has to be gathered as to the pattern of trade and commerce in rice in the locality, the necessity or otherwise for an addition to the productive capacity of the existing rice mills in the locality, whether hand pounding industry in the locality is already well organised and whether the establishment of a new rice mill is likely to affect adversely that industry. The counter-affidavit filed on behalf of the Second respondent states that the site in question was approved by the District Health Officer, and that the Special Deputy Registrar of co-operative Societies, Cuddalore, the Deputy Registrar of co-operative Societies, Tirukoilur, and the Village Industries Officer, Cuddalore, reported that they had no objection to the grant of a permit to the first respondent. It is stated that a report was called for from the District Revenue Officer, South Arcot, on the objections of the petitioner herein, and that after a careful consideration of the contentions of the petitioner herein and the report of the District Revenue Officer the objections of the petitioner were overruled and the permit issued to the first respondent. The counter--affidavit sets out in extenso the particulars which the investigation provided for under Section 5(4) of the Act has brought out. It is stated that sufficient surplus of paddy would be available for establishment of additional rice mill in the locality. The Village Industries Officer, Cuddalore, had reported that there was no hand pounding industry in the locality and that there, was no possibility of starting a new one in the near future. The objections of the petitioner were found on the merits untenable and were not borne out by the facts and figures gathered.

5. The main endeavour of Mr. K.K. Venugopal, learned Counsel appearing before me, was to persuade me to refer the matter to a Bench, as there were conflicting views on two of the questions raised for the respondents. Learned Counsel contended that apart from the merits, two objections were raised by the respondents (1) that the proceedings relating to the grant of a permit were administrative in character and therefore a writ of certiorari did not lie; and (2) that the petitioner being only an existing rice mill-owner had no legal interest to maintain an application for certiorari and he should not be considered to be a person aggrieved by the grant. Learned Counsel urged that on both these points differing views have been expressed by learned Judges of this Court. My attention was drawn to the decision of Kailasam, J. in Kuppuswami Pillai v. The State of Madras, etc. W.P. Nos. 2332, 2854 etc. of 1966 where the learned Judge posing for consideration the question whether an existing rice mill-holder is entitled to be heard by the authority in granting a new permit to another person in the locality and whether the order was quasi-judicial in nature, on a consideration of the authorities, has held that an existing rice mill-holder would not be an aggrieved person entitled to maintain a writ petition challenging the grant of a new permit in the area. The learned Judge is also of the view that as there was no provision in the Act for enabling an existing rice mill-holder to make representations or to be heard and as his rights are not affected, the function of the licensing authority cannot be described as quasi-judicial one. The learned Judge has referred in this connection to Lakshmi Ammal v. Vaithilingam W.A. No. 195 of 1962, where the Division Bench observed:

Further we are by no means satisfied that by granting the licence to the first respondent any right of the appellant had been affected so as to entitle him to approach this Court by way of a writ of certiorari.

In Lakshmi Ammal v. The Commissioner for Land Revenu W.P. No. 1091 of 1962, Veeraswami, J., has followed the above Division Bench decision and observed that an existing rice mill-owner has no interest to sustain an application for certiorari to quash an order granting permit. Veeraswami, J., in rejecting the application for certiorari did not go into the merits of the case. This judgment of Veeraswami, J., went up in appeal and in the appeal Lakshmi Ammal v. The Commissioner for Land Revenue and Civil Supplies (1965) 1 M.L.J. 119 : I.L.R. (1964) Mad. 869, the question of maintainability of the writ by the petitioner was not discussed, the Bench going into the merits of the case and finding against the petitioner on the merits. The learned Judges observed:

The learned Judge declined to entertain the writ petition on the short ground that the appellant could not be deemed to be a person aggrieved so as to entitle he, to approach this Court for the issue of a writ. The conclusion reached by the learned Judge can, in our opinion, be supported on the merits of the case as well.

But in Abdul Mazid v. The State of Madras : (1957)2MLJ1 , Rajagopalan, J. has taken the view that the petitioner who had lodged his objections which had been considered by the Government before overruling them and making the grant would be a person aggrieved by the decision of the Government and could invoke the jurisdiction of this Court under Article 226 of the Constitution for the issue of a writ of certiorari. The learned Judge also held that the order in such a case was not solely administrative in character. Rajagopalan, J., in taking that view referred to the observations of the Supreme Court in Raman & Raman Ltd. v. Government of Madras (1956) 1 M.L.J.169 : (1956) S.C.J. 368, under the Motor Vehicles Act where it was observed:.it may be said that a person has the fundamental right to carry on his business of plying buses and therefore has the right to have the statutory functions of those authorities properly exercised in which case they would be quasi-judicial functions.

Learned Counsel referred to the decision of a Division Bench in Tkangavelu v. The Commissioner of Land Revenue W.A. No. 135 of 1966, to which I was a party, where when considering a similar contention under the Madras Cinemas (Regulation) Act we held that the function of the licensing authority is quasi-judicial in character. We had there referred to the passage in Raman and Raman Ltd. v. Government of Madras (1956) 1 M.L.J. 169 : (1956) 1 A W.R. 169 : (1956) S.C.J. 368, already extracted and the decision of this Court in C.S.S. Motor Service v. Madras State : AIR1953Mad279 . We took the view that where a fundamental right is involved as in the case of a trade, business or vocation, the proceeding of a Tribunal regulating the same under the statutory powers would be quasi-judicial in character. The party affected would have the right to see that the statutory functions of the Tribunal are properly exercised. In Ramanathan Chettiar v. Board of Revenue (1963) 2 M.L.J. 320 : I.L.R. (1964) Mad. 151 : (1963) 76 L.W. 426, a case under the Rice Milling Industry (Regulation) Act, Veeraswami, J., held that the mere fact that Sub-section (4) of Section 5 directs the licensing authority to take into account certain specified matters does not mean that for that reason its jurisdiction is quasi-judicial in character. The learned Judge has purported to follow the decision in Lakshmi Ammal v. Vaithilingam W.A. No. 195 of 9162, in preference to the one in Abdul Mazid v. The State of Madras : (1957)2MLJ1 . In this context Mr. K.K. Venugopal referred to the Full Bench decision of this Court in S.M. Transport v. Raman and Raman : AIR1961Mad180 , where this Court had to consider when a person could be said to be aggrieved for the purpose of certiorari under the Motor Vehicles Act. It is true that as contended for the petitioner differing views have been expressed, on the two objections put forward to the maintainability of the writ petition. But I do not think that on the facts of the present case there is need to refer the matter to a Division Bench.

6. Taking it for granted that the petitioner is a person aggrieved who could maintain his application for certiorari, and proceeding also on the assumption that the function of the second respondent in the grant of the permit is quasi-judicial in nature, to what this would lead to so far as the petitioner is concerned on the facts of this case? On the Second premise it is contended for the petitioner first that the absence of any reason on the face of the order without more, would vitiate the order. Secondly an additional ground is sought to be raised that the second respondent has, in arriving at his conclusion, allowed his quasi-judicial determination to be guided and fettered by executive directions issued by the Board of Revenue for determination of availability of paddy and adequacy of the existing rice mills. The basis for this ground is admittedly the averment in the counter-affidavit filed on behalf of the second respondent of the yardstick prescribed by the Board of Revenue for evaluating the production of paddy in the locality.

7. In support of his first contention learned Counsel for the petitioner cites Harinagar Sugar Mills v. Shyam Sundar : [1962]2SCR487 at 1678, where the Supreme Court in a case arising under the Companies Act, 1956, with reference to the determination by the Central Government exercising appellate powers, observed that as the Central Government acts as a Tribunal exercising judicial powers and the exercise of that power is subject to the jurisdiction of the Supreme Court, the power of the Supreme Court cannot be effectively exercised if reasons are not given by the Central Government in support of its order. But it should be noticed that the Supreme Court also observed:

All the documents which were produced before the Deputy Secretary are not printed in the record before us and we were told at the bar that there were several other documents which the Deputy Secretary took into consideration. In the absence of anything to show that the Central Government exercised its restricted power in hearing an appeal under Section 111(3) and passed the orders under appeal in the light of the restrictions imposed by Article 47-B of the articles of association and in the interest of the company, we are unable to decide whether the Central Government did not transgress the limits of their power.

An inference may properly be made that if the records disclosed that the Central Government had acted within the restrictions and was alive to the materials it had to consider, the Supreme Court would not have interfered in the matter on the mere ground that the order itself did not contain reasons. Learned Counsel also cited Govinda Rao v. State of M.P. : [1965]1SCR678 , for the position that reasons should appear on the determination whenever a Tribunal performs quasi-judlcial functions. The Supreme Court in that case quashed an order which gave no reasons when rejecting an application for the grant of money or pension as maintenance under the C.P. and Berar Revocation of Land Revenue Exemption Act. These decisions are certainly authorrities for the view that reasons must be found where a Tribunal, functions in a quasi-judicial capacity. When the rights of a party are denied, he must know why he has been denied those rights or why his claim has been rejected. Can this requirement be postulated in favour of a person like the present petitioner with reference to a determination in which he is not entitled to any notice under the statute which governs that determination? No fundamental right of the petitioner is involved in this case except that the opening of rice mills is regulated in the interests of general economy and he would benefit by the absence of free competition. But for the Regulation the petitioner cannot contend even, that no other rice mill could be opened in the neighbourhood of his own rice mill to the detriment of his interest. Referring to the contention that natural justice would require notice to the existing rice mill owners in the locality having regard to commercial expediency and that profits of persons already running rice mills may not be upset, Jagadisan, J., in Ramasundara Nadar v. State of Madras W.P. No. 644 of 1961, observed:

Neither the express provisions of the statute and the rules, nor the legal implications flowing therefrom, nor even the scheme and pattern of the statute can afford any room for such contentions. The question of granting a permit for installation of a rice mill may be considered in the background of some policy relating to village economy, but individual rights can hardly have any place in such a consideration. There can be no question of violation of principles of natural justice because of lack of notice to the petitioner as the question is not whether petitioner's rights will or will not be affected but whether the necessary permits can be granted to the second respondent in accordance with the statutory provisions.

The object of the Act is not to give monopoly in rice mill trade to a few but to regulate the rice milling industry in the interests of the general public and the grant of a permit is made when in the opinion of the Central Government it is necessary to grant the permit for ensuring adequate supply of rice. That being the true position one can say that it will be incumbent on the authority to give reasons when a permit is refused. But when a permit is granted, it follows that the objections to the grant of a permit, if any, had been overruled and the necessary requisites for the grant are present. I see no ground for the Contention that in such circumstances also ex facie the order, for the benefit of the objector to whom the Statute does not even provide notice in the matter, must give reasons, and that in the absence of reasons on the face of the order it is vitiated. For the State, my attention was drawn to M.P. Industrials Ltd. v. Union of India : [1966]1SCR466 , where the majority of the Court did not accept the broad contention that every order appealable under Article 136 of the Constitution must be a speaking order and omission to give reasons for the decision is by itself a sufficient ground for quashing it. Therein it was pointed out that an order of an administrative Tribunal rejecting a revision application cannot be pronounced to be invalid on the sole ground that it does not give reasons for its rejection. The decision in Harinagar Sugar Mills v. Shyam Sunddr : [1962]2SCR487 , was explained as a case where apart from the fact that the Central Government reversed the decision appealed from without giving any reasons, the record produced before the Court did not disclose any apparent ground for the reversal. In Rdmanathdn Chettiar v. Board of Revenue (1963) 2 M.L.J. 320 : I.L.R. (1964) Mad. 151 (1963) 76 L.W. 426, the learned Judge Veeraswami, J., after observing that it is not necessary in the case to express a final opinion as to the character of the jurisdiction of the authority functioning under Section 5 of the Madras Rice Milling Industries (Regulation) Act, while observing that it is desirable that the authority should state reasons for its order where objections to grant of permit are made, has said that, that it is not to say that failure to give Such reasons will necessarily affect the validity of the order. The learned Judge observed:

Where no reasons are given In an order, prima facie it is liable to be considered to be arbitrary. For that reason it may be necessary to issue rule nisi and call for the records so that this Court may be Satisfied that the power under Section 5 has been justly and reasonably, and not arbitrarily exercised....

The learned Judge examining the records, found that investigation was made into the specified matters that the authority was satisfied that there was enough surplus paddy in the neighbourhood to justify the issue of the permits in question, and that the objections of the petitioners in that case were duly taken into consideration before they were overruled.

8. As stated at the outset, the record in the present case amply bears out that every requirement for the grant of a permit as contemplated and provided for under the Act and Rules has been observed. The necessary data and statistics have been examined and the objections put forward by the petitioner have been taken into consideration and examined before they were overruled. It may be that the actual grant does not specify the reasons. But the record shows that the total production of paddy in the locality has been taken into consideration, milling capacity of the existing mills noticed and it was also found that there was a surplus necessitating location of a new rice mill in the locality. There was no hand--pounding industry in the locality which would be affected by the Introduction of the rice mill. The order on the merits cannot therefore be challenged.

9. The second objection that the second respondent as a quasi-judicial tribunal has allowed itself to be directed by a communication from the Board of Revenue is again devoid of substance. The instructions in question issued by the Board of Revenue for the District Officers for future guidance are not issued under any statute or rule. The communication has no Statutory basis and is merely a worksheet. It does not purport to fetter the discretion of the officers In their functions under the Act. It is not addressed to the authority that has to order the grant. These instructions to the District Officers give guidance in the matter of gathering the necessary data and figures which have to be considered before making the grant. The instructions are for Securing to the ultimate administrative adjudicator the relevant materials from the locality and contain expertise and technical guidance, for gathering of statistics. For instance the average paddy yield that may be expected with reference to the acreage in respect of the single crop wet land, dry land, etc. is shown there. The Instructions themselves point out that the figures may be adopted normally but the actual yield should be adopted if conditions vary widely. I find nothing in these Instructions which can be regarded as fetters on the exercise of quasi-judicial functions. A tribunal may use the technical and local knowledge and accumulated expertise to draw an Inference. It is not-like a Court bound by strict rules of evidence. Learned Counsel' could not point out any particular instruction which would affect a quasi-judicial determination in accordance with the provisions of the Act and Rules in an unwarranted or illegal manner So as to vitiate it. If follows that the writ petition is devoid of merits and it is dismissed with costs to be shared by the two respondents. Counsel's fee Rs. 100.


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