1985 (2) TMI 249 - SC - Indian Laws

Supreme Court Upholds State's Paddy Movement Ban as Valid

The Supreme Court upheld the validity of Clause 3 (1A) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982, ruling that the State Government's ... Whether cl. 3 (IA) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 issued by the State Government under s 3 of the Essential Commodities Act, 1955 read with the Government of India, Ministry of Agriculture (Department of Food) Order, a. s. R, 800 dated June 9, 1978, with the prior concurrence of the Government of India, was ultra vires the State Government being in excess of its delegated powers? Held that:- 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 re-impose compulsory levy on the producers 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 cl.. (d) of sub-s. (2) of s. 3 of the Act being relatable to the general powers of the Central Government under sub-s. (1) of s. 3, there is no reason for us to give a restricted meaning to the word 'regulating' in cl. (d) of sub-s. (2) of s. 3 of the Act so as not to take in prohibiting'. Appeal dismissed. Issues Involved:1. Whether Clause 3 (1A) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 was ultra vires the State Government.2. Whether the delegation of specific power under Clause (d) of Sub-section (2) of Section 3 of the Essential Commodities Act, 1955 includes the general powers of the Central Government under Sub-section (1) of Section 3.3. Whether Clause 3 (1A) imposes an unreasonable restriction on the freedom of trade and commerce under Article 19(1)(g) and Article 301 of the Constitution.Issue-wise Detailed Analysis:1. Ultra Vires of Clause 3 (1A):The appellant contended that Clause 3 (1A) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982, which placed a ban on the transport, movement, or carrying of paddy outside specified districts, was ultra vires the State Government. The argument was based on the assertion that the delegation of power under Clause (d) of Sub-section (2) of Section 3 of the Essential Commodities Act, 1955, by the Central Government did not include the general powers under Sub-section (1) of Section 3, which allows for regulating or prohibiting the production, supply, and distribution of essential commodities.The Supreme Court rejected this contention, stating that the source of power for the impugned order was derived from Sub-section (1) of Section 3 of the Act. The Court emphasized that the notification G.S.R. 800 dated June 9, 1978, issued by the Central Government, delegated the powers conferred by Sub-section (1) of Section 3 to the State Government, subject to specified conditions. The Court clarified that Sub-section (2) of Section 3 is merely illustrative of the general powers conferred by Sub-section (1) and does not confer fresh powers. Therefore, the State Government was within its rights to issue the impugned order under the delegated powers.2. Delegation of Powers:The appellant argued that the delegation of specific power under Clause (d) of Sub-section (2) of Section 3 did not carry the general powers of the Central Government under Sub-section (1) of Section 3. The Court disagreed, stating that the notification G.S.R. 800 clearly indicated that the powers conferred by Sub-section (1) of Section 3 were exercisable by the State Government in relation to foodstuffs, subject to conditions. The Court reiterated that Sub-section (2) of Section 3 is illustrative and not restrictive of the general powers under Sub-section (1).The Court cited previous judgments, including Santosh Kumar Jain v. The State and the Privy Council's decision in Emperor v. Sibnath Banerjee, to support its view that Sub-section (2) of Section 3 is not restrictive but illustrative of the general powers under Sub-section (1). Consequently, the delegation of powers to the State Government included the authority to issue the impugned order.3. Restriction on Trade and Commerce:The appellant contended that Clause 3 (1A) imposed an unreasonable restriction on the freedom of trade and commerce guaranteed under Article 19(1)(g) and Article 301 of the Constitution. The Court held that the power to regulate includes the power to prohibit under certain circumstances. The word 'regulation' does not have a rigid meaning and can include prohibition depending on the context and the object of the legislation.The Court referred to the decision in Narendra Kumar v. Union of India, which held that the word 'regulation' in Article 19(2) to 19(6) includes 'prohibition.' The Court also cited various cases where restrictions on the movement of essential commodities were deemed regulatory in character. Given the acute shortage of paddy due to monsoon failure, the State Government's action to impose a ban on the movement of paddy to ensure equitable distribution and availability at fair prices was justified.The Court concluded that the restriction imposed by Clause 3 (1A) was reasonable and had a rational nexus with the object sought to be achieved, i.e., to ensure the equitable distribution of paddy in deficit areas. Therefore, the impugned order did not violate the freedom of trade and commerce guaranteed under the Constitution.Conclusion:The Supreme Court dismissed the appeal, upholding the validity of Clause 3 (1A) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982. The Court found that the State Government acted within its delegated powers and that the restriction imposed was reasonable and justified in the context of ensuring the equitable distribution of essential commodities.