Khalimulla Khan Vs. State of Karnataka - Court Judgment

Excerpt:
(a) karnataka rice procurement (levy) order,1984 - scope and object -- levy order issued after obtaining prior concurrence of central government.;on the ground of unreasonable restriction on the right to trade in violation of article 19(1)(g) of the constitution of india, validity of various provisions of the levy order having been challenged :;the whole object of the procurement of rice is to see that rice is made available for public distribution and no artificial scarcity is created and the people do not suffer because of hoarding by certain unreasonable traders.....it is to relief to such section of the public, who cannot afford to pay higher price and obtain rice from open market for their consumption, the state government is compulsorily acquiring certain quantity of rice from.....orderk.a. swami, j.1. in all these petitions, some of the petitioners are dealers and others are millers and one of them is a grower i.e., the petitioner in writ petition no. 19593 of 1984.2. in all these petitions under article 226 of the constitution of india, the petitioners have challenged the validity of sub-clauses (f) & (i) of clause 2; sub-clauses (i), 3 and 4 of clause 3; sub-clauses (1) (b), (2) and (3) of clause 4 ; and clauses 6, 8, 9 and 10 and also form 'd' of the karnataka rice procurement levy order, 1984 (hereinafter referred to as 'the levy order,') on the ground that they impose unreasonable restriction on the right to trade and as such, the same are violative of article 19(1)(g) of the constitution.3. one of the petitioners, viz., the petitioner in w.p. 19593/84 is a.....

Judgment:
ORDER

K.A. Swami, J.

1. In all these petitions, some of the petitioners are dealers and others are millers and one of them is a grower i.e., the petitioner in Writ Petition No. 19593 of 1984.

2. In all these petitions under Article 226 of the Constitution of India, the petitioners have challenged the validity of Sub-clauses (f) & (i) of Clause 2; Sub-clauses (i), 3 and 4 of Clause 3; Sub-clauses (1) (b), (2) and (3) of Clause 4 ; and Clauses 6, 8, 9 and 10 and also Form 'D' of the Karnataka Rice Procurement Levy Order, 1984 (hereinafter referred to as 'the Levy Order,') on the ground that they impose unreasonable restriction on the right to trade and as such, the same are violative of Article 19(1)(g) of the Constitution.

3. One of the petitioners, viz., the petitioner in W.P. 19593/84 is a grower. He is a resident of Coorg district. According to his case, neither the paddy grown by him nor the rice obtained therefrom has market in the State of Karnataka, therefore, the petitioner has to necessarily transport the paddy or the rice outside the State ; that the Levy Order prohibits transporting of paddy outside the State, and as far as the rice obtained from such paddy is concerned, the petitioner is a cultivator not a dealer or a miller, as there is no provision in the Levy Order enabling a grower to transport the rice outside the State ; therefore, the Levy Order imposes unreasonable restriction on his right to enjoy the property.

4. The State Government has filed the statement of objections. It is contended on behalf of the State by Sri M.R. Achar, Learned Government Advocate, that the entire Levy Order is valid as the same is issued with the prior concurrence of the Central Government and in exercise of the power delegated to it under the Notification dated 9th June, 1978 bearing Order No. G.S.R. 800 issued by the Central Government under Section 3 of the Essential Commodities Act, 1955 (hereinafter referred to as 'the Act') delegating the powers to the State Government under Section 3(2)(d)(e) and (f) of the Act. It is also the stand of the State Government that none of the provisions contained in the Levy Order offends the fundamental right of the petitioners guaranteed under Article 19(1)(g) of the Constitution ; that the certificate of the nature prescribed in Form-D is necessary in order to see that the release certificate is not misused ; that the experience of the State Government has shown that under the Levy Order 1981 & 1983, the release certificates were misused. Therefore, it has become necessary to improve upon the release certificate prescribed under the Levy Order, 1983; hence the State Government has provided the conditions mentioned in Form 'D' of the Levy Order.

5. It is not necessary at this stage to refer to the pleas raised by the petitioners and the State in detail as the same can be dealt with while considering the validity of each of the provisions of the Levy Order, as challenged by the petitioners.

6.(1) Before considering the validity of the provisions of the Levy Order challenged in these Writ Petitions, it is necessary to point out that the Levy Order has been issued after obtaining the prior concurrence of the Central Government. The Central Government by the order dated 14th November, 1984 - No. 6 (KARN) (28)/83-D and R-I-has accorded approval to the Levy Order, by suggesting certain modifications. The said order of approval is as follows :

'I am directed to refer to your letter No. FTD/178/Secy/84 dated the 5th November; 1984, on the subject mentioned above, and to say that the Central Government concurs in your proposal to issue the Karnataka Rice Procurement (Levy) Order, 1984, in terms of the draft notification sent along with your letter under reference, subject to the following observations ;

i) In Sub-Clause 3(1) the words 'conforming to specifications' may be inserted between the words 'total quantity of rice' and 'obtained by milling paddy' and the last five words of the paragraph i.e., 'conforming to Fair Average Quality' may be deleted.

ii) In Sub-Clause 3(4)(1)(a) (first line of the last para of page 3 of the proposed draft notification) and 3(4)(1)(b) (first line of the first para of page 4 of the proposed draft notification) the words 'fair average quality' may be replaced by the words 'conforming to specifications.'

iii) In Clause 13 the word 'likewise' may be inserted between the words 'as may be specified in the order, and may and 'at any time suspend' in the sixth line on page 8 of the proposed draft notification.

iv) A suitable clause for the disposal of levy-free rice within one month of the issue of release certificate may be inserted in the order.

v) Provision may be made for the milling of paddy purchased/acquired by the millers or dealers before the end of the marketing season, i.e., before 1st October.

It is requested that ten copies of the order when issued may please be sent to this Department for reference and record.'

The modifications suggested by the Central Government are incorporated in the Levy Order.

6.2 At one stage, it was contended that the power under Section 3(2) (d) of the Act, had not been delegated, hence the prohibition regarding the transporting of paddy was beyond the power of the State Government. The Notification dated 9th June, 1978 bearing No. H.S.R. 800 specifically delegates the power under Section 3(2)(d) of the Act. But, in respect of the powers exercisable under that clause, it is stated that before making an order relating to any matters specified in Clauses (a)(c) or (f) or in regard to distribution or disposal of food-stuffs to a place outside the State or in regard to food-stuffs under Clause (d), the State Government shall also obtain prior concurrence of the Central Government. Accordingly, the State Government has obtained prior concurrence which is reproduced above. Thus, the Levy Order, has been issued after following the required procedure and the provisions contained therein are well within the powers of the State Government as delegated to it under the aforesaid notification bearing G.S.R. No. 800, dated June 9, 1978.

7.[1] I will now take up for consideration the contentions relating to the validity of the provisions of the Levy Order, as challenged by the petitioners.

Sub-clause (f) of Clause 2 provides. -

'MARKETING SEASON' means the period commencing on the first day of October of every year and ending with the thirtieth day of September of the following year ;'

It is the case of the petitioners that the definition of the expression 'marketing season' as found in the Levy Order, is not valid because it offends their fundamental right to carry on the trade. It is contended that this definition read with; Sub-clauses (4) and (3) of Clauses 3 and 4 respectively of the Levy Order, makes it incumbent upon millers and dealers to dispose of the rice before the marketing season is over. Consequently, they are compelled to dispose of the levy free rice irrespective of the loss that may be caused to them ; hence, it is submitted that it causes great hardship and Joss to them and results in imposing unreasonable restriction on their right to trade.

7.2 Once paddy and rice are declared as Essential Commodities, the whole produce is liable to be controlled by the State Government in exercise of its delegated powers under Section 3(2) of the Act. The whole object of the procurement of rice is to see that rice is made available for public distribution and no artificial scarcity is created, and the people do not suffer because of hoarding by certain unreasonable traders. In the State of Karnataka, there will not be a harvest in the month of July, August and September The harvest takes place only in the month of June and even if some period is allowed for drying there will be sufficient time left to the growers, dealers and millers to hull the paddy and dispose of the rice ;- therefore, they are not put to any loss or inconvenience whatsoever. The dealers and millers are required to mill the paddy acquired or owned by them before the marketing season is over. There is no compulsion on them to sell or dispose of the remaining 50% of levy-free rice before the marketing season is over. The compulsion on them is only to mill the paddy, so that the levy is collected. Such a compulsion is necessary in order to effectuate the object of the Levy order, as otherwise no miller or dealer will mill the paddy owned or acquired by him before the marketing season is over and as a result thereof, the State will not be in a position to collect requisite quantity of levy rice. Such a situation will lead to artificial scarcity of rice. Consequently, the public in general and rice: Consumers in particular will suffer. No doubt, in some cases, it may cause certain amount of loss also; but that itself is not the criteria, because in the public-interest such a compulsion to mill paddy before the marketing season is over, is necessary. It is to relief to such section of the public, who cannot afford to pay higher price and obtain rice from the open market for their consumption, the State Government is compulsorily acquiring certain quantity of rice from millers and dealers under the Levy Order. Further, the provisions relating to release certificate and disposal under the release certificate, clearly 'provide that if a miller or a dealer intends to transport or sell rice outside the State, he has to seek release certificate within a particular period and dispose of the rice within a period of one month from the date of such release certificate. Whereas, for disposal of levy free rice within the State no release certificate is necessary. Consequently, it is not required by a miller or a dealer to dispose of levy free rice within the State before the marketing season is over. Therefore, it is not possible to hold that the definition of the expression 'marketing season' is unreasonable and places unreasonable restriction on the right to trade of a miller or a dealer. As far as growers are concerned it does not at all affect them because Sub-clauses (4) and (5) of Clauses 3 and 4 respectively of the Levy Order, do not apply to growers of paddy.

8. Sub-clause (i) of Clause 2 of the Levy Order defines 'Purchase Price' thus :-

' PURCHASE PRICE ' means, the prices specified in Schedule-I for the purchase of such variety of rice.'

According to Schedule-I, the price is fixed for raw rice/parboiled rice at the ex-mill point. So far as superfine rice is concerned, the price is fixed at Rs. 228.45, for fine rice at Rs. 222.45 and for common rice at Rs. 216.45 per quintal, excluding the cost of gunny bag. In this regard, it is contended that while fixing the price, actual cost incurred by the dealers and the millers in purchasing paddy has not been taken into account; that the Government itself is purchasing paddy at the rate of Rs. 166/- per quintal; therefore, nobody would prefer to give paddy to the dealers and millers at a lesser rate. Consequently, millers and dealers are required to purchase paddy either at the same rate or at a rate higher than the rate at which the Government is purchasing paddy. If one has to surrender fifty percent of the rice obtained from such paddy one has to necessarily undergo loss. Therefore, it is submitted that it amounts to imposing not only an unreasonable restriction, but also results in expropriation of the property without any compensation. It is also not. possible to accept this contention. It is not as though the entire rice obtained from the paddy is procured. What is procured is only 50% of the rice obtained from the paddy purchased or acquired by a dealer or a miller. Remaining 50% of levy free rice, a dealer or a miller is free to sell in the open market and the profit which he makes by selling such rice in the open market, it is not the case of the petitioners that it is not sufficient to meet the loss that they incur on surrendering 50% of rice to the Government towards levy. Even if it is presumed for the sake of argument, that they are put to a loss to a certain extent such a loss itself is neither sufficient nor a determinative criteria when public interest is involved to hold that the price fixed is invalid because it results in loss to a dealer or a miller. Such a measure i.e., Levy order has to be viewed in the background that it is intended for the purpose of controlling transporting and distribution of rice for the benefit of the public.

9. In New India Sugar Works etc v. State of Uttar Pradesh & Ors., : [1981]3SCR29 the Supreme Court his held thus :-

'It was next strongly contended that in fixation of the price of levy sugar the Government has not taken into consideration the fact that the petitioners would undergo a serious loss because the price would not be sufficient even to cover their manufacturing cost. We are, however, unable to agree with this argument. The policy of price control has for its dominant object equitable distribution and availability of the commodity at fair price so as to benefit the consumers. It is manifest that individual interests, however, precious they may be, must yield to the larger interest of the community, namely, in the instant case, the large body of the consumers of sugar. In fact, even if the petitioners have to bear some loss there can be no question of the restrictions imposed on the petitioners being unreasonable.'

It is also noticed in the aforesaid decision that a similar view is also taken by the Supreme Court in the case of Shree Meenakshi Mills Ltd. v. Union of India, : [1974]2SCR398 . In the light of the above decision of the Supreme Court, it is not possible to hold that the price fixed for rice surrendered towards levy under the Levy Order, is in any way unreasonable.

10. Sri C. N. Kamath, learned Counsel for some of the petitioners, submits that in the aforesaid case the Supreme, Court has also observed that the Government may consider the question as to giving minimum hearing to the concerned parties. Similarly, in the instant case, if the Government has to issue another Levy Order in future, while fixing the price for the rice procured as levy, millers, dealers and growers may be afforded an opportunity of hearing. I do not think it is necessary to issue any such direction as the Government has to act in the public interest which also includes the interest of millers, dealers and growers. It will be better if the Government hears these three categories viz., millers, dealers, and growers in the matter of fixing price for the rice procured as levy and that will satisfy all the concerned and is likely to relieve the grievance of growers, dealers and millers.

11. Sub-clauses (1), (3) and (4) of Clause 3 of the Levy Order is as follows :

'3. MILLER TO SELL RICE : (1) Every miller shall sell everyday beginning with the date of commencement of this order to the State Government or the purchase agent at the purchase price fifty per cent of the total quantity of rice conforming to specifications obtained by milling paddy owned by him in his rice mill everyday.

(2) The rice required to be sold to the Slate Government or the purchase agent under Sub-clause (1) shall be delivered by the miller to purchase agent or to such other persons as may be authorised by the State Government or the purchase agent to take such delivery.

(3) No stock of rice shall be removed from the mill premises without delivery of the rice relating to such stock in accordance with Sub-clause (2).

(4) Every miller shall mill the paddy acquired or owned by him before the close of the marketing season.'

I do not find any unreasonableness in Sub-clause (1) of Clause 3 of the Levy Order, which directs that 50% of the total quantity of rice conforming to specifications obtained by milling paddy owned by a miller in his rice mill everyday to be surrendered towards levy to the State Government or the purchase agent at the purchase price. This clause is attacked on the ground that if 50% of the rice obtained from, milling the paddy has to be surrendered at the rates fixed in the schedule attached to the Levy Order loss would be caused to a miller, therefore it is unreasonable. I have already held that the purchase price fixed under the Levy Order cannot be held to be unreasonable. That being so the contention relating to the validity of Sub-clause (1) of Clause 3, which is based upon the inadequacy of price, cannot be upheld. There is no challenge to Sub-clause (2) of Clause 3 of the Levy Order. Sub-clauses (3) and (4) of Clause 3 of the Levy Order, provide that no stock of rice shall be removed from the mill premises without delivery of the rice relating to such stock in accordance with Sub-clause (2) and every miller shall mill the paddy acquired or owned by him before the close of the marketing season.

12. It is contended that once levy is surrendered, the remaining 50% of the rice is a free rice and the miller is at liberty to deal with it and any further restriction relating to the remaining 50 percent of rice is not justified, therefore, it amounts to unreasonable restriction. It is further submitted that there is no levy on paddy; therefore, it is open to a miller to stock paddy as long as he wants, whereas Sub-clauses (3) and (4) of Clause 3 of the Levy Order, compel him to mill the paddy acquired or owned by him before the close of the marketing season. The enforcement of both the clauses results in imposing unreasonable restriction on the right to trade inasmuch as there is no liberty whatsoever left to a miller as he cannot wait until he is able to get reasonable returns which he intends to have from the trade. Right to trade as guaranteed under Art. 19(1)(g) read with Articles 301 & 302 of the Constitution, is not an absolute right. It is subject to reasonable restrictions. Without reasonable restrictions, no fundamental right can be enjoyed. Unless the Fundamental. Rights are not regulated by imposing reasonable restrictions, it is not possible to advance public as well as individual interest. The restriction imposed by Sub-clauses (3) and (4) of Clause 3 of the Levy Order cannot be characterised as being unreasonable because without such a restriction, it is not possible to achieve the object of the Levy Order, which is permissible in law. The object of the Levy Order is to procure 50 percent of the rice obtained by milling paddy grown in the State, during the marketing season. If a miller is free to mill the paddy belonging to him or acquired by him at any time according to his own calculations, it may so happen that during the entire marketing season, a miller may not hull any quantity of paddy; as a result thereof, there will be no procurement of rice. If there is no procurement of rice, the object of the Levy Order cannot be fulfilled nor rice can be made available to public for consumption at a reasonable rate. Therefore, the restrictions imposed by Sub-clauses (3) and (4) of Clause 3 of the Levy Order, are reasonable restrictions and the same are necessary in public interest in order to effectuate the dominant object of equitable distribution of rice by making it available at a fair price so as to benefit the consumers. Therefore, it is not possible to hold that Sub-clauses (3) and (4) of Clause 3 of the Levy Order, are unconstitutional being opposed to Article 19(1)(g) and Articles 301 and 302 of the Constitution.

13. Restrictions imposed on the right to trade in relation to essential commodities has been exhaustively dealt with by the Supreme Court in Krishan Lal Praveen Kumar v. State of Rajasthan, : AIR1982SC29 . Therefore, it is not necessary to deal with it once again in this Judgment, Accordingly, it is held that Sub-clauses (1), (3) & (4) of Clause 3 of the Levy Order are valid.

14. Sub-clauses (1), (2) and (3) of Clause 4 of the Levy Order, are as follows :

'4. Dealer to sell rice :-- (1) Every dealer shall sell to the State Government, or to the purchase agent at the purchase price fifty percent of the total quantity of--

(a) each variety of rice conforming to specifications got milled by him every day out of his stocks of paddy; and

(b) each variety of rice conforming to specifications purchased or otherwise acquired by him for the purpose of sale from persons other than millers or dealers ;

(2) No Stock of rice got milled by the dealer shall be removed from the mill premises without delivery of the rice relating to such stocks in accordance with Sub-clause (1) (a):

Provided that nothing contained in Clause 3 and in this clause shall apply to the rice obtained for personal consumption by a cultivator from the stocks of paddy grown by him or by an agricultural labourer out of the stocks of paddy earned by him as wages, subject to the following conditions, namely :-

(i) that the cultivator shall not mill more than five quintals of paddy and the agricultural labourer shall not mill more than one quintal of paddy at a time in a month ; and

(ii) that he shall produce from the Village Accountant and when there is no resident Village Accountant from the concerned Revenue Inspector, a certificate that the paddy so milled is for his personal consumption. Such a certificate shall be handed over to the Miller.

(3) Every dealer shall get the paddy purchased or otherwise acquired by him milled into rice before the close of the marketing season.'

The reasons that apply to the validity of Sub-clauses (1), (3) and (4) of Clause 3 of the Levy Order also apply to Sub-Clause 4 of the Levy Order, because Clause 4 also deals with similar circumstances ; the only difference being that Clause 4 applies to dealers whereas Clause 3 applies to millers. Therefore, applying the same reasons I hold that Sub-clauses (2) and (3) of Clause 4 of the Levy Order, are valid.

15. Clause 4(1)(b) of the Levy Order provides that each variety of rice conforming to specifications purchased or acquired by a dealer for the purpose of sale from persons other than millers or dealers, shall be sold to by such dealer to the Slate Government or to the purchase agent fifty per cent of the total quantity of such purchase at purchase price. In this regard, it is submitted that this provision is also applied to the rice purchased in another State and brought into the State of Karnataka for sale. It is submitted that in respect of such rice this provision is not applicable because the Levy Order is applicable to the paddy grown in the State of Karnataka and the rice obtained out of such paddy and not to the rice brought into the State of Karnataka from another State by a dealer for the purpose of sale. The contention deserves to be accepted. The Levy Order applies to the paddy grown in the State of Karnataka and the rice obtained from such paddy by a miller or a dealer and procurement of rice is made from such rice. That being so, it is unreasonable to extend the provisions of Clause 4(1)(b) of the Levy Order to the rice which is purchased in the other State by a Dealer and brought into the State of Karnataka for the purpose of sale, consumption or use. As far as the State of Karnataka is concerned, there is no restriction imposed on the importing of rice into the State of Karnataka for sale, consumption or use. Therefore, it is made clear that Clause 4(1)(b) of the Levy Order does not apply to the rice which is purchased in other States and imported to the State of Karnataka for the purpose of sale, consumption or use by a dealer or any other person. However, it is open to the enforcement authorities to find out whether it is so. In such an event, the burden is upon the person concerned to prove that the rice is purchased outside the State of Karnataka and imported into the State of Karnataka for the purpose of sale, consumption or use.

16. Clause 6 of the Levy Order, is as follows :

'6. Restriction on Transportation and movement of rice/ paddy :- (1) No person shall transport to any place outside the State, rice in respect of which a release certificate has not been obtained.

(2) No person shall transport paddy from one district to another without a permit to be issued by the Deputy Commissioner of the concerned district in accordance with directions issued hereafter by the State Government in this regard.

(3) No person shall transport paddy to any place outside the State.'

It is seriously contended on behalf of the petitioners that the restriction imposed by Claus-3 6(3) of the Levy Order is highly unreasonable because there is a total prohibition and as a result thereof, neither a dealer nor a miller nor even a grower is entitled to transport paddy outside the State. Such restriction, it is submitted, is not only opposed to Article 19(1)(g) of the Constitution, but also to Article 402 of the Constitution, which ensures free trade throughout the territory of India. The scope, ambit and effect of this Clause has to be judged from the object which is sought to be achieved by the Levy Order and the other provisions contained therein. The definition of 'rice' includes any variety of dehusked, polished raw and par-boiled rice and includes rice equivalent to paddy held in stock. The object is to procure 50% of rice obtained from the paddy during the marketing season. Therefore, the remaining 50 percent of the rice, a miller or a dealer is free to transport, sell according to his convenience. No doubt, there is total restriction with regard to transporting of paddy outside the State ; but there is no restriction for movement, sale and purchase of paddy within the State. Therefore, it does not amount to total restriction. It is always open to a dealer or a miller to hull paddy and transport 50 per cent of the rice obtained therefrom to outside State. If the restriction of the nature imposed by Sub-clause (3) of Clause 6 is not imposed on the transporting of paddy outside the State, it is not possible to achieve the object of procuring fifty per cent of the rice obtained from the paddy grown in the State. None of the petitioners is able to suggest how it is possible to achieve the object of the Levy Order without such restriction. If paddy is allowed to be transported freely outside the State, the net result would be that no rice would be available for procurement because everyone will be interested in transporting paddy outside the State in order to secure more profit. Therefore, in order to achieve the object of the Levy Order, it is necessary to prohibit transporting of paddy outside the State.

17. The petitioner in W. P. 19593/84 is a grower. It is the case of the petitioner that the paddy grown by him has no market in the State of Karnataka. Similarly, according to him, the rice obtained from such paddy has also no market in the State, The further case is that such paddy has got market only in Kerala; therefore necessarily he has to transport the rice or paddy to the State of Kerala which is not permissible under the provisions of the Levy Order, It is also submitted that the release certificate is granted for transporting rice only if the levy is surrendered and levy is liable to be surrendered only by a miller or a dealer not by a grower. Therefore, the petitioner is also not entitled' to have release certificate for transporting the rice. Hence it is submitted that Sub-clause (3) of Clause 6 of the Levy Order, is oppressive as far as the petitioner is concerned. If there is any such hard case, it is always open to the State Government to issue necessary directions in this behalf. Because of the circumstances peculiar to the petitioner in W.P. 19593/84, it is not possible to hold that the restriction imposed by Sub-clause (3) of Clause 6 of the Levy Order is unconstitutional as the same is necessary for the purpose of achieving the object of the Levy Order.

18. There may also be a case in which the grower may be a resident of another State having lands in the State of Karnataka. Such a person, if he wants to transport paddy or rice, he will not also be entitled to transport either paddy or rice because he does not fall within the category of a miller or a dealer. As per the provisions of Sub-clause (2) of Clause 4 of the Levy Order, a grower can get the paddy hulled not more than five quintals at a time in a month for his personal consumption. In such a case, if the paddy grown by him has a market in the State necessarily he has, in accordance with the provisions of the Levy Order to sell the paddy in the State. But, in a case like that of the petitioner in W.P. 19593/84, where, according to him, there is no market for the paddy or rice obtained from that paddy, Mr. Achar, Learned Government Advocate, submits that the Government will after collecting necessary facts in this regard, introduce necessary amendments to the Levy Order. This submission is placed on record. Therefore, it is not necessary to hold that by reason of the special case pleaded by the petitioner in W.P 19593/84, Sub-clause (3) of Clause 6 of the Levy Order, is invalid. Accordingly, it is held that Sub-clause (3) of Clause 6 of the Levy Order, is valid.

19. With regard to Sub-clause (1) of Clause 6 of the Levy Order, it is submitted that once the Levy is surrendered in accordance with the provisions contained in Clauses (3) (4) and 7 of the Levy Order, there should not be any further restriction to deal with the remaining fifty per cent of the rice and the millers and dealers must be free to deal with it; therefore it is contended that the requirement of obtaining a release certificate is an unreasonable restriction and it deprives the petitioners of their right to affect free sale of rice of the remaining fifty per cent. In support of this contention reliance is placed on para-6 of the Judgment of the Supreme Court in the case of New India Sugar Works etc v. State of Uttar Pradesh & Ors, : [1981]3SCR29 . The Supreme Court has not decided the contention. It has disposed of the contention on the assurance given by the Learned Attorney General that he will see that no inconvenience is caused to the petitioners therein by implementing Sub-clauses (3) & (5) of the Order concerned therein, issued under Section 3(2) of the Act. Therefore, it is not possible to rely upon the above observations as the ratio decidendi of the case. It is not one of the matters for consideration by the Supreme Court in the aforesaid case that if there is no requirement of obtaining the release certificate in respect of the sale of remaining fifty per cent, it is not possible to check whether the rice in possession of a miller or a dealer is the levy-free rice or the rice which has or has not suffered a levy. If the provisions of the Levy Order have to be effectively enforced and the object has to be achieved, i.e., to procure fifty per cent of the rice obtained from the paddy produced in the State by a dealer or a miller by way of levy, it is necessary to regulate the trade relating to the remaining fifty per cent of levy-free rice. The requirement as to obtaining of a release certificate is not such an onerous requirement. The petitioners are not required to pay any amount for that. Therefore, 1 do not see any justification to hold that the provision as to obtaining release certificate for the purpose of transporting rice to any place outside the State is unreasonable.

20. However, in this regard it is necessary to make it clear and it is also one of the contentions advanced by Mr. Eswarappa, Learned Counsel for the petitioner, that this provision is also applied to the rice which is imported into the Slate of Karnataka and again exported to other State in the course of inter-State sale. The Levy Order is intended to cover the paddy grown in the State of Karnataka and the rice obtained from such paddy. Therefore, it is not applicable to the rice which is purchased in another State and imported into the State of Karnataka for sale. Whether such a rice is sold to residents of the State of Karnataka or to an outsider, it makes no difference, as such rice is not covered by the provisions of the Levy Order. However, in order to see that the provisions of the Levy Order are not violated and are not defeated, and under the guise of transporting the rice which is stated to have been purchased from outside the State of Karnataka (the rice which is liable to suffer levy, is not transported to a place outside the State of Karnataka) without surrendering levy : the enforcement authorities are entitled to, and will be acting well within their powers to, check such transporting of rice and find out whether the rice which a particular dealer or miller transports, has suffered or is liable to suffer levy in accordance with the provisions of the Levy Order. The system of issuing and requirement of obtaining, release certificate for transporting rice outside the State to a certain extent ensures compliance to the provisions of the Levy Order and at the same time enables and facilitates the enforcement authorities to find out whether the provisions of the Levy Order are complied with. The entire burden is upon a miller or a dealer or a person who transports rice to show that the provisions of the Levy Order are not applicable; and if applicable, the same are complied with. Therefore, even though rice, in a given case, may be free from levy, being outside the purview of the provisions of the Levy, Order; nevertheless the enforcement authorities are entitled to check such rice and the burden is upon the person in possession or transporting such rice, to establish that the rice was purchased from outside the State and brought into the State of Karnataka for sale, use or consumption, or in the course of inter-State sale it was being transported to other State through the highways of the State. In view of this elucidation, it is not possible to hold that Sub-clause (1) of Clause 6 of the Levy Order imposes unreasonable restriction either on the right to trade or on the right to enjoy the property. Accordingly it is held that Sub-clause (1) of Clause 6 of the Levy Order is valid.

21.1) As far as Sub-clause (2) of Clause 6 of the Levy Order is concerned, it is the case of the petitioners that this provision is not at all enforceable, and further it is subject to the directions that may be issued by the State Government from time to time and as a result thereof, the scope and ambit of this provision is such that it is deterimental to the fundamental right guaranteed to the petitioners under Article 19(1)(g) of the Constitution; and it is also likely to lead to arbitrary exercise of power. It is further submitted that since no order is issued in this respect by the State Government, the Deputy Commissioners are not in a position to issue any permit for transporting the paddy from one District to another and as a result thereof, neither a grower nor a dealer or a miller is in a position to transport paddy from one District to another within the State. It is further submitted that by Sub-clause (3) of Clause 6 of the Levy Order, transporting of paddy outside the State is prohibited. The object of the Levy Order is that the paddy grown in the State is hulled in the State, and fifty percent of rice obtained from hulling such paddy, by a miller or a dealer, is procured. That object is not in any way affected by allowing free-movement of paddy within the State and no other object or the purpose whatsoever is going to be achieved by restricting the movement of paddy within the State. In support of the submission that Sub-clause (2) of Clause 6 of the Levy Order is not valid, Learned Counsel for the petitioners have placed reliance on a decision of the Supreme Court in Narendrakumar & Ors., v. The Union of India & Ors., : [1960]2SCR375 .

21.2) On the contrary, it is contended on behalf of. the State by Mr. Achar, learned Government Advocate, that in pursuance of food-grain procurement policy, the entire State is divided into six zones by the State Government by the Order No. PTD 245 RPR 84/11, Bangalore, dated 4th December, 1984. The said six zones are :-

1. Dharwad Zone (Dharwad, (Uttarakannada and Belgaum),

2. Shimoga Zone (Shimoga, Dakshinakannada and Kodagu),

3. Raichur Zone (Raichur, Gulbarga and Bijapur),

4. Bellary Zone (Bellary, Tumkur and Chitradurga),

5. Mysore Zone (Mysore, Hassan and Chickamagalur), and

6. Mandya Zone (Mandya, Bangalore and Kolar).

The said order states that there is no restriction on the movement of paddy within each of the Zones ; however, there shall be no movement of paddy from one Zone to another. The Director of Food and Civil Supplies and the Managing Director of Karnataka Food and Civil Supplies Corporation Ltd., are also requested to take necessary action for implementation of the Zonal order forthwith. It is further submitted that the object of creating Zones is to see that the paddy grown in the particular Zone is hulled within that Zone so that the rice mills situated within the Zone will have sufficient paddy for hulling and it will also be convenient to the residents of each Zone to get the paddy hulled according to their requirements, and at the same time it is submitted that mills situated in each Zone will have the requisite paddy for hulling.

21.3) No doubt there is a free-movement of paddy in each Zone, but the restriction on movement of paddy from one zone to another itself results in restricting the movement of paddy from one District to another which is not prohibited by Sub-clause (2) of Clause 6 of the Levy Order. If a resident, a miller or a dealer of any one of the Zones wants to transport paddy to another place situated in another Zone it is not permissible. The Zonal Order even states that transporting of paddy from one Zone, to another is prohibited; whereas sub-clause (2) of Clause 6 of the Levy Order does not impose such a restriction and it only says that transporting of paddy from one district to another without a permit is not permissible. Under Sub-clause (2) of Clause 6 of the Levy Order, it is permissible to transport paddy from one district to another provided permit is obtained from the Deputy Commissioner. Thus, the Zonal Order in its operation, results in contravention of Sub-clause (2) of Clause 6 of the Levy Order. In addition to this in Narendra Kumar & Ors. v. Union of India Ors. The Supreme Court has considered a similar provision and has held that such a provision is not valid because the very operation of it is subject to the direction that may be issued by the State Government. The relevant portion of the decision is as follows :

'26. But without the principles, Clause 4 of the Order is not effective. The system of permits which this clause is designed to introduce can come into existence only if the permits can be issued ; but permits can be issued only in accordance with the principles laid down by the Central Government. It is not possible to build on the use of the words 'may specify' in Clause 4 an argument that so long as no principles are specified the Controller would have authority to issue permits by exercise of his own judgment and discretion. The words used in Clause 4 do not permit such a construction and compel the conclusion that so long as the principles are not specified by the Central Government no permit can be issued by the Controller. Enforcement of the provision that no person shall acquire or agree to acquire except under a permit, would thus, so long as the principles are not specified in a legal manner as required by sub-sections (5) and (6) of Section 3 of the Essential Commodities Act, would mean a total stoppage of the copper trade not only of the transactions of dealers but of any transaction whatever in imported copper. On the face of it this could not be a reasonable restriction in the interests of the general public. There is no escape therefore from the conclusion that so long as principles are not specified by the Central Government by an Order notified in accordance with Sub-section (5) and laid before both Houses of Parliament in accordance with Sub-section (6) of Section 3, the regulation by Clause 4 as it is now worded is not within the saving provisions of Articles 19(5) and 19(6) of the Constitution, and is void as taking away the rights conferred by Articles 19(1)(f) and 19(1)(g).'

Thus, the aforesaid enunciation squarely applies to Sub-clause (2) of Clause 6 of the Levy Order as the exercise of power by the Deputy Commissioner to issue permits for transporting paddy from one District to another is not permissible unless the directions are issued by the State Government prescribing the principles or criteria for issuing permits. In the absence of such directions, no permits can be issued. Consequently, it results in complete stoppage of movement of paddy from one district to another and thereby, it results in imposing unreasonable restriction on the right to trade. Accordingly it is held that Sub-clause (2) of Clause 6 of the Levy Order is violative of Article 19(1)(g) of the Constitution. As such, it is liable to be struck down. By striking down Sub-clause (2) of Clause 6 of the Levy Order, neither Sub-clauses (1) & (3) of Clause 6 of the Levy Order become inoperative nor the Levy Order becomes unenforceable. The said Clause is severable from the other portions of Clause 6. The absence of it does not in any way affect the enforceability of the Levy Order, It is also not possible to see any justification or relevancy of having such a Clause as long as there is total prohibition of transporting of paddy outside the State. Such a Clause will only create an administrative problem and impose unreasonable restriction on the right to trade and for transporting paddy from one district to another.

22.1) Clause 8 of the Levy Order is as follows: --

'8. Release Certificate : (1) After delivery of the rice, in accordance with Clause 7, every licenced miller and licenced dealer may make an application in Form C to the Deputy Commissioner for issue of a release certificate for disposal of levy free rice.

(2) The application referred to in Sub-clause (1) shall be accompanied by the receipt in original issued by the purchase officer in respect of delivery of rice under levy.

(3) On receipt of an application under Sub-clause (1), the Deputy Commissioner shall issue a release certificate for movement and disposal of the levy-free rice. The release certificate shall be in. Form-D and as per the directions issued by the Government in this regard.

(4) An application under Sub-clause (1) shall be made within one month of the date of delivery of rice in accordance with Clause 7 and the stock of rice in respect of which such release certificate is issued shall be disposed off by the miller or the dealer within a period of one month from the date of grant of such certificate :

Provided that the period may be relaxed by the State Government for reasons to be recorded in writing.'

The contention of the petitioners in this regard is that after the Levy is surrendered the remaining fifty per cent of the rice must be free to be dealt with either by a miller or a dealer as the case may be and there should not be any further restriction or requirement of obtaining a release certificate for the purpose of transporting levy free-rice therefore such requirement is unreasonable restriction and it has no nexus with the object of the Levy Order. It is submitted that the Levy is collected at the mill-point or at the purchase-point in the case of a purchase made by a dealer or a miller from persons other than millers or dealers; therefore, by allowing the remaining fifty per cent of the rice to be transported freely without any restriction, to any place, either within or outside the State, the object of the Levy Order is not defeated nor it is in any way affected. Therefore, it is submitted that the requirement of obtaining release certificate being wholly unnecessary having no nexus to the object, amounts to an unreasonable restriction, as such, it is liable to be struck down.

22.2) On the contrary, it is the contention of the State that the provision relating to obtaining of release certificate is not a restriction, it is only regulatory and it does not in any way prohibit transporting of rice within or outside the State. It is complimentary to Sub-clause (1) of Clause 6 of the Levy Order and it only requires that a release certificate be obtained for the purpose of transporting rice in accordance with the provisions contained therein. It is further submitted that if such a requirement is not there, it will not be possible to make out or point out whether the rice which is being transported by a dealer or a miller is the one which has suffered levy or not or in respect of which the concerned person is entitled to deal with it without complying with the requirements of the Levy Order. Therefore, in order to find out whether the provisions of the Levy Order are followed and are strictly adhered to, it is necessary to insist upon obtaining of release certificate for the purpose of transporting rice either within or outside the State. It is submitted that without such a check, it will not be possible to achieve the object of the Levy Order. It is also one of the contentions of the petitioners that Sub-clause (3) of Clause 8 of the Levy Order is also subject to the directions that may be issued by the State Government. Therefore, it is contended that the said clause also suffers from the same defect which Sub-clause (2) of Clause 6 of the Levy Order suffers.

22.3) Clause 8 of the Levy Order provides that after delivery of the rice, in accordance with Clause 7, every licensed miller and licensed dealer may make an application in the prescribed form before the concerned Deputy Commissioner for issue of a release certificate for disposal of the levy-free rice. Such an application has to be made within a period of one month from the date of surrender of levy. The Deputy Commissioner on receipt of such an application has to issue a release certificate for movement and disposal of the levy-free rice. The levy certificate has to be in the prescribed form i.e., Form-D. After obtaining release certificate, the miller or dealer, as the case may be, has to dispose of the rice concerned therein within a period of one month from the date of grant of such release certificate. Of course, there is a power vested in the State Government to relax the condition regarding disposal of such rice within a period of one month for the reasons to be recorded in writing. It is not possible to hold that Clause 3 of the Levy Order imposes a restriction much less an unreasonable restriction on the right to trade. It is only a regulatory measure. After all what it says is that a licensed dealer or a licensed miller, who has surrendered levy, has to apply for a release certificate within a period of one month and on such application being filed, the Deputy Commissioner has to issue the release certificate. Thereafter, the miller or the dealer is free to transport the rice mentioned in the release certificate to any place either within or outside the State. Such a condition, which is only regulatory, cannot be held to be imposing a restriction much less an unreasonable restriction. It is also not possible to hold that the requirement of obtaining a release certificate has no nexus with the object of the Levy Order. The object of the Levy Order, as it is already pointed out, is to secure or procure 50 per cent of the rice obtained by a miller or a dealer from milling the paddy grown in the State. Whether a dealer or a miller has surrendered 50 per cent of the rice can be verified from the release certificate also. It is also possible from the grain vouchers to find out as to whether the levy is surrendered in respect of the paddy hulled at the mill point; but in respect of the rice in movement it will not be possible to know whether such rice has suffered levy. It is only to find out whether the rice which is in movement, in other words, which is being transported, has suffered levy or not, it is necessary that such rice must be supported by release certificate. In a way the release certificate facilitates transporting of rice to any place outside the State. Otherwise, the enforcement authorities will have to interfere or impede movement of rice and stop its movement until it is proved that the rice which is being transported has suffered levy. On the contrary, if the release certificate which has to accompany the rice which is being transported outside the State, is obtained and shown to the enforcement authorities, immediately the enforcement authorities have to allow the movement or transporting of rice to continue without any obstruction. Therefore, requirement of obtaining of release certificate far from acting as a restriction, facilitates free movement of rice within and outside the State.

22.4) The fact that the Deputy Commissioners do not issue release certificates immediately is not a ground to hold that the provision requiring obtaining of release certificate imposes an unreasonable restriction. Under such cirumstances, this Court in many cases has held that the Deputy Commissioners have to issue release certificates within ten days from the date of receipt of applications for grant of release certificates. Several Writ Petitions are being filed only for the purpose of issuing directions to the Deputy Commissioners to issue release certificates. If only the Deputy Commissioners attend to the applications filed for issue of release certificates immediately, no difficulty whatsoever is faced by dealers or millers In other words, the dealers and the millers consider the requirement of obtaining release certificate as unreasonable because the Deputy Commissioners do not consider the applications immediately: and issue the release certificates. It is high time that the State Government should issue strict directions and instructions to the Deputy Commissioners to attend to the applications filed for grant release certificates immediately. After all the applications for grant of release certificates are filed in the prescribed form and they are accompanied by grain vouchers in original; therefore, there is no difficulty whatsoever to consider the applications without any delay. The Deputy Commissioners must also bear in mind that the trade activities must go on without unreasonable hindrance. Sri Achar, Learned Government Advocate, also assures the Court that the Government will immediately take action in the matter and issue suitable instructions in this regard.

22.5) The next question connected with the release certificate is the validity of the provision contained in Sub-clause (4) of Clause 8 of the Levy Order directing a miller or a dealer to dispose of the levy-free rice within one month from the date of grant of release certificate. It is the case of the petitioners that this provision adversely affects the interest of a miller or a dealer. It is submitted that once a miller or a dealer surrenders levy he must be free to deal with the levy-free rice. It is by the sale of levy-free rice a miller or a dealer is able to make up the loss caused to him in surrendering fifty per cent of the rice towards levy on a specified rate. It is further submitted that fixing of the period for disposal of levy-free rice apart from being unnecessary, has no nexus with the object of the Levy Order. Reliance is also placed on a decision of the Supreme Court in Oudh Sugar Mills Ltd. etc. v. Union of India. & Ors, : AIR1970SC1070 . It is not possible to accept the aforesaid contentions. For the purpose of disposal of levy-free rice within the State, there is no period fixed by the Levy Order. It is open to a dealer or a miller to dispose of the levy-free rice within the State at any time. It is only when a dealer or a miller wants to transport the levy-free rice to a place outside the State, a release certificate is required to be obtained and the levy-free rice in respect of which release certificate is obtained is required to be disposed of within a period of one month from the date of grant of release certificate. There is no compulsion on a miller or a dealer to transport levy-free rice to a place outside the State. If a miller or a dealer on obtaining a release certificate for transporting levy-free rice to a place outside the State is not able to transport the same within a period of one month, it is still open to him to sell such levy-free rice within the State. Therefore, it is not possible to hold that the provision contained in Sub-clause (4) of Clause 8 of the Levy Order that the stock of rice in respect of which release certificate is issued shall be disposed of by a miller or a dealer within a period of one month from the date of grant of such certificate, is either unreasonable or imposes an unreasonable restriction on the right to trade. It is also not possible to hold that it adversely affects a miller or a dealer. Such a provision is necessary in order to ensure that there is no unreasonable hoarding of the levy-free rice. One of the objects of the Levy Order is to ensure that sufficient quantity of rice becomes available within the State for the benefit of the consumers. The Supreme Court, in the aforesaid Oudh Sugar Mills's case5 no doubt has held that granting of 26 days for disposal of the commodity is unreasonable. In view of what is stated above, it is clear that the aforesaid decision is not applicable to the case on hand.

22.6) With regard to Sub-clause (3) of Clause 8 of the Levy Order, it is contended on behalf of the petitioners that the words 'and as per the directions issued by the Government in this regard' make the said Clause unworkable and in the absence of the directions issued by the State Government, the Deputy Commissioner will not be in a position to issue the release certificate. They also contend that Form-D contains several unreasonable requirements to be complied with.

22.7) As far as Form-D is concerned, the same will be dealt with separately. But, I do not find anything wrong with the words 'and as per the directions issued by the Government in this regard' occurring in Sub-clause(3) of Clause 8. The Clause merely provides for the procedure to be followed for obtaining release certificate. It only provides that on receipt of the application by the Deputy Commissioner under Sub-clause (1) within one month from the date of surrender of levy, he shall have to issue release certificate for movement and disposal of the levy-free rice. Sub-clause (1) provides that after delivery of the rice in accordance with Clause 7 of the Levy Order, the licenced miller and licenced dealer may make an application in Form-C to the Deputy Commissioner for issue of release certificate for disposal of levy-free rice. Sub-clause(2) provides as to what should accompany the application filed for grant of release certificate. If Sub-clauses (1) and (2) are complied with, the Deputy Commissioner has no option but to grant release certificate even if there is no direction issued by the State Government. If there is any such direction issued by the State Government, he has to issue the release certificate in accordance with the directions. Whether the directions issued by the State Government are consistent with the scope and object of the Levy Order will have to be considered in the light of the directions issued by the State Government. Therefore, that matter need not be considered at this stage. Hence, I do not find anything wrong with Sub-clause (3) of Clause 8 of the Levy Order.

22.8) Regarding Sub-clause (4) of Clause 8, it is contended that the period of one month fixed for disposal of the levy-free rice from the date of grant of release certificate is too short a period and it affects the petitioners very much because in order to keep the margin of profit or avoid loss being caused, millers or dealers are required to wait till they get good price ; but the release certificate becomes invalid after the expiry of one month from the date of its issue ; therefore they are required to sell it before the expiry of one month from the date of issue of the release certificate. This question is also closely connected with the scope of Clauses 6 and 8 of the Levy Order. In this behalf it is contended on behalf of the Stale by Mr. Achar, Learned Government Advocate, that a release certificate is necessary for the purpose of not only transporting levy-free rice outside the State, but also for internal movement and disposal within the State. It is submitted that in the absence of such a requirement, it is not possible to check whether a miller' or a dealer who deals in rice has paid levy. The period of one month, it is submitted, is also necessary in order to see that there is no unreasonable hoarding of the rice. He also contends that Clauses 6 and 8 are intended to serve the object of the Levy Order and they are complimentary to each other.

On the contrary, the case of the petitioners is that Clause 6 of the Levy Order is the only Clause which imposes restriction on transporting of rice to any place outside the State without a release certificate and completely prohibits transporting of paddy outside the State. Whereas Clause 8 provides a procedure for obtaining a release certificate. Therefore Clause 8 cannot control Clause 6 of the Levy Order. It is submitted that if a release certificate has to be obtained even for internal movement and disposal of the rice, it will not be possible to carry on trading activities smoothly because every time even for disposal of one or two quintals of rice sold within the State, a dealer has to approach the Deputy Commissioner for obtaining release certificate. It is further contended that when once 50 per cent of the rice obtained from milling the paddy is delivered towards levy, the remaining 50 per cent of the rice left with a miller or a dealer for free sale shall not be subjected to further restriction of obtaining release certificate and a miller or a dealer must be allowed free hand to make up the loss which he incurs by surrendering fifty per cent of the levy rice at a specified rate and he must be free to sell as and when he gets good profit margin and not necessarily within the period of one month from the date of grant of release certificate.

22.9) Therefore, it is necessary to determine whether the Levy Order intends that a release certificate should be obtained even for internal movement and disposal of the Levy-free rice.

22.10) In this connection, it is also pertinent to notice and it is permissible to take into consideration also that the Levy Order, 1983 which is repealed by the Levy Order in question, specifically provided under Clause 3(3) as under:

'No stock of rice shall be removed from the mill premises without delivery of the rice relating to such stock in accordance with Sub clause (2) and obtaining a release certificate under Clause 9.'

Similarly, Sub-clause(2) of Clause 4 of the Levy Order, 1983 relating to a dealer also provided for complying with similar requirement. But these provisions are not found in Sub-clauses (3) and (2) of Clauses 3 and 4 respectively of the Levy Order. Clause 7 of the Levy Order, 1983 was similar to Clause 6(1) of the Levy Order. Similarly, Sub-clause (2) of Clause 7 of the Levy Order, 1983 was also similar to Sub-clause (3) of Clause 6 of the Levy Order, Clause 9 of the Levy Order 1983 was equivalent to Clause 8 of the Levy Order. Sub-clause (1) of Clause 9 of the Levy Order, 1983, was also similar to Sub-clause (1) of Clause 8 of the Levy Order, relating to Levy free rice. Sub-clause (2) of Clause 9 of the Levy Order 1983 was also similar to Sub-clause (2) of Clause 8 of the Levy Order. However, Sub-clause (3) of Clause 9 of the Levy Order, 1983 did not contain the words 'and as per the directions issued by the Government in this regard' which are found in Sub-clause (3) of Clause 8 of the Levy Order. Sub-clause 4 of Clause (9) of the Levy Order 1983 was similar to Sub-clause (4) of Clause 8 of the Levy Order. Whereas, Sub-clause (3) of Clause (3) and Sub-clause (2) of Clause 4 of the Levy Order do not provide that a release certificate should be obtained for removing the rice from the mill ; whereas, it is already pointed out under the Levy Order, 1983, it was necessary to obtain a release certificate even for removing the rice from the mill premises to any other place within the State or Town outside the mill premises The omission of this requirement in the Levy Order, of obtaining a release certificate for removing rice after surrendering levy from the mill point to any other place outside the mill within the State or same town or place is very material and it is a relevant circumstance to be taken into consideration in order to find out the scope and ambit and intendment of Clauses 6 and 8 of the Levy Order, Clause 6 is a substantive provision. It imposes a restriction on the movement and disposal of rice and paddy. Sub-clause (1) specifically states that no person shall transport outside the State any rice in relation to which the release certificate has not been obtained. As far as paddy is concerned, no person shall transport the same to any other place outside the State. Thus, for the purpose of transporting rice outside the State, release certificate is necessary. This restriction on transporting and movement of rice is imposed by Clause 6. Whereas, Clause 8 of the Levy Order, is not a substantive provision. It deals only with the procedural aspect. In other words, it is in aid to or complementary to Clauses 3, 4, 6 and 7 of the Levy Order and it only provides for obtaining of release certificate for disposal of levy free rice. This Clause cannot be interpreted to expand the scope of the restriction imposed by Clause 6 of the Levy Order inasmuch as Clause 8 of its own has no efficacy without Clause 6 which imposes restriction on movement of levy-free rice.

22.11) Learned Government Advocate submits that the words ''for disposal of levy free rice' and 'for movement and disposal of levy free rice' found in Sub-clauses (1) and (3) respectively of Clause 8 of the Levy Order, are material, and they go to indicate that release certificate is necessary even for movement and disposal of levy free rice within the State. If such a restriction the State Government intended to impose under the Levy Order, even for internal movement and disposal of levy free rice, there was no reason whatsoever for the State Government to omit to include the specific provisions which were found in Sub-clauses (3) and (2) of Clauses 3 and 4 respectively of the Levy Order, 1983 in Clauses 3 and 4 of the Levy Order. The requirement of obtaining release certificate for removing levy free rice from the mill premises is not to be found in the Levy Order. Further, removal of the requirement of obtaining release certificate for internal movement and disposal of levy free rice within the State in the Levy Order is consistent with the object of the Levy Order.

22.12) The object of the Levy Order is to procure fifty percent of the rice obtained from the paddy produced in the State and hulled by a dealer or a miller; and also to see that the remaining fifty percent of the rice is disposed of within the State in the manner provided in the Levy Order as far as possible or by selling the same to any place outside the State on obtaining release certificate. By holding that for the internal movement and disposal of levy free rice no release certificate is necessary, the object of the Levy Order is not in any way going to be affected because levy free rice if not transported to any place outside the State, it will be sold within the State. As far as transporting of rice to any place outside the State is concerned, the Release Certificate is necessary and Clause 6 specifically provides for it. Release certificate has to be obtained by a miller or a dealer for transporting levy free rice outside the State in order to show that he has surrendered levy and what is being transported. is levy free rice. It is also necessary to make it clear that the quantity of levy free rice sold within the State is also required to be taken into account for the purpose of deciding the quantity of levy free rice for which a Release Certificate for transporting it outside the State can be granted. For example, a miller or a dealer after having surrendered 500 quintals of rice, is entitled to deal with equal quantity of 500 quintals as levy free rice. Out of that, if he disposes of 200 quintals within the State he is entitled to a Release Certificate for 300 quintals only. Therefore, it appears to me that the contention advanced by Learned Government Advocate that in the absence of a Release Certificate for internal movement and disposal of rice within the State, it will be difficult to find out whether the miller or dealer has surrendered levy or not, cannot be accepted.

22.13) Under Clause 5 of the Levy Order, a miller or a dealer is required to maintain accounts and furnish the same at stated intervals. Similarly, a miller is also required to maintain.accounts in the prescribed form as per Clause 9 of the Levy Order. The particulars required to be furnished as per Clause 5 and the accounts maintained as per Clause 9 contain not only the surrender of rice towards levy, but also the disposal of levy free rice also. Therefore, it cannot be held that the State is left with no manner of check in this regard.

22.14) Insistence of Release Certificate for the internal movement and disposal of rice within the State will lead to several difficulties. It is open to a dealer or a miller to sell any quantity of levy free rice within the State. He. may even sell 1 or 2 quintals to a consumer. In such an event also, if he is required to obtain Release Certificate as otherwise the person who purchases the same will not be entitled to transport the rice from the mill premises to the place of his business. Such a requirement will definitely impede normal course of business and will adversely affect the business of a miller or a dealer. Hence, it is held that Release Certificate is required only for transporting levy free rice to any place outside the State. The same is not required for the purpose of internal movement and disposal of levy free rice within the State.

For the purpose of granting Release Certificate, the disposal of levy free rice within the State is also required to be taken into account.

23.1) Connected with the topic of Release Certificate is Form-D. Therefore, I will now take up the contentions relating to Form-D. Form-D is the form of Release Certificate. Petitioners are aggrieved with condition Nos. 4 to 7, which are as follows:

'4. At the time of despatch, the miller/dealer shall obtain from the Tahsildar of the concerned Taluka a Certificate in the following form :

CERTIFICATE TO BE APPENDED BY THE TAHSILDAR OF THE CONCERNED TALUK

i) Lorry No.ii) Quantity loaded : Quantity of Raw Boilediii) Variety (Hamsa, Masoori etc.)iv) Place of loading :v) Date and time of loadings :vi) Date and time by which the lorry should reach the firstcheck post - check post to be specified.vii) Date and time by which the lorry should pass through the last check post - check postto be specified.Date : Tahsildar .... Taluk(Seal)5. Movement of stock without this certificate appended to the release certificate will be treated as transport without a release certificate.

6. Only the original of the release certificate will be handed over to the consignor.

7. Movement of stock after the time, limit prescribed in the certificate issued by the Tahsildar will be treated as trans- port without a release certificate.'

The contention of the petitioners is that the nature of the trade is such that it can go on from morning to evening and even up to late hours in the night also and the Office of the Tahsildar or of any enforcement officer will not be open upto that time, nor it is possible to insist upon the Tahsildar or the enforcement officer to be available as and when the rice is ready for transporting. It is also further submitted that the Tahsil Office and the places of business cannot always be situated in one place and may be situated at different places, and in such a case it will be too harsh and unreasonable to expect a miller or a dealer to obtain a certificate of the nature that is required to be obtained as per condition No. 4 of Form-D. Thus, it is submitted that the business will be unreasonably impeded and it will not be possible for a miller or a dealer to go on with his normal business smoothly and uninterruptedly. Therefore, it is submitted that condition No. 4 imposes an unreasonable restriction. It is also further submitted that it is not always possible to transport rice in a lorry, and it is also open to adopt common means of transport i.e., cart which is very much in vogue in India, and it is also not possible to state in advance as to at what time the lorry transporting the rice will reach the destiny because of several hurdles and unforeseen events that may happen on the way; such as breakdown of the vehicle and some such other events. Thus, it is submitted that condition No. 4 is unreasonable.

23. 2) On the contrary, it is submitted by Mr. Achar, Learned Government Advocate that such a condition is necessary in order to keep a check on a miller or a dealer and to ensure that he transports levy free rice only and that he does not misuse the Release Certificate. It is submitted that many instances of using the same Release Certificate for transporting rice outside the State more than once have come to the notice of the Government and as a result thereof, the State has suffered very much and the availability of rice in the State is affected because of the illegal transporting of rice to a place outside the State. It is also further submitted that no doubt in the State of Andhra Pradesh, similar condition was imposed and the presence of the officer at the time of loading was provided and it was considered by the High Court of Andhra Pradesh in the case of Kishore Boiled Rice Mill v. State of Andhra Pradesh & Ors., : AIR1983AP230 and held that such a requirement was impracticable and unreasonable because besides the office hours it was highly impracticable for the Government officials to be present at 'the time of loading. Here, in the instant case, it is submitted that the presence of the officer is not required, but what is required is that a miller or a dealer has to go to the Tahsildar Office and have the certificate signed by him after loading the vehicle. It is submitted that a miller or a dealer may approach the Tahsildar earlier to the loading, but the requirements stated in condition No. 4 are such that the certificate can be filled in only if the vehicle is loaded with rice.

23. 3) The Court can take judicial notice of the fact that trade activities go on beyond office hours and they go on even beyond 9 p.m. every day. During those hours, it is not reasonable to expect the Tahsildar or any enforcement officer to be present in the office. It is also unreasonable to expect that the transporting of rice must take place only during office hours. That will unreasonably affect the trade itself and consequently results in imposing unreasonable restriction. Similarly, the business place of a dealer or a miller may be outside the taluk headquarters and may also be far away from the Tahsildar office. In such a case, it Will lead to further difficulties because every time a lorry is loaded, the miller or the dealer has to go to Tahsildar office and obtain endorsement on the Release Certificate as per condition No. 4, Therefore, there is no doubt that in actual operation condition No. 4 results in imposing unreasonable restriction on the right to trade of a miller or a dealer. Therefore, it is not possible to sustain condition No-4.

23.4) Once condition No. 4 is held to be unsustainable, Condition Nos. 5, 6 and 7 fall to the ground because they cannot be enforced in the absence of condition No. 4. There is no doubt that it is necessary to provide for checking and taking such other steps as are necessary to prevent misuse of the Release Certificate because it is noticed by the Government that Release Certificates arc misused by dealers and millers and more than once under the same Release Certificate rice is transported to places outside the State. It appears to me that instead of directing obtaining of the certificate of the nature prescribed by condition No. 4, it will be sufficient and may perhaps serve the purpose and prevent to a considerable extent misuse of Release Certificates, if a miller or a dealer is made to file a statement before the concerned Tahsildar within 24 hours of the despatch of the rice under a Release Certificate to a place outside the State, giving the details as to the quantity of rice, vehicle number, the variety of the rice, place of loading, date and time of loading, the place to which it is sent the details of the Release Certificate under which it is sent, and the same are entered in the register maintained in the office of the Tahsildar in this regard, and the original Release Certificate which must accompany the rice, is produced at the first Police Station or the office of the enforcement officer on the route and an appropriate endorsement is obtained on it and the particulars of the Release Certificate and the vehicle number in which the the rice being transported are also entered in the register maintained in the aforesaid offices, and again it as produced at the State border check-post situated on the route, and an endorsement is got made on it that it is exhausted or utilised etc. and all the particulars are also entered in the register maintained in this regard by the Border Check-post Office. Strict enforcement of these requirements may provide sufficient safeguard against misuse of Release Certificate. However, it is a matter on which the State Government has to take a decision.

23.5) It is next contended that Columns 6, 7 and 8 of Form-D are not consistent with the scope and object of the Release Certificate. It is contended that a Release Certificate is valid for a period of one month from the date of issue and within that period it is open to a miller or a dealer to enter into an agreement of sale with an outsider. It is not necessary that at the time of obtaining a Release Certificate, sale of rice must have settled with an outsider. A reading of Clauses 6, 7 and 8 of the Levy Order, make it clear that at the time of seeking a Release Certificate, a miller or a dealer need not have settled the sale of the rice with an outsider. It is open to him to sell and transport the rice within a period of one month from the date of issue of Release Certificate, If that be so, on the date of applying for a Release Certificate or on the date of issue of Release Certificate, it is not necessary to mention the name of the consignee or the place to which permit is issued, and mode of transport as it is open to the miller or dealer after obtaining Release Certificate to sell it to any person and to any place outside the State and transport it within thirty days from the date of issue of Release Certificate. Therefore, Columns 6, 7 and 8 in Form-D are not consistent with Clauses 6, 7 & 8 of the Levy Order. Hence, the said Columns are also liable to be struck down. The information required to be furnished by the applicant seeking Release Certificate as per Columns 6, 7 and 8 of Form-D can very well be insisted to be given at the very first check-post or the office of the enforcement officer situated on the route through which the rice under the Release Certificate is transported,

24. It is contended on behalf of the petitioners that since Clause 10 of the Levy Order gives untrammelled powers to the Enforcement Officer, it is invalid. It is not possible to accept this contention. Clause 10(1) clearly states that the enforcement officer from time to time by general or special order issue to any miller or dealer directions to secure compliance with the provisions of the order. It means, any direction which an enforcement officer may issue must be in accordance with the provisions of and in consonance with the objects of the Levy Order and must be intended for securing compliance with the provisions of the Levy Order Therefore, it is not possible to hold that Sub-clause (1) of Clause 10 of the Levy Order contains no guidelines for exercising power by the enforcement officers. Guidelines for exercising power under Clause 10(1) are the very contents of the Levy Order itself. That being so, it is not possible to hold that Sub-clause (1) of Clause 10 of the Levy Order suffers from any infirmity. If the directions issued in exercise of power under Sub-clause (1) of Clause 10 of the Levy Order do not fall within the scope and ambit of the Levy Order and are not intended to secure compliance with the provisions of the Levy Order, it is always open to the aggrieved person to challenge such directions. Hence, it is not possible to accept the contention of the petitioners. Accordingly, the contention is negatived.

25. In Writ Petitions 5, 6 and 835 to 838 of 1985, the grievance of the petitioners is that there are two rates fixed for the rice delivered to Food Corporation of India (for short, 'F.C.I.') and to Karnataka Food and Civil Supplies Corporation (hereinafter referred to as the 'KF & CSC') towards levy. There are no guidelines prescribed by the Levy Order nor any order is issued by the State Government under the Levy Order as to what percentage of levy to be delivered to the F.C.I. and KF & CSC. It is not in dispute that the rates prescribed by the KF & CSC for a quintal of rice surrendered towards levy is higher than the rates fixed for a quintal of rice delivered to the F.C.I. For one quintal of ordinary rice delivered to F.C.I. a sum of Rs. 216.45 is fixed; whereas in the case of levy delivered to KF & CSC Rs. 241.45 is fixed. Similarly, in respect of fine and superfine rice delivered towards levy, the rates fixed are Rs. 222.45 and 228.45 to F.C.I. and Rs. 247.45 and 253.45 to KF & CSC. When the price payable by each, one of the two purchasing agents is different, it is necessary for the State Government to fix the percentage. Otherwise, it may so happen that the Deputy Commissioner may direct a particular miller or a dealer to deliver large quantity of rice to the F.C.I, and smaller quantity to KF & CSC and another miller or dealer to surrender larger quantity to KF & CSC and smaller quantity to the F.C.I. In this way, there will not be any uniform treatment to a miller or a dealer. This will result in loss to the miller or dealer because one who is directed to deliver levy rice to KF & CSC will definitely get higher price and whereas the one who is directed to deliver levy rice to F.C.I. will get lesser price. From Annexure-A and B produced in W.Ps. 835 to 838 of 1985, it is clear that the Deputy Commissioner has not followed any uniform standard. Therefore, it is necessary that the State Government must fix percentage of levy rice to be delivered to F.C.I. and KF & CSC so that no miller or dealer is subjected to any discrimination. Annexures A and B produced in W.Ps 835 to 838 of 1985 fix the target of levy required to be delivered by a miller and a dealer. The provisions contained in the Levy Order do not admit or permit fixing of such a target in advance as the levy becomes payable as and when the paddy is hulled. Therefore, it is not possible to sustain fixing of the target as is done by the orders issued by the respective Tahsildars. Accordingly, Annexures A and B produced in Writ Petitions 835 to 838/85 are liable to be quashed and the same are hereby quashed. The State Government is further directed to fix percentage of levy rice to be delivered by miller or a dealer to F.C.I, and KF & CSC.

26. For the reasons stated above, in addition to the reliefs granted as above in Writ Petitions 5, 6 and 835 to 838 of 1985, the Writ Petitions are allowed in the following terms :

'The following impugned provisions of the Levy. Order, 1984 are held as valid :

(1) Sub-clauses (f) and (i) of Clause 2, Sub-clauses (3) and (4) of Clause 3, Sub-clauses (2) and (3) of Clause 4, Sub-clauses (1) and (3) of Clause 6 and Clauses 8 and 10.

(2) Sub-clause (2) of Clause 6, columns 6, 7 and 8 and Condition Nos. 4, 5 and 7 in Form-D of the Levy Order, 1984 are struck down.

(3) Release Certificate is required for the purpose of transporting levy-free rice to any place out side the State. For disposal, transporting and movement of levy free, rice to any place within the State no release certificate is required. The quantity for which a dealer or a miller is entitled to a release certificate for transporting Levy free rice to any place outside the State has to be determined after taking into account the quantity of levy free rice sold and disposed of by such person within the State.

(4) 'The Zonal Order bearing. No. FTD 245 RPR 84 (II), Bangalore, dated 4th December, 1984, issued by the State Government is quashed.

(5) The Levy Order, 1984 applies to the paddy, grown in the State of Karnataka and the rice obtained from such paddy.'