1. The Edible Oils Packaging (Regulation) Order, 1998 ('Control Order' for brevity) was issued by the Central Government vide GSR No. 584(E), dated 17-9-1998 in exercise of their powers under Section 3 of the Essential Commodities Act, 1955 ('the Act' for brevity). The Government of Andhra Pradesh by their orders in G.O. Ms. No. 42, Food, Civil Supplies and Consumer Affairs (CS.III) Department, dated 17-5-2000 adopted compulsory packaging scheme introduced by the Control Order and decided to implement the same in phased manner. The Control Order was, however, not implemented immediately. By G.O. Ms. No. 66, Food, Civil Supplies and Consumer Affairs Department, dated 11-8-2000, the Government of Andhra Pradesli ordered to implement the Control Order with effect from 1-11-2000 in the urban areas and with effect from 1-4-2001 in the rural areas in the State. All these writ petitions are concerned with the validity of these orders.
2. In this batch of writ petitions, the action of the Government in adopting the Control Order and orders of implementation have been under challenge. The writ petitions are filed either by Oil Millers Associations, Edible Oil Millers Associations or Retail Kirana and General Merchants Associations and others. As the questions raised are common, it would be convenient to dispose of all the matters by a common judgment. Most of the cases were heard on 19.2.2002 and other connected cases though heard subsequently are being disposed of by this order.
3. WP No,23289 of 2000 is taken as illustrative case as the same is comprehensive writ petition challenging the Control Order, G.O. Ms. No. 42, dated 17-5-2000 and G.O. Ms. No. 66, dated 11-8-2000. In that writ petition, the petitioner is the Nalgonda District Oil Millers Association. It prayed for issuing a writ of mandamus declaring the Control Order and the Government Orders of the State Government as arbitrary, illegal and unconstitutional.
Petitioner's case :
4, The members of the petitioner association carry on the business of extracting edible oils from the seeds and sell the same to dealers and other consumers. Eighty per cent of the consumers are poor and purchase edible oils in small quantities like 50 gms., 150 gms., etc., for their daily consumption. The Central Government issued Control Order under Section 3 of the Act to ensure availability of edible oils at fair prices and to provide for distribution, use and consumption in the consumers interest. Such order was issued purportedly on the ground that there are incidents of oil adulteration. The millers, dealers and retailers made representations to the Government and, therefore, the Government decided to postpone the implementation of the Control Order. Now, by reason of G.O. Ms. No.66, dated 11-8-2000, the same is being implemented in the State of Andhra Pradesh. The Control Order is not intended for maintaining or increasing supplies or for securing equitable distribution and availability at fair prices. As there is no control for manufacture, distribution or sale of these edible oils, merely because there were certain incidents of adulteration, the Central Government cannot promulgate such a Control Order which has far reaching consequences in the oil industry. The Central Government has no such power to issue the Control Order under Section 3 of the Act. The Control Order results in automatic increase in the rates of edible oils by 30% which would be detrimental to the interests of the poor people.
A packing machine costs about Rs. 30 lakhs and it will be difficult for each of the millers to purchase the same. The oil millers or dealers would be forced to close down their business as they cannot compete with the large scale industry. The Control Order imposes unreasonable restrictions on enjoyment of fundamental right under Article 19(1)(g) of the Constitution of India.
Respondent's Case :
5. Though notice was duly served, the Central Government has not filed any counter-affidavit. The Government of Andhra Pradesh filed an application to vacate the interim order along with a counter-affidavit (WV MP No. 3408 of 2000 in WP No. 20700 of 2000). The Consumer Care Centre, Andhra Pradesh was impleaded in WP No. 20700 of 2000 and they also filed a counter-affidavit.
It is stated in the counter that it is the policy of the State to ensure availability of unadulterated and quality edible oils. Though the Control Order promulgated in 1998 was to be implemented from 1-8-2000, keeping in view the problems in establishing laboratories and packing machines and after considering the representations of the representatives of trade and commerce, the Government gave ample time of two years for implementing the same. The consumers never complained about the likelihood of increase in the prices. The consumer representatives repeatedly requested the Government to ensure supply of edible oils in packed form in order to control adulteration and reduce recurrence of events like dropsy (an infectious disease) in the country. This was considered by the Central Government and issued the Control Order. The Government are interested in the health and welfare of the people. The Government vide G.O. Ms. No. 89, dated 30-10-2000 confined the sale of oils in packed form to Groundnut, Safflower, Soya Been, Sunflower and Palmolien only. Mustard, Sesame (Gingelli) and Niger oils were exempted from the purview of the Control Order. All other edible oils are not covered by the Control Order. It is estimated that increase in the cost for packing oils varies between Rs. 3.15 ps. to Rs. 3.50 ps. per litre depending upon the size of the pack. The total increase in the cost of oil would be 10 to 12% which is a small price to pay for the consumer to guard against the rampant adulteration and short weighment that goes on in the sale of edible oils today. These ills can be controlled by the Control Order as the quality and quantity of the oil can be ensured only in packed form as the pouch would bear the name and address of the manufacturer. The packing would also increase the revenue of the State in the form of Sales Tax by Rs. 100 to Rs. 120 crores which can be deployed to developmental activities. The allegation that packing machines would cost about Rs. 30 lakhs is not correct. There are modern pouch packing machines available between Rs. 2.5 lakhs and Rs. 5 lakhs which have the capacity to fill 10 pouches per minute which translates to 2,50,000 - one litre pouches per month. If the millers cannot afford to set up packing machines, they can sell their bulk to the packers who in turn test and pack the oil as required under the Control Order. In the city of Hyderabad, a market survey was conducted on 10-11-2000 which shows that loose refined Sunflower oil was sold between Rs. 28/- and Rs. 30/- per kg., (Rs. 25 to Rs. 27/- per litre). When compared to this, brands of refined Sunflower oil such as Sunrich, Sheetal Drop, Gold Drop and Real Gold in packets are sold around Rs. 28/- to Rs. 30/- per litre. The State Government only implements the Control Order issued by the Central Government and the petitioners are not entitled for any relief in the writ petition.
6. The Consumer Care Centre (respondent No. 6 in WP No. 20700 of 2000) in their counter-affidavit stated that in the sale of edible oils in loose, the traders are indulging in several violations including short weighment. Some of the traders are selling adulterated edible oils to the consumers without any regard to the health. Therefore, the Control Order was issued by the Central Government. The Control Order in question is not ultra vires and is in accordance with the Act. The Control Order contains salient features like insisting the manufacturer to display his/its name, batch no. quantity etc., which will help the consumers to get quality edible oils, which are not available when edible oils are sold in loose. During 1998, due to adulteration of loose oil in New Delhi, more than one hundred people died due to Dropsy warranting promulgation of the Control Order. The Government of Andhra Pradesh considering the representations of the trading community postponed the implementation of the Control Order till 2001 to allow the traders to comply with impugned Control Order. The Control Order imposes reasonable restrictions and is not arbitrary.
Grounds of Challenge :
7. Sri A. Rajasekhara Reddy, who led the arguments on behalf of the petitioners mainly raised two contentions. To put it in a nutshell, he submits that the impugned Control Order is ultra vires. Secondly, he submits that the impugned Control Order is violative of fundamental right under Article 19(1)(g) of the Constitution of India. He would submit that if small manufacturers are compelled to comply with the provisions of the Control Order most of them would be compelled to wind up their business for it is not possible for small manufacturers to invest huge investment for purchasing packaging machine and establishing laboratory.
Defence of State :
8. Smt. Rekha Prasad, learned Additional Central Government Standing Counsel submits that having regard to the past experience when large scale adulteration of edible oil was reported by reason of loose sales Central Government promulgated the Control Order. She submits that there have been many deaths due to dropsy and therefore the Control Order incorporates reasonable restrictions permissible under Article 19(6) of the Constitution of India. It is also her submission that though Control Order has to be enforced from November, 1998, the State Government has allowed sufficient time having regard to the representations made by the representatives of the manufacturers, wholesalers and retailers which itself would belie the complaint of unreasonableness.
9. Insofar as the State Government is concerned, (without intending any discourtesy to the learned Government Pleader for Civil Supplies and the learned Assistant Government Pleader for Civil Supplies) the Court must keep on record that there is no assistance whatsoever. What happened in these cases is that on 4.2.2002 WP No. 20833 of 2000 in which notice before admission was ordered, came up for admission. It was adjourned to 12.2.2002 at the request of the learned Government Pleader. On that day, a representation was made that there is group of connected cases and therefore this Court directed to list the cases on 13.2.2002 along with other two connected matters. The learned Government Pleader herself on 13.2.2002 submitted that there arc 35 other cases where the same Control Order is challenged and while furnishing a list of 35 cases requested to take up all the cases. On her representation, and as per the list furnished, I passed the following order:
In these writ petitions, an order being G.O. Ms. No. 42, Food, Civil Supplies and Consumer Affairs (CS.III) Department, dated 17-5-2000, in effect, requiring the manufacturers of edible oils to sell and distribute the oil in packaged from December 1998 as per the Edible Oils Packaging (Regulation) Order, 1998 (Central Government Control Order) is challenged.
The learned Government Pleader for Civil Supplies has brought to the notice of the Court that the same question was also raised in as many as 35 other cases (list appended). In view of this, it would be convenient to dispose of all the matters finally.
Office is directed to obtain necessary orders from the Hon'ble the Chief Justice and post all the connected writ petitions on 19.2.2002 as Specially Mentioned Cases before appropriate Bench.
10. The Hon'ble the Chief Justice was pleased to direct the Registry to list all the cases before me. When the cases were listed on 19.2.2002 on highup in the list and when the cases were called, though Court sent for, learned Government Pleader was not present to argue on behalf of the Government in such an important matter involving serious questions as to breach of fundamental rights. The learned Assistant Government Pleader Ms. Bharati Devi to say the least, was not at all well informed with the law and practice of Essential Commodities Act or for that matter, basic constitutional principles. This Court is compelled to point out these things to bring home the point that the Government should have a fresh look at the whole institution of Office of Government Pleaders duly keeping in mind that Government Pleaders in a public law Court have an important role to play and any slackness in the administration, management and organisation of the Office of the Government Pleaders would result in mockery of public law practice in the highest Court of the State.
11. This Court requests the Chief Law Officer of the State, the learned Advocate General of the State of Andhra Pradesh to bestow much needed concern on this aspect of administration of Justice. This Court must again emphasise that the Court does not intend any discourtesy to the learned advocates in making these remarks.
12. The silver lining in the dark cloud, however, is the counter-affidavit filed by Sri H.S. Brahma, the Commissioner of Civil Supplies along with the application for vacate stay being WV MP No. 3408 of 2000 filed by the Edible Oil Dealers Welfare Association. Though the application for vacate stay was filed on 14.12,2000, curiously the same was not pursued by the Office of the Government Pleader concerned with all earnestness it deserve.
13. It is the contention of the State Government of Andhra Pradesh that during various meetings representatives of consumers requested the Government to ensure supply of edible oils in packed form in order to control adulteration arid reduce recurrence of cases of dropsy in Andhra Pradesh. The Government is more interested in the welfare of consumers as it is primary duty of the State to look after health and welfare of the people duly ensuring distribution of supply of unadulterated food stuffs and edible oils. Secondly, it is the contention that the Control Order does not result in increase of the prices of oil and in any event the increase is negligible (10% to 12%) which is the price to pay for quality consumer goods. Thirdly, it does not result in hardship to the small manufacturers as the packaging machines are available at a cost of Rs. 2.5 lakhs and packaging can also be taken on co-operative symbiotic manner between rotary millers and oil packers. The Government also justifies the Control Order and consequential Government Orders on the ground that they are reasonable restrictions permissible under Article 19(6) of the Constitution of India.
Questions for Determination :
14. The two questions which require to be addressed are whether the impugned Control Order is ultra vires and whether it imposes unreasonable restriction on the right of the petitioners (or their members) under Article 19(1)(g) of the Constitution of India. Be it noted that all the petitioners are associations of millers, dealers or distributors and as per settled law an association or incorporated company cannot claim or enforce rights under Article 19(1) (See All India Bank Employees Association v. National Industrial Tribunal, : (1961)IILLJ385SC , Tata Engineering Company v. State of Bihar, : [1964]6SCR885 and D.F.O. v. Viswanath Tea Company, AIR 1981 SC 1369). Nonetheless W.P.Nos. 22437, 22692, 23602, 23661, 24728 of 2000; 1450 and 2389 of 2001 are filed by individual manufacturers or dealers of edible oil and therefore this point requires consideration.
Question of Ultra Vires :
15. The learned Counsel for the petitioners Sri A. Rajasekhara Reddy contends that in 1977 the Central Government made Pulses, Edible Oil seeds and Edible oils (Storage Control) Order, 1977 ('the Storage Control Order' for brevity). By subsequent amendment in 1997 the Central Government deleted the words 'Edible oil- seeds and Edible oil' thereby removing Edible oil from the purview of the Storage Control Order. When the A.P. State Government under A.P. Scheduled Commodities (Licensing and Distribution) Order, 1982 ('State Control Order', for brevity) insisted traders to obtain licence under the State Control Order the same was challenged before this Court successfully. In A.P. Oil Millers Association v. Commissioner of Civil Supplies, : 1998(5)ALD704 , this Court held that once the Edible oils are deleted from the Central Control Order the same is liable to be carried out by the State as per the directions issued by the Central Government and therefore dealers in edible oil seeds and edible oils are not required to obtain licence under the State Control Order. The judgment of the learned single Judge was also affirmed by a Division Bench in W.A.No. 1546 of 1998 and S.L.P. thereagainst was also dismissed. Placing reliance on these events, the learned Counsel would submit that when once the Central Government itself amended the Storage Control Order deleting edible oilseeds and edible oils from Storage Control Order the Central Government again cannot issue the impugned Control Order. He would submit that Section 3 of the Act would not enable the Central Government to issue Control Order specifically dealing with packaging when once the earlier Control Order is withdrawn.
16. The learned Counsel would further submit that under Sub-section (I) of Section 3 of the Act the Central Government may provide for regulating the equitable distribution and for securing availability at fair prices of essential commodities. As there is no storage control or movement control on edible oils there is no necessity for issuing the impugned Control Order. The same according to him is not in public interest.
17. The submission made by the learned Counsel ignores the object and purpose for which the Parliament enacted the Act, It is an Act to provide for the control of production, supply and distribution of essential commodities in the interest of general public. No doubt, Section 3 of the Act does not specifically empower the Central Government to regulate and control the quality of essential commodities as well. But, it would be absurd to think that regulation of supply, distribution, sale at fair price etc., are only intended in the interest of general public and not the quality. Under Section 3(2) of the Act consumption of any essential commodities can also be regulated. Further under Section 3(2)(j) the Control Order may provide for any incidental or supplemental matters. Therefore, any Control Order which prescribes standards of quality and method of distributing or selling the essential commodity is infra vires the powers under Section 3 of the Act. The standard of quality of the essential commodities can be a subject of regulation.
18. The object of the Act as noticed is to protect the society in respect of essential commodities as defined in the Act and also as notified by the Central Government. 'Essential Commodity' is defined in Section 2(a) of the Act. Among other things, foodstuffs, include edible oil as defined under 2(a)(v). In Tika Ramji v. State of U.P., : [1956]1SCR393 and Diwan Sugar and General Mills (P) Ltd. v. Union of India, : AIR1959SC626 , the Supreme Court noticed the objects of the Act. In Diwan Sugar's case it was observed;
Reading Section 3 of the Act with the preamble, it would be obvious that the object of the Act is to provide for control of the production, supply and distribution of trade and commerce in, essential commodities in the interests of the general public, so that the supplies of such commodities may be maintained or increased, their equitable distribution secured and they may be available to the general public at fair prices. Considering the history of sugar control and the trends which appeared in the market from April, 1958, it cannot possibly be said that the impugned notification does not subserve the purposes of the Act and the Order. There can be little doubt that fixation of exfactory prices of sugar mills in the main surplus areas would have the effect of stablising sugar prices for the general public which is the consumer, at a fair level and make sugar available at fair prices.
19. As per Sub-sections (1) and (2) of Section 3 of the Act production, transport, storage, distribution, supply, sale, trade and commerce in relation to essential commodities can be regulated. Storage control is referable to Section 3(2)(d) of the Act. Under the said clause of section it is permissible for the Central Government to make Control Order for regulating storage, transport, distribution, disposal, acquisition etc. of any essential commodities. Merely because oil seeds and edible oils were excluded from the purview of the Storage Control Order, the same does not mean that for all times the Central Government is divested of the power to make another control order for regulating the quality and distribution of edible oil. There are sufficient indications in the Act that in respect of the same essential commodity the Central Government or the State Government can make more than one Control Order and the came cannot be objected to. When the power is given to the Legislature to enact a law or make statutory orders having force of law, the power includes to make as many laws as are necessary dealing with different aspects of same subject. The power vested in the Central Government should be interpreted as to include all incidental and supplemental powers. Therefore, the submission of the learned Counsel cannot be countenanced.
20. Sri Vedula Srinivas, learned Counsel for the petitioner in WP No. 21027 of 2000 filed by Twin Cities Edible Oil Dealers Association, Hyderabad, submits that the Act is mainly concerned with regulation of production, distribution, storage, sale etc., and the Act does not in any manner authorise the Central Government or State Government to control the quality of Edible oil Seeds or Edible oil, According to the learned Counsel the quality aspect of Edible oils is taken care of by the Prevention of Food Adulteration Act, 1954 ('PFA Act' for brevity). Sri P. Sri Raghuram, learned counsel for the fourth respondent in W.P. No. 21027 of 2000 (Consumer Care Centre, Hyderabad) has placed reliance on a judgment of the Supreme Court in Municipal Corporation of Delhi v. Shiv Shanker, : 1971CriLJ680 , to submit that the quality control is an important ancillary and supplementary matter in relation to essential commodities and therefore the Government can also control the quality and that by reason of the impugned Control Order there is no conflict between the PFA Act and the Essential Commodities Act. He would submit that the object of the impugned Control Order is not only distribution and assured availability of edible oils but also to control quality of edible oil keeping in view the health of the consumers.
21. In Shiv Shanker's case (supra) the question that fell for determination of Apex Court was whether the respondent is liable to be prosecuted under the PFA Act for selling adulterated venigar sold under licence granted under Fruit Products Order, 1955 made by the Central Government under Section 3 of the Act. The High Court of Punjab agreed with the accused and annulled the prosecution. Before the Supreme Court it was submitted that the Fruit Products Order, could not harmoniously coexist on the Statute book as compliance with one would in certain contingencies results in other some aspects. The submission was rejected and the Court laid down as under.
The object and purpose of the Adulteration Act is to eliminate the danger to human life and health from the sale of unwholesome articles of food. It is covered by Entry 18, List III of the 7th Schedule to the Constitution. The Essential Commodities Act on the other hand has for its object the control of the production, supply and distribution of, and trade and commerce in essential commodities and is covered by Entry 33 of List III. Inspite of this difference in their main objects, control of production and distribution of essential commodities may, to an extent from a broader point of view include control of the quality of the essential articles of food and thus considered, it may reasonably be urged that to some extent it cover the same field as it covered by the provisions of the Adulteration Act. The two provisions may, therefore, have within these narrow limits conterminous fields of operation.
Therefore, the submission that the Central Government has no power or authority to make the impugned Control Order is devoid of any merit and it is accordingly rejected.
Question of Unreasonable Restrictions :
22. The learned Counsel would submit that the conditions imposed on the manufacture, distribution and sale of edible oil are so stringent that it would result in the small dealers and small manufacturers closing down their business. The impugned Control Order, the learned Counsel would urge, amounts to unreasonable restrictions thereby violating fundamental rights of the petitioners under Articles 14 and 19(1)(g) of the Constitution of India. This submission is to be examined in the background of the impugned Control Order and the two Government Orders impugned.
Scope and operation of impugned orders :
23. The Edible Oils Packaging Order consists of 15 clauses and V schedules. Clause 2(b) defines edible oils as 'vegetable oils and fats and includes any margarine, vanaspati, bakery shortening and fat spread as specified in the Prevention of Food Adulteration Act and rules made thereunder, for human consumption'. Clause 3 of the Control Order is the main clause and reads as under.
3. Prohibition as to sale, etc, :-- On and from the 15th day of December, 1998, no person shall sell or expose for sale, or distribute, or offer for sale, or despatch, or deliver to any person for the purpose of sale any edible oil--
(a) which does not conform to the standards of quality as provided in the Prevention of Food Adulteration Act, 1954 (37 of 1954) and rules made thereunder; and
(b) which is not packed in a container, marked and labelled in the manner as specified in the Schedule-1 :
Provided that the State Government may, in the public interest, for reasons to be recorded in writing, in specific circumstances and for a specific period by a notification in the Official Gazette, exempt any edible oil from the provisions of this order.
24. As per Clause 3 sale and distribution of Edible oil which does not conform to the standards of quality as provided in the PFA Act and the PFA Rules is prohibited. Clause 3(b) further prohibits sale or distribution of Edible oil which is not packed in a container, marked and labelled in the manner as specified. Clause 2(g) defines 'registered packer' as a person who has obtained a certificate of registration under Sub-clause (4) of Clause 4 for carrying on business of packing of any edible oil. The legal requirements imposed on the registered packer are in dealt with by Clause 5 which reads as under :
5. Requirements to be complied with by the registered packer :--(l) No registered packer shall pack any edible oil except under and in accordance with the provisions of this Order.
(2) Every registered packer shall pack edible oils in conformity with the sanitary and other requirements specified in the Schcdule-IV.
(3) Every registered packer shall, in regard to packing, marking and labelling the containers of edible oils, comply with the requirements specified in the Schedule-I.
(4) Notwithstanding anything contained in Sub-clauses (1) and (2) the Edible oils Commissioner may by order published in the Official Gazette, specify any other conditions to be complied with by a registered packer, and it shall be the duty of every registered packer to comply with such conditions.
25. As per Clause 5 a registered packer is granted registration by registering authority subject to terms and conditions in Schedule III. A registered packer shall have to comply with the requirements as to sanitary conditions contained in Schedule IV. These inter alia include cleanliness and ventilation of factory premises, maintenance of hygienic conditions during packing operations, provision for treatment of industrial effluents and prohibition of entry of persons suffering from contagious diseases. A 'registered packer' is also required in case of epidemic to see that all workers of factory are properly inoculated or vaccinated and no employee who is suffering from hand or face injury, skin infection or clinically recognizable infectious disease shall be permitted to work in the factory. As per Clause 5(3) every registered packer has to comply with the requirements in Schedule I while packing, marking and labelling the containers of edible oils. These labelling particulars on packaging shall be in English or Hindi (Devnagri Script) and in a regional language, the requirement of printing label in a regional language was deleted by GSRNo. 710 (E) dated 30-11-1998. The particulars of other requirements of labelling are - the name, trade name; name and address of packer, name or description of the contents; the net mass or volume of the contents; the batch No., month and year of manufacture; and Registration No. It further requires that Edible oil shall be packed in conformity with the provisions of Standards of Weights and Measures (Packaged Commodities) Rules, 1977 ('Packaged Commodities Rules' for brevity) and PFA Act and PFA Rules.
26. Clauses 6 and 7 of the Control Order deal with period of validity of certificate of registration or renewal of certification. Clauses 8 and 9 provide for appointment of Inspecting Officers and power to carry out inspection, entry and sampling. As per Clause 10 Edible oil sample drawn by Edible Oil Commissioner or Inspecting Officer of the Central or State Government, authorised under the Control Order shall be analysed by a laboratory of the Central or State Government or a laboratory authorised for this purpose by the Edible Oil Commissioner. Clause 11 prescribes that monthly returns be furnished by the registered packer as specified in the Schedule V. The impugned Order is mainly concerned with packaging of Edible oils which business activity can be undertaken only with certificate of registration and subject to complying with conditions in Schedule I, a registered packer can undertake the business of packing oil.
27. The Control Order was to come into force on 17-9-1998 throughout the country. The same was not enforced in Andhra Pradesh. It appears Edible oil Millers represented to the Government to defer the implementation of the Control Order for reasons that in rural areas the population is in the habit of purchasing small quantities like 100 gms. or 250 gms. and not half a Kg. or one Kg. Due to packing, the cost will go up by 20% of the cost of the oil, that the millers are required to purchase packing machine and incur expenditure for conveyance and production besides appointing distributors and that unless the Control Order is implemented throughout the country, it gives lot of scope for unpacked oil to go to other States for sale as loose in those States without packing which creates scarcity of oil in Andhra Pradesh. The Government discussed the issue with manufacturers/millers, dealers and packers of Edible oils as well as Director of Institute of Preventive Medicine, Controller of Legal Metrology and Inspector General of Police, Vigilance Cell, Civil Supplies. Having regard to Government of India policy to have uniform packaging policy for Edible oils throughout the country, the State Government issued G.O. Ms. No. 42 dated 17-5-2000 which is also impugned in many writ petitions. By the said G.O., the Government of Andhra Pradesh adopted Compulsory Packaging Scheme as per the impugned Control Order for all edible oils.
28. All these writ petitions were filed in 2000 and 2001. In the meanwhile, the President of A.P. Arya Vysya Mahasabha made representation to the State Government on 31-7-2000 and such other organisations also filed representations requesting the Government to implement the Control Order from 1-11-2000 for urban areas and with effect from 1-4-2001 for rural areas. The State Government on consideration of representations made by Chamber of Commerce and other associations, issued G.O. Ms. No. 66 dated 11-8-2000 ordering to implement the Control Order with effect from 1-11-2000 and 1-4-2001 in urban areas and rural areas respectively.
29. The proviso to Clause 3 of the Control Order empowers the State Government to exempt for specified period any edible oil from the provisions of the Control Order in public interest and for specific period by notification in the Official Gazette. In the counter-affidavit filed by the Commissioner of Civil Supplies a reference is made to G.O. Ms. No. 89 dated 30-10-2001 whereunder Mustard Sesame (Gingelli) and Niger oils were exempted from the purview of the Control Order.
Fundamental Freedoms; the Scope and Extent:
30. The fundamental rights entrenched in Part III of the Constitution of India do not owe their existence to any law. As observed by Justice P.A. Choudary, J., in Biharilal Mudugal v. Secretary of State, 1986 (2) ALT 241, our fundamental rights are conceptual expressions of those Jeffersonian Doctrine on natural law and are not the result of constitutional declarations. The right of a citizen to practice any profession or to carry on any occupation, trade or business is not an ordinary right. The right of a citizen to carry on trade, however, is also coupled with a duty that every citizen owes to community and society. No citizen can claim a fundamental right the enjoyment of which would be detrimental to the enjoyment of right of other citizens. Indeed, the Constitution does not absolutely deny legislative supremacy to deal with citizens rights in Part III. The Constitution regulates and impedes legislative and executive action by declaring that any law which violates fundamental rights would be void (Article 13). If a law violates fundamental rights but shown to be in the interest of general public as well as to ensure public order morality and health, the same would have constitutional protection. In certain areas the Constitution has made this aspect very specific and in certain other areas it is implied. But that as it may, Article 19(2) to (6) are such explicit provisions which enable the State to make law in public interest and for public good imposing reasonable restrictions on the exercise of rights conferred by Article 19(1)(a) to (g).
Standards and Tests of Reasonableness :
31. What are the standards to be applied and what are the tests of reasonableness and on whom the burden lies to prove that they are unreasonable Tn arriving at a conclusion on these aspects, a literal or mechanical construction of the provisions would be inappropriate. In dealing with the legislation which impinges fundamental rights, the Court should remind itself the impact of legislation on constitutional provisions and safeguards therefor.
32. In Vrajilal, M and Company v. State of M.P., : [1970]1SCR400 , a Constitution Bench of the Supreme Court ruled that in all cases where law is challenged as unreasonable impinging on fundamental freedoms two rules of construction have to be kept in mind : (1) that Courts generally lean towards the constitutionality of a legislative measure impugned before them upon the presumption that a Legislature would not deliberately flout a constitutional safeguard or right and (2) that while construing such an enactment the Court must examine the object and purpose of the impugned Act, the mischief it seeks to prevent and ascertain from such factors its true scope and meaning. When any of the statutes is challenged as violating the freedom guaranteed under Article 19(1) of the Constitution, the same would be invalidated unless it is brought under the protective provisions of Articles 19(2) to (6).
Burden of proof of unreasonableness :
33. Notwithstanding the presumption in favour of the constitutionality of the impugned law, if the petitioner succeeds in showing that the law prima facie violates the fundamental freedoms under Article 19(1) of the Constitution, the burden then shifts to the State to show that the legislation comes within the protective umbrella of Clauses (2) to (6) of Article 19. If the State does not discharge its burden, the Court cannot compel the petitioner to prove negatively that the law is not covered by any of the permissible restrictions. In Vrajlal (supra) it was held:
If that be so, it affects the right of the purchaser under Article 19(1)(f) to hold and to dispose of the goods he has acquired, a right which is not co-related, as the right under Clause (g) is, with the monopoly which the section seeks to create. It follows therefore, that, such a provision would have to pass the test of reasonableness under Clause 5 and the first part of Clause 6 of Article 19. That would also be the position in respect of Article 304(b). But since the requirement of these provisions is the same the yardstick of reasonableness would be common to all these cases. It is well recognised that when an enactment is found to infringe any of the fundamental rights guaranteed under Article 19(1), it must be held to be invalid unless those who support it can bring it under the protective provisions of Clause 5 or Clause 6 of that Article. To do so, the burden is on those who seek that protection and not on the citizen to show that the restrictive enactment is invalid. (Cf. Saghir Ahmed v. State of U.P. : [1955]1SCR707 , and Khyerbari Tea Company Limited v. Stale of Assam, : [1964]5SCR975 .
The Principles for Testing Reasonableness :
34. Insofar as tests of reasonableness are concerned, the following from the judgment of the Supreme Court in State of Madras v. V.G.Row, : 1952CriLJ966 , is the law of the land.
It is important in this context to determine that the test of reasonableness wherever prescribed should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict.
The above ratio of V.G. Row (supra) was followed in large number of decisions of the Supreme Court including in Mineral Development Limited v. State of Bihar, : [1960]2SCR609 , Collector of Customs v. Nathella Sampathu Chetty, : 1983ECR2198D(SC) and Laxmi Khandsari v. State of U.P., : [1981]3SCR92 .
Directive Principles of Slate Policy and Reasonableness of Law :
35. By reason of various decisions of the Supreme Court, principles of reasonableness have been evolved. One such principle is that if a law is intended to achieve the objects of any of the directive principles in Part IV of the Constitution, the same ordinarily must be construed as a reasonable restriction. Indeed, Article 31C of the Constitution explicitly declares that no law giving effect to the policy of the State towards securing principles specified in Clause (b) or Clause (c) of Article 39 shall be deemed to be void on the ground that they are inconsistent with or takes away or abridges any of the rights conferred by Article 14 or Article 19 of the Constitution. In Sanjeev Coke Mfg Company v. M/s. Bharat Coking Coal Limited, : [1983]1SCR1000 , the Supreme Court ruled that when the law has express declaration that it is intended for giving effect to the principles specified in Article 39 (b) and (c), the ground based on Article 14 (unreasonableness) is not available to invalidate the legislation.
36. The restrictions imposed for securing the purposes of Directive Principles of State Policy are regarded as reasonable restrictions. In Saghir Ahmed v. State of U.P, : [1955]1SCR707 , Hanif Quareshi v. State of Bihar, AIR 1951 SC 731, Slate of Bombay v. F.N. Balsara, AIR 1951 SC 318, Bijoy Cotton Mills v. State of Ajmei, : (1955)ILLJ129SC , Fatehcand v. State of Maharashtra, : [1977]2SCR828 , the Supreme Court relied on various directive principles like Articles 38, 39, 43, 37 and 48 in upholding the legislations which are challenged as violativc of freedoms under Article 19(1).
General Notion of Reasonableness in Unsuitable :
37. In Dalmia Cement (Bharat) Limited v. Union of India, : (1996)10SCC104 , Jute Packaging Material (Compulsory Use in Packing Commodities) Act, 1987 was challenged as unconstitutional, violating Articles 14, 19(1)(g) and 301 of the Constitution. The Supreme Court upheld the legislation as a reasonable restriction on right to trade or business. Alter referring to the relevant case law in Chintaman Rao v. Stale of M.P., : [1950]1SCR759 , Narendra Kumar v. Union of India, : [1960]2SCR375 , Parvej Aktar v. Union of India, : [1993]1SCR803 , Municipal Corporation of the City of Ahmedabad v. Jan Mohd. Usmanbhai, : [1986]2SCR700 , Sushila Saw Mill v. State of Orissa, : AIR1995SC2484 , Slate of Kerala v. Joseph Antony, : AIR1994SC721 , Kerala Swathantra Malaya Thozhilali Federation v. Kerala Trawlnet Boat Operators' Assn., : (1994)5SCC28 , the Supreme Court laid down that restriction includes total prohibition and that while considering whether test of reasonableness is satisfied, the Court should examine the question in the background of factual circumstances under which the order came to be made taking into account the nature of evil that was sought to be remedied by law. It was further observed:
In determining the reasonableness of the restriction imposed by the law under Article 19(6), the Court cannot proceed on a general notion of what is reasonable in the abstract or even on a consideration of what is reasonable from the view of the person or persons on whom the restrictions are imposed. The Court has to consider whether the restrictions are reasonable in the interest of the general public. The question of the interest of the general public is of wide import comprehending public order, economic welfare of the public, public security, morals and the objects mentioned in the Directive Principles. The test of reasonableness has to be viewed in the context of the issues which faced the Legislature. In constructing such laws and judging their validity, Courts must approach the problem from the point of view of furthering the social interest which is the purpose of the legislation to promote. They are not in these matters functioning in vacuo but as pan of society which is Hying, by the enacted law, to solve the problems and further the moral and material progress of the community as a whole.
38. In M.R.F. Limited v. Inspector Karala Government, : (1999)ILLJ289SC , Kerala Industrial Establishments (National and Festival Holidays) (Amendment) Act, 1990 was challenged as imposing unreasonable restriction and violating Article 19(1)(g) of the Constitution. The Supreme Court after referring to important decisions on the subject laid down the following principles for testing the reasonableness of restrictions :
(1) While considering the reasonableness of the restrictions, the Court has to keep in mind the Directive Principles of State Policy.
(2) Restrictions must not be arbitrary or of an excessive nature so as to go beyond the requirement of the interest of the general public.
(3) In order to judge the reasonableness of the restrictions, no abstract or general pattern or a fixed principle can be laid down so as to be of universal application and the same will vary from case to case as also with regard to changing conditions, values of human life, social philosophy of the Constitution, prevailing conditions and the surrounding circumstances.
(4) A just balance has to be struck between the restrictions imposed and the social control envisaged by Clause (6) of Article 19.
(5) Prevailing social values as also social needs which are intended to be satisfied by restrictions have to be borne in mind (See Stale of U.P. v. Kaushaliya, : [1964]4SCR1002 .)
(6) There must be a direct and proximate nexus or a reasonable connection between the restrictions imposed and the object sought to be achieved. If there is a direct nexus between the restrictions and the object of the Act, then a strong presumption in favour of the constitutionality of the Act will naturally arise (See Kavalappara Kottarathil Kochuni v. Stales of Madras and Kerala, : [1960]3SCR887 , O.K. Ghosh v. E.X. Joseph, : (1962)IILLJ615SC ).
Reasonableness of impugned control order :
39. Learned Counsel for the petitioners, as noticed earlier, contend that the impugned Control Order results in hardship to small petty dealers and small oil millers. They would also contend that the impugned Control Order is not in the interest of general public because, according to them, the cost of edible oil in packed form is likely to go up causing deprivation to the poor people who generally buy edible oil in small quantities of 50 gms., 100 gms., 150 gms. They would also contend that as installation of packing machine and as well as testing facilities would cost heavily, most of the oil millers would go out of the business, Per contra, it is the case of the respondents that the oil in packed form would not cost 25 to 40% higher than the loose oil, as contended. There would be marginal increase of 10 to 12% and the consumers will be willing to pay the price as generally there is an increase in demand for quality and unadulterated items. The allegation that packing machine would cost about Rs. 30 lakhs a piece is also denied categorically stating that there are good packing machines available in the market at a cost of Rs. 2.50 to Rs. 5 lakhs,
40. The petitioners in this pleadings as well as in their submissions have discharged their burden that the impugned Control Order violates the fundamental rights under Article 19(1)(g) of the Constitution, for, the members of the petitioners-associations might go out of the business. Equally, the respondents have demonstrated by affidavit evidence (counter) before this Court that the impugned Control Order imposes reasonable restrictions and, therefore, gets the protection of Article 19(6) of the Constitution. But, ultimately, this Court has to see whether the restrictions are reasonable and whether they are in public interest. As held by the Supreme Court in Dalmia Cements (supra) as well as MRF Limited (supra), the Court cannot consider the reasonableness from the view of the person or persons on whom restrictions are imposed and who are likely to suffer hardship. The Court is concerned with the interest of the general public. The interest in the general public is not what the Court perceives, but it is the interest of the general public in relation to the underlying purpose of the restriction, the extent and urgency, the evil sought to be remedied, the disproportion of the imposition and prevailing conditions at the time when legislation was made.
41. As pointed out supra and as can be seen from the Government Order in G.O. Ms. No. 42, dated 17-5-2000, the salient features of the order are to ensure the distribution and sale of edible oil which conforms to the standards of quality as provided in Prevention of Food Adulteration Act, 1954 and PFA Rules. To ensure that and having regard to the breakdown of epidemic Dropsy disease in many parts of the country which was attributed to the sate of loose edible oil, the Government thought to impose a restriction on the sale of edible oil compelling the sale of such edible oil in packed containers duly labelled with necessary particulars. The Control Order presumes that the sale of packed edible oil ensures the distribution and sale of edible oil which conforms to the standards of quality as per Prevention of Food Adulteration Law. The activity of packing oil can only be undertaken if a certificate of registration is granted by the registering authority. Every registered packer has to comply with the terms and conditions of certificate of registration in Schedule 111 as well as sanitary requirements in Schedule IV appended to the Control Order. A reading of these to which a reference was already made above would show that the entire endeavour is to ensure supply of unadulterated and healthy edible oil packed in hygienic conditions without any infection. The requirement to be complied with with regard to packing as per Schedule I ensures and protects the interest of general public. When the epidemic like Dropsy breaks out, it is only the persons who are poor and citizens below poverty line who suffer the most. For these reasons, the submission that it would be detrimental to the interest of the poor, therefore, cannot be accepted. At the time of grant of certificate of registration conditions are also imposed besides other mandatory conditions for establishment of packaging facility. A reading of this shows that the anxiety of a legislation is to ensure the manufacture, distribution and sale of edible oil which would conform to the quality standards so that the health of the people will not be in jeopardy. Applying the test laid down by the Supreme Court in various cases from V.G. Row to MRF Limited (supra), it must be held that having regard to the prevailing conditions and value of human life, the impugned Control Order has a direct and proximate nexus as well as a reasonable connection with the object sought to be achieved for the same.
42. A reference may be made to a legal maxim founded on public policy of social relations. Salus populi est suprema lex (regard for the public welfare is the highest law) as explained by 'Herbert Broom' in his classical book Legal Maxims is based on the implied agreement of every member of society that his own individual welfare shall in cases of necessity yield to that of community; and that his property, liberty and life shall under certain circumstances be placed in jeopardy or even sacrifice for the public good. If the circumstances are such that Legislature would interfere with private rights, but the legislation and the authority to whom the power is conferred acts reasonably such interference will not give rise to any action (privatum incommodum publico bono pensatur) and in such cases the individuals incurring damages should appeal to the Legislature. In D.K. Basu v. State of West Bengal, : 1997CriLJ743 , the Supreme Court explained as follows:
The Latin maxim solus populi suprema lex (the safety of the people is the Supreme law) and solus republicae suprema lex (safety of the State is the supreme law) coexist and are not only important and relevant but lie at the heart of the doctrine that the welfare of an individual must yield to that of the community. The action of the State, however, must be 'right, just and fair'.
43. Further, under Article 47 of the Constitution of India, it is the duty of the State to raise the level of standard of living and improve public health. Indeed, raising the level of standard of living and improving public health are 'primary duties' of the State. Article 51A(j) lays down the fundamental duty to the effect that every citizen of India should strive towards excellence in all spheres of individual and collective activity, so that the nation constantly rises to higher levels of endeavour and achievement. The sale of edible oil in packed form in comparison with the sale of loose edible oil is certainly an endeavour to reach higher standard of living. Therefore, while examining the reasonableness of the Control Order, these provisions of the Constitution cannot be lost sight of. The impugned Control Order certainly attempts to achieve the objects of directive principles under Article 47 of the Constitution of India and such law cannot be invalidated as violating Article 19(1)(g) of the Constitution as held by the Supreme Court in the cases cited supra. It is brought out in the counter-affidavit of State Government that short weighment is rampant in the sale of loose oil and the Control Order is also intended to control this social evil. It is true that selling oil in packed form reduces chances of short weighment. This also negatives the point raised by the petitioners that the Control Order is not in the interest of general public.
44. The Control Order requires a registered packer to have his own laboratory and also appoint a chemist. This, according to the learned Counsel, imposes unreasonable restriction and arbitrary. As per Clause 4(3) of the impugned Control Order, no person shall be eligible for grant of certificate of registration unless he has his own laboratory facilities and appoints a qualified chemist in that laboratory or such person has made any other arrangement for a common laboratory for such purpose to the satisfaction of the registering authority for testing the samples of edible oils. Indeed, the statement made by the Commissioner of Civil Supplies in the counter-affidavit that if the rotary oil millers cannot afford the cost of the packing machines and laboratory, they can as well sell their bulk oil to packers who can have a tie-up with the common laboratory for testing, furnishes complete answer to the submission of the learned Counsel for the petitioners. The endeavour of the State is to ensure public health and hence this condition is not unreasonable.
45. The submission regarding establishing laboratory is also not sound having regard to Clause 3(a) of the Control Order which requires the edible oil to conform to the standards of quality as provided in the PFA and PFA Rules. Under the PFA Act, the sale of unadulterated goods that will fall below the prescribed standards would be an offence (Section 7 of the PFA Act) Rule 5 of the PFA Rules lays down that standard of quality of various foods specified in Appendix B would be as defined in that Appendix. Entries A.17.01 to A.17.26 lay down standards of various edible oils. All the oil millers, manufacturers, distributors and retailers prior to coming into force of the Control Order were equally bound to sell edible oils which conform to the standards laid down in Entries A. 17 in Appendix B of PFA Rules. Any sale of edible oil which does not conform to those standards would be an offence. By reason of the impugned Control Order {Clause 3(a)}, now it is mandatory for the registered packers first to test standards in a laboratory with reference to the standards laid down in the PFA Rules and then sell. The requirement of pre-testing of oil by the registered packer is now mandated having regard to the circumstances prevailing at the time of promulgation of the Control Order as noticed hereinabove. Therefore, the submission that the restriction is unreasonable cannot be countenanced.
46. Be it noted that vegetable oil had been subject-matter of various control orders like Vegetable Oil Products (Control) Order, 1947, Vegetable Oil Products (Standards of Quality) Order, 1975. All the producers of vegetable oil were required to obtain registration and maintain prescribed standards of quality. The Central Government made Vegetable Oil Products (Regulation) Order, 1998 (VOP Order) which, by reason of Sub-clause (3) of Clause 1 came into force with effect from 16-12-1998. This VOP Order was made in supersession of the two earlier orders noticed in this paragraph. As per VOP Order a producer is a person engaged in the business of manufacturing any vegetable oil product. No person can carry on business of 'producer' Unless he obtains a registration certificate and a person shall not be eligible for such certificate unless he has his own laboratory facility for analytically testing samples and as per Clause 6 all manufacturers are required to manufacture vegetable oil products conforming to the standards of quality and other requirement of quality. None of the Counsel appear in this cases has thrown any light on this aspect. Be that as it may, in the absence of any subsequent Control Order repealing VOP Control Order it is plausible to arrive at a conclusion that by operation of VOP Order all the manufacturers who have also filed some of the writ petitions are required to obtain registration and as a condition precedent for the same establish a laboratory. Therefore, insofar as manufacturers are concerned there cannot be any hardship as urged.
47. It is also settled law that individual hardship to businessman is not the test to be applied for examining the reasonableness of restriction under Article 19(1)(g) of the Constitution. The test to be applied is as to whether the restrictions are in the interest of general public. The impugned Control Order cannot be said to be not in the interest of general public. The Government is conferred with the power to exempt any edible oil from the purview of the Control Order. It is also brought to the notice of the Court that the Government issued G.O. Ms. No. 89, dated 30-10-2000 exempting Mustard, Sesamum (Gingelly) and Niger Oil which would certainly mitigate the hardship if any.
48. In most of the writ petitions G.O. Ms. No. 42, dated 17-5-2000 is alone challenged. By issuing the said G.O., the Government only decided to implement the Control Order which was later modified by G.O. Ms. No. 66 dated 11-8-2000 ordering to implement the Control Order with effect from 1-11-2000 in urban areas and 1-4-2001 in rural areas. The petitioners contend that the action of the State Government in proposing to implement the Central Control Order is arbitrary and illegal. This challenge ignores the basic principles of constitutional governance. The Essential Commodities Act is a law made by the Union Legislation under to Entry 33 of the concurrent list of VII Schedule to the Constitution. Therefore, even if in the State of A.P. were to make a law, the same by reason of Article 246(2) read with Article 254 cannot be contrary to Essential Commodities Act or any Control Order made by the Central Government under Section 3 thereof. This is well settled. A reference may be made to District Collector, Chittoor v. Chittoor District Groundnut Traders Association, (1989) 2 SCC 58, wherein the Supreme Court laid down that the State Government cannot make any Control Order in contravention of the power delegated to the State Government under Section 5 of the Act. Further, under Article 256 of the Constitution the executive power of every State shall be so exercised as to ensure compliance with the law made by Parliament and any existing laws which apply in that State. It must not be ignored that the laws made by the Parliament apply for the whole of the country and the State Government is bound to enforce them. The effect of mandamus which is sought in these cases, would be compelling the Government to ignore the Control Order made by the Central Government. It is well settled that the jurisdiction under Article 226 of issue writs in the nature of mandamus cannot be exercised to direct the State or any authority to ignore the law or Act contrary to constitutional provisions and validly made law. (See Brij Mohan v. M.P.S.R.T. Corporation, and LIC of India v. Asha Ramachandra Ambedkar)
49. In the result, for the aforementioned reasons, all the writ petitions fail and arc accordingly dismissed. No order as to costs.
V.V.S. Rao, J.
After pronouncement of the judgment, Sri K Srinivas, learned Counsel has placed before this Court a Photostat copy of the Gazette of India dated 15-2-2000 vide which the Government notified the Removal of (Licensing requirements, Stocks limits and Movement Restrictions) on specified Foodstuffs Order, 2002 (2002 Control Order). By reason of Clause l(c) of the said Control Order, the same shall come into force after thirty days from the date of publication in the Official Gazette. Clause 3 thereof lays down that after coming into force of the said Order, any dealer may freely buy, stock, sell, transport, distribute, dispose, acquire, use or eonsume any quantity of wheat, paddy/rice, coarse gains, sugar, edible oil seeds and edible oils and shall not require any licence or permit under any Order issued under the Essential Commodities Act, 1955. After going through the 2002 Control Order, this Court is of the considered opinion, in pith and substance, it is only a Control Order permitting a person to buy or sell certain foodstuffs without any licence under any Order issued by the Central Government or State Government under the Essential Commodities Act. The impugned Control Order viz., Edible Oils Packaging (Regulation) Order, 1998 does not, however, deal with the same. Therefore, the submission that on coming into force of the 2002 Control Order, the earlier Control Order cannot be given effect to, cannot be countenanced. There is no explicit repeal of the impugned Control Order nor it can be implied. The findings recorded on the two points for consideration while dismissing the batch of writ petitions do not in any way get diluted by 2002 Control Order referred to herein above. Though this was not put in issue, the learned Counsel for the petitioners requested this Court to make observations and hence these observations will form part of the judgment.