ORDER
B. Subhashan Reddy, J.
1.Thewrit appeals are filed against the orders of the learned single Judge affirming the decision of the Tobacco Board in announcing the crop holiday relating to the Virginia Tobacco for the year 2000-2001. The writ petition has been filed in support of the cause espoused by the appellants in the writ appeals.
2. Each year tobacco is grown in Andhra Pradesh and some other States like Karnataka, Orissa and Maharashtraand there are several varieties of tobacco and Virginia variety is one such. Further, there are grades in original tobacco having regard to several factors like quality of soil, crop etc.
3. While there is no tobacco zone as is found relating to sugarcane cultivation, for instance, sugarcane zones ear-marked and notified under Andhra Pradesh Sugar Cane Supply Act. But, when the growers want to raise tobacco crop, be it Virginia or otherwise, they have to seek permission from the Tobacco Board (hereinafter referred to as 'the Board'). It is a misnomer to say that only relating to Virginia Tobacco, permission is necessary. May be, as of present, there is no regulation made to other varieties of tobacco than Virginia, but the Tobacco Board Act, 1975, which is a Central enactment (Central Act No.4 of 1975), (hereinafter referred to as 'the Act') deals with all kinds and varieties of tobacco and that is so clear from the provision contained in sub-section (3) of Section 8 of the Act.
4. In these cases, the question to be considered is the correctness of the affirmation made by the learned single Judge of the notification issued by the Board on 7-6-2000 declaring crop holiday for the production of Virginia Tobacco in the State of Andhra Pradesh for the year 2000-2001.
5. The Tobacco Board is constituted under Section 4 of the Act and it is entrusted with some functions for the purpose of development and control of manufacture and sale of tobacco in the country. But, this Tobacco Board is a body subservient to the Central Government and that is so loud and clear from the scheme of the Act.
6. The functions of the Board are enumerated in Section 8 and it is apt to extract sub-sections (1) and (2) :
'8(1) It shall be the duty of the Board to promote, by such measures as it thinks fit, the development under the control of the Central Government of the tobacco industry.
(2) Without prejudice to the generality of the provisions of sub-section (1), the measures referred to therein mayprovide for--
(a) regulating the production and curing of Virginia tobacco having regard to the following factors namely :
(i) the demand for Virginia tobacco in India and abroad;
(ii) the suitability of land for growing Virginia tobacco;
(iii) the differences in soil characteristics and agro climatic factors in different regions of the country where Virginia tobacco is grown and the effect thereof on the quality and quantity of Virginia tobacco produced in those regions;
(iv) the marketability of different types of Virginia tobacco;
(v) the need for rotation of crops; and
(vi) the nature of the holdings of the growers of Virginia tobacco whether owned or leased.
(b) keeping a constant watch on the Virginia tobacco market, both in India and abroad, and ensuring that the growers get a fair and remunerative price for the same and that there are no wide fluctuations in the prices of the commodity.
(c) maintenance and improvement of existing markets, and development of new markets outside India for Indian Virginia tobacco and its products anddevising of marketing strategy in consonance with demand for the commodity outside India, including group marketing under limited brand names.
(cc) establishment by the Board of auction platform with the previous approval of the Central Government for the sale of Virginia tobacco by registered grower or curers and functioning of the Board as an auctioneer at auction platforms established by or registered with it subject to such conditions as may be specified by the Central Government.
(d) recommending to Central Government the minimum prices which may be fixed for purposes of export of Virginia tobacco having due regard to the interests of growers, manufacturers and dealers and the nation.
(e) regulating in other aspects Virginia tobacco marketing in India and export of Virginia tobacco having due regard to the interests of growers, manufacturers and dealers and the nation.
(f) propagating information useful to the growers dealers and exporters (including packers) of Virginia tobacco and manufacturers of Virginia tobacco products and others concerned with Virginia tobacco and products thereof.
(g) purchasing Virginia tobacco from growers when the same is considered necessary or expedient for protecting the interests of the growers and disposal of the same in India or abroad as and when considered appropriate.
(h) promoting the grading of tobacco at the level of growers.
(i) sponsoring, assisting, co-ordinating or encouraging scientific, technological and economic research for the promotion of tobacco industry.
(j) such other matters as may be prescribed.'
As is seen from the above, sub-section (1) is general in nature and without prejudice to the generality of the said provision, the factors which could be taken for consideration by the Board for development of the Tobacco industry are enumerated in sub-section (2). One of the questions which falls for consideration is as to whether the word 'regulating' employed in clause (a) of sub-section (2) of Section 8 can be interpreted to mean complete prohibition of cultivation of Virginia tobacco or even declaration of crop holiday for a single or number of years in such part of the country, as the Board deems fit, thereby resulting in either total stoppage of growing of Virginia tobacco or in a particular year or number of years. Much debate has been made before the learned single Judge and even before us, the appellants side contending that regulation does not mean prohibition while the respondents arguing that regulation in regard to Virginia tobacco production can be read as empowering the Board to impose total prohibition or prohibition for a year/s. Some judicial precedents have been cited by either side, but they are not having any relevance to interpret the provisions of the Act. It is needless to mention that each Act has its own aims and objects and having regard to the intendment of the same, the interpretation has to be made, and so interpreting and having regard to the scheme of the Act, we are not inclined to hold that the Board is empowered to impose total prohibition of growing of Virginia tobacco. However, having regard to the enumerated functions in sub-section (2) of Section 8, as also Section 10 of the Actand the corresponding obligations of the persons, be it grower, curer, trader etc., the Board in appropriate areas can specify the crop size having regard to the aspect of marketability, stress being on the competitive prices to the grower and in that process, it may some times happen that the crop size is reduced and even may lead to a condition where the growing of Virginia tobacco may have to be stopped for some period, say, period of one year, as in the instant case, and if the fact situation so warrants resulting in a crop holiday for a year, it cannot be called as an unreasonable restriction violating the fundamental right enshrined in Article 19(1)(g) of the Constitution of India. But, if the above factors are absent, certainly, it will be infractive of the said fundamental right. But, the facts and circumstances have to support placing of such restrictions to treat them as reasonable restrictions.
7. The learned single Judge after hearing the parties, by his elaborate order has held that the notification declaring crop holiday for Virginia tobacco for the year 2000-2001 as a reasonable restriction and laid stress on the glut of Virginia tobacco crop of yester years and that having regard to the said factor, the growers may not fetch competitive price and as such, the Board had acted reasonably in imposing a crop holiday for this year. We are in complete agreement with the learned single Judge that, one of the important factors, which can be taken as the basis for the decision of the Board is the growers' interests in getting the competitive price and to prevent the unhealthy competition by underbidding. What was upper-most in the mind of the learned single Judge was that the traders were playing fraud on the growers by keeping the tobacco purchased by them in godowns and then expecting the growers to grow for this year and take undue advantage of pressurising the growers to under-sell their product of Virginiatobacco, if permitted to grow for this year 2000-2001 A.D. Facts and figures have been given by the learned single Judge from which, it is clear that as on the fact-situation, in March, 2000, the market conditions were not so favourable, but the said gloom disappeared later and entire stocks which were thought surplus have-been purchased by the traders. In fact, the said situation has prompted the learned single Judge to issue interim directions on 28-9-2000 which are to the following effect:
(a) The Board shall invite applicationsfrom the intending growers of Tobacco nursery growers and curers (barren owners) seeking registration on or before 8-10-2000.
(b) The intending growers have tosubmit their applications on or before 8-10-2000.
(c) The Board shall furnish information to this Court with regard to the number of applications received, the extent of land in which tobacco is sought to be grown, and the expected yield of tobacco.
(d) The Board shall screen the applications and identify the eligiblegrowers for registration.
(e) The Board shall reconsider its decision by inviting the views of the growers on each of the grades of tobacco that is being grown in the State and also of the representatives of the trade before 10-10-2000 and take appropriate action thereon.
(f) The growers' Committee attached to each auction-platform shall immediately convene a meeting of all registered growers and lake a decision before making representation to the Board in one way or the other.
(g) If there is no growers' Committee to any auction platform, the auction Superintendent is directed to convene a meeting of the growers and send a detailed report with regard to the total number of members, the number of persons that attended the meeting and how many of them are supporting and how many of them are opposing the crop holiday.
(h) The traders shall give their firm commitment for the year 2000 and also file an undertaking to that effect that in the event of their failure to purchase the tobacco, for which a commitment was given, the Board is at liberty to recover the cost of the tobacco that was not purchased at the higher prices that fetched on the auction-platform during that year in the event of lifting of the crop holiday.
(i) They shall also express their willingness to give bank guarantee for one half of the value of the tobacco as per their commitment
(j) They shall also indicate the Minimum Guarantee price, which they are going to offer, in the event of the growers being allowed to grow tobacco.
(k) They shall communicate their view to the Board by 10-10-2000.
(3) The Board shall meet after 10-10-2000 and take a decision in the light of the information received by the growers and traders; and that decision shall be communicated to the Court before 15-10-2000.
(4) Till a decision is taken by the Board or till the Court delivers the judgment, no grower shall grow either nurseries or tobacco crop.
(a) The Board shall also keep in the mind the suggestions made by Dr.Yelamanchili Sivaji, in his representation dated 1-4-2000.
(b) The Board shall publish the entire programme given in the order in the vernacular papers and also send circulars to the Superintendents of each auction-platforms with the above information and with necessary instructions to convene the meetings of the growers attached to the platforms and submit their reports as directed in this order and also receive applications from the intending growers'.
8. Pursuant to the said directions, the Board issued a notification dated 1-10-2000 calling for the applications from the growers and in its meeting held on 12-10-2000, reconsidered the issue in the light of the directions issued by the learned Judge mentioned supra, but, had reiterated its decision to continue the crop holiday for the reasons mentioned infra:
1. Only very small percentage ie., 7.54% of growers (3.368 growers out of 44,629) have applied for crop. Majority of the farmers are for continuing crop holiday.
2. Majority of the tobacco growers have already grown alternative crops such as maize, groundnut, black gram, red gram, castor, coriander, cotton, sugarcane, dry peddy etc., in an area of 92.964 hectares against 1,27,284 hectares planted under tobacco last year.
3. The expert advice of the scientists of CTRI is that no nurseries shall be sown after 30th August for upper NLS and 15th September for all regions and no plantation shall take place after 15th October in NLS and 15th November in all other regions, as there will be loss in productivity as well as quality of tobacco.
4. There are enough carried over stocks available for export use and domestic consumption for the next year.
5. The traders have declined to give willingness to submit bank guarantee and have not submitted undertakings permitting the Board to recover the cost of tobacco required by them in case of their failure to purchase tobacco committed by them.
6. The MGP indicated by the trade is not remunerative and conditional.
7. A section of trade i.e., small dealers who purchased around 25% to 30% of total crop, are also for continuing crop holiday.
'As mentioned a majority of the members of the Board are in favour of not altering the decision of the Board taken in its 100th and 101st meetings, the Board resolved that no crop is authorised for the 3368 applicants for cultivation for FCV tobacco and 19 applicants for growing commercial nurseries of FCV tobacco and the decision on Crop Holiday for the year 2000-2001 in respect of A.P. and Maharashtra will continue and the decision be communicated to the Hon'ble High Court of A.P.'.
9. The plantation season was running out of time and in their anxiety, some of the growers who made applications and are 3368 in number, and raised nursery and it is said that some have also planted them. The result is that as on to-day, there is standing crop of Virginia tobacco raised by some of the growers, while other growers had taken-up alternative crop even before the grant of interim directions, as the sowing season for other crops had already commenced in June-July.
10. It is evident from the fact situation that before the judgment was rendered by the learned single Judge and atleast by the end of September, 2000, there was no tobacco available with any of the growers to say that it was a glut and the entire tobacco grown in the yester years was exhausted because of the purchase by the traders and this fact situation is indisputable. But, what had weighed with the learned single Judge in not taking note of the exhaustion of crops of the growers was that the traders might have played tricks to artificially show that there was no glut and have piled-up the stocks of tobacco so as to compel the Board to lift the crop holiday by reconsidering its earlier decision and in compliance of the interim orders and permit the tobacco growing. It is apt to extract that portion of the judgment of the learned single Judge:
'......... I have no manner of doubtthat the traders purchased the tobacco grown authorisedly and unauthorisedly during the current year even without mopping up the piled up stocks with them, only to convince the Court that there is no need to continue crop holiday. Hence, I am of the opinion that mere purchase of tobacco from the auction platforms by the traders without indicating how they are going to liquidate the stocks cannot be presumed that the purchases were affected on the basis of the purchase orders or commitments from others to purchase the tobacco and it is nothing but a trade trick that was pressed into service to mislead the Court, if possible.'
But, there is no material to substantiate the said presumption of the learned single Judge. That apart, the Indian Tobacco Company has given unconditional undertaking to purchase the specified quantities of tobacco and the minimum guaranteed price. The said undertaking is also followed by the affidavit filed. Thesaid material was filed before the learned single Judge, as also before this Court as we wanted to know as to whether still the ITC stick on to their commitment made before the learned single Judge. It is apt to extract the letter of 7th December, 2000 filed before us:
'Mr. Y. Vijay Kumar, Dec. 7, 2000.Secretary
The Indian Tobacco Association, Guntur.
Dear Sir,
W.A. 1411 of 2000 - Virginia Tobacco Growers Association-vs-Union of India and Others- Before the Hon'ble High Court of Andhra Pradesh.
We understand that in response to the query raised by the Hon'ble Court in the course of the proceedings in the above case, the Indian Tobacco Association is filing an affidavit containing, inter alia, an undertaking that the members of the Association shall buy upto 77 million kgs. of tobacco for the current crop year 2000-01, if offered by the Tobacco Board on the Auction Platforms.
We also understand that the Association is further undertaking in the said affidavit that the average prices for a normal crop at which the members of the Association would buy the above quantity would not be less than the following figures:
NLS - Rs.40.05 per kg.SLS - Rs.35.56 per kg.BCS - Rs.32.05 per kg.Now, in response to your request in this behalf, we hereby unconditionally undertake that, in the event that out of the aforesaid quantity of 77 million kgs, any quantity of tobacco remains unsold during the crop year 2000-01, we willpurchase such unsold quantity (out of the aforesaid 77 million kgs.) at the Tobacco Auction Platforms at the average prices indicated above.
Thanking You,
Yours faithfully,
Sd/-
K.S. Rao
Divisional Chief Executive
ITC LTD-ILTD Division'.
But the learned single Judge wanted a bank guarantee to be furnished, which we find it to be not necessary and in fact, by that imposition, the very purpose of exercising the jurisdiction by this Court to see the feasibility of raising a crop gets frustrated, as the said condition is not only onerous, but scares away the purchaser. In fact, the above commitment of the ITC and in terms thereof is beneficial to the fanners. But, we cannot take-away decision straight away in this regard. We cannot re-entrust this decision for reconsideration to the Board either, as the Board had been very firm in its stand to continue the crop holiday. Yes, there are some violations by the growers, but, every violation cannot be viewed seriously. We have to see the attendant circumstances, as some farmers have diversified their cultivation by growing some crops, other farmers were very hopeful of continuing tobacco cultivation, though minority in-number. Added to that, they were granted with the interim directions, of course, imposing some conditions. But, the hard reality cannot be ignored and as on today, there is a Virginia tobacco grown by some growers and the said crop is standing. Justice should always be tempered with mercy. The equitable considerations arise in this case and in view of the peculiar facts and circumstances and at this juncture, such of the farmers who have grown Virginia tobacco cannot grow other crops, Whenthere is a hope of purchase by the reputed organisations like ITC, their offer cannot be brushed aside lightly. It needs a serious consideration. Any hard decision without such considerations will lead to anomalies and have got lot of ramifications, as it affects not only the farmers who have grown the crops in the fond expectation of permission to continue the same, as also the farm-labour and above all, national economy, which is one of the prime factors in enacting the Tobacco Board Act, 1975, as the piquant situation is that the growers now cannot raise other crops, as the season had already passed the standing tobacco crop would wither away, if the protective order is not granted by this Court. Taking the overall situation, we are of the considered view that it is the fittest case, where the intervention of Central Government is necessary, which is the final authority in this matter, as is evident from Section 20A of the Act, which reads:
'20-A. Without prejudice to the provisions of clause (g) of sub-section (2) of Section 8 and notwithstanding anything contained in any other provision of this Act, if the Central Government is satisfied that it is necessary or expedient so to do, it may, by order in writing and subject to such conditions and limitations as may be specified in the order, authorise anybody or other agency to purchase Virginia tobacco from the growers and dispose of the same in India or abroad'.
The Central Government is now directed to take the matter into consideration having regard to the material available and as may be called upon by it and decide as to whether the Virginia tobacco crop raised by some of the farmers in West Godavari District to be continued or not and particularly, in the context of the offer of the ITC mentioned supra. This exercise shall be done within a period of two weeksfrom the date of the receipt of a copy of this order. Pending such decision to be taken by the Central Government, the farmers who have raised Virginia tobacco shall be entitled to continue the process of nurturing the said crops.
11. The writ appeals and writ petitionare disposed of accordingly. No costs.