M. Venkatesh Vs. the Officer In-charge, Sainya Farm Military Farm Secunderabad and anr. - Court Judgment

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constitution - violation of fundamental rights - articles 14, 19 (1) and 73 of constitution of india - petitioners had been regularly supplying milk to military farm - milk supply discontinued - writ filed alleging violation of articles 14 and 19 (1) (g) - no specific contract with petitioner so he had no right - making investments in business does not give any right or privilege to petitioner - decision taken after careful consideration of all matters and in interest of department so no arbitrariness involved - policy issued under article 73 under executive powers of union - no extraneous consideration or malafides made out - decision reasonable and in public interest - no violation of article 19 (1) (g) and writ liable to be dismissed - all india services act, 1951.sections 8 & 11 & a.p. buildings (lease, rent and eviction) control rules, 1961, rule 5: [v.v.s. rao, g. yethirajulu & g. bhavani prasad, jj] refusal by landlord to receive rent - deposit of rent in court - held, a tenant has the option to take recourse to section 8 in case of refusal or evasion by landlord to receive rent and if landlord were to not name a bank or refuse even the money order of rent, the tenant can deposit the rent in accordance with sub-rules (1) to (3) of rule 5. the notice to person entitled to rent and proper maintenance of accounts of such deposits under sub-rules (4) and (5) of rule 5 are solely dependent on compliance with sub-rule (3) by the tenant. the payment or deposit of rent under section 11 read with sub-rule (6) of rule 5 arises only in respect of a tenant who did not take recourse to section 8 or section 9 before an application for eviction has been made against him in respect of any rent in arrears by date of that application, whereas in respect of rent that becomes subsequently due since date of application for eviction, the tenant is bound to pay or deposit regularly until termination of proceedings in order to enable him to contest the application. any violation of section 11(1) to (3) and sub-rule (6) of rule 5 makes the tenant liable for the adverse consequences under sub-section (4) of section 11. thus, the provisions of section 11 and sub-rule (6) of rule 5 are intended only to ensure the payment and deposit of rent including arrears during pendency and till termination of proceedings for eviction. the forfeiture of right of tenant to contest in case of default is to protect the rights and interests of landlord pending such an application for eviction, but not to confer any right on tenant to plead that all defaults committed by him prior to application for eviction can never be considered wilful, if he were to deposit all arrears of rent due within fifteen days under rule 5(6) read with sub-section (1) of section 11. the object and effect of section 11 and sub-rules (1) to (5) to rule 5, the former being for protection of landlord during pendency of eviction proceedings and the later being for protection of tenant to avoid any liability for eviction on ground of wilful default. consequently, while taking recourse to section 8 by tenant is optional, once that option is exercised, compliance with sub-rules (1) to (5) of rule 5 becomes mandatory in the sense that any non-compliance with prescribed procedure will positively indicate the wilful nature of default committed in paying or tendering rent as prescribed. while deposit of rent in terms of provisions of act and the rules amounts to valid tender of rent to landlord, the failure to comply with rule 5 (3) requiring delivery of a copy of the challan for deposit of rent in office of controller or appellate authority, as the case may be, so as to enable controller or appellate authority to cause maintenance of proper accounts under sub-rule (5) and give notice of deposit to person amounts to wilful default in making valid payment or lawful tender of the rent by the tenant to the landlord. thus, where a tenant obtains an order to deposit rent, same shall be deposited at least by the last day of the month following that for which rent is payable and rent challan shall be delivered in the office of controller within a reasonable time so that rent controller can take necessary action for service of notice of deposit under sub-rule (4) of rule 5 of the rules within seven days of such delivery. in the absence of compliance in so depositing rent and delivering challan in the office of controller, tenant shall be deemed to have committed wilful default. - under the local purchase system, the 1st respondent used to observe all the formalities like calling for quotations, opening the same by the station board of officers and placing the demand on the lowest quotation monthly or periodically and so, whoever was the lowest, used to supply without sacrificing the quality of milk. respondents is that the state can create monopoly by law and 10 the decision taken by the president of india on behalf of the ministry of defence, is an executive act of the president, which has been taken in the best interest of the military farms all over the country, as it dispenses with calling for frequent tenders. but in so far as the, fight to make tenders for purchase of kendu leaves was restricted to these persons while had obtained contracts in the previous year the scheme was open to the same objection who right to make offers being open to limited claw of persons it effectively shut out all other persons carrying on trade in kendu leaves and also new entrants into that business. the high 'court also did not consider whether the restrictions imposed upon persons excluded from the benefit of trading satisfied the test of reasonableness under the first part of art. the state government after due deliberation, took a responsible decision to run the fair price shops directly, being satisfied that it was necessary so to do with the object of distributing foodstuffs at fair prices- to the consumer after taking into consideration the fact that the earlier experiment of running these slt6ps through retail dealers was an utter failure. it cannot be said that the state government was not actuated with the best of intentions in bringing about a change in the system of distribution of foodstuffs through fair price shops. this is one of the well settled facets of art. . 19(1)(g)..so the state by a valid law can create, monopoly in favour of itself or in favour of a corporation owned or controlled by the state without being called upon to justify its action in court as reasonable- but when a law creates exclusion of competition or imposes restriction creating something like a monopoly in somebody to the exclusion of others, the basis on which the said exclusion or restrictions are imposed must be reasonable and the same can be questioned by the court. law is well settled that the state can make a classification for the purpose of achieving particular legislative objects but the classification must satisfy two conditions -(1) this must be founded on intelligible differentia and (2) the differentia must have a rational relation to the object sought to be achieved. there is no discrimination, because it is perfectly open to the government, even as it is to a private party to choose a person to their liking to fulfil contract which they wish to he performed. the breach of the contract if any may entitle the person aggreived to sue for damages or in appropriate cases, even specific performance, but he cannot complain that there has been a deprivation of the right to practise any profession or to carry on any occupation! it is now well settled as a result of the decision of this court in ramana d. international airport authority of india, (1979)iillj217sc that the government is not free, like an ordinary individual in selecting the recipients for its largess and k cannot choose to deal with any person it pleases in its absolute and unfettered discretion. the law is now well established that the government need not deal 'it is difficult to appreciate how the impugned order could be assaulted on the ground that it created monopoly in favour of the 2nd respondents or imposed unreasonable restriction on the with any one, but if it does so, it must do so fairly without discrimination and without unfair procedure. ,.with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess the government cannot act arbitrarily at its sweet will and, like a private individual deal with any person it pleases but its action must be in conformity with some standard or norm which is not arbitrary, irrational or irrelevant. the assumption is not well founded.order1. these four - writ petitions pertain to common points and therefore, they could be disposed of for together. 2. the petitioner seek a mandamus directing the secretary, ministry of defence, to continue the milk supplies made by the petitioners while declaring proceedings of the officer-in-charge, military farm, secunderabad dt. 8-10-1985 by which it has been stated that millk from now on will be procured from the local milk scheme i.e. dairy development corporation', as illegal and arbitrary. for the purpose of narrative, w.p. no. 11827185 is referred. 3. the relevmt facts in brief are: the petitioner has been supplying milk regularly since 15 years to the sainya farm (military farm) secunderabad who is the 1st respondent herein, which caters to the military personnel centred around the twin cities of hyderabad and secunderabed. he has been supplying in huge quantities uninterruptedly to the satisfaction of the 1st respondent and for that purpose he had to build up sufficient infrastructure. he has been supplying 500 litres of milk per day which supply is in off- season and in flush season regular, for which different people have to lend their hand to keep the chain running and so, he had to depend upon ten suppliers from different villages. to that end, the petitioner advanced at the moment a sum of rs.40,000/- to a number of persons and some of them have made their livelihood to supply milk to the petitioner's agency. they purchased buffaloes and the required appliances for dairy farming by raising loans from nationalised banks and also the petitioner had to develop a transport system so as to make sure that the supplies reach the farm in time. 4. while so, to the shock of the petitioner, the impugned letter dt. 8-10.1985 was received from the 1st respondent stating that they are going to discontinue the milk supplies to be made by him from 1-11-1985. this discontinuance is not the result of any lapses on the part of the petitioner. in fact, the 1st respondent, as alleged in the affidavit, was- graceful enough to approve t e services rendered by the petitioner, as it was stated that the supplies were uninterrupted despite the fluctuating season. hence, the discontinuance by revoking unilaterally with' an illusory notice amounts to depriving the livelihood. this petitioner and the other three, who are the petitioners in the other writ petitions, addressed a letter to the 1st respondent dt. 12-10-85 requesting him to revoke the decision, which was fumed down stating that the 1st respondent is abiding by the orders issued by the government. hence, these writ petitions. 5. the averments in the affidavit in opposition filed on behalf of the respondents are: the action of the department in discontinuing the supplies of milk from the petitioner 'is in the interest of the military farm. the ministry of defence has issued a letter dt. 13-8-1985 formulating the policy of purchase and supply of milk by the military .farm that they-have to purchase milk at all places throughout the country from the national dairy development.,. board, federation/state government milk schemes. this policy is adopted as there would be constant supplies at constant rates to the military farms without any hindrance and that would avoid frequent calling of tenders and complying with other formalities with the contractors as in the petitioner's cam. the state and central government milk schemes and co-operative federations would assure standard quality of milk at material times than the other suppliers. that apart, due to administrative convenience also, the policy decision was adopted by the ministry of defence in the interest of the organisation. the service rendered by the petitioner was treated purely under local purchase without any legal contractual binding/commitments. there is no specific contract with the petitioner, hence, he has no right in the matter muchless any constitutional right. the petitioner has been supplying milk since last 15 years. he might have invested monies in the said business but that does not give any right or privilege to the petitioner to be favoured in the supply of milk to the 1st respondent-farm. under the local purchase system, the 1st respondent used to observe all the formalities like calling for quotations, opening the same by the station board of officers and placing the demand on the lowest quotation monthly or periodically and so, whoever was the lowest, used to supply without sacrificing the quality of milk. therefore, the petitioner may not always get the order. if he does not get in a particular, period, then he has to sell the produce outside. the decision of the government to procure milk from the milk supply schemes of the state or central government is applicable to all military farms in places where such schemes or federation exist. the decision was taken only after careful consideration of all the matters concerning a and in the interest of the department. hence, it cannot be termed arbitrary. 6. the contention of sri p.ln. sarma, learned counsel for the petitioners, is that the decision stopping the supply for milk is illegal and arbitrary. it amounts to distribution of largess in favour of a particular agency even if it is a milk scheme run by the state or central government, as it dispenses with calling for tenders and purchase of milk on competitive rates. it is not the case for the r'ndents, that the petitioners were not supplying milk to the satisfaction of the military farm. for nearly over two decades there has been a constant supply without any interruption despite adverse seasonal conditions and without any sacrifice in respect .of the quality of milk and, therefore, the impugned action which has no basis, should be struck down as arbitrary and illegal. 7. the counter-contention of the learned standing counsel for the. respondents is that the state can create monopoly by law and 10 the decision taken by the president of india on behalf of the ministry of defence, is an executive act of the president, which has been taken in the best interest of the military farms all over the country, as it dispenses with calling for frequent tenders. further, the procurement of milk from state or central government milk schemes will not only assure quality and quantity of milk, but also constant price is maintained by the said schemes. 8. the case law cited for and against the flow noticed. in rasbihari v. state of orissa : [1969]3scr374 the supreme court held.: 'validity of the schemes adopted by the government of orissa for sale of kendu leave must be adjudged in the light of art. 19(1)(g) and art. 14. instead of inviting tenders the government offered to certain old contract the option to purchase kendu leaves for the year 1968 on terms mentioned therein. th reason suggested by the government to these offers were made because the purchasers had carried-out their obligation in the previous year to the satisfaction of the government is not of any significance. from the affidavit filed by the state government appears that the price fetched at public auctions before and after jan., 1968 we much higher than the prices at which kendu leaves were offered to the old contractor the government realised that the scheme offering to enter into contracts with the licensees and to renew their terms was opt to grave objection since it sought arbitrary to exclude many persons interested in the trade. the government then decided to invite offers for advance purchases of kendu lease but restricted the invitation to the individuals who had carried out the contract., in the previous year without default, and to the satisfaction of the government. by the new scheme instead of the government making an offer, the executing contractors were given the exclusive right to make offers to purchase kendu leaves. but in so far as the, fight to make tenders for purchase of kendu leaves was restricted to these persons while had obtained contracts in the previous year the scheme was open to the same objection who right to make offers being open to limited claw of persons it effectively shut out all other persons carrying on trade in kendu leaves and also new entrants into that business. it was ex facie discriminatory, and impose unreasonable restrictions upon the right persons other than existing contractors carry on business. in our view, both the schemes evolved by the government were violative of the fundamental right of the petitioners under art. 19(1)(g) and art. 14 because the schemes gave rise to a monopoly in the trade in kendu leaves to certain traders and singled out other traders for discriminatory treatment.' further held:'validity of the law by which the state assumed the monopoly to trade in a given commodity has to be judged by the to whether the entire benefit arising therefore is to ensure to the state, and the monopoly not used as a cloak for conferring private benefit upon a limited class of persons. the scheme adopted by the govt. first of offering to enter into contracts with certain named licensees, and later inviting tenders from licensees who had in the previous year cart out their contracts satisfactorily is liable be adjudged void on the ground that unreasonably excludes traders in kendu leaves from carrying on their business. the scheme of selling kendu leaves to selected purchasers or of accepting tenders only from a specified class of purchasers was not 'integrally and essentially' connected with the creation of the monopoly and was not on the view td by this court in akadasi pandhan's case 1963 supp (2) scr 691 : air 1963 sc 1947 protected by art. 19(6)(ii) . it had therefore to satisfy the requirement of reasonableness under the first part of art 19(6). no attempt was mad to support the scheme' on the ground that it imposed reasonable restrictions on the fundamental rights of the. traders to cam on business in kendu leaves. the high 'court also did not consider whether the restrictions imposed upon persons excluded from the benefit of trading satisfied the test of reasonableness under the first part of art. 19(6). the high court examined the problem from the angle whether the action of the state government was vitiated on' account of any oblique motive, and whether it was such as a prudent person carrying on business may adopt.'in m.p. ration vikreta sangh society v. state of m.p., : [1982]1scr750 . the supreme court held: 'the m.p. (foodstuffs) civil supplies public distribution scheme, 1981, formulated by the state government under sub-cl. (d) of cl 2 of the m.p. foodstuffs (distribution) central order, 1960, introducing a new scheme for running of government fair price shops by agents to be appointed under a government scheme giving preference-to co- operative societies, in replacement of the earlier scheme of running such fair price shops through retail dealers appointed under cl. 3 of the order is not violative of arts. 14 and 19(1)(g) of the constitution. the scheme promulgated on 20-3-1981 does not suffer from arbitrariness nor is irrational to -the object sought to be achieved. the state government after due deliberation, took a responsible decision to run the fair price shops directly, being satisfied that it was necessary so to do with the object of distributing foodstuffs at fair prices- to the consumer after taking into consideration the fact that the earlier experiment of running these slt6ps through retail dealers was an utter failure. the scheme has been designed by the state government by executive action under art. 162 of the constitution with a view to ensuring equitable distribution of food stuffs at fair prices. the wider concept of equality before the law and the equal protection of laws is that there shall be equality among equals. even among equals there can be unequal treatment based on an intelligible differential having a rational relation to the objects sought to be achieved. consumers' co-operative societies form a distinct class by themselves. benefits and concessions granted to them ultimately benefit persons of small means and promote social justice in accordance with the directive principles. there is an intelligible differentia between the retail dealers who are nothing but traders and consumers' co-operative societies. the position would have been different if there was a monopoly created in favour of the latter. the scheme only envisages a rule of preference. . the formulation of the scheme does not exclude the retail traders from making an application for appointment as agents. it cannot be said that the state government was not actuated with the best of intentions in bringing about a change in the system of distribution of foodstuffs through fair price shops. the scheme is also not violative of art. 19(1)(g) of the constitution as it in no way infringes the petitioners' right to carry on their trade of food grains. they are free to carry on business as wholesale or retail dealers in food grains by taking out licences under the m.p. foodgrains licensing order. 1964. there is no fundamental right in any one to be appointed as an agent of a fair price shop under a government scheme.' also held:'the question whether fair price shops in the state of madhya pradesh under a government scheme should he directly run by the government through the instrumentality of consumers co-operative societies as its agents or by retail dealers to be appointed by the collector under c). 3 of the control order, is essentially a matter of policy with which the court is not concerned. the learned counsel for the state reiterated the assurance given in the sarkari sasta anaj, vikreta sangh case (decision of supreme court dt. 26-8-1981), as was done by the learned advocate general before the high court, that by the expression 'co-operative societies' in the scheme, the government intended and meant 'consumed co-operative societies', and that if by mistake there was a wrong allotment made to a 'co-operative society' which was not a 'consumers co- operative society', the government, would take steps to cancel the allotment'in mahindra & mahindra ltd. v. state, : air1986ap332 a division bench of this court held:'the other aspect of the case is that every citizen has a right to carry on the trade and the state in its multifarious activities is itself a great trader, manufacturer and industrialist and it cannot act arbitrarily in giving jobs or entering into contracts or granting other for' of largess to whomsoever it likes. this is one of the well settled facets of art. 14 of the constitution as laid down by the supreme court. it is enough if we refer to m/s. kasturi pal v. state of j & k, : [1980]3scr1338 wherein bhagwati, j., following the earlier principle laid down by him in ramana dayaram shetty v. international airport authority of india, : (1979)iillj217sc , observed: 'the discretion of the government has been held to be not unlimited in that the government give largess in its arbitrary discretion or at its sweet will or on such terms as it chooses in its absolute discretion. there are two limitations imposed by law which structure and control the discretion of the government in this behalf. the first is in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess and it is further observed that : 'every activity of the government has a public element in it and it must, therefore, be informed with reason and guided by public interest. every ' action taken by the government must be in public interest; the government cannot act arbitrarily and without reason and if it does, its action would be liable to he invalidated. if the government awards a contract or lease, out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid.' it is clear when a citizen complains about the unfavourable treatment, and discrimination against him the court has to see who is the recipient of such largess and the terms of such largess and such action can be justified to be reasonable and in the public interest. in rasbihari v. state of orissa, : [1969]3scr374 the supreme court held that, exclusion of all persons interested in the tram, who were not in the previous year licensees was ex facie arbitrary; it had no direct relation to the object of preventing exploitation of pluckers and growers of kendu leaves nor had it any just or reasonable relation to securing the full benefit from the trade to the state7'. we have already noticed that if rights of a citizen are denied the state must be armed with a law. in kharak singh v. state of u.p., : 1963crilj329 it is observed by rajagopala ayyangar j., 'the only manner in which this violation of the fundamental right could be defended would be by justifying the impugned action by reference to a valid law, i.e., be it a statute, a statutory rule or a statutory regulation.' in hrudananda v. revenue divisional commr. cuttack, : air1979ori13 a division bench of the orissa high court held: 'the word 'monopoly' has not been defined in the constitution. according to the shorter oxford english dictionary the word 'monopoly' means - 'exclusive possession of the trade in some commodity an exclusive privilege (conferred by the sovereign or the state) of selling some commodity or trading with a particular place or country; exclusive possession, control or exercise of something.' in gresham's comprehensive english dictionary the meaning of that word is stated as - 'are exclusive trading privilege; 'sole right or power of selling something or full command over a sale of it; possession or assumption of anything to the exclusion of others'. in jowitt's dictionary of english law 'monopoly' has been explained as 'the exclusive privilege of selling any commodity', a licence or privilege allowed by the crown, for the sole buying, selling, making, working, and using of anything.' the constitution disfavours monopoly in trade because of the provisions in art. 19(1)(g) and art. 14 of the constitution. under constitution any citizen has the right to engage in any lawful business or trade or occupation as of right and at his pleasure, subject of course to the power of the state to regulate or restrict any occupation, trade or business on the grounds specified in cl. (6) of art 19. the right to carry on any trade, occupation or business can be impaired by the state by a valid law (as it is understood in the wider sense in the constitution) within the permissible limits prescribed under cl. (6) of art, 19. a restriction which is not authorised by a valid law cannot be saved if a monopoly is created by law in favour of the state or a corporation owned or controlled by the state to carry on any trade or business on any particular field to the exclusion of others that cannot be questioned on the ground that it is an infringement of the right guaranteed by art.. 19(1)(g)..so the state by a valid law can create, monopoly in favour of itself or in favour of a corporation owned or controlled by the state without being called upon to justify its action in court as reasonable- but when a law creates exclusion of competition or imposes restriction creating something like a monopoly in somebody to the exclusion of others, the basis on which the said exclusion or restrictions are imposed must be reasonable and the same can be questioned by the court. a monopoly cannot be created by an administrative order. it can be created only by law made in the interest of the general public or in favour of the state or a corporation owned or controlled by the state, as is evident fromart. 19(6) of the constitution. it is open to the state authorities to give preference to cooperative societies if they are of the opinion that granting the lease to a cc-operative society would facilitate the' objects of any law in force. law is well settled that the state can make a classification for the purpose of achieving particular legislative objects but the classification must satisfy two conditions -(1) this must be founded on intelligible differentia and (2) the differentia must have a rational relation to the object sought to be achieved.' 9. in c-k. achutan v. state of kerala, : air1959sc490 the supreme court held: 'the gist of the present matter is the breach. if any, of the contract said to have been given to the petitioner which has been cancelled either for good or for bad reasons. there is no discrimination, because it is perfectly open to the government, even as it is to a private party to choose a person to their liking to fulfil contract which they wish to he performed. when one person is chosen rather than another, the aggrieved party cannot claim the protection of art. 14., because the choice of the person to -fulfil a particular contract must be left to the government. similarly, a contract which is held from government stands on no different footing from a contract held from a private party. the breach of the contract if any may entitle the person aggreived to sue for damages or in appropriate cases, even specific performance, but he cannot complain that there has been a deprivation of the right to practise any profession or to carry on any occupation!, trade or business, such as is contemplated by art. 19(1)(g). nor has it been shown how art. 31 of the constitution may be. invoked to prevent cancellation of a contract in exercise of powers conferred by one of the terms of the contract itself.'10. in m/s. kasturi lal v. state of j&k;, : [1980]3scr1338 the supreme court held - 'the second limitation on the discretion of the government in grant of largess is in regard to the persons to whom such largess may be granted. it is now well settled as a result of the decision of this court in ramana d. shetty v. international airport authority of india, : (1979)iillj217sc that the government is not free, like an ordinary individual in selecting the recipients for its largess and k cannot choose to deal with any person it pleases in its absolute and unfettered discretion. the law is now well established that the government need not deal 'it is difficult to appreciate how the impugned order could be assaulted on the ground that it created monopoly in favour of the 2nd respondents or imposed unreasonable restriction on the with any one, but if it does so, it must do so fairly without discrimination and without unfair procedure. where the government is dealing.,. with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess the government cannot act arbitrarily at its sweet will and, like a private individual deal with any person it pleases but its action must be in conformity with some standard or norm which is not arbitrary, irrational or irrelevant.' further held: right of the petitioners to carry on tapping business under art. 19(1)(g). the impugned order did not hand over the tapping of the entire forest area in the state exclusively to the 2nd respondents so as to deny the opportunity of tapping any forest areas to the petitioners. what was done under the impugned order was merely to allot 11,85,414 blazes in the inaccessible areas of reasi, ramban and poonch divisions to the 2nd respondents so that the 2nd respondents could have an assured supply of 3500 metric tonnes of resin for the purpose of feeding the factory to be set up by them in the state and a large number of blazes amounting to about 68 lacs in other forest areas of the state were left available for tapping by the petitioners and other forest contractors. no monopoly was treated in favour of the 2nd respondents the petitioners and other forest contractors could bid for wage contract in respect of other blazes which were more than five times in number than the blazes allotted to the second respondents.' 11. in sarkari sasta anaj vikreta sangh v. state of m.p., : air1981sc2030 the supreme. court held: 'one of the submissions of the learned counsel was that the formulation of the scheme was an exercise of power by the delegate of a delegate and, therefore, void. we see no force in this submission. the basic assumption underlying the argument was that the scheme was formulated by the, government pursuant to some power purp6rted to be vested in the government under the m.p. foods stuffs (distribution), control order, 1960 and that the government would otherwise have no power to formulate such a scheme. the assumption is not well founded. in-the first place the m.p. food- stuffs (contribution) control order, 1960 as amended in 1980 defines fair price shops as a 'shop set up by the government under the government scheme' and the 'government scheme' as 'the scheme for distribution of foodsstuffs to consumers through fair price shops set up by the government in this behalf.' there is no other provision in the order authorising the setting up of fair price shops or the making of a scheme for setting up fair price shops. on the other hand the state government has undoubted competence to make a scheme for setting up fair price shops and to set up fair price shops. in pursuance thereof, in exercise of its executive power under art. 162 of the, constitution. the executive power of the state government under art. 162 of the constitution is coextensive with the legislative power of the state legislature. entry 33(b) of list 111 (concurrent list) is 'trade and commerce in, and the production supply and distribution of foodstuffs, including edible oil-seeds and oils.' the government, therefore, has the undoubted right to make a scheme for the distribution of foodstuffs, without being vested with any special authority under any order made under the essential commodities act. as already mentioned by us the m.p. foodstuffs (distribution) control order, 1960 does not purport to vest any such power in the government. it must, therefore, be taken that the m.p. foodstuffs (civil supplies public. distribution) scheme, 1981, was made in exercise of the executive power of the. government and not in exercise of any power delegated by a delegate under the essential commodities act.' 12. the resultant position on the above conspectus is: (1) unlike a private individual the state cannot act as it pleases in the matter of giving largess; the power, is not absolute and unfettered. there are two limitations which structure and control the discretion; first is, in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess. (2) basically, there is a presumption that the governmental action is reasonable and in. public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not formed in public interest. but where it is satisfies the plainest duty of the court is to invalidate the said action. however, it may be cautioned that the governmental action being unreasonable or lacking in public interest is different from that of mala fides though they may furnish evidence of mala fides. (3) it would be open to the government to create monopoly in the exercise of its powers, executive or statutory. 13. the policy decision taken by the ministry of defence as confirmed by the president of india, under the letter dt. 13-8- 85 of the government of india addressed to the chief of the army staff, reads: 'i am directed to convey the sanction of the president for the conclusion of negotiated contracts with the government milk schemes national co-op. dairy federation of india including the maharashtra state government milk schemes without calling for tenders for supply of liquid and milk products to troops at the stations where they can arrange supplies for one year as a special case on an experimental basis. at all places where the state government or the central government milk schemes or the co-op. federations can supply milk the same would be accepted from them at negotiated rates. milk at these places may not be available according to the laid down asc specifications. milk. closest to the asc specifications as available may be accepted. milk depots established by military farm at stations, where milk be supplied by national dairy development board federation state government milk schemes, will be closed down and shifted to other stations where milk from these agencies is not available under the administrative instructions of the qmg army h. qr. the contracts which fall within the financial power of goc-in-c/lower as hithertofore, while other contracts of higher financial value will he sent to army h qrs. with the ,recommendations of intermediatory cfa for further action. the condition of calling open tenders at such mutually agreed stations is waived for a period of one year as a special case. this issues with the concurrence of ministry of defence (financial) vide their g.0. no. 2072/qqa of 1985.' 14. in my view, the aforesaid policy has been issued under the executive power of the union within the meaning of art. 73 of the constitution. the policy envisages that the entire military farms wherever they axe located in the country have been directed to procure milk'. from the state or central government milk schemes or maintained by the co-operative federations. now this is said to be on the administrative grounds viz.. to avoid calling for tenders periodically and constant retention of prices and assurance of supply of milk, both qualitatively and quantitatively. 15. in effect, the policy does not in any way create monopoly in favour of all the milk schemes, as it does not restrict the citizens or other agencies from selling milk to any other establishments; nor does it give rise to imposition of any restriction on the trade or business carried on by the individuals or other agencies. this policy cannot be said to spell out any distribution of largess in favour of milk schemes. no case is made out to show that the price which is paid to the said milk schemes for the supply of milk is abnormally high in comparison with the usual milk rates bearing in mind the quality and the quantity. even otherwise, in this case, the policy is aided by law, as it is issued under the executive powers of the union. no extraneous consideration nor any mala fides have been made out for interference with the said policy decision. hence, the policy decision so taken must be held to be reasonable and in public interested does not suffer from any mala fides; nor could it be said to impose a restriction on the trade or business of the petitioners infringing art. 19(1)(g) of the constitution, muchless the said decision is arbitrary. hence, the contention of the petitioners is devoid of merit and substance. however, the respondents are directed to allow the petitioners to supply milk to the end of march, 1987 and thereafter they can give effect to the memorandum. 16. in the result, the writ petitions are dismissed but in the circumstances, no order as to costs. 17. petition dismissed.

Judgment:
ORDER

1. These four - writ petitions pertain to common points and therefore, they could be disposed of for together.

2. The petitioner seek a mandamus directing the secretary, Ministry of Defence, to continue the milk supplies made by the petitioners while declaring proceedings of the Officer-in-charge, Military Farm, Secunderabad dt. 8-10-1985 by which it has been stated that millk from now on will be procured from the local milk scheme i.e. Dairy Development Corporation', as illegal and arbitrary.

For the purpose of narrative, W.P. No. 11827185 is referred.

3. The relevmt facts in brief are: The petitioner has been supplying milk regularly since 15 years to the Sainya Farm (Military Farm) Secunderabad who is the 1st respondent herein, which caters to the military personnel centred around the Twin Cities of Hyderabad and Secunderabed. He has been supplying in huge quantities uninterruptedly to the satisfaction of the 1st respondent and for that purpose he had to build up sufficient infrastructure. He has been supplying 500 litres of milk per day which supply is in off- season and in flush season regular, for which different people have to lend their hand to keep the chain running and so, he had to depend upon ten suppliers from different villages. To that end, the petitioner advanced at the moment a sum of Rs.40,000/- to a number of persons and some of them have made their livelihood to supply milk to the petitioner's agency. They purchased buffaloes and the required appliances for dairy farming by raising loans from Nationalised Banks and also the petitioner had to develop a transport system so as to make sure that the supplies reach the Farm in time.

4. While so, to the shock of the petitioner, the impugned letter dt. 8-10.1985 was received from the 1st respondent stating that they are going to discontinue the milk supplies to be made by him from 1-11-1985. This discontinuance is not the result of any lapses on the part of the petitioner. In fact, the 1st respondent, as alleged in the affidavit, was- graceful enough to approve t e services rendered by the petitioner, as it was stated that the supplies were uninterrupted despite the fluctuating season. Hence, the discontinuance by revoking unilaterally with' an illusory notice amounts to depriving the livelihood. This petitioner and the other three, who are the petitioners in the other writ petitions, addressed a letter to the 1st respondent dt. 12-10-85 requesting him to revoke the decision, which was fumed down stating that the 1st respondent is abiding by the orders issued by the Government. Hence, these writ petitions.

5. The averments in the affidavit in opposition filed on behalf of the respondents are: The action of the Department in discontinuing the supplies of milk from the petitioner 'is in the interest of the Military Farm. The Ministry of Defence has issued a letter dt. 13-8-1985 formulating the policy of purchase and supply of milk by the Military .Farm that they-have to purchase milk at all places throughout the country from the National Dairy Development.,. Board, Federation/State Government Milk Schemes.

This policy is adopted as there would be constant supplies at constant rates to the Military Farms without any hindrance and that would avoid frequent calling of tenders and complying with other formalities with the contractors as in the petitioner's cam. The State and Central Government milk schemes and co-operative federations would assure standard quality of milk at material times than the other suppliers. That apart, due to administrative convenience also, the policy decision was adopted by the Ministry of Defence in the interest of the Organisation. The service rendered by the petitioner was treated purely under local purchase without any legal contractual binding/commitments. There is no specific contract with the petitioner, hence, he has no right in the matter muchless any constitutional right. The petitioner has been supplying milk since last 15 years. He might have invested monies in the said business but that does not give any right or privilege to the petitioner to be favoured in the supply of milk to the 1st respondent-Farm. Under the local purchase system, the 1st respondent used to observe all the formalities like calling for quotations, opening the same by the Station Board of Officers and placing the demand on the lowest quotation monthly or periodically and so, whoever was the lowest, used to supply without sacrificing the quality of milk. Therefore, the petitioner may not always get the order. If he does not get in a particular, period, then he has to sell the produce outside. The decision of the Government to procure milk from the milk supply schemes of the State or Central Government is applicable to all Military Farms in places where such schemes or federation exist. The decision was taken only after careful consideration of all the matters concerning A and in the interest of the department. Hence, it cannot be termed arbitrary.

6. The contention of Sri P.LN. Sarma, learned counsel for the petitioners, is that the decision stopping the supply for milk is illegal and arbitrary. It amounts to distribution of largess in favour of a particular agency even if it is a milk scheme run by the State or Central Government, as it dispenses with calling for tenders and purchase of milk on competitive rates. It is not the case for the r'ndents, that the petitioners were not supplying milk to the satisfaction of the Military Farm. For nearly over two decades there has been a constant supply without any interruption despite adverse seasonal conditions and without any sacrifice in respect .of the quality of milk and, therefore, the impugned action which has no basis, should be struck down as arbitrary and illegal.

7. The counter-contention of the learned Standing Counsel for the. respondents is that the State can create monopoly by law and 10 the decision taken by the President of India on behalf of the Ministry of Defence, is an executive act of the President, which has been taken in the best interest of the Military Farms all over the country, as it dispenses with calling for frequent tenders. Further, the procurement of milk from State or Central Government milk schemes will not only assure quality and quantity of milk, but also constant price is maintained by the said schemes.

8. The case law cited for and against the flow noticed. In Rasbihari v. State of Orissa : [1969]3SCR374 the Supreme Court held.:

'Validity of the schemes adopted by the Government of Orissa for sale of kendu leave must be adjudged in the light of Art. 19(1)(g) and Art. 14. Instead of inviting tenders the Government offered to certain old contract the option to purchase kendu leaves for the year 1968 on terms mentioned therein. Th reason suggested by the Government to these offers were made because the purchasers had carried-out their obligation in the previous year to the satisfaction of the Government is not of any significance. From the affidavit filed by the State Government appears that the price fetched at public auctions before and after Jan., 1968 we much higher than the prices at which kendu leaves were offered to the old contractor The Government realised that the scheme offering to enter into contracts with the licensees and to renew their terms was opt to grave objection since it sought arbitrary to exclude many persons interested in the trade. The Government then decided to invite offers for advance purchases of kendu lease but restricted the invitation to the individuals who had carried out the contract., in the previous year without default, and to the satisfaction of the Government. By the new scheme instead of the Government making an offer, the executing Contractors were given the exclusive right to make offers to purchase kendu leaves. But in so far as the, fight to make tenders for purchase of kendu leaves was restricted to these persons while had obtained contracts in the previous year the scheme was open to the same objection who right to make offers being open to limited claw of persons it effectively shut out all other persons carrying on trade in kendu leaves and also new entrants into that business. It was ex facie discriminatory, and impose unreasonable restrictions upon the right persons other than existing contractors carry on business. In our view, both the schemes evolved by the Government were violative of the fundamental right of the petitioners under Art. 19(1)(g) and Art. 14 because the schemes gave rise to a monopoly in the trade in kendu leaves to certain traders and singled out other traders for discriminatory treatment.'

Further held:

'Validity of the law by which the State assumed the monopoly to trade in a given commodity has to be judged by the to whether the entire benefit arising therefore is to ensure to the State, and the monopoly not used as a cloak for conferring private benefit upon a limited class of persons. The scheme adopted by the Govt. first of offering to enter into contracts with certain named licensees, and later inviting tenders from licensees who had in the previous year cart out their contracts satisfactorily is liable be adjudged void on the ground that unreasonably excludes traders in kendu leaves from carrying on their business. The scheme of selling kendu leaves to selected purchasers or of accepting tenders only from a specified class of purchasers was not 'integrally and essentially' connected with the creation of the monopoly and was not on the view td by this Court in Akadasi Pandhan's case 1963 Supp (2) SCR 691 : AIR 1963 SC 1947 protected by Art. 19(6)(ii) . it had therefore to satisfy the requirement of reasonableness under the first part of Art 19(6). No attempt was mad to support the scheme' on the ground that it imposed reasonable restrictions on the fundamental rights of the. traders to cam on business in kendu leaves. The High 'Court also did not consider whether the restrictions imposed upon persons excluded from the benefit of trading satisfied the test of reasonableness under the first part of Art. 19(6). The High Court examined the problem from the angle whether the action of the State Government was vitiated on' account of any oblique motive, and whether it was such as a prudent person carrying on business may adopt.'

In M.P. Ration Vikreta Sangh Society v. State of M.P., : [1982]1SCR750 . The Supreme Court held:

'The M.P. (Foodstuffs) Civil Supplies Public Distribution Scheme, 1981, formulated by the State Government under sub-cl. (d) of CL 2 of the M.P. Foodstuffs (Distribution) Central Order, 1960, introducing a new scheme for running of Government fair price shops by agents to be appointed under a Government scheme giving preference-to co- operative societies, in replacement of the earlier scheme of running such fair price shops through retail dealers appointed under Cl. 3 of the Order is not violative of Arts. 14 and 19(1)(g) of the Constitution.

The scheme promulgated on 20-3-1981 does not suffer from arbitrariness nor is irrational to -the object sought to be achieved. The State Government after due deliberation, took a responsible decision to run the fair price shops directly, being satisfied that it was necessary so to do with the object of distributing foodstuffs at fair prices- to the consumer after taking into consideration the fact that the earlier experiment of running these slt6ps through retail dealers was an utter failure. The Scheme has been designed by the State Government by executive action under Art. 162 of the Constitution with a view to ensuring equitable distribution of food stuffs at fair prices.

The wider concept of equality before the law and the equal protection of laws is that there shall be equality among equals. Even among equals there can be unequal treatment based on an intelligible differential having a rational relation to the objects sought to be achieved. Consumers' co-operative societies form a distinct class by themselves. Benefits and concessions granted to them ultimately benefit persons of small means and promote social justice in accordance with the directive principles. There is an intelligible differentia between the retail dealers who are nothing but traders and consumers' co-operative societies. The position would have been different if there was a monopoly created in favour of the latter. The scheme only envisages a rule of preference. . The formulation of the scheme does not exclude the retail traders from making an application for appointment as agents. It cannot be said that the State Government was not actuated with the best of intentions in bringing about a change in the system of distribution of foodstuffs through fair price shops.

The scheme is also not violative of Art. 19(1)(g) of the Constitution as it in no way infringes the petitioners' right to carry on their trade of food grains. They are free to carry on business as wholesale or retail dealers in food grains by taking out licences under the M.P. Foodgrains Licensing Order. 1964. There is no fundamental right in any one to be appointed as an agent of a fair price shop under a Government Scheme.'

Also held:

'The question whether fair price shops in the State of Madhya Pradesh under a Government scheme should he directly run by the Government through the instrumentality of consumers co-operative societies as its agents or by retail dealers to be appointed by the Collector under C). 3 of the Control Order, is essentially a matter of policy with which the Court is not concerned. The learned counsel for the State reiterated the assurance given in the Sarkari Sasta Anaj, Vikreta Sangh case (decision of Supreme Court dt. 26-8-1981), as was done by the learned Advocate General before the High Court, that by the expression 'co-operative societies' in the scheme, the Government intended and meant 'consumed co-operative societies', and that if by mistake there was a wrong allotment made to a 'co-operative society' which was not a 'consumers co- operative society', the Government, would take steps to cancel the allotment'

In Mahindra & Mahindra Ltd. V. State, : AIR1986AP332 a Division Bench of this Court held:

'The other aspect of the case is that every citizen has a right to carry on the trade and the State in its multifarious activities is itself a great trader, manufacturer and industrialist and it cannot act arbitrarily in giving jobs or entering into contracts or granting other for' of largess to whomsoever it likes. This is one of the well settled facets of Art. 14 of the Constitution as laid down by the Supreme Court. It is enough if we refer to M/s. Kasturi Pal v. State of J & K, : [1980]3SCR1338 wherein Bhagwati, J., following the earlier principle laid down by him in Ramana Dayaram Shetty v. International Airport Authority of India, : (1979)IILLJ217SC , observed:

'The discretion of the Government has been held to be not unlimited in that the Government give largess in its arbitrary discretion or at its sweet will or on such terms as it chooses in its absolute discretion. There are two limitations imposed by law which structure and control the discretion of the Government in this behalf. The first is in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess and it is further observed that :

'Every activity of the Government has a public element in it and it must, therefore, be informed with reason and guided by public interest. Every ' action taken by the Government must be in public interest; the Government cannot act arbitrarily and without reason and if it does, its action would be liable to he invalidated. If the Government awards a contract or lease, out or otherwise deals with its property or grants any other largess, it would be liable to be tested for its validity on the touchstone of reasonableness and public interest and if it fails to satisfy either test, it would be unconstitutional and invalid.' It is clear when a citizen complains about the unfavourable treatment, and discrimination against him the court has to see who is the recipient of such largess and the terms of such largess and such action can be justified to be reasonable and in the public interest. In Rasbihari v. State of Orissa, : [1969]3SCR374 the Supreme Court held that,

Exclusion of all persons interested in the tram, who were not in the previous year licensees was ex facie arbitrary; it had no direct relation to the object of preventing exploitation of pluckers and growers of kendu leaves nor had it any just or reasonable relation to securing the full benefit from the trade to the State7'. We have already noticed that if rights of a citizen are denied the State must be armed with a law. In Kharak Singh v. State of U.P., : 1963CriLJ329 it is observed by Rajagopala Ayyangar J., 'the only manner in which this violation of the fundamental right could be defended would be by justifying the impugned action by reference to a valid law, i.e., be it a statute, a statutory rule or a statutory regulation.'

In Hrudananda v. Revenue Divisional Commr. Cuttack, : AIR1979Ori13 a Division Bench of the Orissa High Court held:

'The word 'monopoly' has not been defined in the Constitution. According to the Shorter Oxford English Dictionary the word 'monopoly' means - 'Exclusive possession of the trade in some commodity an exclusive privilege (conferred by the sovereign or the State) of selling some commodity or trading with a particular place or country; exclusive possession, control or exercise of something.' In Gresham's Comprehensive English Dictionary the meaning of that word is stated as - 'are exclusive trading privilege; 'sole right or power of selling something or full command over a sale of it; possession or assumption of anything to the exclusion of others'. In Jowitt's Dictionary of English Law 'Monopoly' has been explained as 'the exclusive privilege of selling any commodity', a licence or privilege allowed by the Crown, for the sole buying, selling, making, working, and using of anything.' The Constitution disfavours monopoly in trade because of the provisions in Art. 19(1)(g) and Art. 14 of the Constitution. Under Constitution any citizen has the right to engage in any lawful business or trade or occupation as of right and at his pleasure, subject of course to the power of the State to regulate or restrict any occupation, trade or business on the grounds specified in Cl. (6) of Art 19.

The right to carry on any trade, occupation or business can be impaired by the State by a valid law (as it is understood in the wider sense in the Constitution) within the permissible limits prescribed under Cl. (6) of Art, 19. A restriction which is not authorised by a valid law cannot be saved if a monopoly is created by law in favour of the State or a Corporation owned or controlled by the State to carry on any trade or business on any particular field to the exclusion of others that cannot be questioned on the ground that it is an infringement of the right guaranteed by Art.. 19(1)(g)..So the State by a valid law can create, monopoly in favour of itself or in favour of a Corporation owned or controlled by the State without being called upon to justify its action in court as reasonable- But when a law creates exclusion of competition or imposes restriction creating something like a monopoly in somebody to the exclusion of others, the basis on which the said exclusion or restrictions are imposed must be reasonable and the same can be questioned by the Court.

A monopoly cannot be created by an administrative order. It can be created only by law made in the interest of the general public or in favour of the State or a Corporation owned or controlled by the State, as is evident fromArt. 19(6) of the Constitution. It is open to the State authorities to give preference to cooperative societies if they are of the opinion that granting the lease to a cc-operative society would facilitate the' objects of any law in force. Law is well settled that the State can make a classification for the purpose of achieving particular legislative objects but the classification must satisfy two conditions -(1) This must be founded on intelligible differentia and (2) the differentia must have a rational relation to the object sought to be achieved.'

9. In C-K. Achutan v. State of Kerala, : AIR1959SC490 the Supreme Court held:

'The gist of the present matter is the breach. if any, of the contract said to have been given to the petitioner which has been cancelled either for good or for bad reasons. There is no discrimination, because it is perfectly open to the Government, even as it is to a private party to choose a person to their liking to fulfil contract which they wish to he performed. When one person is chosen rather than another, the aggrieved party cannot claim the protection of Art. 14., because the choice of the person to -fulfil a particular contract must be left to the Government. Similarly, a contract which is held from Government stands on no different footing from a contract held from a private party. The breach of the contract if any may entitle the person aggreived to sue for damages or in appropriate cases, even specific performance, but he cannot complain that there has been a deprivation of the right to practise any profession or to carry on any occupation!, trade or business, such as is contemplated by Art. 19(1)(g). Nor has it been shown how Art. 31 of the Constitution may be. invoked to prevent cancellation of a contract in exercise of powers conferred by one of the terms of the contract itself.'

10. In M/s. Kasturi Lal v. State of J&K;, : [1980]3SCR1338 the Supreme Court held -

'The second limitation on the discretion of the Government in grant of largess is in regard to the persons to whom such largess may be granted. It is now well settled as a result of the decision of this court in Ramana D. Shetty v. International Airport Authority of India, : (1979)IILLJ217SC that the Government is not free, like an ordinary individual in selecting the recipients for its largess and k cannot choose to deal with any person it pleases in its absolute and unfettered discretion. The law is now well established that the Government need not deal 'It is difficult to appreciate how the impugned order could be assaulted on the ground that it created monopoly in favour of the 2nd respondents or imposed unreasonable restriction on the with any one, but if it does so, it must do so fairly without discrimination and without unfair procedure. Where the Government is dealing.,. with the public, whether by way of giving jobs or entering into contracts or granting other forms of largess the Government cannot act arbitrarily at its sweet will and, like a private individual deal with any person it pleases but its action must be in conformity with some standard or norm which is not arbitrary, irrational or irrelevant.' Further held: right of the petitioners to carry on tapping business under Art. 19(1)(g). The impugned order did not hand over the tapping of the entire forest area in the State exclusively to the 2nd respondents so as to deny the opportunity of tapping any forest areas to the petitioners. What was done under the impugned order was merely to allot 11,85,414 blazes in the inaccessible areas of Reasi, Ramban and Poonch Divisions to the 2nd respondents so that the 2nd respondents could have an assured supply of 3500 metric tonnes of resin for the purpose of feeding the factory to be set up by them in the State and a large number of blazes amounting to about 68 lacs in other forest areas of the State were left available for tapping by the petitioners and other forest contractors. No monopoly was treated in favour of the 2nd respondents the petitioners and other forest contractors could bid for wage contract in respect of other blazes which were more than five times in number than the blazes allotted to the second respondents.'

11. In Sarkari Sasta Anaj Vikreta Sangh v. State of M.P., : AIR1981SC2030 the Supreme. Court held:

'One of the submissions of the learned counsel was that the formulation of the scheme was an exercise of power by the delegate of a delegate and, therefore, void. We see no force in this submission. The basic assumption underlying the argument was that the scheme was formulated by the, Government pursuant to some power purp6rted to be vested in the Government under the M.P. Foods stuffs (Distribution), Control Order, 1960 and that the Government would otherwise have no power to formulate such a scheme. The assumption is not well founded. In-the first place the M.P. Food- stuffs (contribution) Control Order, 1960 as amended in 1980 defines fair price shops as a 'shop set up by the Government under the Government scheme' and the 'Government scheme' as 'the scheme for distribution of foodsstuffs to consumers through fair price shops set up by the Government in this behalf.' There is no other provision in the order authorising the setting up of fair price shops or the making of a scheme for setting up fair price shops. On the other hand the State Government has undoubted competence to make a scheme for setting up fair price shops and to set up fair price shops. in pursuance thereof, in exercise of its executive power under Art. 162 of the, Constitution. The executive power of the State Government under Art. 162 of the Constitution is coextensive with the legislative power of the State legislature. Entry 33(b) of List 111 (Concurrent List) is 'trade and commerce in, and the production supply and distribution of foodstuffs, including edible oil-seeds and oils.' The Government, therefore, has the undoubted right to make a scheme for the distribution of foodstuffs, without being vested with any special authority under any order made under the Essential Commodities Act. As already mentioned by us the M.P. Foodstuffs (Distribution) Control Order, 1960 does not purport to vest any such power in the Government. It must, therefore, be taken that the M.P. Foodstuffs (Civil Supplies Public. Distribution) Scheme, 1981, was made in exercise of the executive power of the. Government and not in exercise of any power delegated by a delegate under the Essential Commodities Act.'

12. The resultant position on the above conspectus is:

(1) Unlike a private individual the State cannot act as it pleases in the matter of giving largess; the power, is not absolute and unfettered. There are two limitations which structure and control the discretion; first is, in regard to the terms on which largess may be granted and the other, in regard to the persons who may be recipients of such largess.

(2) Basically, there is a presumption that the governmental action is reasonable and in. public interest and it is for the party challenging its validity to show that it is wanting in reasonableness or is not formed in public interest. But where it is satisfies the plainest duty of the court is to invalidate the said action. However, it may be cautioned that the governmental action being unreasonable or lacking in public interest is different from that of mala fides though they may furnish evidence of mala fides.

(3) It would be open to the Government to create monopoly in the exercise of its powers, executive or statutory.

13. The policy decision taken by the Ministry of Defence as confirmed by the President of India, under the letter dt. 13-8- 85 of the Government of India addressed to the Chief of the Army Staff, reads:

'I am directed to convey the sanction of the President for the conclusion of negotiated contracts with the Government Milk Schemes National Co-op. Dairy Federation of India including the Maharashtra State Government Milk Schemes without calling for tenders for supply of liquid and milk products to troops at the stations where they can arrange supplies for one year as a special case on an experimental basis.

At all places where the State Government or the Central Government Milk Schemes or the Co-op. Federations can supply milk the same would be accepted from them at negotiated rates.

Milk at these places may not be available according to the laid down ASC specifications. Milk. closest to the ASC specifications as available may be accepted.

Milk Depots established by Military Farm at Stations, where milk be supplied by National Dairy Development Board Federation State Government Milk Schemes, will be closed down and shifted to other stations where milk from these agencies is not available under the administrative instructions of the QMG Army H. Qr.

The contracts which fall within the financial power of GOC-In-C/Lower as hithertofore, while other contracts of higher financial value will he sent to Army H Qrs. with the ,recommendations of intermediatory CFA for further action.

The condition of calling open tenders at such mutually agreed stations is waived for a period of one year as a special case.

This issues with the concurrence of Ministry of Defence (Financial) vide their G.0. No. 2072/QQA of 1985.'

14. In my view, the aforesaid policy has been issued under the executive power of the Union within the meaning of Art. 73 of the Constitution. The policy envisages that the entire Military Farms wherever they axe located in the country have been directed to procure milk'. from the State or Central Government Milk Schemes or maintained by the Co-operative Federations. Now this is said to be on the administrative grounds viz.. to avoid calling for tenders periodically and constant retention of prices and assurance of supply of milk, both qualitatively and quantitatively.

15. In effect, the policy does not in any way create monopoly in favour of all the milk schemes, as it does not restrict the citizens or other agencies from selling milk to any other establishments; nor does it give rise to imposition of any restriction on the trade or business carried on by the individuals or other agencies. This policy cannot be said to spell out any distribution of largess in favour of milk schemes. No case is made out to show that the price which is paid to the said milk schemes for the supply of milk is abnormally high in comparison with the usual milk rates bearing in mind the quality and the quantity. Even otherwise, in this case, the policy is aided by law, as it is issued under the executive powers of the Union. No extraneous consideration nor any mala fides have been made out for interference with the said policy decision. Hence, the policy decision so taken must be held to be reasonable and in public interested does not suffer from any mala fides; nor could it be said to impose a restriction on the trade or business of the petitioners infringing Art. 19(1)(g) of the Constitution, muchless the said decision is arbitrary. Hence, the contention of the petitioners is devoid of merit and substance. however, the respondents are directed to allow the petitioners to supply milk to the end of March, 1987 and thereafter they can give effect to the memorandum.

16. In the result, the writ petitions are dismissed but in the circumstances, no order as to costs.

17. Petition dismissed.