1981 (1) TMI 274 - SC - Indian Laws

Summary

Issues Involved:
1. Constitutional validity of certain Rules framed under the Bihar Kendu Leaves (Control of Trade) Act, 1973.
2. Reasonableness of the impugned provisions under Article 19(1)(g) of the Constitution.
3. Violation of fundamental rights under Article 14 of the Constitution.
4. Consistency of the impugned provisions with the proviso to Section 9(1) of the Act.

Issue-Wise Detailed Analysis:

1. Constitutional Validity of Certain Rules Framed Under the Bihar Kendu Leaves (Control of Trade) Act, 1973:
The primary issue revolves around the constitutional validity of clause 13 and clause 4(bb) of the Tender Notice and the Statutory Agreement notified by the Bihar Government. The petitioners argued that these provisions amounted to an unreasonable restriction on their fundamental freedom to carry on trade or business in Kendu leaves, guaranteed under Article 19(1)(g) of the Constitution. The Court examined whether these provisions were integrally and essentially connected with the creation of the State monopoly or merely incidental to its operation.

2. Reasonableness of the Impugned Provisions Under Article 19(1)(g) of the Constitution:
The Court analyzed whether the impugned provisions satisfied the test of reasonableness under the first part of Article 19(6). The Court emphasized that the right to enter into a contract with the State is not a fundamental right. The Court observed that the impugned provisions were designed to ensure a minimum return to the public exchequer and to prevent collusion and fraud between purchasers and agents. The Court found that the provisions were reasonable and operated as an insurance against loss of public revenue.

3. Violation of Fundamental Rights Under Article 14 of the Constitution:
The petitioners contended that the impugned provisions violated their fundamental rights under Article 14 by treating unequals as equals and resulting in arbitrary and harsh treatment. The Court rejected this argument, stating that all tenderers or bidders were treated equally at the time of inviting tenders or bids. The Court held that the impugned provisions did not make any discerning distinction between honest and dishonest purchasers, and the principle of "qui approbat non reprobat" (one who approbates cannot reprobate) applied. The Court concluded that the challenge to the impugned provisions on the ground of Article 14 was unsustainable.

4. Consistency of the Impugned Provisions with the Proviso to Section 9(1) of the Act:
The Court found that clause 4(bb) of the Tender Notices and the statutory Agreement, which barred any objection from the purchaser regarding the quantity or quality of the leaves, was inconsistent with and repugnant to the proviso to Section 9(1) of the Act. The proviso contained a built-in warranty that the Kendu leaves offered would be fit for manufacture of bidis. Therefore, the Court declared clause 4(bb) to be invalid.

Conclusion:
The Supreme Court dismissed all the writ petitions except to the extent that clause 4(bb) in the Tender Notices and the statutory Agreement was declared invalid. The Court upheld the validity of clause 13, finding it reasonable and in the public interest. The Court also dismissed the criminal appeal, affirming the validity of Condition 13 and remanding the case back to the Sub-Divisional Magistrate for disposal in accordance with law.