1970 (2) TMI 140 - SC - Indian Laws

Summary

Issues Involved:
1. Legality of the Director of Food & Civil Supplies' order sanctioning the relocation of the appellants' rice mill.
2. Compliance with the Rice Milling Industry (Regulation) Act, 1958, specifically sections 5, 6, and 8.
3. Locus standi of the respondents to challenge the relocation.
4. Consideration of factors under Section 5(4) in granting permission under Section 8(3)(c).

Detailed Analysis:

1. Legality of the Director's Order:
The appeal was filed against the judgment of the High Court of Mysore, which set aside the order of the Director of Food & Civil Supplies sanctioning the relocation of the appellants' rice mill. The High Court held that the permission under Section 9(3)(c) was a condition precedent to the shifting of the rice mill's location and since the appellants did not obtain prior permission, the Director's order was ultra vires. The Supreme Court, however, found that the appellants had not commenced milling operations before obtaining sanction and thus, the respondents had no valid grievance against the granted permission.

2. Compliance with the Rice Milling Industry (Regulation) Act, 1958:
The Act categorizes rice mills into defunct, existing, and new rice mills, each requiring different permits and licenses. The appellants' rice mill, being an existing one, required a license under Section 6 and prior permission under Section 8(3)(c) for relocation. The Supreme Court noted that the Director of Food & Civil Supplies, who had the delegated authority, had sanctioned the relocation under Section 8(3)(c). The High Court's interpretation that permission must be obtained before shifting was deemed overly restrictive by the Supreme Court, which held that the appellants complied with statutory requirements.

3. Locus Standi of Respondents:
The respondents claimed that the relocation adversely affected their business. The High Court upheld this claim, but the Supreme Court disagreed, stating that competition in business is a fundamental right under Article 19(1)(g) of the Constitution, subject to lawful restrictions. The respondents, being competitors, had no standing to challenge the appellants' compliance with the regulatory framework, as no vested right of the respondents was infringed.

4. Consideration of Factors under Section 5(4):
The respondents argued that the authority should consider factors under Section 5(4) when granting permission under Section 8(3)(c). The Supreme Court clarified that Section 5(4) applies to the grant of permits for new or defunct rice mills, not to the relocation of existing mills. The Supreme Court found no statutory obligation for the authority to consider these factors when permitting a location change under Section 8(3)(c). The appellants had been allotted new land due to the submergence of their original site by the Sharavathi Hydro-Electric Project, and the permission was granted considering relevant circumstances.

Conclusion:
The Supreme Court allowed the appeal, dismissing the respondents' petition and upholding the Director of Food & Civil Supplies' order. The Court emphasized that compliance with statutory requirements was met, and the respondents had no locus standi to challenge the relocation. The judgment underscores the regulatory nature of Section 8(3)(c) and the non-applicability of Section 5(4) considerations to the relocation of existing rice mills.