1981 (9) TMI 299 - SC - Indian Laws

Summary

Issues Involved:
1. Violation of Articles 14 and 19(1)(g) of the Constitution by the Madhya Pradesh (Food-stuffs) Civil Supplies Public Distribution Scheme, 1981.
2. Arbitrariness and irrationality in the governmental action under Article 14.
3. Monopoly in trade in favor of cooperative societies.

Detailed Analysis:

1. Violation of Articles 14 and 19(1)(g) of the Constitution:
The primary issue was whether the Madhya Pradesh (Food-stuffs) Civil Supplies Public Distribution Scheme, 1981, violated Articles 14 and 19(1)(g) of the Constitution. The scheme replaced the earlier system of running fair price shops through retail dealers with a new system where these shops would be run by agents appointed under a government scheme, giving preference to cooperative societies.

The court upheld the validity of the scheme, stating that it was formulated by the State Government in the exercise of its executive function under Article 162 of the Constitution. The scheme aimed to ensure equitable distribution of foodstuffs at fair prices to consumers. The court observed that the rule of preference for cooperative societies did not create a monopoly in trade and was not violative of the petitioners' fundamental rights under Articles 14 and 19(1)(g). The court emphasized that no one had a fundamental right to be appointed as a government agent for running a fair price shop, which was considered a matter of grant of privilege.

2. Arbitrariness and Irrationality in Governmental Action under Article 14:
The petitioners contended that the governmental action should not be arbitrary, irrational, or irrelevant, invoking Article 14. They cited observations from the Airport Authority case, which stated that Article 14 strikes at arbitrariness in state action and ensures fairness and equality of treatment.

The court acknowledged the principles laid down in the Airport Authority case but found that the impugned scheme did not suffer from arbitrariness or irrationality. The State Government had taken a responsible decision to run the fair price shops directly after due deliberation, aiming to distribute foodstuffs at fair prices to consumers. The court noted that the earlier system of running these shops through retail dealers had collapsed due to violations of the Control Order by the retail dealers. The scheme was designed to ensure equitable distribution of foodstuffs and was not arbitrary, irrational, or irrelevant.

3. Monopoly in Trade in Favor of Cooperative Societies:
The petitioners argued that the scheme created a monopoly in trade in favor of cooperative societies, violating Articles 14 and 19(1)(g). The court referred to its earlier decision in the Sarkari Sasta Anaj Vikreta Sangh case, which had upheld the validity of the scheme. The court noted that the scheme did not create a monopoly but merely embodied a rule of preference for cooperative societies.

The court emphasized that cooperative societies form a distinct class and the benefits and concessions granted to them ultimately benefit persons of small means and promote social justice. The preference given to cooperative societies had a reasonable relation to the objects of the legislation set out in Section 3 of the Essential Commodities Act, 1955. The court found no merit in the contention that there was preferential treatment given to cooperative societies in the matter of allotment of fair price shops.

Conclusion:
The court dismissed the Special Leave Petitions, upholding the constitutionality of the Madhya Pradesh (Food-stuffs) Civil Supplies Public Distribution Scheme, 1981. The scheme was found to be consistent with Articles 14 and 19(1)(g) of the Constitution, not arbitrary or irrational, and did not create a monopoly in favor of cooperative societies. The petitioners were ordered to bear the costs.