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TMI Blog1969 (4) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... one, excepting those mentioned therein, either to purchase or transport tendu leaves. Sub-s. 2 of s. 5, however, permitted a grower to transport them within the unit where they grow and a purchaser who has purchased them from the State Government, its authorised officers and agents for manufacturing bidis or for exporting outside the State to transport them outside such unit under a permit and in -accordance with the terms and conditions thereof. By virtue of S. 19 the State Government framed rules called the Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Niyamavali, 1965 (referred to hereinafter as the rules). Rule 9 of the said rules provided for an application for a transport permit in form M and the issuance of such permit in form N. The appellants accordingly applied for and obtained permits authorising them to transport tendu leaves purchased by them from the various forest units to their godowns situate outside those units. In the course of their business the appellants transport the said leaves first from the said units to their warehouses, from there to their branches and thereafter distribute them and tobacco to their sattedars, who are independent contractors, and who in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs and the mazdoors. The State Government, on the other hand, claimed that the restrictions against transport of the leaves were justified under s. 5 and the rules and were valid. The High Court held that on a proper construction of S. 5 (2) (b) a permit was necessary for transport of the leaves by a purchaser not only when he moved them from the units where they were purchased to a place outside but also when he moved them from one place to another outside the said unit, that S. 5 (1), being a provision creating the State monopoly in the trade of tendu leaves, was protected by the latter part of Art. 19 (6) of the Constitution, that the restriction imposed by s. 5 (1) on transport was valid and that sub-s. 2 being merely a relaxation against the said prohibition was valid. It further held that the restrictions on transport of tendu 'Leaves before and after the sale thereof by Government was an integral part of the trade monopoly intended to prevent surreptitious sales of tendu leaves by persons other than Government, their officers and agents, that it was necessary to control the movement of the said leaves to prevent pur- chasers from surreptitiously purchasing and transporti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , on the other hand, maintained that the language of S. 5 was clear and unambiguous, that it forbade without permit transport at any stage right upto the stage of manufacture of the bidis and that those restrictions were the essential part of the scheme of the State monopoly and therefore were protected by the latter part of Art. 19 (6) ; and further that even if they were not, they were reasonable restrictions and therefore permissible. In support of their rival contentions counsel drew our attention to the various forms provided in the rules as also to rule 4 of the new rules dated February 14, 1966 which repealed the rules of 1965. We may, however, make it clear that the parties in the present appeal -are governed by the rules of 1965, and therefore, anything that we say here would not govern either the construction or the effect of the new rules. In examining the correctness of the contentions urged before us the first task is to ascertain what exactly the legislature intended to do while enacting s. 5. The long, title of the Act clearly says that it was passed for regulating trade in tendu leaves in the public interest by creating the State monopoly in that trade, that is to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eaves or tobacco or both. Rules 4 and 6 provide for registration of growers, manufacturers and exporters, and rule 7 provides for the sale of leaves purchased under S. 5(1) by Government, its officers and agents. under rule 6 a manufacturer and an exporter has to maintain accounts of his stock and submit periodical returns thereof in form H -and I showing amongst other things the balance of stock at the date when the last return was made the stock added and the manner of its disposal including the stock consumed, sold or rendered useless and destroyed. Rule 8 provides for a certificate of sale to be issued to the purchaser by Government, its authorised officer and agent. Under rule 9 an application for a transport permit is to be made in form M and, the permit issued must be in form N. Form M provides for giving particulars such as the quantity of leaves purchased, the unit or units where they are putchased, the place or places where they are stored, the destination to which they are to be transported and the place or places where such transported leaves are to be stored. Similar particulars are to be mentioned in the permit as stated in form N. These elaborate provisions in conju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contained in the said law whether they have direct relation with the creation of the monopoly or not. In our opinion, the said expression should be construed to mean the law relating to the monopoly in its absolutely essential features. If a law is passed creating a State monopoly, the Court should enquire what are the provisions of the said law which are basically and essentially necessary for creating the State monopoly. It is only those essential and basic provisions which 'are protected by the latter part of Art. 19(6). If there are other provisions made by the Act which are subsidiary, incidental or helpful to the operation of the monopoly, they do not fall under the said part and their validity must be judged under the first part of Art. 19(6). In other words, the effect of the amendment made in Art. 19 (6) is to protect the law relating to the creation of monopoly and that means that it is only the provisions of the law which are integrally and essentially connected with the creation of the monopoly that are protected. The rest of the provisions which may be incidental do not fall under the latter part of Art. 19(6) and would inevitably have to satisfy the test of the fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch conferred the exclusive right to fix the prices on the State as ail integral and organic part of the trade monopoly in Kendu leaves but treated it only as effectively abetting its implementation. Can an embargo on transport by anyone, save those mentioned in cls. (a), (b) and (c) of s. 5(1) and the manufacturers of bidis and exporters of these leaves under the permit, be regarded as an integral and organic part of the trade monopoly in them, i.e., a monopoly in purchasing and selling them in such area or areas to which the Act is applied ? It may be as stated in the State's counter-affidavit that the trade monopoly can be effectively implemented only if the movement of the leaves is checked and regulated by confining the right of free movement to the State and its agents and under permits to the manufacturers of bidis and the exporters and that if free movement were -allowed there would be loopholes which would suffer illegitimate acquisitions and sales in leaves smuggled through the areas where they grow, raising also difficulties in checking the stocks legitimately purchased from Government. If a person were to purchase a quantity of leaves and is allowed to move it freely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the burden is on those who seek that protection and not on the citizen to show that the restrictive enactment is invalid. (cf. Saghir Ahmad v. The State of U.P. , [1955] 1 S.C.R. 707 and Khyerbari Tea Co. Ltd. v. The State of Assam, [1964] 5 S.C.R.975, 1003. That leads us to the next question as to the scope of the embargo on movement imposed by s. 5. If read literally, sub- s. 1 places -a total ban on any and every person against transporting the leaves, except those only mentioned in cls. (a), (b) and (c) therein. Sub-s. 2 also, if read literally, would mean that an exception is made only in the case of (a) a grower who can move his leaves freely but within the unit where they have grown, and (b). a purchaser who has purchased the leaves for manufacturing bidis within the State or for their export outside the State, but under a permit and in accordance with its terms and conditions. Section 5 read thus, therefore, would mean that except for these two categories of persons, no one can apply for a permit to move the leaves from one place to another as if the legislature intended that the leaves must remain where they -are when purchased. Does it mean that a person who purchases t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is difficult to conceive of a monopoly in this particular commodity, as in others, without any likely loopholes whatsoever. Can the State, therefore, to plug all such loopholes pass a measure which, according to the appellants, imposes unreasonable restrictions and which results in stultifying their business ? There is a strong school of thought which believes that monastic tendencies in economics spell stagnation and that pluralism is as much desirable in economics as in politics and other fields of life. That may or may not be correct, but take the present case as an illustration. According to the appellants, they manufacture as many as 1-1/2 crores of bidis a day. They have established a net-work of branches in several areas of the State.- Wherever they purchase the leaves they have to be moved to their warehouses outside and from there to their branches and then to the sattedars who undertake to have bidis rolled through mazdoors to whom they in turn distribute tobacco, and these leaves supplied to them by the appellants. Even according to the Divisional Forest Officer there were as many as 6 or 7 thousand sattedars in Saugor district alone with whom manufacturers of bidis h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the manufacturer and balancing that with the mischief feared by the State, we think that when s. 5 was enacted the legislature could not have intended that the manufacturer should also obtain permits in respect of the leaves distributed to the vast number of mazdoors for rolling the bidis by the sattedars who are themselves considerable in number. Though, therefore, s. 5 is couched in apparently wide language, the very object of the Act, as disclosed in its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at first reading of the section appear. In our view, reading s. 5 (2) along with rule 9 of the said rules, what they are intended to require is that a manufacturer must have a permit to move the leaves purchased by him from the unit or units where he has purchased them to his warehouse outside and from there to his branches -and also when he transports them to his sattedars. But, no such permit was intended to be necessary when the leaves are distributed for the manufacture of bidis by these sattedars to the mazdoors whom he employs. A construction so limited in its sweep is commendable as it is consistent with the object ..... X X X X Extracts X X X X X X X X Extracts X X X X
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