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TMI Blog1981 (11) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... es questions of the highest importance as to the scope and extent of the executive power of the State under Art. 162 of the Constitution, in relation to regulation and control of trade and commerce in food- stuffs. It necessarily involves a claim by the petitioners who are wholesale dealers of food grains that the exercise of such governmental power conflicts with the rule of law and is in flagrant violation of the freedom of trade, commerce and intercourse guaranteed under Art. 301 of the Constitution and the fundamental right to carry on trade and business guaranteed under Art. 19 (1) (g) of the Constitution. These petitions fall into two distinct and separate categories, one by the wholesale dealers of food grains from the Union Territory of Delhi and the neighbouring States of Punjab and Haryana, and the other by the wholesale dealers of food grains from the State of Uttar Pradesh. The short question that falls for consideration in some of the writ petitions by wholesale dealers of food grains from the Union Territory of Delhi and the State of Punjab and Haryana is whether the action of the State Government of Uttar Pradesh in setting up check-posts on its borders and the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the States of Punjab and Haryana allege that between April 29-30, 1981, they, acting as commission agents, purchased wheat from the open market in Delhi and elsewhere and despatched the same by trucks to various destinations in the State of Maharashtra and to some places in the State of Madhya Pradesh. According to them, the trucks laden with wheat were accompanied by relative bills, goods receipts, inter-State transit passes etc., duly crossed the check-post at Faridabad and were also allowed to cross the check-post at Kotwan on the border between the Union Territory of Delhi and the State of Uttar Pradesh and were on their way to their respective destinations. They allege that the Senior Marketing Inspector, Agra, intercepted the trucks in question at the check-post at Saiyan on the border between the State of Uttar Pradesh and Madhya Pradesh between April 30, 1981, and May 2, 1981. The seized trucks were brought back to the purchase point at Agra and the wheat was unloaded. Thereupon, the petitioners rushed to Agra and made an application on May 4, 1981, under s.6A read with ss. 3 and 7 of the Act before the Additional District Magistrate (Civil Supplies), Agra, for the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e pleaded that they were taking their goods in transit through Agra and in fact the movement of wheat so made by them was inter-state movement which was not banned by the Central Government or State Government. I heard the learned counsels on behalf of the O.Ps. and the learned PO as well. In these proceedings final orders cannot be passed at this stage as the matter is still under investigation. PO directed to put up progress of investigation within 15 days from now. In the meanwhile I order that the wheat seized by SMI Saiyan be got purchased at the Official Price so that the same does not get damaged. The sale proceeds be got deposited in Government Treasury under proper Head of Account. This interim order is being passed under sub-s. (2) (i) of s.6A of the Essential Commodities Act, 1955. File be put up after 15 days along with report of prosecuting office regarding progress of investigation. Sd/- N.N. Varma Addl. Collector, Agra 23.5.1981 The seized wheat has been purchased by the State Government on Government account at the procurement price and the sale proceeds credited into the Treasury. The State Government has filed a counter-affidavit of the Chief Marketing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the border between the States of Uttar Pradesh and Madhya Pradesh or at Agra were in transit during the course of inter-State trade and commerce. With regard to the seizure of the wheat, it is averred in para 13 of the counter-affidavit: The correct fact is that the authority on the bona fide apprehension that the wheat so moved actually was purchased from the State of Uttar Pradesh from nearby places and the same was being moved to other States on the garb of outside wheat. It is submitted that such traders who are exporting wheat alleged to have purchased from places other than the State of Uttar Pradesh and were/are carrying the same to other States, have only to satisfy the authorities concerned of the bona fides of such transactions. However there is no ban on such movement from one State to another. As regards the check-posts, it is submitted that the State Government is committed to provide price support in wheat to farmers at ₹ 130 per quintal. This commitment also involves purchase of wheat directly from the farmers without interference from traders/middlemen, who try to purchase wheat from the farmers at lower prices and sell the same at Government purc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the course of inter-State trade and commerce from the Union Territory of Delhi and the States of Punjab and Haryana to various destinations in the States of Maharashtra and Madhya Pradesh, was without the authority of law and in violation of Art. 300A of the Constitution. The seizure of the wheat being wrongful, the petitioners were entitled to an appropriate writ, direction or order for the return of the seized wheat or the price thereof. (3) The impugned tele printer message of the State Government dated March 31, 1981 on the basis of which the seizures were effected, in truth and substance, had no legal sanction and cannot be construed to be a notified order within the meaning of sub-s. (1) read with sub-s. (5) of s. 3 of the Act; it was nothing but an executive direction. No executive action which operates to the prejudice of a citizen can be taken without the authority of law. It was asserted that the seizures effected were in compliance of the instructions contained in the impugned tele printer message and not for breach of the two Control Orders and therefore it was nothing but a colourable exercise of power. The real purpose of the seizure was procurement of wheat i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d counsel the Government instructions conveyed in the impugned tele printer message is merely in the nature of an executive instruction for the enforcement of the two Control Orders. In support of the contentions, he also relies on the executive power of the State under Art. 162 of the Constitution. In the premises, the contention on behalf of the State is that the question whether the seized wheat was liable to be confiscated or not under s. 6A of the Act, was a matter pending adjudication before the Additional District Magistrate (Civil Supplies) Agra. That depends on whether or not there was contravention by the petitioners of any of the Order issued under s. 3 of the Act and, therefore, cannot be determined without full investigation into the facts. The Inter-Zonal Wheat (Movement Control) Order, 1976, issued by the Central Government, in exercise of the powers conferred by s. 3 of the Act has been rescinded with effect from April 13, 1977. The result of this is that the whole country constitutes a single zone for free movement of wheat except in such States where an order is issued under s. 3 read with s. 5 of the Act, placing a ban on export of wheat such as in the State o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t made(..) RFC will compile and send weekly report to Government(.) Permission to be given very sparingly and general impression made should be that they will not gain by doing any trading in wheat(.) Visit Mandis regularly and check quantities lying in traders premises(.) Presence of large stocks with trade means staff is not during their job properly(.) Inform all concerned immediately for strict compliance(.) Dated: Lucknow; March 31, 1981 Sd/- M. Subrahmanyam Secretary Food Civil Supplies Sec. 5 U.P. Secretariat, Lucknow. There can be no doubt that the aforesaid tele printer message was in the nature of executive instructions of the State Government to the Regional Food Controllers of the various regions to secure compliance with the orders. It may be mentioned that the State Government was committed to provide price support in wheat to producers and hence to maximise procurement of wheat, issued instructions that no fresh licences till June 30, 1981 were to be granted to any person who wished to deal in wheat, wheat products, or both, as well as a wholesale dealer, commission agent or a retailer. It further conveyed the policy decision of the Government that during Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... til the legislature makes a law in that behalf. Otherwise, the administration would come to a standstill. In Ram Jawaya Kapoor's case (supra) it was contended that the executive power of the State did not extend to the carrying on of trade of printing, publishing and selling of text-books for schools unless such trade was authorised by law. In repelling the contention, Mukherjea, C.J. speaking for the Court, observed : Our Constitution, though federal in its structure, is modelled on the British Parliamentary system where the executive is deemed to have the primary responsibility for the formulation of governmental policy and its transmission into law though the condition precedent to the exercise of this responsibility is its retaining the confidence of the legislative branch of the State. The executive function comprises both of the determination of the policy as well as carrying it into execution. This evidently includes the initiation of legislation, the maintenance of order, the promotion of social and economic welfare, the direction of foreign policy, in fact the carrying on or supervision of the general administration of the State. The learned Chief Justice then ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and distribution thereof. This is, of course, subject to the limitation contained in Proviso to Art. 162 which directs that in any matter with respect to which the legislature of a State and Parliament have power to make laws, the executive power of the State shall be subject to, and limited by, the executive power expressly conferred by the Constitution or by any law made by Parliament upon the Union or authorities thereof. This leads us to another aspect of the problem of considerable difficulty and importance. The subject 'search and seizure', is a field which has not come before the court with considerable frequency, but this is a hard fact of life which the citizen does encounter very often. The executive power of 'search and seizure' is a necessary concomitant of a welfare State. It tends to promote the well being of the nation. Many questions arising in the field of search and seizure are factual in nature. They involve varying degrees of difference among the infinitely diverse facts. Every factual variation presents not only a new problem, but also a new constitutional question. It is a limitless area in which different issues may arise with vast variat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivate account from the State of Uttar Pradesh to various other States. The instructions conveyed by the State Government by the impugned tele printer message dated March 31, 1981, were a direct sequel to the Centre's directives contained in its earlier tele printer message. It was intended and meant to achieve three main objectives, namely, (1) to provide price support in wheat to purchasers with a view to sustain, maintain and maximise the procurement of wheat; (2) to prevent hoarding and black marketing; and (3) to provide for equitable distribution and availability of wheat at fair prices. These directions were obviously meant to sub-serve the object of the legislation and were in public interest. These cases were argued with much learning and resource particularly with reference to the rule of law and the consequent limitations on the executive power of the State under Art. 162 to 'trench' upon the fundamental right to carry on trade or business guaranteed under Art. 19 (1) (g) and the freedom of trade, commerce and intercourse throughout the territory of India guaranteed under Art. 301 of the Constitution. It necessarily involves a claim by the State that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... modity for the defence of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein. Sub-s. (2) thereof provides that without prejudice to the generality of the powers conferred by sub-s. (1) an order made thereunder may provide for any of the matters enumerated therein. Sub-s. (5) provides that any order made under this section shall in the case of an order of a general nature or affecting a class of persons, be notified in the Official Gazette. By virtue of the delegation of powers under s. 5 of the Act the State Government in relation to such matters and subject to such conditions as may be specified, may exercise the powers of the Central Government under s. 3 Clause (j) of sub-s. (2) of 3 provides that the Central Government or the State Government, as the case may be, may by order provide: For any incidental and supplementary matters, including, in particular, the entry, search or examination of premises, aircraft, vessels, vehicles or other conveyance and animals, and the seizure by a person authorised to make such entry, search or examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re could be considered to be 'law' or an order having the force of law placing reasonable restriction on the freedom to carry on any occupation, trade or business guaranteed under Art. 19(1)(g) read with Art. 19(6) of the Constitution or on the freedom of trade, commerce and intercourse throughout the territory of India guaranteed under Art. 301 o the Constitution. It is further to be considered whether the seizure of wheat in transit was with authority of law. It is submitted that although the impugned tele printer message dated March 31, 1981 was in the nature of executive instructions of the State Government to the Regional Food Controllers of the various regions to secure compliance with the two Control Orders, it had the force of law. It is pointed out that under licence conditions Nos. 11, 12 and 13 of the licence issued in Form B under cl. 4 of the 1976 Order, a dealer is required to comply with any direction that may be given by the State Government in regard to purchase, sale or storage for sale of food grains, to furnish such information relating to his business as may be demanded of him and to carry out such instructions as may, from time to time, be given, by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ights. The Court must balance the individual's rights of freedom of trade under Art. 19(1)(g) and the freedom of inter State trade and commerce under Art. 301 as against the national interest. Such a limitation is inherent in the exercise of those rights. Under Art. 19(1)(g) of the Constitution, a citizen has the right to carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of the State to make a law imposing reasonable restrictions under cl. (6). The principles underlying in cls. (5) and (6) of Art. 19 are now well settled and ingrained in our legal system in a number of decisions of this Court, and it is not necessary to burden this judgment with citations. The expression 'reasonable restriction' signifies that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public. The test of reasonableness, wherever prescribed, should be applied to each individual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable in all cases. The restriction which arb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commerce or intercourse with or within that State as may be required in the public interest, provided that no Bill or amendment for the purpose of cl. (b) shall be introduced or moved in the legislature of a State without the previous sanction of the President. Although Art. 301 guarantees that trade, commerce and intercourse throughout the country shall be free, the right to carry on inter-State trade and commerce may be subject to reasonable restrictions in the interests of the general public. The word 'free' in Art. 301 does not mean freedom from laws or from regulations. Art. 301 guarantees freedom of trade, commerce and intercourse throughout the country from any State barriers. It declares that subject to the other provisions of Part XIII, trade, commerce and intercourse throughout the territory of India shall be free. The whole object was to bring about the economic unity of the country under a federal structure, so that the people may feel that they are members of one nation. One of the means to achieve this object is to guarantee to every citizen the freedom of movement and residence throughout the country. That is achieved by Art. 19(1)(d) and (e). No less impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... merely transported through the State of Uttar Pradesh in the course of inter-State trade and commerce. If that be so, then there was no contravention of any order issued by the Central Government under s. 3 or by the State Government under s. 3 read with s. 5 of the Act. If, on the contrary, the wheat had been purchased by them at Agra or nearby places within the State of Uttar Pradesh, the question would arise whether such purchase, storage or sale of wheat was in contravention of any of the two Control Orders. In case there was such contravention of any of the provisions of the two Control Orders, then there was undoubtedly the power of search and seizure. The case of the State Government before us was that the source of power to effect the seizure was the two Control Orders. It was asserted that the wheat was not being transported during the course of inter-State trade and commerce from the Union Territory of Delhi to various other States, but had, in fact, been purchased at Agra and was being lifted from the State of Uttar Pradesh and had therefore to be seized at the check-post at Saiyan and at Agra. Under cl. 3 of 1976 Order, no person can carry on business as a dealer or com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d stock'. If really the Delhi traders had purchased the excess stock of wheat from wholesale dealers, commission agents or retailers in the State of Uttar Pradesh, as is alleged, it is possible to contend that there was a contravention of the provisions of cl. 4 of the 1978 Order. The question whether the seizure was for any contravention of any Order issued under s. 3 of the Act has to be determined by the Additional District Magistrate (Civil Supplies), Agra, on the evidence adduced by the parties before him. The facts being controverted, the petitioners have no right to relief under Art. 32 of the Constitution. Each of the petitioners has filed a sheaf of documents showing that the wheat had been purchased in the open market in Delhi and elsewhere, that the trucks laden with their wheat were accompanied by the relevant bills, goods receipts, inter- State transit passes etc., that the trucks in question were allowed to cross the check-posts at Kotwan on the border between the Union Territory of Delhi and the State of Uttar Pradesh. but were seized either at the check-posts at Saiyan on the border between the States of Uttar Pradesh and Madhya Pradesh or at Agra, while they ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de to the police in India, and the Indian police were not authorised to make any investigation. In those circumstances, the Court held that the seizure was not with the authority of law and amounted to an infringement of the fundamental right under Art. 31(1). This view was reaffirmed in Bishan Das's case (supra). The effect of the Constitution (Fourth) Amendment Act, 1955, is that there can be no 'deprivation' unless there is extinction of the right to property. It is urged that the seizure of wheat was not with a view to extinction of the rights of the petitioners, but the property in the seized wheat was theirs. No doubt, the wheat had to be sold, as it was subject to speedy and natural decay, but the petitioners are entitled to the sale proceeds, if ultimately it is found by the Additional District Magistrate (Civil Supplies), Agra, that there was no contravention by them of an order issued under s. 3 of the Act. It is not necessary for us to deal with the question whether an illegal seizure amounts to 'deprivation' of property within the meaning of Art. 300A for purposes of this case, as the State Government does not dispute the right of the petitioners ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21, 1981, issued by the State Government of Uttar Pradesh, by which cl. 4 of the Uttar Pradesh Food grains (Procurement and Regulation of Trade) Order, 1978, has been amended, particularly on three grounds, namely, (1) the impugned notification fixing the maximum limit of wheat permitted to be possessed by a wholesale dealer at 250 quintals, at a time, is an unreasonable restriction on the freedom of trade guaranteed under Art. 19(1)(g) of the Constitution; (2) there is no distinction made between a wholesale dealer and a commission agent in as much as the maximum limit of wheat allowed to be possessed by them is the same, i.e., 250 quintals at a time and the fixation of such limit in the case of a wholesale dealer is arbitrary, irrational and irrelevant and thus violative of Art. 14 of the Constitution; and (3) the instructions conveyed by the State Government by its tele printer message dated March 31, 1981, placing restrictions on movement of wheat by traders on private account from the State of Uttar Pradesh to various other States and on inter- district movement of wheat within the State, were in breach of their fundamental right under Art. 19(1)(g) read with Art. 301 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her arbitrary or is of an excessive nature. The fixation of the stock limit of wheat to be possessed by wholesale dealers, at any time, at 250 quintals is an important step taken by the State Government to obviate hoarding and black-marketing in wheat which is in short supply. It is hardly necessary to emphasise the extent and urgency of the evil sought to be remedied thereby. Perhaps fixation of the minimum limit of wheat permitted to be possessed by a wholesale dealer at 250 quintals, at a time, is too low, but the restriction so imposed cannot be treated to be arbitrary or of an excessive nature, beyond what is required in the national interest. It is a matter of common knowledge that wholesale dealers of food grains mainly operate in large cities and towns and have the means and capacity to manipulate the market by withholding stocks of a commodity. There was need to check such speculative tendencies in the trade. It was therefore felt expedient to re-fix the stock limit of wheat for wholesale dealers at 250 quintals at a time, as in the case of a commission agent. The underlying idea is that the wholesale dealers should be allowed to continue their trading activities within re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tution. One further point requires to be noticed. The contention that the action taken by the State Government in issuing the impugned tele printer message amounts to an 'intrusion' on the fundamental right to carry on trade or business under Art. 19(1)(g) or on the freedom of trade, commerce and intercourse under Art. 301 of the Constitution appears to be wholly misconceived. As already stated the instructions conveyed by the State Government by the impugned tele printer message imposing the requirement for the making of an endorsement by the Deputy Marketing Officer or the Senior Marketing Officer or the physical verification of stocks of wheat during the course of transit, are not a 'restriction' on the fundamental right to carry on trade or business guaranteed under Art. 19(1)(g) or on the freedom of trade, commerce and intercourse under Art. 301. These are nothing but regulatory measures to ensure that the excess stock of wheat held by a wholesale dealer, commission agent or a retailer is not transported to a place outside the State or from one district to another. Even if these requirements are considered to be a 'restriction' on inter- State or int ..... X X X X Extracts X X X X X X X X Extracts X X X X
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