PETITIONER:
K.RAMANATHAN
Vs.
RESPONDENT:
STATE OF TAMIL NADU & ANR.
DATE OF JUDGMENT27/02/1985
BENCH:
SEN, A.P. (J)
BENCH:
SEN, A.P. (J)
VARADARAJAN, A. (J)
ERADI, V. BALAKRISHNA (J)
CITATION:
1985 AIR 660 1985 SCR (2)1028
1985 SCC (2) 116 1985 SCALE (1)510
ACT:
Constitution of India 1950, Arts 14, 19 (1) (2) (p) and
301
Essential Commodities Act, 1955, ss. 3 (1) & (2) and
5-Power under sub-s. (2)-Whether general in nature-Sub-s.
(2)-Whether confers any fresh power-Whether illustrative of
power conferred by sub-s (1)-Cl. (d) of sub-s. (2)-Whether
contains specific power-Making of Orders by State Government
under cls. (a) to (f) of sub-s. 2-Source of power-Whether
flows from sub-s. (1) - Delegation of-By notification under
s. 5
Essential Commodities-Tamil Nadu Paddy (Restriction on
Movement) Order. 1982-Cl. 3 (1A). issued by State Government
under s. 3 read with Ministry of Agriculture (Department of
Food) Order, S. R. 800 dt. June 9 1978-Placing ban on
transport, movement or otherwise carrying of Paddy out of
certain specified are as in the Stale-Whether in excess of
delegated powers -Whether violative of Articles 14, 19 (1)
(g) and 301,
HEADNOTE:
Section 3 (2) (d)-Whether regulating includes in the
context prohibiting.
Interpretation of statutes-Whether some words may be
used in different senses in the Same sentence.
Words and phrases-Regulation and Prohibiting-Meaning
and scope of.
Due to failure of monsoon in the years 1981-82, there
was a steep fall in production of paddy and it became
necessary for the State Government of Tamil Nadu to build up
its buffer stocks for distribution through the public
distribution system throughout the State. ID the
circumstances, the State Government had no other alternative
but to introduce a monopoly procurement scheme with a view
to procure the maximum stock of paddy by banning purchase by
traders. This was in addition to compulsory levy on dealers
of paddy and rice to the extent of 50% under cl. 5 (1) of
the Tamil Nadu Paddy & Rice (Regulation of Trade) Order,
1974.
1029
In exercise of the powers conferred under s. 3 of the
Essential Commodities Act, 1955 read with the Government of
India, Ministry of Agriculture (Department or Food) Order
GSR 800 dated Juno 9, 1978 issued under s. 5 of the Act with
the prior concurrence of the Government of India, the State
Government accordingly promulgated the Tamil Nadu Paddy
(Restriction on Movement) Order, 1982 on October 22, 1982.
Clause 3 (1A) of the Order prohibited transport, movement or
otherwise carrying of paddy outside the State by road or
rail or otherwise except under and in accordance with the
conditions of a permit issued by an officer authorised in
that behalf. By GOMS No. 293 dated May 11, 1982 the State
Government introduced sub-cl. (IA) to cl. 3 of the Order
which prohibited transport; movement or otherwise carrying
of paddy outside places notified by cl. 3 of the Order by
road or rail or otherwise. Thereafter, on June 20, 1983, the
State Government made a further amendment to the newly
inserted cl. 3 (IA) which clamped a complete ban on
transport, movement or otherwise carrying of paddy outside
the Thanjavur District, Chidambaram and Kattumannarkoil
Taluks in South Arcot District and Musiri, Kulithalai,
Lalgudi and Tiruchirapalli Talulks in Tiruchirapalli
District.
The appellant along with other traders assailed the
constitutional validity of cl. 3 (IA) of the Order, as
amended, which placed a complete ban on transport, movement
or otherwise carrying of paddy outside the Thanjavur
district and the aforesaid Taluks in South Arcot and
Tiruchirapalli districts as being violative of Arts. 14,
19(1)(g) and 301 of the Constitution The High Court repelled
the contentions and dismissed the writ petitions.
In the appeal, the appellant contended that the
impugned cl. 3 (IA) of the Order was ultra vires the State
Government on two grounds, namely: (1) The delegation of a
specific power under s 3 (2) (d) of the Act to State
Government by the aforesaid notification dated June 9, 1978
issued by the Central Government under s. 5 of the Act to
regulate storage, transport, distribution, disposal etc. Of
an essential commodity, in relation to foodstuffs, does not
carry with it The general power of the Central Government
under sub-s. (1) of s. 3 to regulate or prohibit the
production, supply and distribution thereof and trade and
commerce therein. And (2) That the word regulating' in cl.
(d) of s. 3 (2) of the Act does not take in 'prohibiting'
and as such there cannot be a total prohicition on
transport, movement or otherwise carrying of paddy out of
the areas in question under (d) but only regulation of such
activities in the course of trade and commerce by grant of
licences or permits.
Dismissing the appeal,
^
HELD: 1. Sub-s (2) of s. 3 of the Essential
Commodities Act, 1955 offers no fresh powers but is merely
illustrative of the general poweres by sub-s. (1) of s. 3
without exhausting the subjects in relation to such powers
can be exercised. Although cl. (d) of sub-s. (2) of s. 3
with a specific power, the general power to issue the
impugned
1030
order flows from the provisions of sub-s. (1) of s.3 which
stands delegated to the State Government by virtue of the
notification issued under s. S of the Act. [1042H; 1043B]
Santosh Kumar Jain v. The State, [I951] SCR 303, and
Emperor v. Sibnath Banerjee, LR [1945]] 72 IA 241, followed.
Nanalal Navalnathji Yogi v. Collector of Bulsar & Ors.
AIR 1981 Guj. 87. approved.
Atulya Kumar v. Director of Procurement & Supply, AIR
1953 Cal. 548, approved. _
Tarakdas Mukherjee v. State of West Bengal, [1978] 2
Cal. L.J. 398 and Lila Biswas v. State of West Bengal,
[1918-89] CWN 539, approved.
Sujan Singh v. State of Haryana, AIR 1998 Pun, 363,
State of Uttar Pradesh v. Suraj Bhan, AIR 1972 All. 401 and
Bejoy Kumar Routrai v. State of Orissa AIR [1976] Orr. 138,
overruled.
2. The word 'regulation' cannot have any rigid or
inflexible meaning as to exclude 'prohibiting'. It is
difficult to define the word 'regulate' as having any
precise meaning. It has different shades of meaning and must
take its colour from the context in which it is used having
regard to the purpose and object of the legislation, and the
Court must necessarily keep in view the mischief which the
legislature seeks to remedy. The question essentially is one
of degree and it is impossible to fix any definite point at
which 'regulation' ends and prohibition' begins. The power
to regulate does not necessarily include the power to
prohibit, and ordinarily the word 'regulate' is not
synonymous with the word 'prohibit'. This is true in a
general sense and in the sense that mere regulation is not
the same as absolute prohibition. But the power to regulate
carries with it full power over the thing subject to
regulation and in obsence of restrictive words, the power
must be regarded as plenary over the entire subject. It
implies the power to rule, direct and control and- involves
the adoption of a rule or guiding principle to be followed
or the making of a rule with respect to the subject to be
regulated. The power to regulate implies the power to check
and may imply the power to prohibit under certain
circumstances, as where the best or only efficatious
regulation consists of suppression.
[1045G-H; 1046E-F
Narendra Kumar v. Union of India, [1960] 2 SCR 361
Slaitery v. Naylor, LR [1888] AC 446 and Municipal
Corporation of the City of Toronto v. Virgo, LR [1896] AC
88, Corpus Juris Secundum, vol. 76 at p. 611 and Webster s
Third New International Dictionary, vol II, p 1913 and
Thorter Oxford Dictionary, vol. II, 3rd edn., p. 1784,
referred to
State of Mysore v. H. Sanjeeviah, [1967] 2 SCR 361,
distinguish and limited.
1031
The source of power to issue an order under cl. (d) of
sub-s. (2) of A s. 3 of the Act being relatable to the
general powers of the Central Government under sub-s. (1) of
s. 3, there is no justification for giving a restricted
meaning to the word 'regulating,' in cl. (d) of sub-s. (2)
of s. 3 of the Act so as not to take in 'prohibiting'. A
word may be used in two different senses in the same
section. [1050B-C]
The Act is a piece of socio-economic legislation and
its predominant object is to provide in the interests of
general public, for the control of the production, supply
and distribution of, and trade and commerce in, certain
essential commodities. Such control can be exercised in a
variety of ways otherwise than by placing compulsory levy on
the producers, for example, by fixing a controlled price for
foodstuffs, by placing a limit on the stock of foodstuffs to
be held by a wholesale dealer, commission agent or retailer
by placing sales except in certain specified manners etc.
All these arc nothing but regulatory measures. Placing a ban
on inter-State or inter-State movement or export of
foodstuffs is one of the ways to regulate and control and
such ban prevents the spiral rise in prices of such
foodstuffs by artificial creation of shortage by
unscrupulous traders. The various Control Orders issued by
the Central Government under sub-s. (1) of s- 3 of the Act
or by the State Governments under s. 3 read with s. 5 have
introduced a system of checks and balances to achieve she
object of the legislation i.e. to ensure equitable
distribution and availability of essential commodities at
fair prices. Special public interest in an industry e. g.
that it is engaged in the production of a commodity vitally
essential to the community, may justify the regulation of
its production, supply and distribution and its trade and
commerce, provided such regulation is not arbitrary and has
a rational nexus with the object sought to be achieved.
[1048C-D; 1047F-H; 1048A]
If one part of the country or of a State is faced with
a famine or even acute shortage of foodstuffs. it is not
unreasonable for the Government to acquire foodstuffs from
the surplus areas and distribute the same in areas where
they are most needed. Since there was steep fall in
production of paddy due to failure of monsoons the State
Government of Tamil Nadu was justified not only to reimpose
compulsory levy on the producers of paddy to the extent of
50% but also to introduce a scheme for a monopoly purchase
of paddy by the Government with a view to build up its
buffer stock for distribution through the public
distribution system throughout: the State. [1049E-G]
State of Tamil Nadu v. Hind Stone & Ors. [19811 2 SCC
205, C. K Krishnan v. State of Tamil Nadu [1975] 2 SCR 715,
Krishan Lal Praveen kumar & Ors. v. State of Rajasthan &
Ors., [1981 4 SCC 550, Suraj Mal Kailash Chand & Ors, v.
Union of India & Ors., [1981] 4 SCC 554 and Bishamber Dayal
Chandra Mohan & Ors. v. State of U.P. & Ors., [1982] 1 SCR
1137, relied on.
1032
JUDGMENT:
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 11417
of 1983
From the Judgment and Order dated 14. 9. 1983 of the
High Court of Madras in W. P. N. 4615 of 1983.
K. Ram Kumar for the Appellant.
A. V. Rangam for the Respondents
The Judgment of the Court was delivered by
SEN, J. This appeal by special leave directed
against the judgment and order of the Madras High Court
dated September 14, 1983 raises a question of some
complexity. The question is as to whether cl. 3 (IA) of the
Tamil Nadu Paddy (Restriction on Movement) Order, 1982
issued by the State Government under s 3 of the Essential
Commodities Act, 1955 read with the Government of India,
Ministry of Agriculture (Department of Food) Order, a. s. R,
800 dated June 9, 1978, with the prior concurrence of the
Government of India, was ultra vires the State Government
being in excess of its delegated powers. That depends on
whether the delegation of a specific power under cl. (d) of
sub-s. (2) of s. 3 of the Act by the aforesaid notification
issued by the Central Government under s. 5 to regulate the
storage, transport, distribution, disposal, acquisition, use
or consumption of an essential commodity, in relation to
foodstuffs, carries with it the general powers of the
Central Government under sub-s. (1) of s. 3 of the Act to
regulate or prohibit the production, supply and distribution
of essential commodities and trade and commerce therein.
There is a conflict OF opinion on this question between
different High Courts. Hence we thought it fit to grant
special leave and heard the appeal on merits. After hearing
the parties, we dismissed the appeal by an order dated
December 5, 1983 for reasons to follow. The reasons
therefore are set out below .
Briefly stated, the facts are these. In the State of
Tamil Nadu, there has been a system of imposing levy on
purchase of paddy by traders in vogue since the year 1970.
This was imposed by cl. 3 (5) (i) of the Tamil Nadu Paddy
and Rice (Licensing, Regulation & Disposal of Stock) Order,
1968 issued by the State Government under s. 3 of the Act
with the prior concurrence of the Government
1033
Of India. Cl. 3 (5) (i) empowered the State Government to
impose A and collect upto 50% of the stocks by way of levy
on purchases of paddy by traders on payment of price
specified from time to time. The said Order was replaced by
the Tamil Nadu Paddy and Rice (Regulation of Trade) Order,
1974 issued under s. 3 of the Act with the prior concurrence
of the Government of India. Cl. 5 (1) of this Order empowers
the State Government to impose and collect levy upto 50% of
the purchase of paddy and rice by the dealers other than
retail dealers and they are paid prices notified by the
Government. This clause was subsequently amended in 1976.
The power to impose and collect levy on the purchase of
paddy and rice was exercised by the State Government under
s. 3 of the Act with a view to procure the stock for
distribution of rice to about 118 lakhs family card-holders
throughout the State through nearly 17, 800 fair price
shops. A review of the food situation in the latter half of
1980 and the beginning of 1981 revealed that the stock of
paddy and rice with the Government was not adequate to meet
the requirements under the public distribution system. The
State Government in the Food & Cooperation Department
accordingly, decided to enforce the levy on traders by G. O.
Ms. No. 33 dated January 1, 1981 and to collect 40% levy on
the purchases of paddy and rice by dealers even though it
had the power to impose levy upto 50% at prices fixed by it
from time to time. Thereafter, the Government in the Food &
Cooperation Department by G. O. MS. No. 765 dated October 1,
1981 increased the levy from 40% to 50% from kuruvai season
1981.
There was a failure of monsoon in the State in the
years 1981-82 and the off take of rice in the fair price
shops had increased from 34,000 tonnes in April to 85,000
tonnes in December 1982. Due to failure of south-west
monsoon in the year 1982 and consequent poor rainfall, the
storage level in the Mettur reservoir fell. As a result of
this there was a steep fall in kuruvai cultivation of paddy.
In Thanjavur district alone, the acreage of paddy
cultivation was reduced from 4. 5 lakhs acres to 2.97 lakhs
acres. Added to this, the north-east monsoon in the State
also failed causing a serious fall in the production of
paddy. In the circumstances, the State Government in the
Food & Cooperation Department had no other alternative but
to introduce a monopoly procurement scheme of paddy with a
view to procure the maximum stock of paddy by banning the
purchases by traders.
1034
In exercise of the powers conferred under s. 3 of the
Essential Commodities Act, 1955 read with the Government of
India, Ministry of Agriculture (Department of Food) Order,
G. S. R. 800 dated June 9, 1978, with the prior concurrence
of the Government of India, the State Government promulgated
the Tamil Nadu Paddy (Restriction on Movement) Order, 1982
on October 22, 1982. Cl. 3 (1) of the Order provides:
“No person shall transport, move or otherwise
carry or prepare or attempt to transport, move or
otherwise carry, or aid or abet in the transport,
movement or otherwise carrying of paddy outside the
State by road/rail or otherwise except under and in
accordance with the conditions of a permit issued by an
authorized officer.”
On January 22, 1983, the State Government Department
issued G. O. MS. No. 42 for purchase of the entire
marketable surplus of paddy in Thanjavur District by the
Government through the Tamil Nadu Civil Supplies Corporation
as an agent of the Government. On February , 1982, the
State Government in the Food & Co-operation Department
issued another G. O. Ms. No. 84 extending the provision made
with regard to Thanjavur district of Chidambaram and
Kattumannarkoil taluks in South Arcot district and Musiri,
Kulithalai, Lalgudi and 7 Tiruchirapalli taluks in
Tiruchirapalli district.
On May 11, 1983, the State Government in the Food &
Co-operation Department issued G. O. Ms. No. 293 introducing
sub-cl. (1A) to cl. 3 of the Order. The newly inserted cl.
(IA) is as follows:
“No person shall transport, move or otherwise
carry or prepare or attempt to transport, move or
otherwise carry, or aid or abet in the transport,
movement or otherwise carrying of paddy outside the
places notified under Clause 3 of the Tamil Nadu Paddy
& Rice (Restriction of Rates) Order, 1974 by road/rail
or otherwise.”
Thereafter, on June 20, 1983, the State Government in
the Food & Cooperation Department by G. O. Ms. No 413 made a
further amendment to the newly introduced sub-cl. (1A) of
cl. 3. The amended cl. (IA) of cl. 3 is follows:
1035
“No person shall transport, move or otherwise
carry or prepare or attempt to transport, move or
otherwise carry, or aid or abet in the transport,
movement or other wise carrying of paddy outside the
Thanjavur District, Chidambaram and Kattumannarkoil
Taluks in South Arcot District and Musiri, Kulithalai,
Lalgudi and Tiruchirapalli Taluks in Tiruchirapalli
District.”
These various orders were issued by the state
Government in exercise of the powers conferred by s. 3 of
the Act read with the Government of India, Ministry of
Agriculture (Department of Food) Order, G. S. R. 800 dated
June 9, 1978 which is set out below: C
“MINISTRY OF AGRICULTURAL AND IRRIGATION
(DEPARTMENT OF FOOD)
ORDER
New Delhi, the 9th June, 1978.
G. S. R. 800-In exercise of the powers conferred by s.
5 of the Essential Commodities Act, 1955 (10 of 1955), and
in supersession of the Order of the Government of India in
the late Ministry of Agriculture (Department of Food) No. G.
S. R. 316 (E) dated the 20th June, 1972, the Central
Government hereby directs that the powers conferred on it by
sub-s. (1) of s. 3 of the said Act to make orders to provide
for the matters specified in cls. (a), (b), (c), (d), (e),
(f), (h), (i), (ii) and (j) of sub-s. (2) thereof shall, in
relation to foodstuffs be exercisable also by a State
Government subject to the conditions-
(1) that such powers shall be exercised by a State
Government subject to such directions, if any, as may
be issued by the Central Government in this behalf;
(2) that before making an order relating to any
matter
specified in the said cls. (a), (c) or (f) or in regard to
distribution or disposal of foodstuffs to places outside the
State or in regard to regulations or transport of any
foodstuffs, under the said cl (d), the State Government
shall also obtain the prior concurrence of the Central
Government and
1036
(3) that in making an order relating to any of the
matter specified in the said cl. (i) the State
Government shall authorize only an officer of
Government.
Sd/-K. Balakrishnan,
Dy. Secretary to the Government of India
(No. 3 (Genl) (1)/78-D&R (1) 59).”
The appellant and various other agriculturists of
Thanjavur district and the aforesaid traditionally rice
growing areas of South Arcot and Thiruchirapalli districts
challenge the constitutional validity of cl. 3 (1A) of the
Order placing a complete ban on the transport, movement or
otherwise carrying of paddy outside Thanjavur district and
the aforementioned taluks of South Arcot and Thiruchirapalli
districts by petitions under Art. 226 of the Constitution in
the High Court. There were as many as 300 writ petitions in
the High Cort which were disposed of by the judgment under
appeal. The validity of cl 3 (IA) of the Order was assailed
on three main grounds: (1) Cl. 3 (1A) was wholly arbitrary
and irrational and thus violative of Art. 14 of the
Constitution. (2) Cl. 3 (IA) was in excess of the delegated
powers conferred on the State Government under s. 3 of the
Act by the aforesaid G. S. R 800 dated June 9, 1978 issued
by the Central Government under s. 5 of the Act. And (3) The
total ban on movement of paddy from out of Thanjavur
district and the aforesaid taluks of South Arcot and
Thiruchirapalli districts by cl. 3 (1A) of the Order was an
unreasonable restriction on the freedom of trade and
commerce guaranteed under Art. 19 (l) (g) and also infringes
the freedom of inter-State trade, commerce and intercourse
under Art. 301 of the Constitution. The High Court repelled
all these contentions.
Shri P. Govindan Nair, learned counsel appearing for
the appellant argued the case with much learning and
resource. Learned counsel with his usual fairness did not
advance some of the contentions raised before the High Court
as they were apparently misconceived. He has confined his
submissions to only two grounds, namely: (l)Cl. 3 (IA) of
the impugned Order issued by the State Government under s. 3
of the Act read with G. S. R. 800 dated June 9, 1978 issued
by the Central Government under s. 5 of the Act with the
prior concurrence of the Government of India placing a ban
on the transport, movement or otherwise carrying of
1037
paddy from out of Thanjavur district, the two taluks of
South Arcot district and the four taluks of Thiruchirapalli
district, was ultra vires the State Government being in
excess of the delegated powers. It is urged that the
delegation of a specific power under cl. (d) of subs. (2) of
s. 3 of the Act by the aforesaid notification issued by the
Central Government under s. 5 of the Act to regulate the
storage, transport, distribution, disposal etc. Of an
essential commodity, in relaston to foodstuffs, does not
carry with it the general power of the Central Government
under sub-s. (l) of s. 3 to regulate or prohibit the
production, supply and distribution thereof and trade and
commerce therein. And (2) The word ‘regulating’ in cl. (d)
of sub- s. (2) of s. 3 of the Act does not take in
‘prohibiting’ for the words ‘regulating’ and ‘prohibiting’
denote two distinct and separate attributes of power and
they are mutually exclusive Otherwise according to learned
counsel, there was no point in the Legislature using both
the words ‘regulating’ and ‘prohibiting’ in sub-s. (1) of s.
3 of the Act and the words ‘regulating’ and ‘prohibiting’
differently in various clauses of sub-s. (2) thereof. It is
urged that there cannot be a total prohibition on transport,
movement or otherwise carrying of paddy out of the areas in
question under cl. (d) of subs. (2) of s 3 but only
regulation of such activities in the course of trade and
commerce by grant of licences or permits The learned counsel
is fortified in his submissions by the decisions of the
Punjab, Allahabad and Orissa High Courts in Sujan Singh v
State of Haryana,(1) State of Uttar Pradesh v. Suraj Bhan(2)
and Bejoy Kumar Routrai v. State of Orissa(3) and he
questions the correctness of the decision of the Gujarat
High Court in Nanalal Navalnathji Yogi Collestor of Bulsar&
Ors.(4) taking a view to the contrary. We are afraid, we are
unable to accept any of the contentions advanced by him.
In order to appreciate the contentions advanced, it
would be convenient to set out the relevant statutory
provisions. Sub-s. (1) of s. 3 of the Act is in these terms:
“3 (1). Power to control production, supply,
distribution etc. Of essential commodities-
(1). AIR [1968] Pun. 363
(2). AIR [.972] Al]. 401
(3). AIR [1976] Orr. 138
(4). [1981] . 87
1038
If the Central Government is of opinion that it
is necessary or expedient so to do for maintaining or
increasing supplies of any essential commodity or for
securing their equitable distribution and availability
at fair prices, (or for securing any essential
commodity 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) of s. 3 of the Act, insofar as material,
lays down:
” 3. (2) Without prejudice to the generality of
the powers conferred by sub-s. (1), an order made
thereunder may provide-
(a) * * * *
(b) * * * *
(c) * * * *
(d) for regulating by licences, permits or otherwise
the storage, transport, distribution, disposal,
acquisition, use or consumption of any essential
commodity.”
S. S of the Act provides:
“5. Delegation of powers-The Central Government
may, by notified order, direct that (the power to make
orders or issue notifications under s. 3) shall in
relation to such matters, and subject to such
conditions, if any, as may be specified in the
direction, be exercisable also by-
(a) such officer or authority subordinate to the
Central Government, or
(b) such State Government or such officer or
authority subordinate to a State Government.
as may be specified in the direction.”
1039
The infirmity in the argument lies in the
erroneous assumption A that the source of power on authority
to promulgate the impugned Order was derived by the State
Government under cl.(d) of sub-s (2) of s. 3 of the Act by
virtue of the delegation of powers by the Central
Governmnent by the notification No G. S. R. 800 dated June
9, 1978 under s 5 of the Act. The source of power to
promulgate an order of this description is derived from sub-
s. (1 of s. 3 of the Act, According to its plain language,
the aforesaid notification No. G. S. R. 800 provides that in
exercise of the powers conferred by s. 5 of the Act, and in
supersession of the earlier order of the Government of India
in the Ministry of Agriculture, Department of Food, No. G. S
R 316 dated June 20, 1972, the Central Government directs
that ‘the powers conferred on it by sub-s. (1) of s. 3 of
the Act’ to make orders to provide for matters specified in
clauses (a), (b), (c), (d), (e), (f), (h), (i), (ii) and (j)
of sub-s. (2) thereof shall, in relation to foodstuffs, ‘be
exercisable also by a State Government subject to the
conditions set out therein’. There must be some meaningful
effect given to the words ‘the Central Government hereby
directs that the powers conferred on it by sub-s. (1) of s.
3 of the Act to make orders etc.. shall be exercisable also
by a State Government subject to the conditions set out
therein’. On a plain construction, the first part of the
aforesaid notification in specific terms provides for the
delegation by the Central Government under s. 5 of the Act
of the powers conferred on it by sub-s. (1) of s. 3 of the
Act. That power is general in its terms and authorises inter
alia the promulgation of any order providing for regulating
or prohibiting the production, supply and distribution of,
and trade and commerce in, any essential commodity, insofar
as it is necessary or expedient so to do for maintaining or
increasing supplies or for securing their equitable
distribution and availability at fair prices. The second
part of the notification directs that the power to make
‘orders thereunder’ i.e. the power under sub-s. (1) of s. 3
of the Act shall be exercisable also by a State Government,
in relation to foodstuffs, with respect to ‘such matters’
viz. for the matters specified in clauses (a), (b), (c),
(d), (e), (f), (h), (i), (ii) and (j) of sub-s. (2) thereof
and subject to ‘such conditions’ set out therein. The
aforesaid notification G. S. R. 800 dated June 9, 1978
issued by the Central Government was strictly in conformity
with s. 5 of the Act. Of the three conditions, the one that
is material for our purpose is condition 2 It provides that
before making an order under cl. (d) of sub-s. (2) of s. 3
of the Act in regard to
1040
distribution or disposal of foodstuffs to places outside the
State or in regard to regulations or transport of any
foodstuffs, the State Government shall also obtain the prior
concurrence of the Central Government. It is manifest on a
plain reading that the aforesaid notification No. G. S. R.
800 dated June 9, 1978 was strictly in conformity with the
requirements of s. 5 of the Act.
Learned counsel for the appellant however strenuously
con tends that the delegation of powers by the Central
Government under s. 5 of the Act must necessarily be in
relation to ‘such matters’ and subject to ‘such conditions’
as may be specified in the notification. The whole attempt
on the part of the learned counsel is to confine the scope
and ambit of the impugned order to cl. (d) of sub-s ( .) of
g. 3 of the Act which uses the word ‘regulating’ and take it
out of the purview of sub-s. (1) of s. 3 which uses the
words ‘regulating or prohibiting’. That is not a proper way
of construction of sub-ss (l) and (2) of s. 3 of the Act in
their normal setting. The restricted construction of s. 3
contended for by learned counsel for the appellant would
render the scheme of the Act wholly unworkable. As already
indicated, the source of power to make an order of this
description is sub-s. (l) of s 3 of the Act and sub-s. (2)
merely provides illustration for the general powers
conferred by sub-s. (l). Sub-s. (2) of s. 3 of the Act
commences with the words ‘Without prejudice to the
generality of the powers conferred by sub-s. (1)’. It is
manifest that sub-s. (2) of s 3 of the Act confers no fresh
powers but is merely illustrative of the general powers
conferred by sub-s. (1) of s. 3 without exhausting the
subjects in relation to which such powers can be exercised.
The matter is no longer res integra. The question
directly arose for consideration by this Court in Santosh
Kumar Jain v. The State (1). There, the Court was
considering the validity of the Sugar and sugar Products
Control Order, 1947 issued by the then Provincial Government
of Bihar in exercise of the powers conferred on it by s. 3
of the Essential Supplies (Temporary Powers) Act, 1946 by
virtue of the delegation of powers by the Central Government
to make orders in relation to foodstuffs under cl. (j) of
sub-s. (2) of s. 3 of that Act. Patanjali Shastri, J.,
speaking for the Court explaining the relevant functions of
sub-ss. (1) and (2) of s. 3 of the Act, said:
(1) [1951] S.C.R. 303.
1041
“It is manifest that sub-s. (2) of s. 3 confers
no fur. A the or other powers on the Central Government
than what are conferred under sub-s. (1), for it is “an
order made thereunder” that may provide for one or two
other of the matter specifically enumerated in sub-s.
(2) which are only illustrative, as such enumeration is
“without prejudice to the generality of the powers
conferred by sub-s. (1)”. Seizure of an article being
thus shown to fall within the purview of sub-s. (l), it
must be competent for the Central Government or its
delegate, the Provincial Government, to make an order
for seizure under that sub-section apart from and
irrespective of the anticipated contravention of any
other order as contemplated in cl. (j) of sub-s. (2).”
The Court drew support for this view from the decision
of the Privy Council in Emperor v. Sibnath Banerjee.(‘) The
Federal Court in that case held r. 26 of the Defence of
India Rules made under cl (j) of sub-s (2) of s. 3 of the
Defence of India Act, 1939 to be ultra vires, which decision
was reversed by the Privy Council, The Court quoted with
approval the following observations of Lord Thankerton, J.
delivering the judgment of Privy Council:
“In the opinion of their Lordships, the
function of sub s. (2) is merely an illustrative one;
the rule-making power is conferred by sub-s. (1), and
“the rules” which are referred to in the opening
sentence of sub-s. (2) are the rules which are
authorized by, and made under, sub-s. (1); the
provisions of sub-s (2) are not restrictive of sub-s.
(1), as, indeed is expressly stated by the words
“without prejudice to the generality of the powers
conferred by sub-s (1).”
This accords with our view of the purport and effect
of sub-ss. (1) and (2) of s. 3 of the Act.
In Atulya Kumar v. Director of Procurement &
Supply(a), the challenge was to the validity of West Bengal
Foodgrains (Intensive Procurement Order, 1952 issued under
s. 3 (1) of the Essential Supplies (Temporary Powers) Act,
1946 by virtue of delegation of powers by the Central
Government under s. 5 of the Act which was
(1) LR [1945] 72 IA 241.
(2). AIR [1953] Cal. 548.
1042
almost in identical terms with s. 5 of the Act. Sinha, J.
(as he then was) held that the powers to promulgate the levy
order was derived from sub-s. (1) of s 3 of the Act; and
that the power was general in terms and authorized inter
alia the promulgation of any order providing for regulating
or prohibiting the production, supply and distribution of,
and trade and commerce in, any essential commodity, insofar
as it appears necessary or expedient to the State Government
for maintaining or increasing supplies or for securing their
equitable distribution and availability at fair prices. The
learned Judge after referring to the Privy Council decision
in Sibnath Banerjee’s case and that of this Court in Santosh
Kumar Jain’s case, observed :
“Sub-s. (2) of s. 3, commences with the words
“without prejudice to the generality of the powers
conferred by sub-s. (1)….etc.” This shows that sub-s.
(2) confers no fresh powers but provides illustrations
of the general powers conferred by sub-s. (1)……”
The learned Judge went on to observe:
“This is undoubtedly very incompetent drafting.
But I think that the meaning is reasonably clear. The
‘Matters Specified’ in sub-s. (2), being “without
prejudice” to the generality of the powers conferred by
sub-s (1) must be held to include such powers. Thus it
cannot be said that the general powers have not been
conferred upon the State, but only those specified in
cls. (a) to (j) of sub-s. (2). The only limitation is
with regard to the kind of essential commodity
concerned. The State has been given powers limited to
‘foodstuffs’ only.”
Quite recently, the Calcutta High Court in Tarakdas
Mukherjee v. State of West Bengal(1) and Lila Biswas v.
State of West Bengal 12) following the dictum of Sinha, J.
in Atulya Kumar’s case, supra, have held that the delegation
of specific powers to issue an impugned order of this nature
is derived from sub-s. (1) of s. 3 and that the provisions
of sub-s. (2) thereof are merely illustrative. It has
further held that the various clauses of sub-s. (2) of s. 3
of the Act cannot be made operative independently by any
notification
(1) [1978] 2 Cal. LJ 383
(2) [1978-9] 83 CWN 539
1043
under s. 5 of the Act without deriving the general powers
under sub-s. (1) of s. 3 of the Act. We are of the
considered opinion that the view of the Calcutta High Court
accords both with reason and principle. The view to the
contrary taken by the Punjab, Allahabad and Orissa High
Courts in Sujan Singh’s. Suraj Ban’s and Bejoy Kumar
Routrai’s cases, supra, dose not lay down good law. It must
accordingly be held that although cl. (d) of sub-s. (2) of
s. 3 of the Act deals only with a specific power, the
general power to issue the impugned order flows from the
provisions of sub-h. (1) of s. 3 which stands delegated to
the State Government by virtue of the notification issued
under s. S of the Act.
Upon that view, the question as to the construction of
the word ‘regulating’ occurring in cl. (d) of sub-s. (2) of
8.3 of the Act does not really arise. However, since the
question has been raised at the Bar we think it proper to
deal with it. As a matter of construction, Shri P- Govindan
Nair, learned counsel for the appellant contends that the
words ‘regulating’ and prohibiting’ connote two distinct and
separate attributes of power which are mutually exclusive
and therefore the word ‘regulating’ used in cl. (d) cannot
be given the same meaning as ‘prohibiting’. He urges that is
A sound rule of construction to give the same meaning to the
same word occurring in different parts of an Act of
Parliament. For the purpose of ascertaining the true meaning
of the word ‘regulating’ in the context of cl. (d) of sub-s.
(2) of s. 3, he has referred to us the different clauses of
that sub-section. A perusal of the various clauses (a) to
(j) indicates that while cls. (a), (d) and (g) speak of the
power to prohibit, and the remaining cls. (b), (c), (f),
(h), (i), (ii) and (j) though they do not mention that they
are illustrative of the power to regulate impliedly partake
of the character of that power. If the contention of the
learned counsel were to be accepted, it would imply that the
Central Government derives its power under sub-s. (1) of s.
3 of the Act as the power to promulgate any order providing
for regulating or prohibiting the production, supply and
distribution of, and trade and commerce in, any essential
commodity insofar as it appears necessary or expedient so to
do, for maintaining or increasing supplies or for securing
their equitable distribution and availability at fair
prices. If the Central Government were to make an order
under sub-s. (1) in respect of the matters specified in cl.
(d), it may not only regulate or control the storage,
transport, distribution etc. Of an essential commodity
including the
1044
movement of such foodstuffs by grant of licenses, permits or
otherwise, but also place a ban on the movement of wheat
from one place to another; but the State Government under
cl. (d) has only a regulatory power in relation thereto i.e.
to make an order only for regulating the movement of wheat
from one place to another by issue of the permits, licenses
or otherwise as provided for by cl. 3 of the impugned Order
but could not have issued cl. 3 (IA) placing a ban on
movement of wheat from one place to another. Although by
force of logic one may be driven to that conclusion that the
State Government has power to promulgate cl 3 of the
impugned Order but not cl. 3 (IA), there is no reason for us
to give such a restrictive meaning to the word ‘regulating’
appearing in cl. (d) of sub-s. (2) of s. 3 of the Act. it
would seem that the rule of construction is clearly y-well
recognized that a word may be used in two different senses
in the same section of an Act.
The world ‘regulation’ has not that rigidity of
moaning as never to take in ‘prohibition’. I must depend on
the context in which it is used in the statute and the
object sought to be achieved by the legislation. For a time
different views were expressed on the question whether the
word ‘regulation’ in Art. 19(2) to 19(6) includes
‘prohibition’ till the Court in Narendra Kumar v. Union of
India(1) answered it in the affirmative.
Shri P. Govindan Nair, learned counsel for the
appellant however contends that the word ‘regulation’ should
not be confused with the expression ‘reasonable
restrictions’ occurring in Art. 19(2) to (6) of the
Constitution and therefore the view t-taken in Narendra
Kumar’s case is not applicable. According to him, the word
‘regulation’ in cl. (d) of sub-. (2) of s. 3 of the Act does
not take in ‘prohibition’. He seeks to draw a distinction
between prohibition or prevention o-certain activities and
their regulation or governance. It is said that a power to
regulate or govern would imply continued existence of that
which is to be regulated or governed; and to be inconsistent
with absolute prohibition. He therefore submits that cl. 3
(IA) of the Order was ultra vires because the State
Government had only power under cl. (d) of sub-s, (2) of s.
3 of the Act to regulate production, supply and distribution
of, and trade and commerce in, essential commodities like
foodstuffs by
(1) [1960] 2 SCR 361.
1045
grant of permits, licenses or otherwise, in
contradistinction to the A power of the Central Government
under sub-s. (1) of s. 3 to regulate or prohibit such
production, supply and distribution of, and trade and
commerce in, essential commodities.
Learned counsel for the appellant placed reliance on
the decision of the Allahabad High Court in Suraj Bhan’s
case which proceeds Upon a decision of this Court in State
of Mysore v. Sanjeeviah(1) holding that power to regulate
does not include power to prohibit or restrict. In
Sanjeeviah’s case, the question arose whether two provisos
framed by the State Government under s. 37 of the Mysore
Forest Act, 1900 which empowered the making of rules to
regulate the transit of forest produce which placed absolute
prohibition against transportation of forest produce between
sunset and sunrise and a qualified prohibition in certain
circumstances, was beyond the rule-making power of the State
Government. The contention on behalf of the State was. that
the two provisos were regulatory and prohibitory- In
repelling the contention, the Court observed:
“The power which the State Government may
exercise is the power to regulate transport of forest
produce, and not the power to prohibit or restrict
transport. Prima facie, a rule which totally prohibits
movement of forest produce during the period between
sunset and sunrise is prohibitory or restrictive of the
right to transport forest produce.”
These observations do not lay down any rule of
universal application.
The word ‘regulation’ cannot have any rigid or
inflexible meaning as to exclude ‘prohibition’. The word
‘regulate’ is difficult to define as having any precise
meaning. It is a word of broad import, having a broad
meaning, and is very comprehensive in scope. There is a
diversity of opinion as to its meaning and its application
to a particular state of facts, some Courts giving to the
term a somewhat restricted, and others giving to it a
liberal, construction. The different shades of meaning are
brought out in Corpus Juris Secundum, vol. 76 at p. 611:
(1) [1967] 2 S.C.R. 361,
1046
“Regulate” is variously defined as meaning to
adjust; to adjust; order, or govern by rule, method, or
established mode; to adjust or control by rule, method,
or established mode, or governing principles or laws:
to govern to govern by rule; to govern by, or subject
to, certain rules or restrictions; to govern or direct
according to rule; to control, govern, or direct by
rule or regulations.
“Regulate” is also defined as meaning to
direct; to direct by rule or restriction; to direct or
manage according to certain standards, laws, or rules;
to rule; to conduct; to fix or establish; to restrain;
to restrict.”
See also: Webster’s Third New International
Dictionary, vol. II, p. 1913 and Shorter Oxford Dictionary,
Vol. II, 3rd edn., p. 1784.
It has often been said that the power to regulate does
not necessarily include the power to prohibit, and
ordinarily the word ‘regulate’ is not synonymous with the
word ‘prohibit’. This is true in a general sense and in the
sense that mere regulation is not the same as absolute
prohibition. At the same time, the power to regulate carries
with it full power over the thing subject to regulation and
in absence of restrictive words, the power must be regarded
as plenary over the entire subject It implies the power to
rule, direct and control, and involves the adoption of a
rule or guiding principle to be followed, or the making of a
rule with respect to the subject to be regulated. ‘the power
to regulate implies the power to check and may imply the
power to prohibit under certain circumstances, as where the
best or only efficacious regulation consists of suppression
It would therefore appear that the word ‘regulation’ cannot
have any inflexible meaning as to exclude ‘prohibition’. let
has different shades of meaning and must take its colour
from the context in which it is used having regard to the
purpose and object of the legislation, and the Court must
necessarily keep in view the mischief which the legislature
seeks to remedy.
The question essentially is one of degree and it is
impossible to fix any definite point at which ‘regulation’
ends and ‘prohibition’ begins. We may illustrate how
different minds have differently reacted as to the meaning
of the word ‘regulate’ depending on the context in which it
is used and the purpose and object of the legislation
1047
In Slattery v. Naylor,(l) the question arose before the
Judicial Committee of the Privy Council whether a bye-law by
reason of its prohibition internment altogether in a
particular cemetry, was ultra vires because the Municipal
Council had only power of regulating internments whereas the
bye-law totally prohibited them in the cemetry in question,
and it was said by Lord Hobhouse, delivering the judgment of
the Privy Council:
“A rule or bye-law cannot be held as ultra
vires merely because it prohibits where empowered to
regulate, as regulation often involved prohibition.”
In contrast in Municipal Corporation of the City of
Toronto v. Virgo,(2) where the question for decision was
whether a section or a bye-law prohibiting hawkers from
plying their trade, was competently and validity made, Lord
Davey delivering the judgment of the Privy Council while
laying down that a power to make a bye law to ‘regulate’ and
‘govern’ a trade does not authorize the prohibition of such
trade, and added:
“There is a marked distinction between the
prohibition or prevention of a trade and the regulation
or governance of it, and, indeed, a power to regulate’
and ‘govern’ seems to imply the continued existence of
that which is to be regulated or governed.”
The predominant object of the Act, as reflected in the
preamble is to provide, in the interests of the general
public, for the control of the production, supply and
distribution of, and trade and commerce in, certain
essential commodities. It is a piece of socioeconomic
legislation enacted in the national interest to secure
control over the production, supply and distribution of, and
trade and commerce in, essential commodities. The various
Control Orders issued by the Central Government under sub-s
(1) of s. 3 of the Act or by the State Government under s 3
read with s. 5 have introduced a system of checks and
balances to achieve the object of the legislation i.e. to
ensure equitable distribution and availability of essential
commodities at fair prices. Special public interest in an
industry e.g. that it is engaged in the production of a
commodity,
(1) LR [1888] AC 446
(2) LR [1896] AC 88
1048
vitally essential to the community, may justify the
regulation of its production, supply and distribution and
its trade and commerce, provided such regulation is not
arbitrary and has a rational nexus with the object sought to
be achieved.
the power to regulate or prohibit the production,
supply and distribution of, and trade and commerce in,
essential commodities may be exercised in innumerable ways.
One of the ways in which such regulation or control over the
production, supply and distribution of, and trade and
commerce in, an essential commodity like foodstuffs may be
exercised by placing a ban on inter Slate or inter-State
movement of foodstuffs to ensure that the excess stock of
foodstuffs held by a wholesale dealer, commission agent or
retailer is not transported to places outside the State or
from one district to another with a view to maximize the
procurement of such foodstuffs from the growers in the
surplus areas for their equitable distribution at fair
prices in the deficit areas. The placing of such ban on
export of foodstuffs across the State or from one part of
the State to another with a view to prevent outflow of
foodstuffs from a State which is a surplus State prevents
the spiral in prices of such foodstuffs by artificial
creation of shortage by unscrupulous traders. But such
control can be exercised in a variety of ways otherwise than
by placing compulsory levy on the producers, for example, by
fixing a controlled price for foodstuffs, by placing a limit
on the stock of foodstuffs to be held by a wholesale dealer,
commission agent, or retailer, by prohibiting sales except
in certain specified manner, etc. These are nothing but
regulatory measures.
We find no lawful justification for giving a
restricted meaning to the word ‘regulating’ in cl. (d) of
sub s. (2) of s. 3 of the Act as not to take in
prohibiting’. In State of Tamil Nadu v. M/S Hind Stone and
Ors.(‘) Chinnappa Reddy, J. referred with approval the
observations of Mathew, J. in G.K. Krishnan v. State of
Tamil Nadu(2) laying down that the word ‘regulation’ has no
fixed connotation and that its meaning differs according to
the nature of that, thing to which it is applied. The
learned Judge also observed:
“In modern statutes concerned as they are with
economic and social activities, ‘regulation’ must, of
necessity,
(1) [l981] 2 SCC 205
(2) [1975] 2 SCR 715
1049
receive so wide an inter-pretation that in
certain situations, A it must exclude competition to
the public sector from the private sector. More so in a
welfare State. It was pointed out by the Privy Council
in Commonwealth of Australia v. Bank of New South wales
[1949] 2 All. ER 755 (PC)-and we agree with what was
stated therein-that the problem whether an enactment
was regulatory or something more or whether a
restriction was direct or only remote or only
incidental involved, not so much legal as political,
social or economic consideration and that it could not
be laid down that in no circumstances could the
exclusion of competition so as to create a monopoly,
either in a State or Commonwealth agency, be
justified.”
In Krishan Lal Praveen Kumar & Ors- v. State of
Rajasthan & Ors.,(l) Suraj Mal kailash Chand & ors. v. Union
of India & Ors.,(a) and Bishamber Dayal Chandra Mohan & Ors.
v. State of U.P. & Ors.(3) the Court has held that a
restriction placed on movement of wheat from one State to
another and/on movement of wheat from one district to
another under cl. (d) of sub-s. (2) of s. 3 of the Act, to
be regulatory in character.
Surely when a part of the country is verging on
conditions of acute shortage or even famine, it is expected
of the government to procure foodstuffs from surplus areas
and transport the same for distribution in deficit areas. [D
the State of Tamil Nadu like some other States, the two
things most essential for the sustenance of human life are
rice and paddy. It is amply borne out from the material on
record that due to the failure of the southwest and north-
east monsoons in successive years, and the consequent poor
rainfall, there was a steep fall in production of paddy. In
the circumstances, the State Government had no other
alternative not only to reimpose compulsory levy on the
producers of paddy to the extent of 50%%, but also to
introduce a scheme for a monopoly purchase of paddy by the
Government with a view to build up its buffer stock for
distribution through the public distribution
(1) 11981] 4 SCC 550
(2) [1981] 4 SCC 554
(3) [1982] I SCR 137
1050
system throughout the State. If one part of the State is
faced with a famine or even acute shortage of foodstuffs, it
is not unreasonable for the Government to acquire foodstuffs
from the surplus areas and distribute the same in areas
where they are most needed. The source of power to issue an
order under cl.. (d) of sub-s. (2) of s. 3 of the Act being
relatable tot he general powers of the Central Government
under sub-s. (1) of s. 3, there is no reason for us to give
a restricted meaning to the word ‘regulating’ in cl. (d) of
sub-s. (2) of s. 3 of the Act so as not to take in
prohibiting’.
For the reasons aforesaid, the appeal must fail.
A.P.J. Appeal dismissed.
1051