{"id":271570,"date":"1961-09-29T00:00:00","date_gmt":"1961-09-28T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/mannalal-jain-vs-the-state-of-assam-and-others-on-29-september-1961"},"modified":"2015-03-26T09:24:11","modified_gmt":"2015-03-26T03:54:11","slug":"mannalal-jain-vs-the-state-of-assam-and-others-on-29-september-1961","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/mannalal-jain-vs-the-state-of-assam-and-others-on-29-september-1961","title":{"rendered":"Mannalal Jain vs The State Of Assam And Others on 29 September, 1961"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Mannalal Jain vs The State Of Assam And Others on 29 September, 1961<\/div>\n
Equivalent citations: 1962 AIR 386, 1962 SCR (3) 936<\/div>\n
Author: S Das<\/div>\n
Bench: Sinha, Bhuvneshwar P.(Cj), Das, S.K., Sarkar, A.K., Ayyangar, N. Rajagopala, Mudholkar, J.R.<\/div>\n
           PETITIONER:\nMANNALAL  JAIN\n\n\tVs.\n\nRESPONDENT:\nTHE STATE OF ASSAM AND OTHERS.\n\nDATE OF JUDGMENT:\n29\/09\/1961\n\nBENCH:\nDAS, S.K.\nBENCH:\nDAS, S.K.\nSINHA, BHUVNESHWAR P.(CJ)\nSARKAR, A.K.\nAYYANGAR, N. RAJAGOPALA\nMUDHOLKAR, J.R.\n\nCITATION:\n 1962 AIR  386\t\t  1962 SCR  (3) 936\n CITATOR INFO :\n E\t    1974 SC 366\t (95)\n R\t    1981 SC2001\t (5)\n RF\t    1981 SC2030\t (4,12)\n\n\nACT:\nFood  Control-Licence  for wholesale  dealing  in  rice\t and\npaddy-Licensing\t Order prescribing- conditions for  licence-\nstate Government issuing instructions to licensing grant  of\nauthorities  to\t grant licences\t to  co-operative  societies\nonly-Propriety of-Grant of license to co-operative societies\nand  refusal  to others\t Legality  of-Essential\t commodities\nAct,  1955(10  of  1955),  ss.\t3  and\t6-Assam\t  Foodgrains\n(Licensing and 'Control) Order, 1961, cl. 5.\n\n\n\nHEADNOTE:\nIn  exercise  of  the  powers conferred\t by  s.\t 3  of\tthe:\nEssential  commodities Art, 1955, the Assam Government\tmade\nthe  Assam Foodgrains (Licensing and Control)  Order,  1961.\nThis  Order  provided that no person could  do\tbusiness  in\nfoodgrains   including,\t  rice\tand  paddy,   in   wholesale\nquantities except under a licence issued thereunder.  Clause\n5  of, the Order laid down in sub. cls. (a) to\t(e)  matters\nwhich  the licensing authority shall, among  other  matters,\nwhich have regard to in granting or refusing a license\tsub-\ncl.  (e)  being\t whether the  applicant\t is  a\tco-operative\nsociety\".   In\t1959,  directions had been  issued  to\tall,\nlicensing  authorities by the Government that the rights  of\nmonopoly  procurement  had been given to  Apex\tCo-operative\nSociety.   The\tpetitioner applied for a  licence   but\t was\nrefused in view of the provisions of sub-cl. (e) of cl. 5 of\nthe  Order.  The  petitioner challenged the  order  refusing\nthe  licence  on the grounds: (1) that\tsub-clause  (e)\t was\nultra vires\n937\nas' it was beyond the powers granted to the State Government\nunder  s. 3 read with s. 5 of the Act, and (ii) that  sub-cl\n(e) had been applied in a discriminatory manner with a\tview\nto  create  a monopoly in favour of  the  Apex\tCo-operative\nSociety.\nHeld, (per C.J., Das and Ayyangar, JJ.), that sub-cl. (c) of\ncl.  5 of the Order was not ultra vires s. 3 read with s.  5\nof the Act, but the impugned,order rejecting the application\nof the petitioner was bad as it infringed the rights of\t the\npetitioner   guaranteed\t under\tArts,  14  and\t19  of\t the\nConstitution.\nSection\t 3 of the Act authorised the making of an  order  to\nachieve two objects, for maintaining or increasing  supplies\nof  essential commodities and for securing  their  equitable\ndistribution  and availability at fair\tprices.\t  Sub-clause\n(e) of cl. 5 of the Control Order,, 1961, which enabled\t the\nlicensing  authority  to' prefer a  cooperative\t society  in\ncertain\t circumstances in the matter of granting a  licence,\nwas  not  unrelated to the objects mentioned in s.3  of\t the\nAct.   A  co-operative society may, by reason of  the  place\nwhich  it  occupies in the village economy of  a  particular\narea, be in a better position for maintaining or  increasing\nsupplies  of  rice  and paddy and even\tfor  securing  their\nequitable distribution and availability at fair prices.\nRamanlal Nagardas v. M. S. Palnitkar<\/a>, A. I.R. 1961 Guj.\t 38,\ndistinguished.\n Sub-clause  (e) permitted the licensing authority  to\tgive\npreference to co-operative societies in certain cases but it\ndid not. have the effect of creating a monopoly in favour of\nco-operative  societies.  In the present case the  licensing\nauthority  refused  licence to the petitioner for  the\tonly\nreason\tand purpose of granting a monopoly  to\tco-operative\nsocieties;  it had administered the law in a  discriminatory\nmanner and for the purpose of achieving the ulterior  object\nof  creating  a monopoly in favour  of\tco-operatives  which\nobject\twas not within sub-cl. (a), The licensing  Authority\nwas influenced, not by considerations mentioned in cl. 5  of\nthe  Order,  but  by the instruction issued  by\t the'  State\nGovernment  to grant licences to cooperatives only.  It\t was\nnot proper for the, Government to issue instructions to\t the\nlicensing  authorities\twhen  they  were  required  to\t act\naccording to the provisions of law.\nPer Sarkar and Mudholkar,JJ.  Sub-clause (e) of cl. 5 of the\nOrder  served the object of s. 3 of the Act to\tmaintain  or\nincrease  the  supplies\t of essential  'commodities  and  to\nsecure their equitable distribution and availability at fair\nprices\tand Was not ultra vires.  Even it the Order  allowed\nonly  one  class, namely cooperative societies,\t to  do\t the\nbusiness and prohibited others. it would; still advance\t the\nobjects,  of,  the Act; and the prohibition of\tthe  others.\ndoing the business would amount. to, reasonable restrictions\nunder Art. 19(6).<\/a>\n\t\t\t    938\nNarendra Kumar v. The Union<\/a> of india, (ISM 2 S.C.R. 375\t and\nGlass Chatons Imports  a Users' Association v. The Union  of\nIndia, (W.P. 65 of 1959, unreported), relied on.\nThe  licensing authority had not exercised its\tpower  under\nsub-cl. (e) in a discriminatory manner in the prevent  case.\nThe  authority\twas  entitled to give preference  to  a\t co-\noperative society and that is what it has done.\t Though\t the\nresult of this preference was to prevent the petitioner from\ncarrying  on  his business, it was in the  circumstances,  a\nreasonable restriction on his right as it was necessary\t for\nsecuring  foodgrains  at reasonable prices and\tin  adequate\nquantities.   There were no directions given, by  the  State\nGovernment  in\t1961  to  licensing  authorities  to   grant\nlicences only to co-operative societies and it could not  be\nsaid  that the licencing authority had only carried out\t the\ndirections   of\t  the\tGovernment   and   had\t not   acted\nindependently.\t  In  fact,  the  Order\t itself\t carried   a\ndirection in sub-cl. (e) to give preference to\tco-operative\nsocieties.   The  co-operative societics formed a  class  by\nthemselves and a provision giving preference to such a class\nbetter served the objects of the Act, and had a clear  nexus\nwith the object of the Act and did not offend Art. 14.<\/a>\n\n\n\nJUDGMENT:\n<\/pre>\n
ORIGINAL JURISDICTION: Petition No. 303 of 1960.
\nUnder  Article\t32<\/a>  of the Constitution\t of  India  for\t the
\nenforcement of Fundamental Rights.\n<\/p>\n
C.   K. Daphtary, Solicitor-General of India, N.  Sharma, S.
\nC. Nath and R. Gopalakrisnan, ‘for the\tPetitioner.
\nM. C. Setalvad, Attorney-General `for India and Naunit\tLal,
\nfor the Respondents.\n<\/p>\n
1961.  September 29.  The Judgment of Sinha C. J., S. K. Das
\nand Rajagopala Ayyangar was delivered by
\nS.K.  DAS.  J.-This writ petition by one Mannalal  Jain\t was
\noriginally  filed  on  October\t17,  1960,  and\t the   order
\ncomplained  of\twas dated September 13, 1960.  This  was  an
\norder  made  by\t the Deputy  Commissioner,  Kamrup  Gauhati,
\nrejecting  an  application made by the\tpetitioner  for\t the
\ngrant  of a license for the year 1960 for dealing  ‘in\trice
\nand  paddy  under  the\trelevant  provisions  of  the  Assam
\nFoodgrains  (Licensing and Control) Order, 1960.  This\twrit
\npetition was put up for
\n939<\/span>
\nhearing in this Court on February 2, 1961.  The hearing was,
\nhowever, adjourned sine die, because it was stated before us
\nthat the period of licence for 1960 had already expired\t and
\na fresh application would have to be made for a license\t for
\n1961.\tA  fresh  application was accordingly  made  by\t the
\npetitioner  on\tFebruary 4, 1961.  But before that  date:  a
\nfresh Assam Foodgrains (Licensing, and Control) Order,\t1961
\nwas  made by the Governor of Assam and the application\tmade
\nby the Petitioner had to be dealt with under the new  Order.
\nNo  order having been made on this fresh application by\t the
\nDeputy\tCommissioner,  the petitioner moved  this  Court  by
\nmeans  of  a petition (C.M.P. No. 850 of  1961)\t asking\t for
\ncertain\t reliefs,  one of which was  that  the\trespondents,
\nnamely,\t the  licensing authorities, should be\tdirected  to
\nconsider  the application of the petitioner and grant him  a
\nlicense.  On April II, 1961 an order was made rejecting\t the
\napplication of the petitioner.\tThis order which is impugned
\nbefore us was in these terms.\n<\/p>\n
\t       Having  regard  to the existing\tlicenses  in
\n\t      these  areas (Mangaldai and Gauhati), and\t the
\n\t      quantity of foodgrains available therein,\t any
\n\t      further license would be superfluous.”\n<\/p>\n
When  the  petition was again put up for hearing on  May  1,
\n1961  the petitioner asked for time to amend  his  original,
\npetition, which related to the order refusing to grant him a
\nlicense for 1960.  This amendment became necessary by reason
\nof  the\t subsequent order passed on April 11,  1961,  quoted
\nearlier, by which the petitioner’s application for a license
\nfor   1961  was\t rejected.   This  amendment  was   allowed.
\nTherefore,  we\thave now to deal with the writ\tpetition  as
\namended by the petition dated May 5, 1961 (C.M.P. No.  1140.
\nof 1961).\n<\/p>\n
It is necessary now to state the relevant facts out of which
\nthe  petition has arisen.  The petitioner states that he  is
\nan  Indian  citizen carrying on a business dealing  in\trice
\nand paddy in the district of
\n\t\t\t    940<\/span>
\nKamrup\tin  the\t State of Assam.  In 1955  was\tenacted\t the
\nEssential  Commodities\tAct<\/a>,  1955 (Act\t 10  of\t 1955).\t  In
\nexercise  of the powers conferred by s. 3<\/a> of the  said\tAct,
\nread  with  a  notification by which the  said\tpowers\twere
\ndelegated  by  the Central Government to the  Government  of
\nAssam, the latter Government made an Order called- the Assam
\nFoodgrains (Licensing and Control) Order. 1958.\t The  result
\nof  this was that no dealing in rice and paddy in  wholesale
\nquantities was permissible unless the petitioner obtained a,
\nlicense\t  from\tthe  relevant  licensing   authority.\t The
\npetitioner  states that he obtained such a license in  1958.
\nThis license expired on December 31, 1958.  The case of\t the
\npetitioner  is that in 1959 also he carried on his  business
\nthough\tthere  is some dispute as to whether he\t obtained  a
\nlicense for that year.\tOn November 26, 1959, the petitioner
\nreceived a letter from the office of the Deputy Director  of
\nSupply,\t Gauhati, which said that his license would  not  be
\nrenewed after December 31, 1959.  This communication, it  is
\nstated, was the result of a decision taken by the Government
\nof  Assam on the advice of a body called the  Food  Advisory
\nCouncil to give a right of monopoly procurement of paddy  to
\na cooperative society in the district of Kamrup known as the
\nAssam Co. operative Apex Marketing Society Ltd.\t (respondent
\nNo. 6 before us).  In a letter dated November 13, 1959,\t the
\nDirector  of  Sup-ply,\tAssam, indicated the  policy  to  be
\nfollowed  to give effect to the decision aforesaid in  these
\nterms
\n\t      “The right of monopoly procurement in  respect
\n\t      of  Kamrup district including  Mangaldai\tSub-\n<\/p>\n
\t      division,\t   Taxpur   Sub-division,     Cachar
\n\t      district,\t Nowgong district  including  United
\n\t      Mikir   and  North  Cachar  Hills\t and   North
\n\t      Lakhimpur\t Sub-division has been given to\t the
\n\t      Co-  operative  Apex Marketing  Society.\t The
\n\t      Society  will procure paddy from the  ‘growers
\n\t      through various service Co-operative Societies
\n\t      spread over the district or sub-division. They
\n\t      941<\/span>
\n\t      will  procure all available surplus paddy\t and
\n\t      deliver  to  Supply  Department  the  quantity
\n\t      required for the buffer stock for those areas.
\n\t      Any  paddy  procured  by\tthem  which  is\t not
\n\t      required by us may be delivered to the mills.”
\nA  copy\t of  the  letter  was  forwarded  to  all  licensing
\nauthorities.  on  January  5,  1960,  the  Assam  Foodgrains
\n(Licensing and Control) Order, 1960, came into force.\tThis
\nreplaced  the earlier Order of 1958.  Clause 5 of  the\t1960
\nOrder was in these terms:\n<\/p>\n
\t      5.    Maiters to be- taken into  consideration
\n\t      for   granting  a\t license.-In   granting\t  or
\n\t      refusing\ta  license  under  this\t Order,\t the
\n\t      licensing authority shall among other  matters
\n\t      have regard to the following,- namely:-\n<\/p><\/blockquote>\n
\t      (a)   the stock of foodgrains available in the
\n\t      locality for which the license is required;\n<\/p><\/blockquote>\n
\t       (b)  the number of persons who  have  applied
\n\t      for  and\/or been granted licenser, in  respect
\n\t      of  the  foodgrains under this  Order  in\t the
\n\t      locality\n<\/p><\/blockquote>\n
\t      (c)   the\t business ordinarily carried  on  by
\n\t      the applicant; and\n<\/p><\/blockquote>\n
\t\t(d) the past activities of the applicant  as
\n\t      a licensee or business man\/firm:
\n\t       Provided that the State Government may
\n\t       from time to time modify the conditions for
\n\t       granting a license.”\n<\/p><\/blockquote>\n
On January 28, 1960 the petitioner made his application\t for
\na license for the year 1960.  This application was  rejected
\nby  an order dated February 17, 1960.  The reason given\t for
\nthe rejection was in these terms:\n<\/p>\n
\t       “You  are  hereby informed that as  ;the\t Co-
\n\t      operative\t Apex  Marketing  Society  has\tbeen
\n\t      given  the right of monopoly purchase  in\t the
\n\t      Kamrup  district this year, your case.  cannot
\n\t      be considered for issue of the license.\n<\/p><\/blockquote>\n
942<\/span><\/p>\n
This  reason  was  obviously based on  the  decision  as  to
\nmonopoly procurement, which the Government of\t  Assam\t had
\nadopted.\n<\/p>\n
Against-this  order the petitioner moved the High  Court  of
\nAssam  by  means of a writ petition under Art. 226<\/a>,  of\t the
\nConstitution.  The High Court allowed the petition mainly on
\nthe;  ground that the application, of the petitioner  for  a
\nlicense\t for, the year 1960 was not considered on merits  by
\nthe licensing authority in accordance with the provisions of
\nel. 5 of the Assam Foodgrains (Licensing and Control) Order,
\n1960.\tThe High Court did not go into the  larger  question
\nwhether\t the State could or could not create a\tmonopoly  in
\nthe matter of procurement of paddy under the said provisions
\nby  means of executive instructions issued to the  licensing
\nauthorities.  It however, quashed, the order dated  February
\n17,  1960  and\t issued a writ\tof  mandamus  directing\t the
\nlicensing  authority  to  consider the\tapplication  of\t the
\npetitioner on- merits and in accordance with the  provisions
\nof the aforesaid Control Order.\t Till June 7, 1960 no  order
\nwas passed by the licensing authority, and on that date\t the
\npetitioner made two applications to the High Court, one\t for
\ndirecting  the licensing authority to grant,, him &  license
\nfor  1960 and the other for taking action, for\tcontempt  of
\ncourt.\t A notice of these applications, it is\tstated,\t was
\nserved\ton  the respondents. On June 8, 1960  the  licensing
\nauthority made another order refusing to grant a license  to
\nthe  petitioner.  This order stated that “as the  Assam\t Co-
\noperative  Apex\t Marketing Society Ltd.,  had  already\tbeen
\ngranted\t a  license  to deal in rice and  paddy.,  with\t its
\nbranches  spread  all over the district, it  was  considered
\nunnecessary to grant further dealing licenses to  individual
\ndealers\t  for  the  same  area”.   On  June  9,\t  1960\t the
\napplications  earlier  made by the petitioner  to  the\tHigh
\nCourt on June 7, 1960 were withdrawn and a fresh application
\nwas  made on June 15, 1960, which, was directed against\t the
\norder dated June 8, 1960.  On
\n943<\/span>
\nAugust 10, 1960 the-High Court again set aside the order and
\ndirected  the  licensing authority to act  independently  of
\ninstructions received from the Government and, to apply\t its
\nmind  to  the merits of the application and,  decide  it  in
\naccordance  with  the  relevant\t provisions  of\t the   Assam
\nFoodgrains  (Licensing and Control) Order, 1960.  Again,  no
\norders\twere made by the licensing authority till  September
\n8, 1960 in accordance with the directions of the High Court,
\nand  the petitioner made two applications on that date:\t one
\nfor  enforcing\t the direction of the High  Court,  and\t the
\nother\tfor  initiating\t proceedings  in  contempt.    These
\napplications  were  admitted and it is stated  that  notices
\nwere  served  on the respondents,  including  the  licensing
\nauthority,  on\tthat very date.\t On September 13,  1960\t the
\nlicensing authority made another order, again rejecting\t the
\napplication  of\t the petitioner.  This\torder  stated  inter
\nalia:\n<\/p>\n
\t      “For the areas for which the application\thave
\n\t      been   made   the\t Assam\t Co-operative\tApex
\n\t      Marketing\t Society Ltd., has earlier.  applied
\n\t      for and has been granted license.\t This is  as
\n\t      relevant\tconsideration under Clause 5 (b)  of
\n\t      the  Assam Foodgrains (Licensing\tand  Control
\n\t      Order,  1960.  The stock of  foodgrains  avail
\n\t      able in the area can easily be procured by the
\n\t      party  already  given  license.\tBeing  a  on
\n\t      operative,  it  has better  facility  in\tthis
\n\t      respect.\n<\/p><\/blockquote>\n
\t      As  such, I do not find it necessary to  grant
\n\t      license  to the applicant.  The  petition\t is,
\n\t\t\t    therefore, rejected”.\n<\/p><\/blockquote>\n
This  time instead of going to the High Court of Assam,\t the
\npetitioner came here and filed his writ petition on  October
\n17,  1960  (Writ  Petition No. 303  of\t1960).\t Thereafter,
\ncertain\t proceeding  ,took place in this Court to  which  we
\nhave  earlier  referred\t in  the  first\t paragraph  of\tthis
\njudgment  The  amended\twrit petition as it  now  stands  is
\ndirected against the order of the licensing authority  dated
\nApril 11, 1961, by which it rejected the
\n\t\t\t    944<\/span>
\napplication  of the petitioner for a license for 1961.\t The
\nprovisions  of the Assam Foodgrains (Licensing and  Control)
\nOrder  1960  are no longer relevant, because a\tfresh  Order
\ncalled\tthe Assam Foodgrains (Licensing and Control)  Order,
\n19,61,\twas  made  by  the Governor  of\t Assam.\t  We  shall,
\nhereinafter  call  this\t the Control  Order,  1961.   It  is
\nnecessary ‘to read here cl. 5 of the Control Order, 1961.\n<\/p>\n
\t      5.    Matters  to be taken into  consideration
\n\t      for   granting  a\t license.-In   granting\t  or
\n\t      refusing\ta  license  under  this\t Order,\t the
\n\t      licensing\t  authority  shall,   among.   other
\n\t      matters,\t have  regard  to   the\t  following,
\n\t      namely:-\n<\/p>\n
\t      (a)   the stock of foodgrains available in the
\n\t      locality for-which the license is required;\n<\/p>\n
\t      (b)   the\t number of persons who have  applied
\n\t      for  and those who have been granted  licenses
\n\t      in respect of the foodgrains under this  Order
\n\t      in    the locality;\n<\/p>\n
\t      (c)   the\t business ordinarily carried  on  by
\n\t      the applicant;\n<\/p>\n
\t      (d)   the past activities of the applicant  as
\n\t      a licensee or business man\/firm; and\n<\/p>\n
\t       (e)  whether the applicant is  a\t cooperative
\n\t      society.\n<\/p>\n
It  should  be\tnoticed that the proviso to old\t el.  5\t was
\nomitted\t and a new sub-cl. (e) was added.   This  sub-clause
\nenables\t the licensing authority, in granting or refusing  a
\nlicense,  to  have regard to the consideration\twhether\t the
\napplicant  is  a  co-operative\tsociety.   To  complete\t the
\nstatement  of  facts,  it may perhaps be  observed  that  on
\nNovember  10, 1960, the High Court rejected the\t application
\nfor  proceeding\t against  the opposite, parties\t by  way  of
\ncontempt,  mainly  on  the ground. that the  order  made  on
\nSeptember 13, 1960, was not before it.\n<\/p>\n
On behalf of the petitioner the order dated April 11,  1961,
\nhas been impugned on two main
\n\t\t\t    945<\/span>
\ngrounds.   The first ground of attack is that sub-cl.(e)  of
\ncl.5  of the control Order, 1961 is ultra  vires,because  it
\ngoes beyond the powers granted to the State Government under
\ns.  3  read with S. 5<\/a> of the  ‘Essential  Commodities’\tAct,
\n1955.  The second ground of attack is that ‘even if  sub-cl.\n<\/p>\n
(e)  of\t cl. 5 of the Control Order.. 1961, is\tintra  vires
\nbeing within the powers granted to the State Government,  it
\nmerely\t allows\t the  licensing\t authority  to\t take\tinto
\nconsideration,\t among,\t  other\t  relevant   matters,\t the
\ncircumstance  that  the\t applicant for a licence  is  a\t co-
\noperative society; it does not say that a monopoly right  of
\nprocurement  Should  be given in favour\t of  a\tco-operative
\nsociety by excluding all. Others; therefore, it was not open
\nto the, licensing authority to proceed on the footing as  if
\nthat subclause bad created a right of  monopoly in favour of
\nco-operatives.\t The argument. is that in the present  case,
\nthe licensing authority instead of applying its mind to\t the
\nprovisions of cl. 5 of the Control Order, 1961, went by\t the
\ninstructions  issued  by the State Government  to  grant  a.
\nright  of ,monopoly to cooperative societies and  based\t its
\norder  on such, instructions.., in spite’ of  directions  to
\nthe contrary given by the High Court on earlier applications
\nmade  by  the petitioner.  In other words, it  is  contended
\nthat  the impugned order was a mere” colourable exercise  of
\npower in the sense that instead of exercising the powers  in
\naccordance with the provisions of law by which the licensing
\nauthority had to be guided, it acted in, accordance with the
\ninstructions of the State Government and granted ‘a monopoly
\nin  favour  of co-operative, societies,- such  monopoly\t not
\nbeing contemplated by the provisions of cl. 5 of the Control
\nOrder,\t1961; therefore., the impugned order was  bad  being
\nwithout any legal authority or jurisdiction, and as it took-
\naway the right of the petitioner to carry on his trade,\t and
\nfurthermore  made  a  discrimination  against  him  for\t the
\npurpose\t of  granting  a monopoly to respondent\t No.  6\t not
\ncontemplated by law, it violated the
\n946<\/span>
\npetitioner’s   rights\tunder  Arts.  14  and  19   of\t the
\nConstitution.  He is accordingly entitled. to come. to\tthis
\nCourt  under Art. 32<\/a> of the Constitution to have  the  order
\nquashed.  The petitioner has also claimed that for the\tsame
\nreasons, the grant of a license in favour of respondent\t No.
\n6 should also be quashed.\n<\/p>\n
On  behalf  of\tthe respondents, the State-  of\t Assam,\t its
\nofficers, and the Assam Co-operative Apex Marketing  Society
\nLtd.  (respondent No. 6), it has been urged that neither  of
\nthe  aforesaid\ttwo grounds of attack is  valid.   On  their
\nbehalf\tthe  argument is that sub-cl. (e) of cl,  5  of\t the
\nControl\t Order,\t 1961,\tis within the  authority  and  power
\ngranted to the State Government under s. 3<\/a> read with a. 5 of
\nthe  Essential\tCommodities  Act<\/a>,  1955.   Secondly,  it  is
\ncontended that no monopoly has been granted to the Assam Co-
\noperative Apex Marketing Society Ltd., and the order of\t the
\nlicensing  authority  dated April 11, 1961 is based  on\t the
\nconsiderations referred to in sub-cls. (a) and (b) of el.  5
\nof  the\t Control Order, 1961, and cannot be  assailed  on  a
\npetition under Art. 32<\/a> of the Constitution.
\nWe  proceed now to a consideration of the grounds of  attack
\nand  the replies thereto.  As to the first ground of  attack
\nit  must be made clear at the very outset that the vires  of
\nthe Essential Commodities Act<\/a>, 1955 have not been challenged
\nbefore us.  What has been contended before us is that s.3 of
\nthe  Act  gives, certain powers to the\tCentral\t Government,
\nwhich powers the Central Government has delegated the  State
\nGovernment  of Assam.  These powers it is contended, do\t not
\nauthorise  the\tinsertion  of sub-cl. (e) of cl.  5  of\t the
\nControl\t Order,\t 1961; in other words the argument  is\tthat
\nwhether\t the  applicant\t for a licence\tis  a,\tco-operative
\nSociety\t or not has no relevance whatsoever to\tthe  objects
\nfur  which s. 3<\/a> grants the powers to the  Central-Government
\nor its delegate\t to make certain Orders.  Sub-section (1) of
\na. 3 is relevant to this argument and reads:\n<\/p>\n
\t\t\t    947<\/span><\/p>\n
\t      “3 (1) If the Central Government is of  *onion
\n\t      that it is necessary or expedient an to do for
\n\t      maintaining  or  increasing  supplies  of\t  my
\n\t      essential\t commodity  or\tfor  securing  their
\n\t      equitable\t distribution  and  availability  at
\n\t      fair  prices  it may by,\torder,\tprovide\t for
\n\t      regulating  or  prohibiting  the\t production,
\n\t      supply and distribution thereof and trade\t and
\n\t      commerce therein.”\n<\/p><\/blockquote>\n
Sub-section  (2) of s. 3<\/a> which we need not  read  enumerates
\nthe  various  categories  of Orders which  can\tbe  made  in
\nexercise  of the powers conferred by sub-s.(1), but  without
\nprejudice  to  the  generality of those\t powers.   Now,\t the
\nargument  before  us is that the, powers under a. 3  can  be
\nexercised when the Central Government or its delegate is  of
\nopinion\t that it it; necessary or expedient to exercise\t the
\npowers\tto  achieve  two objects:  (a)\tfor  maintaining  or
\nincreasing  supplies of any essential commodity, or (b)\t for
\nsecuring  their equitable distribution and  availability  at
\nfair prices.  It is contended that the circumstance  whether
\nthe applicant for a licence is a co-operative society or not
\nhas  no\t connection   what so ever with\t the  aforesaid\t two
\nobjects\t and therefore, sub-cl. (e) of cl.5 of\tthe  Control
\nOrder, 1961 is not within the powers granted by a. 3 of\t the
\nAct.\n<\/p>\n
We  cannot accept this argument in the very broad  terms  in
\nwhich  it has been stated.  We are astisfied that cl.  5  of
\nthe  Control Order, 1961 does not provide for a monopoly  in
\nfavour of cooperative societies.  The clause enumerates five
\nmatters\t and states that the licensing authority shall\thave
\nregard\tto those matters in granting or refusing a  license.
\nThe five matters enumerated in the clause are not exhaustive
\nof  the matters which the licensing authority may  consider;
\nbecause the clause says that the matters enumerated  therein
\nare   five  “”among  other  matters”  which  the   licensing
\nauthority may  consider.  Obviously enough it is open to  Ye
\nlicensing authority to
\n     948<\/span>
\nconsider all matters relevant to, the’grant or refusal\tof
\na  license  and the; five matters enumerated in\t the  clause
\nmerely highlight  some of those matters.All that can be said
\nis  that  sub-cl. (e) enables the licensing  authority\tto,;
\nprefer\ta co-operative society in certain  circumstances  in
\nthe matter of granting a license; in other words, there\t may
\nbe cases or localities : where the considerations set out in
\nsub-cl. (e) may override other considerations, in the matter
\nof  granting a license.\t We do not think that sub-  cl.\t (e)
\nhas  any  more\tfar reaching effect.   Indeed  the:  learned
\nAttorney-General  appearing for : the  respondents  conceded
\nthat  sub-cl.  (e)  of cl. 45 did not  have  the  effect  of
\ncreating a monopoly in favour of co-operative societies.
\nProceeding,  therefore, on the footing that sub-cl.  (e)  of
\nel.  5 does not provide for the creation of a monopoly,\t can
\nit  be said that it is out. ,side the powers  conferred.  on
\nthe  State Government by s. 3<\/a> of’ the Essential\t Commodities
\nAct<\/a>, 1955 ? It is no disputed before us that\t  sub-
\ncls.(a)\t (a) to (d)fall\t within the  powers conferred by  s.\n<\/p>\n
3. Matters     such as the stock of foodgrains, available in
\nthe  locality for which the license is required, the number,
\nOf  persons  who have applied for and those  who  have\tbeen
\ngranted\t licenses in the locality, the\tbusiness  ordinarily
\ncarried on by the applicant, and the ‘Past activities of the
\napplicant  as a licensee   or- businessman,  are  undoubtedly
\nmatter& which have; relation to the two objects mentioned in
\ns.  3.\tCan it be. said that the fifth matter  mentioned  in
\nsub-cl.\t (e) viz., whether the applicant is  a\tco-operative
\nsociety is completely’ unrelated to those two, objects?\t  We
\nare  unable  to say that it is.\t  In  the  counter-affidavit
\nfiled on. behalf of the respondents it has; been stated that
\ncooperative  societies have better facilities for  procuring
\nfoodgrains and are in a position to ensure scheduled  prices
\nto the farmers who, grow paddy.\t It has been further  stated
\nthat   amongst\tthe  cooperative  societies,  axe   primary,
\nsocieties which
\n 949<\/span>
\nconsist\t of the growers of paddy there are also\t cooperative
\nsocieties  called  supply  co-operatives  which\t are  in   a
\nposition  to eliminate middle-man’s profits. In para.  4  it
\nwas  stated  that the National Development  Council  decided
\nthat   the  State  should  take\t over  wholesale  trade\t  in
\nfoodgrains with a view to maintaining price levels which are
\nfair  to  the producer and the consumer and  reduce,-to\t the
\nminimum\t the  disparity between the prices received  by\t the
\nfarmer\tand the prices paid by the consumer  throughout\t the
\nyear.\tIt  was\t also decided that  an\tadequate  number  of
\nprimary marketing societies should be set up and linked with
\nvillage\t cooperatives  which should serve  as  agencies\t for
\ncollection and sale of foodgrains at assured price,% at\t the
\nvillage level.\tThe affidavit then stated
\n\t      In  view\tof  the\t decision  of  the  National
\n\t      Development, Council, the Government of  Assam
\n\t      in consultation with their State Food Advisory
\n\t      Council decided that in making procurement  of
\n\t      rice and paddy in the State, preference should
\n\t      be   given  to  the   co-operative   societies
\n\t      wherever they have resources and facilities.
\nWe are of the view that by reason of the position which\t co-
\noperative  societies may occupy in the village economy of  a
\nparticular  area,,  it\tcannot be laid\tdown  as  a  general
\nproposition that sub-cl.(e) of cl 5 of of the Control Order,
\n1961,  is unrelated to the objects mentioned in s. 3<\/a> of\t the
\nEssential  Commodities\tAct, 1955.  There may be  places  or
\nareas where co-operative societies are in a better  position
\nfor  maintaining or increasing supplies of rice and.,  paddy
\nand  even,  for- securing their equitable  distribution\t and
\navailability  at fair prices.  We must, therefore repel\t the
\nvery  broadly stated contention of the learned\tcounsel\t for
\nthe  petitioner\t that sub-cl. (e) of cl. 5  of\tthe  Control
\nOrder,\t1961,  can have no-relation whatsoever\tto  the\t two
\nobjects mentioned in s. 3<\/a> of the Essential Commodities\tAct,
\n1955.  On behalf of them petitioner reliance
\n\t\t\t    950<\/span>
\nwas  placed  on the decision in Ramanlal Nagardas v.  M.  S.
\nPalnitkar<\/a>  (1).\t  That was a case in which the\tvalidity  of
\nState  action in entrusting wholesale distribution of  sugar
\nwhich  is  an essential commodity under the  Essential\tCom-
\nmodities  Act,\t1955,  to Co-operative\tSocieties  only\t and
\nexcluding  other dealers holding similar licenses  like\t the
\nco-operative   ‘societies   from  such\t distribution,\t was
\nchallenged and adore for consideration.\t It was held that  a
\nState  could  make  a classification  for  the\tpurpose\t of@
\nachieving    particular\t  legislative\tobjects\t  but\t the
\nclassification must satisfy two conditions : (1) it must  be
\nfounded on intelligible differentia, and (2) the differentia
\nmust  have a rational relation to the objects sought  to  be
\nachieved.   The\t question was considered from the  point  of
\nview of Art. 14<\/a> of the Constitution and it was held that the
\naction\tof  the\t State Government  in  entrusting  wholesale
\ndistribution  of  sugar\t to  cooperative  societies  to\t the
\nexclusion   of\t other\t licence-holders   amounted   to   a
\ndiscrimination\twhich  violated the right  guaranteed  under
\nArt. 14.<\/a>  The principles underlying Art. 14<\/a> of the Constitu-
\ntion  are  now\twell-settled and have  been  enunciated\t and
\nexplained  in  a number of decisions of this  Court  and  we
\nconsider  it  unnecessary to refer to  those  principles  in
\ndetail.\t   In\tthe   case  under   our\t  consideration\t  no
\ndiscrimination\thas been made between one class of  license-
\nholders and another class of license-holders as in the\tcase
\nof  Ramanlal  Nagardas\tV. M. S. Palnitkar<\/a>  (1).   What\t has
\nhappened  in  the present’ case is that licenses  have\tbeen
\ngranted only to cooperative societies and a license has been
\ndenied to the petitioner, the licensing authority proceeding
\non the footing that a monopoly must be created in favour  of
\nco-operative  societies.  A discrimination has indeed  taken
\nplace ‘as against the petitioner, a discrimination which  is
\nnot  justified\tby the ‘Provisions of cl. 5 of\tthe  Control
\nOrder,\t1961.\tIn  dealing  with  the\tapplication  of\t the
\npetitioner the licensing authority
\n(1)  A. I. R. 1961 Guj. 38.\n<\/p>\n
\t\t\t    951<\/span><\/p>\n
has  made,  a, discrimination which is met justified  by  5.
\nThat  would  take us to the second argument of\tthe  learned
\ncounsel\t for the petitioner, but on his first  argument\t the
\ndecision  in Ramanlal Nagardas v. M. S. Palnitkar<\/a> (1) is  of
\nno  assistance.\t  Sub-clause (e) of el. 5, we  have  already
\nstated,\t enables the licensing authority to give  preference
\nto  a co-operative society in certain circumstances; but  it
\ndoes  not  create  a monopoly  in  favour  ;of\tco-operative
\nsocieties.   The preference given has a reasonable  relation
\nto  the\t objects of the legislation set out in s. 3<\/a>  of\t the
\nAct;  therefore, sub-cl. (e) of cl. 5 of the Control  Order,
\n1961,  cannot  be  held to be bad on  the  ground  of  class
\nlegislation but the passing of an order under the sub-clause
\nfor  a\tpurpose\t not  contemplated  by\tit  will  amount  to
\ndiscrimination\t and  denial  of  the  guarantee  of   equal
\nprotection of the law.\n<\/p>\n
This brings us to the second argument urged on behalf of the
\npetitioner  and here we think that the learned\tcounsel\t for
\nthe petitioner is on much surer ground.\t It was open to\t the
\nlicensing  authority  to  give\tpreference  to\tco-operative
\nsocieties, if it was of the opinion that granting a  license
\nto  a  co-operative society in a particular  locality  would
\nfacilitate the objects of s. 3<\/a> of the Act.  This is not what
\nthe  licensing\tauthority  did.\t  He  repeatedly  refused  a
\nlicense\t to the petitioner, for the only reason and  purpose
\nof granting a monopoly to co-operative societies.  In  other
\nwords,\tthe  discrimination  that  has\tbeen  made  by\t the
\nlicensing  authority is really in the administration of\t the
\nlaw.   It has been administered in a discriminatory,  manner
\nand for the purpose of achieving an ulterior object, namely,
\nthe  creation of a monopoly in favour of  co-operatives,  an
\nobject\twhich, clearly enough, is not within sub-cl. (e)  of
\nel.  5 of the Control Order, 1961.  We have  quoted  earlier
\nthe  various  orders  which  the,  licensing  authority\t had
\npassed.\t  Those\t orders\t clearly  show\tthat  the  licensing
\nauthority refused a licence to the
\n(1)  A.I.R. 1961 Guj. 38.\n<\/p>\n
952<\/span><\/p>\n
petitioner not on grounds referred to in sub-cls.(a) and (b)
\nof  cl. 5 but on the ground’ that the State  Government\t had
\ndecided\t to  introduce a right of  monopoly  procurement  of
\npaddy in favour of co-operative societies and therefore,  no
\nlicenses should be granted to individual dealers other\tthan
\ncooperative  societies.\t  Judged against the  background  of
\nfacts  to ‘which we have earlier referred in this  Judgment,
\nthe  impugned  order dated April 11, 1961 appears to  us  to
\nhave been based on the same ground, namely, the creation  of
\na monopoly in favour of co-operatives, even though the order
\nrefers\tto existing licenses and the quantity of  foodgrains
\navailable  in  the locality.  In the course of\tthe  hearing
\nbefore\tus,  the  case was adjourned in order  to  give\t the
\nparties\t an  opportunity of filing necessary  affidavits  to
\nshow  whether  individual dealers other\t than  co-operatives
\nhave  been completely excluded in the whole of the State  in
\nthe  matter of dealing in paddy.  The affidavits  show\tthat
\nprivate\t dealers  have\tbeen completely\t excluded.   In\t the
\naffidavit  filed on behalf of respondent No. 1, it has\tbeen
\nstated in para.\t    4:\n<\/p>\n
\t       “It  is\tnot  denied that in  the  year\t1961
\n\t      licenses\tfor  the procurement of\t paddy\thave
\n\t      been  issued to the co-operatives in  all\t the
\n\t      paddy producing districts in Assam.”\n<\/p><\/blockquote>\n
To   show however that no monopoly hag been  created\t  in
\nfavour of a particular co-operative society like  respondent
\nNo.  6,\t it has been stated that a  number  of\tco-operative
\nsocieties  have been or are being granted licenses  for\t the
\nprocurement  of paddy.’ In our view these statements in\t the
\naffidavits filed on behalf of the respondents show only\t one
\nand  one  object viz., creation of a monopoly in  favour  of
\ncooperatives.\tTo achieve that object the State  Government
\nhas  resorted to an indirect method.  Instead of  making  an
\nOrder authorising such monopoly (if the State was
\n\t\t\t    953<\/span>
\ncompetent  to  make  such  an  Order  under  the   Essential
\nCommodities  Act<\/a>, 1955, as to which we express no  opinion),
\nit  has\t chosen\t to adopt the  indirect\t method\t of  issuing
\ninstructions  to  the  licensing  authorities  in  all\t the
\ndistricts to grant licenses to co-operatives only.  The vice
\nof  the\t impugned  order lies  in  the\tlicensing  authority
\naccepting   such  instructions\tand  passing  an  order\t  in
\naccordance there with.\tThe duty of the licensing  authority
\nwas  to pass orders in accordance with el. 5 of the  Control
\nOrder,\t1961.  Instead of doing that. it passed an order  in
\naccordance  with the instructions given to it on  behalf  of
\nthe State Government, instructions which appear to us to  be
\nnot in consonance with sub-cl.(e) of el. 5; because  sub-cl.\n<\/p>\n
(e)  contemplates a preference to co-operative societies  in
\ncertain circumstances, but not a monopoly in their favour.
\nWe  accordingly\t hold  that the impugned  order\t is  bad  as
\nviolating  the\trights of the  petitioner  guaranteed  under
\nArts.  14 and 19 of the Constitution.  We  must,  therefore,
\nquash  the order of the licensing authority dated April\t 11,
\n1961.\tWe must also quash the order by which the  licensing
\nauthority  granted a licence in favour of respondent No.  6.
\nThe licensing authority must now consider the application of
\nthe  petitioner\t for a license for the year 1961  on  merits
\nalong  with the application , of respondent No. 6  and\tsuch
\nother applications as may be still pending.  In dealing with
\nthese applications the licensing authority must have  regard
\nto  the provisions of cl. 5 of the Control Order, 1961,\t and
\nsuch  other provisions of law as have a bearing on them,  in
\nthe  light  of the observations made in\t this  judgment.  it
\nwould  be the duty of the licensing authority to ignore\t all
\ninstructions which are not in consonance with the provisions
\nof  law\t by which it is to be guided As the year  1961\twill
\ncome to an end within a few months., the applications should
\nbe dealt with as expeditiously as possible so that the right
\nof the petitioner may
\n954<\/span>
\nnot  be rendered infructuous by reason of the delay made  in
\ndisposing of the applications.\n<\/p>\n
Before\twe part with this case we express our  deep  concern
\nover  the  manner  in  which the  State\t Government  or\t its
\nofficers have issued instructions in the matter of granting’
\nof  licenses, instructions which clearly’ enough are not  in
\nconsonance with the provisions of law governing the grant of
\nsuch  licenses.\t  We doubt the wisdom of  issuing  executive
\ninstructions  in  matters which are governed  provisions  of
\nlaw;   even   if  it  be  considered  necessary\t  to   issue
\ninstructions  in such a matter,, the instructions cannot  be
\nso ‘framed or utilised as to override the provisions of law.
\nSuch  a method ‘Will destroy the very basis of the  rule  of
\nlaw and strike at the very root of orderly administration of
\nlaw.   We have thought it necessary to refer to this  matter
\nbecause\t we  feel  that the  instructions  which  the  State
\nGovernment  or\tits officers have issued in  the  matter  of
\ngranting of licenses for the procurement of paddy are not in
\nconsonance with the provisions of el. 5 of the Control Order
\n1961,
\nIn  the\t result the petition is allowed with costs  and\t the
\nnecessary orders should now issue as directed above.
\nSARKAR\tJ.-The petitioner is a citizen of India and  carries
\non  business  as dealer in rice and paddy in  the  State  of
\nAssam.\tSince 1958, dealing in rice and paddy was controlled
\nin  that State by Orders made by the State  Government\tfrom
\ntime  to time under the Essential Commodities Act<\/a>,  1955  by
\nvirtue\tof powers delegated to it by the Central  Government
\nunder  s.  5<\/a> of that Act.  These  Orders  here.after  called
\nLicensing  Orders,, provided that no person could engage  in
\nany  purchase, sale or storage for sale of  any\t foodgrains,
\nwhich  included\t rice  and  paddy  in  wholesale  quantities
\nexcept, under and in accordance with the terms and condition
\nof   a\tlicence\t  business  involving  issued\t thereunder.
\nPurchase or, sale in wholesale quantities was defined
\n955<\/span>
\nas  purchase, or sale of quantities exceeding ten maunds  in
\nany one transaction.  The petitioner had obtained a  license
\nto deal in paddy for the year 1958.  It is not clear whether
\nhe  had obtained a license to do so\t   for 1959.\tWith
\nthese years, however, this case is not concerned.
\nOn  January 28, 1960, the petitioner had applied  under\t the
\nLicensing Order then in force for a license to deal in paddy
\nin  Kamrup  district:  of  Assam for  the  year\t 1960.\t His
\napplication  was  refused by an order made on  February\t 17,
\n1960  on the ground that it could not be considered  as\t the
\nCo-operative Apex Marketing Society had been given the right
\nof monopoly purchase in Kamrup district. The petitioner then
\nmoved  the  High  Court\t of Assam  under  Art.\t226<\/a>  of\t the
\nConstitution  to quash this order.  On April 27,  1960,\t the
\nHigh  Court  delivered judgment quashing the  order  on\t the
\nground\tthat the authority concerned was bound to  ;consider
\nthe  petitioner’s application for licence and had failed  to
\ndo  so.\t The High Court issued a writ of mandamus  directing
\nthat  the  petitioner’s\t application be\t considered  on\t its
\nmerits.\t  As  the licensing authority did not  consider\t the
\npetitioner’s  application  till June 7 1960, the  latter  on
\nthat date moved the High Court again for enforcement of\t the
\nwrit  issued.\tOn receipt of the notice  this\tmotion,\t the
\nlicensing  authority passed an order on June 8,\t 1960  again
\nrefusing  to grant the petitioner the licence.\tThis  order,
\nstated,\t “Your\tpetition is considered.\t As  the  Assam\t co-
\noperative  Marketing  Society has already  been’  granted  a
\nlicence\t to deal in rice and paddy with branches spread\t all
\nover  this district, it is considered unnecessary  to  grant
\nfurther dealing licences to individual dealers for the\tsame
\narea.  Hence the petition is rejected.”\n<\/p>\n
The  petitioner\t thereupon dropped his motion to  the  High,
\nCourt  of  Assam of June 7, 1960 and moved  the\t High  Court
\nafresh\tunder  Art. 226<\/a> against the order of  June  8,\t1960
\nrefusing him the licence
\n956<\/span>
\nand  the  High Court on August 8, 1960, quashed\t it  on\t the
\nground\tthat the licensing authority had to act in a  quasi-
\njudicial  capacity and that it bad decided the case  on\t the
\ninstructions of the State Government without considering for
\nitself\tthe  merits of the case in terms  of  the  Licensing
\nOrder.\tThe authority was again directed to decide the\tcase
\nin a quasijudicial capacity.\n<\/p>\n
The licensing authority not having taken up for decision the
\npetitioner’s  case for the grant of licence as\tdirected  by
\nthe  High  Court, he moved. the High Court on  September  8,
\n1960  for appropriate reliefs.\tOn receipt of the notice  of
\nthis  motion  the  licensing authority passed  an  order  on
\nSeptember  13, 1960, again refusing to grant licence to\t the
\npetitioner  and\t certain other private dealers.\t  The  order
\nstated, “For the areas for which the applications have\tbeen
\nmade  the.  Assam Co-operative Apex  Marketing\tSociety\t has
\nearlier applied for and has been granted licence.  This is a
\nrelevant   consideration  under\t el.  5(b)  of\t the   Assam
\nFoodgrains  (Licensing and Control) Order, 1960.  The  stock
\nof  foodgrains available in the area can easily be  procured
\nby  the\t party\talready\t given the  licence.   Being  a\t Co-
\noperative  Society it has better facility in  this  respect.
\nAs such I do not find it necessary to grant licence to these
\napplicants.    The   petitions\tare   therefore\t  rejected”.
\nThereupon the High Court on November 10, 1960, made an order
\non  the petitioner’s aforesaid motion of September  8,\t1960
\ndischarging  the rule as the order asked for had been  made.
\nIt  observed  that the order of September 13, 1960  was\t not
\nbefore it and it was competent to say whether that order was
\nin  consonance\twith its order of August 8, 1960.   It\talso
\nobserved that it did not find sufficient reason to take\t any
\naction against the licensing authority for the delay in\t the
\nmatter of the disposal of the application for licence.
\nBefore proceeding further I would like to point out that the
\nAssam Foodgrains (Licensing and
\n957<\/span>
\nControl) Order, 1960 being the Licensing Order by which\t the
\npetitioner’s  application for licence for 1960 was  governed
\ndid not contain any provision enabling any preference to  be
\ngiven  to a co-operative society in the matter of the  grant
\nof licence.\n<\/p>\n
I  now come to the present petition.  It was ;moved in\tthis
\nCourt  by the petitioner under Art. 32<\/a> of  the\tConstitution
\nchallenging  the  validity  of the order  of  the  Licensing
\nauthority  dated  September 13, 1960, and  asking  that\t the
\nlicence\t granted  to the Assam Co-operative  Apex  Marketing
\nSociety\t be declared illegal and for an order directing\t the
\nlicensing   authority  to  consider  the  applications\t for
\nlicences according to the provisions of,the Licensing Order,
\n1960.  The petition came in for hearing on February 2, 1961.
\nBy that date the year for which the petitioner had asked for
\na licence had expired and the Licensing Order, 1960 had been
\nreplaced  by  another  Order of 1961.\tIn  the\t result\t the
\npetition   bad\t become\t substantially\t infructuous.\t The
\npetitioner, therefore, suggested to this Court that he would
\nmake  an application for a licence for the year 1961 and  in
\nthe  meantime the petition might stand adjourned.  An  order
\nwas thereupon made adjourning the petition sine die.
\nThereafter the petitioner on February 4, 1961, made a  fresh
\napplication  for licence for dealing in paddy for  the\tyear
\n1961.  An order was made by the licensing authority on\tthis
\napplication  on\t April 1 1, 1961, in these terms  :  “Having
\nregard\tto the existing licences in these  areas  (Mangaldai
\nand  Gauhati),\tand the quantity of  food  grains  available
\ntherein,an  further licence,, would be superfluous.” In\t the
\nresult the petitioner was refused licence for the year 1961.
\nThereafter,  the petitioner under orders obtained from\tthis
\nCourt amended hi,$ petition and now seeks to challenge\tthe.
\norder  of April 11, 1961.  The respondents to this  petition
\naxe  the State of Assam and some of its\t officers  including
\nthe licensing, authority
\n958<\/span>
\nconcerned,  as also. the Assam Co-operative  Apex  Marketing
\nSociety, hereafter called the Apex Society.
\nAs I have already said, the application for licence for 1961
\nwas  governed by the Licensing Order, 1961.  The dispute  in
\nthis  case  mainly turns on cl. (e) of paragraph 5  of\tthis
\nOrder.\tThat paragraph is in these terms:\n<\/p>\n
.LM15
\n“In  granting  or refusing a licence under this\t Order,\t the
\nlicensing authority shall, among other matters, have  regard
\nto the following, namely: –\n<\/p>\n
(a)  the  stock of foodgrains available in the locality\t for
\nwhich the licence is required;\n<\/p>\n
(b)  the  number of persons who have applied for  and  those
\nwho, have been granted licences in respect of the foodgrains
\nunder this Order in the locality;\n<\/p>\n
(c)  the business ordinarily carried on by the applicants\n<\/p>\n
(d)  the  past activities of the applicant as a licensee  or
\nbusiness man\/firm; and\n<\/p>\n
(e)  whether the applicant is a cooperative society.”
\nIt  is\tnot  in\t dispute that in  the  areas  to  which\t the
\nLicensing Order 1961, had been applied, licences to deal  in
\npaddy  had  been given to:  various  Co-operative  Societies
\nwhich  were subsidiaries of the Apex Society and no  licence
\nhad  been given to any private dealer.\tThe respondents\t say
\nthat these grants were duly made under cl. (e) of  paragraph
\n5  of  the Licensing Order, 1961.  It is this  action  which
\nforms  the main grievance of the ,petitioner.  He  puts\t his
\ncontentions on two grounds.  First, he says that cl. (e)  of
\nparagraph 5 of the Licensing Order 1961 is ultra vires as it
\nhas no
\n\t\t\t    959<\/span>
\nrelation,  to, the object of the Essential  Commodities\t Act<\/a>
\nunder  which  it was made.  Secondly, he says  that  in\t any
\nevent the Order has been applied. in a discriminatory manner
\nand  with a view to create a monopoly in favour of the\tApex
\nSociety\t to deal in paddy and the  petitioner’s\t fundamental
\nrights\tunder  Arts.  19(1)(g)\tand  14\t have  thereby\tbeen
\nviolated..\n<\/p>\n
It does not seem to me that either of these two\t contentions
\nis  well founded.  I shall first consider whether  paragraph
\n5(e)  of  the  Order  is ultra vires the  Act.\t Now  it  is
\nimportant  to  note  ,that the validity of the\tAct  is\t not
\nchallenged.   It would follow that if the Order\t made  under
\nthe Act is not ultra vires, it would be perfectly valid.  It
\nis  s.\t3<\/a> of the Act which enables the Orders  to  be  made.
\nThat section so far as relevant is in these terms
\n\t      S.    3<\/a>  (1).-If the Central Government is  of
\n\t      opinion  that it is necessary or expedient  so
\n\t      to  do for maintaining or increasing  supplies
\n\t      of  any  essential commodity or  for  securing
\n\t      their equitable distribution and\tavailability
\n\t      at fair prices, it may, by order, provide\t for
\n\t      regulating or prohibiting the production, sup-
\n\t      ply  and\tdistribution thereof and  trade\t and
\n\t      commerce therein.\n<\/p>\n
The object of the Act, therefore, is to maintain or increase
\nthe   supplies\tof  essential  commodities   which   include
\nfoodgrains  and to secure their equitable  distribution\t and
\navailability  at fair prices.  Clause (e0 of paragraph 5  of
\nthe  Licensing Order, 1961 certainly allows  a\tco-operative
\nsociety\t to  be\t Preferred.  in the matter  of\ta  grant  of
\nlicence.  The question then is, would the object of the, Act
\nbe  achieved if the trade in paddy is given to\tco-operative
\nsocieties ? I think it would.  A co-operative society is one
\nwhich  has  as\tits object the promotion  of  the,  economic
\ninterests  of  its members in accordance  with\tco-operative
\nprinciples : see s. 4<\/a> of the
\n960<\/span>
\nCo-operative  Societies\t Act<\/a>, 1912.  A\tsociety\t carries  on
\nbusiness in accordance with co-operative principles when  it
\ntrades\twith  its own members, the profit motive  not  being
\nparamount  in such business.  When, therefore, a licence  to
\npurchase  paddy\t is  given  to\ta  co-operative\t society  of
\ngrowers, what happens is that the seller sells to a body  of
\nwhich he is a member.  The result is the virtual elimination
\nof the middleman and a consequential reduction in the price.
\nThe following observation,% from the judgment of this  Court
\nin Narendra Kumar v. The Union of India<\/a> (1) are, to my mind,
\nvery apposite in the present context :\n<\/p>\n
\t      “That  middleman’s profits increase the  price
\n\t      of  goods\t which the consumer has\t to  pay  is
\n\t      axiomatic’ ” (p. 389). ,,It has therefore been
\n\t      the  endeavour  at least in modern  times\t for
\n\t      those  responsible for social control to\tkeep
\n\t      middlemen’s  activities to the minimum and  to
\n\t      replace  them  largely  by  co-operative\tsale
\n\t      societies\t of producers and co-operative\tsale
\n\t      societies of the consumers.” (p. 390).\n<\/p><\/blockquote>\n
Therefore, I feel no doubt that if the purchase of paddy  is
\nleft  to growers co-operatives-and that is what cl.  (e)  of
\nparagraph  5  aims  at-rice,, which  is\t husked\t paddy,\t can
\nreasonably be expected to be made available to the consumers
\nat a fair price.  That would serve the object of the Act and
\nthe clause cannot, therefore, be said to be ultra vires\t the
\nAct.\n<\/p>\n
Then it is said that cl. (e) of paragraph 5 would result  in
\ncreating a monopoly in favour of co-operative societies\t and
\nthat  would  be illegal and also outside the object  of\t the
\nAct.   This contention also seems to me to be  ill  founded.
\nIt  seems to me that if paragraph 5 had contained  only\t cl.\n<\/p>\n
(e)   directing\t preference  being  given  to\tco-operative
\nsocieties  in the matter of grant of licences  and  that  is
\nthe  basis on which the present contention is advanced\tthat
\nwould not have made it bad.  The question
\n(1)  [1960] 22 S. C. R. 375.\n<\/p>\n
961<\/span><\/p>\n
of creating a monopoly does not really arise in such a case.
\nThe  Order  may\t then  allow one  class\t only,\tnamely,\t co-
\noperative  societies, to do the business.  That would, as  I
\nhave  already  stated, advance the object of  the  Act.\t  It
\nwould  also however amount to a prohibition of others  doing
\nthe business.  The only question then would be whether\tsuch
\nprohibition  would be reasonable under Art. 19(6).<\/a>  That  is
\nhow the matter appears to have been considered by this Court
\nin two cases to which I will now refer.\n<\/p>\n
The   first  is\t the  case  of\tNarendra  Kumar(1)   earlier
\nmentioned.   There  an order called the\t “Non-ferrous  Metal
\nControl\t Order,\t 1958”\thad been issued under s.  3<\/a>  of\t the
\nEssential Commodities Act, as the Licensing Order now  under
\nconsideration  also  was  Clause  (4)  of  the\torder  there
\nconsidered  provided  that  no\tperson\tcould  acquire\t any
\nnonferrous  metal  except  under  a  permit  issued  by\t the
\nController in accordance with such principles as the Central
\nGovernment  might from time to time specify.   Subsequently,
\nthe Central Government enunciated certain principles for the
\ngrant  of  these permits in a certain communication  to\t the
\nChief Industrial Adviser.  Under these principles, no permit
\ncould  be issued to a dealer but it could only be issued  to
\ncertain\t manufacturers.\t  The result was that  the  dealer’s
\ntrade was totally prohibited and only certain  manufacturers
\nwere  eligible for permits to carry on the trade of  rolling
\nnon-ferrous metals.  Certain dealers moved this Court  under
\nArt.  32<\/a>  for  a  declaration that el.\t(4)  read  with\t the
\nprinciples formulated by the Government was bad as offending
\nArt. 19(1)(f)<\/a> and (g).<\/a>\tThis Court held that (p. 387) :\n<\/p>\n
\t      “It is reasonable to think that the makers  of
\n\t      the    Constitution   considered\t the\tword
\n\t      “restriction” to be sufficiently wide to\tsave
\n\t      laws   ‘inconsistent’  with  Art.\t 19(1<\/a>),\t  or
\n\t      “taking away the rights’ conferred by the
\n\t      (1)   [1960] 2 S. C. R. 375.\n<\/p><\/blockquote>\n
\t      962<\/span><\/p>\n
\t      Article, provided this inconsistency or taking
\n\t      away  was reasonable in the interests  of\t the
\n\t      different\t matters  mentioned in\tthe  clause.
\n\t      There  can  be no doubt  therefore  that\tthey
\n\t      intended\tthe  word  restriction’\t to  include
\n\t      cases  of ‘prohibition’ also.  The  contention
\n\t      that  a  law  prohibiting the  exercise  of  a
\n\t      fundamental right is in no case saved,  cannot
\n\t      therefore be accepted.”\n<\/p><\/blockquote>\n
Having\tconsidered the facts of the case, the Court came  to
\nthe  conclusion that el. (3) of the Order, the\tlegality  of
\nwhich  also  had  been challenged, and el.  (4)\t were  valid
\nprovisions.  It observed that, (p. 390):\n<\/p>\n
\t      “It  must therefore be held that el. 3 of\t the
\n\t      Order.   even  though  it\t results   in\tthe,
\n\t      elimination of the dealer from the trade is  a
\n\t      reasonable restriction in the interests of the
\n\t      general  public.\t Clause\t 4  read  with\t the
\n\t      principles  specified must also, be  hold\t for
\n\t      the  same reason to be a\treasonable  restric-
\n\t      tion.”\n<\/p><\/blockquote>\n
I ought here to point out that the principles enunciated  by
\nthe Government were held to be of no effect as they had\t not
\nbeen  issued in compliance with sub-ss. (5) and (6) of s.  3<\/a>
\nof the, Essential Commodities Act<\/a> and on that basis petition
\nwas allowed and a writ was issued restraining the Union from
\ngiving\teffect\tto  el.\t 4  of the  order  so  long  as\t the
\nprinciples  governing  the issue of permits  were  not\tduly
\nspecified.   This however does not affect the force  of\t the
\nobservations  that I have earlier read from the judgment  in
\nthe case.\n<\/p>\n
It  seems to me that these observations fully apply  to\t the
\npresent\t case.\t The order read with  the  policy  statement
\nthough\tit resulted in a complete prohibition in trading  by
\ndealers\t and  in the creation of what the  petitioner  would
\ncall a monopoly in favour of certain manufacturers was\thold
\nto be good as a reasonable restriction on the
\n963<\/span>
\ndealer’s  right to trade under Art. 19(6)<\/a> and the Writ\twas:
\nissued only because the formalities required for  specifying
\nthe  policy statement had not been complied with.  There  is
\nno  defect in the issue of the Licensing Order,\t 1961,\twith
\nwhich  the present case is concerned.  Therefore,  the\tonly
\nquestion would be whether such a prohibition of the trade of
\nthe  dealers like the petitioner, if any, by  the  Licensing
\nOrder, 1961 would be reasonable in the circumstances of this
\ncase.,
\nThe  other  case to which I wish to refer is  Glass  Chatons
\nImporters  &  User’s Association v. The Union of  India<\/a>\t (1)
\ndecided\t by this Court on April\t 10, 1961.  That case  arose
\nout  of\t a petition under Art. 32<\/a> by  certain  importers  of
\nglass chatons.\tThere, the Central Government had issued  an
\norder  under  the  Import and Export  (Control)\t Act,  1947,
\ncalled\tthe Imports (Control) Order, 1955,  prohibiting\t the
\nimport of glass chatons except under a licence.\t Paragraph 6
\nof  the\t Order laid down a number of grounds  on  which\t the
\nCentral\t Government or the Chief Controller of\tImports\t and
\nExports might refuse to grant a licence or direct any  other
\nlicensing  authority  not to grant a  licence.\t The  ground
\nmentioned in el. (h) of this paragraph was ,if the licensing
\nauthority  decide to canalise imports and  the\tdistribution
\nthereof\t  through   special  or\t specialised   agencies\t  or
\nchannels.”  It\tappears that since 1958, licences  had\tbeen
\ngranted\t to the State Trading Corporation.  No\tapplications
\nfor licences had been, made by the petitioners or any  other
\ntrader\tat  any time since 1957.  It was  however  contended
\nthat so long as paragraph 6(h) of the Order remained, it was
\nuseless for the private traders to apply for licences.\t The
\nargument  advanced  on behalf of the  petitioners  was\tthat
\nparagraph  6(h)\t was  void being in  contravention  of\tArt.
\n19(1)(f)<\/a>  and  (g).<\/a>  In regard to this argument\t this  Court
\nobserved:\n<\/p>\n
(1)  (W. P. 65 of 1959, unreported).\n<\/p>\n
964<\/span><\/p>\n
\t       “It  is obvious that if a decision  has\tbeen
\n\t      made  that  imports  shall  be  by  particular
\n\t      agencies\tor channels the granting of  licence
\n\t      to any applicant outside the agency or channel
\n\t      would  frustrate\tthe implementation  of\tthat
\n\t      decision.\t  If  therefore\t a  canalization  of
\n\t\t\t    imports  is\t in the interests  of  the  genera
\nl
\n\t      public  the  refusal of  imports\tlicences  to
\n\t      applicants  outside the agencies\tor  channels
\n\t      decided upon must necessarily be hold also  in
\n\t      the interests of the general public.  The real
\n\t      question\ttherefore is : Is  the\tcanalization
\n\t      through  special\tor specialized\tagencies  or
\n\t      channels\tin  the\t interests  of\tthe  general
\n\t      public.”\n<\/p><\/blockquote>\n
The  Court  held that it was unable to accept  the  argument
\nthat  a decision that imports shall be canalised is  per  se
\nnot a reasonable restriction on the right to trade.  On\t the
\nfacts  of the case, the Court took the view that a  decision
\nto canalise imports of glass chatons was in the interest  of
\nthe  general  public.  In this case, it had  been  contended
\nthat the Government was creating a monopoly in favour of the
\nState  Trading Corporation.  The Court hold that the  period
\nof  permits granted to the State Trading Corporation  having
\nalready expired, the question did not really arise.  But, as
\nwould have been noticed earlier, the Court really dealt with
\nthe  same contention in deciding the-validity  of  paragraph
\n6(h)  of  the  Order.  This decision  lends  equally  strong
\nsupport to the view that preference directed to be given  by
\ncl. (e) of paragraph 5 of the Licensing Order with which  we
\nare   concerned\t  to  co-operative  societies,\t would\t not
\nnecessarily render it invalid.\n<\/p>\n
I  feel\t no doubt on the facts of the present  case  that  a
\npreference  to co-operative societies even if that  resulted
\nin  the dealers being prevented altogether from\t dealing  in
\npaddy,\twould, be a reasonable restriction on  the  latter’s
\nright of trade.\t Assam is a deficit State in foodgrains.  It
\nis the
\n\t\t\t    965<\/span>
\nduty  of the State Government to see that the people  living
\nwithin its boundaries are supplied with adequate  foodgrains
\nand that at a reasonable price. The If paddy is procured for
\nthe use of the consumers in the State through a co-operative
\nsociety,  there is good reason, as already stated, to  think
\nthat  rice at a reasonable price would be available  to\t the
\npeople\tof  Assam.   I\twill later  in\tdetail\tdiscuss\t the
\nstructure  and the activities of the co-operative  societies
\nto whom licences had been granted.  What I will have to\t say
\nthere will amply establish that it was a reasonable step  to
\nhave  taken  to put the trade in charge solely\tof  the\t co-
\noperative societies.\n<\/p>\n
I  turn now to the petitioner’s second\tcontention,  namely.
\nthat   cl.(e)\tof  paragraph  5  has  been  worked   in   a
\ndiscriminatory\tmanner so as to create a monopoly in  favour
\nof the Apex Society.  The first thing that I wish to observe
\nis  that licences have not been given for the year  1961  to
\nthe Apex Society but they have been given to a large  number
\nof  primary  co-operative societies of growers.\t I  find  it
\ndifficult,  in any case, to appreciate how this can be\tsaid
\nto  create  a monopoly.\t It may amount to a  prohibition  of
\ntrade  by some persons.\t That however is a different  matter
\nwith  which I have already dealt.  I may state here that  it
\nappears\t that  in 1960 the licences had been issued  to\t the
\nApex  Society, but that is not the situation  now.   Whether
\nwhat  was  done in 1960 was strictly legal or not is  not  a
\nquestion  that\tnow arises, for we are no  longer  concerned
\nwith the licences for 1960.\n<\/p>\n
I Before proceeding further, I think it right to I say a few
\nthings\tabout the co-operative societies with which  we\t are
\nconcerned.   About 1957, the Assam Government sponsored\t the
\nformation of the Apex Society.\tI would like to remind here.
\nthat   it  is  one  of\tthe  directive\tprinciples  of\t the
\nConstitution   that   co-operative   societies\t should\t  be
\nencouraged.  Now, the structure of the Apex Society is\tlike
\na  pyramid.  It appears to have three tiers.  On the top  is
\nthe Apex Society.  Under it
\n966<\/span>
\ncome various. primary marketing Co-operative societies.\t  At
\nthe  bottom rung are a large number of primary\tco-operative
\nservice\t  societies.   The  membership\tof  the\t  marketing,
\nsocieties   consists  mostly  of  cultivators  and   service
\nsocieties,   and  of  the  service  societies,\t mostly\t  of
\ncultivators.  The function of the Apex Society appears to be
\nto co. ordinate the working of the subsidiary societies\t and
\nto  obtain moneys from the Co-operative Apex Bank and  there
\nout make advances to the cultivators through the  subsidiary
\nsocieties,  to help them in their cultivation.\tThe  service
\nsocieties procure from the growers the paddy grown by them I
\nthey can spare and realise the moneys advanced to them\tout.
\nof the price of the paddy purchased.  The money realised  is
\nduly passed on to the Apex Society.  The paddy collected  is
\nsold  by the service societies to the  marketing  societies.
\nThe  marketing societies in their turn deliver part  of\t the
\npaddy to the Government for creating a buffer stock and\t the
\nremaining  quantity to mills for milling into rice, in\tboth
\ncases  according to the directions of the  Government.\t The
\nbenefits  derived from the whole scheme are  obviously\tvery
\nlarge.\t The  middlemen are eliminated.\t The  growers  being
\nthemselves  members of ‘the societies, participate in  their
\nprofits\t whatever  they are. :This helps to  keep  down\t the
\nprice  because a service society in passing on the paddy  to
\nthe  marketing society charges very little by way of  profit
\nand  that   profit  is shared by the groweres  who  are\t its
\nmembers.    This   enables  the\t growers  to   sell   at   a
\ncomparatively  lower  price.  The growers have\tfurther\t the
\nadvantage of loans from the Apex Society to help them in the
\nWork of cultivation; these loans can be easily advanced\t and
\non liberal terms because their repayment is secured  by.,the
\nprocess\t of  purchase of the produce  through  the,  service
\nsocieties.  It would he reasonable to think that this. would
\nencourage  cultivation\tand result in larger  quantities  of
\nfoodgrains-,  being  produced.\t That  would  also  help  to
\nachieve the
\n 967<\/span>
\nobject of the Act It may further be pointed out that each of
\nthese  societies  is a body corporate see s.18\tof  the\t Co-
\noperative  Societies Act<\/a>, 1912.\t The  societies form  a\t net
\nwork over the entire surplus grain producing area of  Assam,
\neach working in its own area. , A vast number of growers  of
\nfoodgrains  are\t the members of the primary.  marketing\t and
\nservice\t societies.   It  is to\t these\tsocieties  that\t the
\nlicences had been issued of which, a grievance is being made
\nby the petitioner.\n<\/p>\n
It appears that after the Apex and the subsidiary  societies
\nhad  been formed, the State Government with the\t concurrence
\nof  the Central Government decided on a policy of  procuring
\npaddy\tin  certain  specified\tareas  only  through   these
\nsocieties.    The   State   Government\t thereupon    issued
\ninstructions  to  certain  officers at the end\tof  1959  at
\nprocurement  of paddy for the Kharif year 1959-60  would  be
\nmade through the co-operative societies.  It may be that  it
\nwas for this reason that the licensing authority had  stated
\nin  its order of February 17, 1930, earlier mentioned,\tthat
\nthe  petitioner’s  application for a licence  could  not  be
\nconsidered.  I have now to remind that the Licensing  Order,
\n1960  did  not\tcontain any  provision\tenabling  preference
\n‘being\tgiven to a co-.-operative society in the grant of  a
\nlicence.   This case however is not concerned any more\twith
\nregard to a licence for the year 1960 or the validity of any
\norder  of  the\tlicensing authority refusing  to  grant\t the
\npetitioner any licence for that year..\n<\/p>\n
Returning to the contention that the power under paragraph 5\n<\/p>\n
(e)  of\t the  Licensing\t Order\thad  been  exercised  in   a
\ndiscriminatory\tmanner, I wish first to observe\t that  under
\nthe  Order  which  I  have already  held  to  be  good,\t the
\nauthority concerned in granting the licences was entitled to
\nprefer\ta  co-operative society, and this is  what,  it\t has
\n,done..\t Though\t the  result may have been  to\tprevent\t the
\npetitioner  from  carrying on, the trade of  purchasing\t and
\nselling paddy, that, in my view is, in the
\n968<\/span>
\ncircumstances of this case, a reasonable restriction on his’
\nright  to  trade for that was necessary to  secure  for\t the
\npeople\tof Assam supply of foodgrains at a reasonable  price
\nand in adequate quantities:\n<\/p>\n
I  have\t very grave doubts if the  licensing  authority\t was
\nintended  to act in a Quasi-judicial capacity in the  matter
\nof  granting  licences.\t It has to be  remembered  that\t the
\nquestion before it was not so , much of the competing rights
\nof various applicants or of any is between an applicant\t and
\nthe  State.   The  duty of the licensing  authority  was  to
\nadvance\t the  object of the Act in terms  of  the  Licensing
\nOrder.\t Its  main consideration has to be to see  that\t the
\nlicences  granted by it helped to make foodgrains  available
\nat  a fair price to the people of Assam.  The Act<\/a>  gave\t the
\npowers\tfor  that purpose.  It is because  this\t purpose  is
\nlegitimate  that  the resultant prohibition  of\t trading  by
\nprivate dealers is also legitimate.  I believe that the\t two
\ncases  I have earlier mentioned proceeded on the basis\tthat
\nthe  licensing authority was not a  quasi-judicial  officer.
\nIt  is not necessary for me however to pronounce finally  on
\nthis question.\n<\/p>\n
It  was contended that the licensing authority\tin  granting
\nthe licence to the co-operative society had only carried out
\nthe   directions  of  the  Government  and  had\t not   acted
\nindependently.\t I find no basis for this  contention  apart
\nfrom the bald allegation of the petitioners which is  denied
\nby the respondent.  N directions by the Assam Government for
\nthe year 1961 have been produced.  The instructions to which
\nI have earlier referred requiring the licence to be given to
\nthe  co-operative societies were confined to the year  1959-\n<\/p>\n
60.  That had no force in regard to the year 1961 with which
\nwe  are\t concerned.  Those instructions cannot be  taken  as
\noperating  for\tall  time to come  for\tthen  the  licensing
\nauthority’s  order  granting  licences\tto  a\tco-operative
\nsociety in future years will always have ‘to be held to have
\nbeen  made  under these instructions.  I am unable  to\ttake
\nsuch a view of the matter.  As
\n\t\t\t    969<\/span>
\nalready\t stated, the High  Court had by its Order of  August
\n10,  1960  asked  the licensing authority to  proceed  in  a
\nquasi-judicial manner.\tThere is no reason to think that the
\nlicensing  authority had not observed this direction of\t the
\nHigh Court.\n<\/p>\n
It  also  seems\t to me reasonable to think  that  the  Assam
\nGovernment inserted cl. (e) in paragraph 5 of the  Licensing
\nOrder,\t1961 in view of the judgments of the High  Court  of
\nAssam\tto  which  I  have  earlier  referred.\t The   Assam
\nGovernment  obviously intended that the licensing  authority
\nwould in view of cl. (e) give preference to the co-operative
\nsocieties.   Furthermore, s. 4<\/a> of the Act provides  that  an
\norder  made under s. 3<\/a> conferring powers on any\t officer  or
\nauthority  may contain directions to him as to the  exercise
\nof such powers.\t In my view, for the reasons earlier stated,
\na direction in the Licensing Order to give preference to co-
\noperative  societies would not be bad.\tIt seems to me\tthat
\ncl.  (e) of paragraph 5 of the Licensing Order, 1961  really
\namounts to such a direction.  It was not necessary after the
\nLicensing Order, 1961 for the Government of Assam  therefore
\nto give any other direction to the licensing authority.
\nI  do not think any question of violation of Art. 14<\/a> can  be
\nseriously  pressed.  If the duty of the licensing  authority
\nwas  quasi-judicial in its nature, then it is  difficult  to
\nappreciate how it can be said that its decision would offend
\nArt.  14.<\/a>  In any case, it seems to me quite clear that\t the
\nco-operative  societies\t form a class by  themselves  and  a
\nprovision giving preference to such a class, would be a good
\nprovision  because  the object of the Act  would  be  better
\nserved\tthereby\t for  the reasons  earlier  mentioned;\tsuch
\nprovision  would have a clear nexus with the object  of\t the
\nAct and therefore satisfy the test of Art. 14.<\/a>
\nLooking at the matter from any point of view it seems to  me
\nthat the Order of the licensing authority giving  preference
\nto the co-operative
\n970<\/span>
\nSocieties is not open to any objection.\t In my view that was
\na fair Order to have been made in the circumstances of\tthis
\ncase.\n<\/p>\n
I would for these reasons dismiss this petition.
\nMUDHOLKAR, J.-I agree with the judgment delivered by Sarkar,
\nJ.\n<\/p>\n
 By  Court-In  accordance with the opinion of  the  majority
\nthis Writ Petition is allowed with costs.\n<\/p>\n
Petition allowed.<\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Mannalal Jain vs The State Of Assam And Others on 29 September, 1961 Equivalent citations: 1962 AIR 386, 1962 SCR (3) 936 Author: S Das Bench: Sinha, Bhuvneshwar P.(Cj), Das, S.K., Sarkar, A.K., Ayyangar, N. Rajagopala, Mudholkar, J.R. PETITIONER: MANNALAL JAIN Vs. RESPONDENT: THE STATE OF ASSAM AND OTHERS. DATE OF […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-271570","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nMannalal Jain vs The State Of Assam And Others on 29 September, 1961 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/mannalal-jain-vs-the-state-of-assam-and-others-on-29-september-1961\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Mannalal Jain vs The State Of Assam And Others on 29 September, 1961 - 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