TMI Blog1996 (4) TMI 503X X X X Extracts X X X X X X X X Extracts X X X X ..... e commodities with gunny bags would relieve hardships to them. The would relieve hardships to them. The constitutionality of the Act and the Jute Packaging Material (compulsory Use in Packing commodities) Rules and standing order No. 539(E) dated May 29, 1987 are impugned as ultra vires and mandatory direction to the respondents to forbear enforcement thereof in packing their finished products with jute bags etc., is sought for. We have had the advantage of fearing galaxy of learned senior counsel with their forensic legal skills to assail the constitutionality of Section 3 to 5 of the Act and the orders issued by the central Government on the anvil of Articles 14, 19(1) (9) and 301 of the constitution and their repudiation with equal vehemence by counsel appearing for respondent. The petitioners' fundamental premise is that their right to carry on trade and business guaranteed by Article 19(1) (9) and free flow of trade and commerce throughout the territory of India under Article 301 has been impeded by operation of the Act, the Rules and the orders issued by the central Government the restriction by way of compulsory packing of their finished products with gunny bags is an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, apart from cost factors, loss of the essential commodities, pollution and health hazards to the workmen. The Act casts no corresponding obligation on jute manufacturers to supply gunny bags as per growing demand nor are they obligated to pass on the benefits to the growers of raw jute. The report of the High power committee of 1992 would show that the growers are victims of exploitation at the hands of the manufacturers to supply gunny bags as per growing demand nor are they obligated to pass on the benefits to the growers of raw jute. The report of the High power committee of 1992 would show that the growers are victims of exploitation at the hands of the manufactures. They are not receiving any benefit from the Act. The Act does not provide any guidelines to protect the interests of the growers. On the other hand, compulsory packing of the commodities with jute bags is intended to benefit only jute will owners who have already taken large sums of money by way of subsidy from the central Government and modernised their mills. Yet jute bags are not available to the required demands, which would establish that they had diversified the jute products. No guidelines are provided ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her. In addition, they relied on paragraphs 6.1; 2.9; 2.10; 9.1 and 9.6. The standing Advisory committee constituted under section 4 of the Act is not a representative committee nor the manufacturers find their representatives in the committee. The HDPE is much cheaper than the gunny bag. The incidence of cost of the gunny bag being component of the sale price of the essential commodity, needless burden would be passed on to the consumers. In this regard, the sugar industry pointed out that there is increase in the sugar factories and production of sugar industry pointed out that there is increase in the sugar factories and production of sugar over the years from 216 to 435 from 37.40 lac tonnes to 146.35 lac tonnes respectively. On the other hand, there is gradual decline in jute cultivated area from 11.03 hectors to 9.10 hector. Consequently, import of jute from Bangladesh has been increased from 3.10 to 54 tonnes. It is , contended that it is no longer feasible to obtain sufficient quantity of 'A' class bags fit for packing sugar. The Act being a penal Act, the Rules made and the orders issued thereunder are, therefore, arbitrary offending Article 14. Interplay of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t also to establish an egalitarian social order. Individual has to live within the social confines suppressing his unsocial and unbridled growth for reconciling individual liberty with social control. Liberty must be controlled in the interests of the society. The societal interest must never br overbearing to justify total deprivation of individual liberty. Liberty cannot stand alone. It must be paired with a companion virtue; liberty and morality; liberty law; liberty and justice; liberty and common good; liberty and responsibility which are concomitants for orderly progress and social stability. Man being a rational individual has to live in harmony with the equal rights of others more differently for the attainment of antithetic desires. Liberty would not, therefore, be always an absolute licence but must arm itself within the confines of law. In that case, the question was: whether TADA Act is constitutionally valid? while declaring part of the Act as invalid, the above statement of law came to be laid therein. In Kesawananda Bharati vs. Union of India [(1973) Supp. SCR 1], the Full court had held that preamble of the constitution is integral part of the constitution. In S.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts would attach. justice, equality and fraternity are trinity for social and economic equality. Law is the foundation on which the potential of the society stands. Law is an instrument for social change as also defender for social change. In Madhu Kishwar Ors. etc. v. state of Bihar Ors. [Writ petition (C) No. 5723 of 1982 dated April 17,1996], the question was: whether the tribal women are entitled to equality in matters of succession with male members? One of us (K. Ramaswamy, J.) has held that they are entitled to equality in matters of succession. Social justice is the comprehensive form to remove social imbalances by law harmonising the rival claims or the interests of different groups and/or sections in the social structure or individuals by means of which alone it would be possible to build up a welfare state. The ideal of economic justice is to make equality of status meaningful and the life worth living at its best removing inequality of opportunity and of status- social, economic and political. The content ambit and interplay of justice and social justice was elucidated in Consumer Education Research Centre Ors. v. Union of India Ors. [(1995) 3 SCC 42] by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice and equality are complementary to each other so that both should maintain their vitality. Rule of law, therefore, is a potent instrument of social justice to bring about equality in result. Article 1 of the universal Declaration of Human Rights envisions that all human beings are born free and equal in dignity and rights and each should act towards one another in a spirit of brotherhood. In that case the question was: whether rights to social security is a fundamental right to workman? to make the life of the workman worth living with health, it was held that right to health is a fundamental right and it is the duty of the state and the employer to provide facility and opportunities for ensuring sustained good health and leisure to the workman as facet of right to life under article 21. In Mrs. Valsamma Paul v. Cochin University Ors. [JT 1996(1) SC 57], a Bench of this court has held that human rights are derived from the dignity and worth inherent in the human person. Human rights and fundamental freedoms have been reiterated in the universal declaration of human rights. Democracy, development and respect for human rights. Democracy, development and respect for human righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution introduced, secularism and socialism in the preamble which are implicit in the Directives and the Fundamental Rights read together. Social and economic justice in the context of our Indian constitution must, therefore, be understood in a comprehensive sense to remove every inequality and to provide opportunity to all citizens in social as well as economic justice means the abolition of those economic conditions which ultimately result in the inequality of economic values between mem. It means to establish a democratic way of life built upon socio-economic structure of the society to make the rule of law dynamic. Article 14 of the constitution is a shining star among the fundamental rights which guarantees equality to every citizen and equal protection of laws to all persons. Equality before laws ins correlative to the concept of rule of law for all-round evaluation of healthy social order. Directives set forth social principles to eliminate inequalities in income, in status and opportunity and to provide facilities and opportunities to every citizen to make the fundamental rights meaningful and the life of every citizen worth living and at its best, with the dignity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in productivity and production. To meet the increasing demands of the growing population enlarging the income of the farmers and realising the country potential by stepping up agricultural exports effective steps are directed to be taken. In paragraph 1.11.7, it is stated that marketing infrastructure has to be further augmented and streamlined, especially in respect of perishable commodities. In the light of the technological advancement and gains, agricultural produce requires to promote diversification within and outside the country which gains importance in the coming years. In paragraph 1.11.9, it is stated that the changes in the trade policies have vastly improved the prospects for realising the full potential of the country with its varied agro-climatic conditions from tropical to temperate regions, in producing commodities for export. Maximising the production of the traditional export commodities etc. requires to be stepped up on modern technologies and sustained efforts should be made in the coming years. In paragraph 1.11.11, it is stated that the promotion of initiatives outside the Government to further socioeconomic development is of cardinal importance and is centra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tives, parliament is the best Judge to decide what is good for the community by whose suffrage it comes into existence and the majority political party assumed governance of the country. The Directive principles are the fundamentals in their manifestos. Any digression is unconstitutional. The constitution enjoins upon the Executive, Legislature and the Judiciary to balance the competing and conflicting claims involved in a dispute so as to harmonise the competing claims to establish an egalitarian social order. It is a settled law that the Fundamental Rights and the Directive principles are two wheels of the chariot; none of the two is less important than the other. Snap one, the other will lose its efficacy. Together, they constitute the conscience of the constitution to bring about social revolution under rule of law. The Fundamental Rights and the directives are, therefore, harmoniously interpreted to make the law a social engineer to provide flesh and blood to the dry bones of law. The Directives would serve the court as a beacon light to interpretation. Fundamental Rights are rightful means to the end, viz., social and economic justice provided in the Directives and the preamb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compulsory use of jute packing material in the supply and distribution of certain commodities in the interest of production of raw jute packing material and the persons engaged in the production thereof for the matters connected therewith. Section 3,4 and 5 reads thus: 3. (1) Notwithstanding anything contained in any other law for the time being in force, the Central Government, may, if it is satisfied, after considering the recommendations made to it by the standing Advisory committee, that it is necessary so to do in the interest of production of raw jute and jute packaging material, and of persons engaged in the production thereof, by order published in to time, that such commodity or class of commodities or such percentage thereof, as may be specified in the order, be packed for the purposes of its supply or distribution in such jute packaging material as may be specified in the order: (a) the existing level of usage of jute material; (b) the quantity of raw jute available; (c) the quantity of jute material available: (d) the protection of interest of persons engaged in the jute industry and in the production of row jute; (e) the need for continued maintenanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isory committee shall, after considering the following matters, indicate its recommendations to the central Government, namely : Sections 6 to 8 are machinery provisions. Section 9 to 11 are penal provisions. Section 16 gives power to the Central Government, to exempt by notification published in the official Gazette, any commodity or class of commodities from the operation of any order made under section 3. The order should be laid under sub-section (2) before each House of parliament as provided therein. The orders issued under section 3 are subject to modification by the parliament. Section 17 gives rule- making power to the central Government. Rules, namely, the Jute packaging Materials (compulsory use in packing commodities) Rules, 1987 (for short, the 'Rules') were made. Rule 3 provides for constitution of the commodities. Sub-section (1) of section 3, with a non-obstante clause, excludes, excludes the operation of any other law for the time being in force and, regulates use of jute or jute packaging material in supply and distribution of certain commodities. It gives power to the Central Government, on being satisfied, on consideration of the recommendations ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbers not exceeding 20, nominated by the central Government for a term of three years. The date of the constitution of the committee and of filling up of all the vacancies and manner in which it is to be done is provided thereunder. It is true that though a committee was constituted by the central Government, in addition to the Advisor committee which recommended to the Government to abolish compulsory use of jute packing material by 1997, the Government and the Advisory committee did not consider it desirable to completely phase out compulsory use of Jute packaging Material. It issued directions for compulsory packing of the commodities with jute packaging material with varying percentage. In the case of sugar, 100% use of jute packaging material is insisted to be continued. The question, therefore, is: whether direction issued by the central Government for the compulsory packing of the commodities with jute packaging material, [in respect of sugar 100% use of the gunny bags and at varying percentage for other commodities is unconstitutional? As stated earlier, the Act aims to accord socio-economic justice to the tillers of the soil by protecting the cultivation of raw jute ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rests of the agricultural industry and the industry involved in commercial products need to be protected and would guide the central Government appropriately by resolution or otherwise. When parliament debates on the subject, it focuses its attention on all its constituents and it would be open to debate, on the subject by participants from all the members of the parliament and political parties and of shades of opinion. Parliament is entitled to direct the Central Government to place on the floor of each House the necessary factual material for discussion. They are the best judges to direct the central Government to act on their advice in a particular way, based on the existing factual material. The parliament is empowered to overrule of the central Government under section 3(1) by disapproval. It is a question of fact, to be considered in each case, as to what percentage is required to be used it is primarily of the central Government to be decide as executive policy. The central Government is guided by the material placed before it and the advice tendered to it by the standing Advisory committee constituted under Section 4 of the Act. It depends upon the availability of the j ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to the sugar was not amenable to judicial review. In R.K. Garg etc. vs. Union of India Ors. [(1981) 4 SCC 675], when Special Bearer Bonds (Immunities and Exemptions) Act, 1981 was challenged in this Court under Article 32 of the Constitution, this Court per majority, had held that legislation particularly in economic matters, is essentially empiric and it is based on experimentation. There may be crudities, inequities and even possibilities of abuse but on that account alone, it cannot be struck down as invalid. These can always be remedied by the legislature by passing amendments. The Court must, therefore, adjudge the constitutionality of such legislation by the generality of its provisions and not by its crudities. Laws relating to economic activities should be viewed with greater latitude than laws touching civil rights such as freedom to speak or practise any religion. There is always a presumption in favour of the constitutionality of the Act. Burden is on the petitioner to show that there has been a clear transgression of constitutional principles. The legislature understands and correctly appreciates the needs of its own people; its laws are directed to problems made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the court had stated that Morey was the only case in the last half century to invalidate a wholly economic regulation solely on equal protection and now we are satisfied that the decision was erroneous . In Charles Roberts Co. Ltd. vs. British Railways Board [(1965) 1 W.L.R. 396] , the chancery Division had held that, in general, Judges are not qualified to the said questions of economic policy and such questions by their nature are not justiciable. But, in England, judicial review of parliamentary enactment was not available. That decision may not be of much assistance. Robert Jackson, J. in H.P. Hood sons vs. Dumond (1949), had stated that our system is that every farmer and every craftsman shall be encouraged to produce by the certainty that he will have free access to every market in the nation, that no home embargo will withhold his exports and that no foreign state will by custom, duties or regulation exclude them [vide: The Encyclopedia of American Constitution on the chapter Economic Analysis and the constitution at page 597]. At page 598, it is stated that since 1937, the court has consistently declined to invalidate economic legislation on substantive due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a second crop. In other areas in south Eastern region, as is evident, apart from agriculture, jute also is the main agricultural product. In Uttar Pradesh, sugarcane gets intensive cultivation apart from paddy and wheat. In Gangatic platue, apart from agriculture intensive sugarcane cultivation is the special feature. In Punjab and Haryana, wheat and paddy are the main cultivation. In Rajasthan, bazra, pulses etc. are cultivated. Throughout the country but cultivation of agriculture produce is the sole resource of the rural population as majority is compared to urban population in the country. It is, therefore, clear that raw agriculture produce is an input of finished product for commercial purposes and its regulation, by the Acts or Rules or orders, cannot be assailed as ultra vires the legislature on the basis of the population of the agriculturists when it affects consumer public or manufacturers of finished products whose business avocation incidentally gets affected. On that account, the Act cannot be declared void or Ultra vires the power of the parliament to enact the law. The main Plank of the petitioners, to demolish the validity of the Act as ultra vires of Article 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition of total prohibition in the purchase and import of copper and fixation of the prices in view of policy of eliminating the dealers from such trade as not violative of Article 19(a) (9) of the constitution. It was held that restriction includes total prohibition. In view of the foreign exchange crunch, the prohibition on import of copper, lead etc. Was upheld that the court is to see whether the test of reasonableness is satisfied by considering the question in the background of factual circumstances under which the order came to be made, taking into account the nature of the evil that was sought to be remedied by law, the ratio of the harm caused to the individual citizens by the proposed remedy, the beneficial effect reasonably expected to the general public and whether the restrain caused by the law was more than necessary in the interest of the general public. In M/s. Dwarka Prasad Laxmi Narayan vs. Stateof Utter Pradesh Two ors. [(1954) SCR 803], it was held that regulating the trade or business in normally available commodities was unreasonable. U.P. coal control order had given absolute power to the licensing authority to renew the licence under the order. In that ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson or persons on whom the restrictions are imposed. The court has to consider whether the restrictions are reasonable in the interest of the general public. The question of the interest of general public is of wide import comprehending public order, economic welfare of the public, public security, morals and the objects mentioned in the Directive principles. The test of reasonableness has to be viewed in the context of the issues which faced the legislature. In constructing such laws and judging their validity, courts must approach the problem from the point of view of furthering the social interest which is the purpose of the legislation to promote. They are not in these matters functioning in vacuo but as part of society which is trying, by the enacted law, to solve the problems and further the moral and material progress of the community as a whole. In Sushila Saw Mill vs. State of Orissa ors. [(1995) 5 SCC 615], the orissa saw mills and saw pits (control) Act, 1991 and in particular section 4 thereof was challenged as violative of Articles 19(1) (g) and 301 of the constitution. Section 4 imposed restriction on establishing saw mill within the notified prohibited zones. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Government had recommended to phase out use of gunny bags on the ground that in a free market. It is not justified primarily to encourage free market. It is seen that the state has not abandoned and cannot abandon the mixed economy and power of regulation as mandated by constitutional policy. The Act was made in implementation of socio-economic equality and policies. Even a private industry by operation of Directive contained in part IV, is bound to adopt them implement them and the Government policies to establish an egalitarian social order. The committee in its free market frenzy became oblivion of the policy resolution of Eighth Five year plan, the Trinity, Preamble, Fundamental Rights and Directives. The executive policy of the state would be cognizant to these mandated which should always bind the Government and all agencies including private agencies. As seen, the Advisory committee constituted under section 4 has recommended 100% use of packing the sugar with gunny bags. On consideration of the report, the Government had acted upon the same. the economic policy to render socio-economic justice to the growers of the raw jute and the workman is based on the above cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... benefited from the regulation. We cannot decide the validity of the Act on that basis. May be that there does not appear to be any control on the prices of the raw jute supplied by the farmers to the jute factories. If that is the situation, the Government should look into the problem and met out justice to the producers for whose benefits the Act was primarily enacted. Corrective steps should be taken to protect the interests of the growers. For the labour, they demands. But on that account, the Act cannot be struck down. The further contention that since the Act is a temporary measure to benefit the jute industry, the regulation should be phased out gradually, is without substance. From the Eighth plan and the Resolution, it is evident that the Government intends to continue the regulation. The further contention that the jute products are being diversified and the need for regulation, therefore, no longer subsists , cannot be accepted. It is for the Central Government to take into consideration, on the basis of the material placed before it, as to what extent the regulation would need modification. The further contention is since no adequate supply of the jute bags is availab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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