9911796707
TMI Blog1951 (9) TMI 59X X X X Extracts X X X X X X X X Extracts X X X X ..... This order provides for the control of raw materials and stores as well as cloth and yarn. In these two applications we are only concerned with the provisions relating to cloth and yarn. Clause (12) of the order runs as follows: "12 (1) No producer who has no spinning plant shall work or cause or permit to be worked, (a) looms in excess of the number of looms working in the undertaking on the 30th September 1944. (b) Any loom for a period which in any one month exceeds the average number of hours of work per loom per month in the undertaking during the year ending 30th September 1944. (2) No producer who has a spinning plant shall in any quarter -- (a) purchase a quantity of yam exceeding 1/4 of-the quantity of yarn purchased by him in the year 1944; (b) sell a quantity of yarn less than 1/4 of the quantity of yarn sold by him in the year 1944; (3) No producer who has no weaving plant shall install or cause or permit to be installed any loom in his undertaking. (4) No person shall acquire or Install any loom to be worked by power as defined in Section 2(f) of the Factories Act, 1934. (5) Any person having in his possession any loom which he is not entitled to w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n units to serve 100 to 120 power looms in the count of yarn used by the petitioner's looms. As the petitioner had only 24 power looms he wanted to acquire further looms. The Textile Commissioner advised the petitioner to apply through the Provincial Textile Commissioner at Madras. The petitioner made an application accordingly on the 19th August 1949. This application was refused by the Government on 6th December 1949. He repeated his request and was informed by the Director of Controlled Commodities in his letter dated 17th March 1950, that Permission for additional looms would not be granted in view of the meagre supply position of yarn In the State. The petitioner again made representations to the Minister for Industries with no success. On 5-7-1950 he received a communication from the Secretary to Government Development Department, that in view of the difficult conditions of yarn supply, the petitioner's request for permission to install 36 additional looms would not be considered at present. Meanwhile the petitioner had purchased the preparatory machinery at a cost of about a lakh of rupees. 5. In the affidavit filed in support of C.M.P. No. 6181 of 1951, the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Issue of Writ of a Mandamus or an order directing the respondent namely, the State of Madras represented by the Director of Controlled Commodities to forbear from and in any way interfering with the acquisition and installation by the petitioner of additional power looms in his mill. In the second application (C.M.P. No. 6182 of 1951), the petitioner prayed that a Writ or order may issue directing the respondent to allot and supply to the petitioner 400 lbs. of yarn per loom per month. 8. On behalf of the State an Upper Division clerk in the Office of the Director of controlled Commodities swore to a counter-affidavit traversing the allegations and charges made by the petitioner in his affidavit. The learned Advocate-General confessed that the counter-affidavit could have been filed by some one morel responsible than a clerk. The legal position taken up in this counter-affidavit was that the Textile Commissioner had full discretion to grant or refuse permission for acquisition and installation of new looms. The refusal to give to the petitioner permission to install new looms was said to be due to the acute scarcity of yarn in the State. A reference is made to an All-India Yarn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al mills. 10. The argument of Mr. Venkatasubramania Aiyar, learned Counsel for the petitioner was in the main based on Article 14 of the Constitution which ensures to all persons equality before the law and equal protection of the laws from the State. The definition of "State" in Article 12 includes besides the Government and Parliament of India and the Government or Legislature of each of the States, also local or other authorities within the territory of India or under the control of the Government of India. Taking first the provisions regarding acquisition of looms, he contended that Clause 12 (4) of the Cotton Textiles Control Order, though in terms prohibits any acquisition or Installation, must be read with Clause 33 which empowers the Textile Commissioner to exempt wholly or in part certain cases from the operation of the provision. The combined effect of Clauses 12 (4) and 33 (1) would therefore be that unless permitted by the Textile Commissioner no new looms can be acquired or installed. Clause 33 (1) does not mention the grounds or circumstances which should influence the Textile Commissioner in granting or withholding special permission. Ultimately it comes t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strained to conclude that they do not mean to leave room for the play and action of purely personal and arbitrary power. . . But the fundamental rights to life, liberty, and the pursuit of happiness, considered as individual possession, are secured by those maxims of constitutional law which are the monuments showing the victorious progress of the race in securing to men the blessings of civilisation under the reign of just and equal laws, so that in the famous language of the Massachusetts Bill of Rights, the Government of the Commonwealth 'may be a Government of laws and not of men.' For, the very idea that one man may be compelled to hold his life, or the means of living or any material right essential to the enjoyment of life, at the mere will of another seems to be intolerable in any country where freedom prevails, as being the essence of slavery itself." Mr. Justice Matthews quoted with approval the following observations made by the Court of Appeals of Maryland in the case of 'Baltimore v. Radecke', 49 Md 217 : "But it commits to the unrestrained will of a single public officer the power to notify every person who now employs a steam engine in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer made in contravention of the section shall be void. It was conceded that there were no rules laying down the grounds on which any transfer could be approved or refused. Meeting the argument that the Custodian would not ordinarily refuse to approve any transfer unless for proper grounds, I said: "But surely that would be gambling on the reasonableness of the Custodian. As the section stands, there is nothing to prevent the Custodian from most unreasonable refusing to approve of any transfer by an intending evacuee." Reliance was placed on these remarks by the learned Counsel for the petitioner. Reference was also made to the decision in 'Anumathi Sadhu-Khan v. A. K. Cratterjee', AIR1951Cal90 for the general proposition that deprivation of valuable rights of property without the necessity of giving any reasons for the action would be unconstitutional. Bose, J., observed in that case thus: "An order which arbitrarily or excessively invades the right of an individual cannot be said to contain the quality of reasonableness, Clauses 9 and 13 of the Rice Mills Control Order which no doubt empower cancellation or refusal of a licence already issued and refu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f yarn. He also relied on the circumstance that the main Act, Essential Supplies (Temporary Powers) Act, was itself a temporary measure. Any scheme devised by the Government for a fair and equal distribution of essential commodities cannot be said to be imposing unreasonable restrictions though the scheme may certainly affect prejudicially some persons. It will be difficult and improper for the Court to embark on the actual measure taken by the Government or its special officers to secure a fair and equitable distribution. He cited to us two decisions of the United States supreme Court which dealt with this question of distribution. In ' Railroad Commission Of Texas v. Rowan And Nicholas Oil Co.', (1940) 310 US 573:84 Law Ed 1368 the validity of an order promulgated by the Rail Road Commission of Texas came up for consideration. The statutes empowered the Railroad Commission to make rules and regulations for the prevention of waste of oil and natural gas. It was specially provided that in the exercise of the powers conferred on them, the commission shall in the event of any regulation was adopted limiting the production of oil and natural gas in any pool, prorate or apport ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Agriculture was authorised to allot the refined sugar quota as well as the inclusive allowance of a particular area among those marketing sugar on mainland from that area. The section inter alia provided that allotment shall be made in such manner and for such amounts as to provide a fair, efficient and equitable distribution of such quota or proration thereof by taking into consideration three factors (1) proceedings of sugar to which proportionate shares pertained, (2) past marketing ; and (3) ability to market the amount allotted. An allotment made by the Secretary in exercise of the power conferred by the section was challenged on the ground that the Act, itself was not valid under due process clause of the Fifth Amendment, besides other grounds. It was held that the Act did not offend the due process clause because of the alleged discriminatory character. Mr. Justice Frankfurter who delivered the opinion of the Court after referring to the old and obstinate sugar problem of the country and the necessity for some sort of regulation to ameliorate the effect of disorderly competition observed that it was not for the Court to substitute its notion of expediency and fairness fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prohibition from the exercise of any right be ever justified as a reasonable restriction within the meaning of that expression as it occurs in Article 19(5) and (6). I am inclined to think that a total prohibition unless it be for a short and prescribed time will be invalid. I quite realise that there may be emergent situations when such absolute prohibition may be necessary. But such contingency is provided for by Article 358 of the Constitution. When the President is satisfied that a grave emergency exists whereby the security of India, or any part of the territory thereof is threatened whether by war or external aggression or internal disturbance, he may by proclamation make a declaration to that effect (Article 352). While such proclamation is in operation nothing in Article 19 shall restrict the power of the state to make any law or to take any executive action which the State would but for the provisions contained in Part III of the Constitution be competent to make or to take (Article 358). In such a state of emergency a total prohibition of the exercise of the right conferred by Article 19 may be valid, but otherwise, I am of opinion that it would be unconstitutional. An i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possibility of its being applied for purposes not sanctioned by the Constitution cannot be ruled out; it must be held to be wholly unconstitutional and void." 17. The petitioner has also mentioned concrete instances to show that there has been discrimination in the grant of exemptions under Clause 33 of the order. It is not necessary for us to discuss whether the exemption in each case was justified or not. What is of significance is that there is scope for discrimination. In the absence of any statutory rules to indicate the manner in which the discretion of the Textile Commissioner should be exercised it is impossible to say whether his discretion in a particular case is or is not justified. If the yardstick is only the personal opinion of the Officer concerned, it is plainly a case of a naked and arbitrary power. It is therefore not only desirable but also necessary that proper rules should be framed and general principles laid down to govern the discretion vested in the Textile Commissioner under Clause 33. If that is done and individual cases are dealt with accordingly without making any discrimination there could be no valid complaint. 18. The proper order in the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this attitude on behalf of the State. Even in the affidavit subsequently filed by the Assistant Director of Cotton, Bombay, there is no indication as to the basis on which the yarn is allotted to the several mills. 20. I quite realise that during periods of acute shortage of essential goods and commodities, it is not only desirable but also imperative that the state should take steps to regulate their purchase and sale with a view to an equitable distribution among all the consumers. Legislation undertaken with this object, though it may in a sense, be restrictive of free trade, cannot be declared to be unconstitutional so long, of course, as restrictions are necessary in the interests of the general public and the restrictions are reasonable. It is also clear that legislation in the matter of controls cannot go into the minutest detail of the actual distribution. As Mr. Justice Frankfurter observed in ' Railroad Commission Of Texas v. Rowen And Nicholas Oil Co.', (1940) 310 U S 573: 34 Law Ed. 1368, "merely writing laws is only the beginning of the matter. The Administration of these laws is full of perplexities". The commitment of the delicate task of adjusting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view to ensure fair and equitable distribution. I have already referred to observations of learned Judges of the Supreme Court of the United States that the details of any scheme of regulation or control can only be worked out by administrative agency and not by definite provisions in the Statute. In this connection I found the following passage in Willis' Constitutional Law very suggestive, "Is it proper classification to put in one class those who get the consent of a board or of an official and into another class those who do not where no standard is set up to control the action of the board or official? Some cases answer this question in the affirmative, while other cases answer it in the negative. Perhaps the best view on this subject is that due process and equality are not violated by the mere conference of un-guided power but only by its arbitrary exercise by those upon whom conferred. If a Statute declares a definite policy, there is a sufficiently definite standard for the rule against the delegation of legislative power, and also for equality if the standard is reasonable. If no standard is set up to avoid the violation of equality, those exercising the pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder for us to make is to direct the respondent to consider the application of the petitioner for allotment of yarn on its merits without making any discrimination and in accordance with general rules as to fair and equitable distribution that may be made on the subject. 26. The petitioner will have his costs in the two applications; advocate's fee ₹ 250 in each. T.L. Venkatarama Ayyar, J. 27. These are petitions filed under Article 226 of the Constitution raising the question of the validity of some of the provisions of the Cotton Textiles Control Order, 1948. The petitioner is the proprietor of a Weaving Factory called Sundararaj Textiles at Kalapatti in Coimbatore district. In 1944 the factory was equipped with ten power looms. In 1946 the petitioner applied to the Government for permission to install 14 more power looms and the same was granted and the factory has been working ever since with 24 power looms. The Cotton Textiles Control Order, 1948, with which we are now concerned came into force on 2nd August 1948. Clause 12(4) of this Order runs as follows: "No person shall acquire or install any loom to be worked by power as defined in Section 2(f) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt to Article 14 as it confers wide and arbitrary powers on the Textile Commissioner and that it is therefore void. Thus the points for determination are the validity of Clause 12 (4), CL 33(3) and Clause 30 of the Cotton Textile Control Order, 1948. 30. I shall first set out the relevant legislative provisions bearing on the question. Under 9 and 10 George VI, Chap. 39 India (Central Government and Legislature) Act, the British Parliament conferred on the Central Legislature certain powers. In the exercise of those powers, the Indian Legislature passed the Essential Supplies (Temporary Powers) Act, XXIV of 1946. The preamble to the Act shows that the object of the Legislation was to continue the war-time control of the production, supply and distribution of essential articles for a further period. 31. Section 3(1) enacts: "The Central Government, so far as it appears to it to be necessary or expedient for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability of fair prices, may by notified order provide for regulating or prohibiting the production, supply or distribution thereof and trade and commerce t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id statute can be rendered valid by an efficient officer working it to satisfaction. In either case the validity of the enactment should be determined, on its own merits. If the impugned provisions confer an absolute and un-restricted power, discrimination is inherent in their very nature and they must be declared void without further investigation as to whether in fact there has been discrimination or not. The well-known observation occurring in 'John H. Reagan v. Farmers Loan & Trust Co.', (1694) 154 US 362: 38 Law Ed 1014 , "This, as has been often observed, is a Government of laws and not a government of men" seems eminently adapted to this context. 34. I shall now deal with the authorities cited on either side. Mr. K. V. Venkatasubramania Aiyar the learned advocate for the petitioner relied on the decisions in 'YICK WO. v. HOPKINS', (1886) 118 U S 356: 30 Law Ed 220, 'Anumathi Sadhu-Khan v. A. K. Chatterjee', AIR1951Cal90 and the observations in 'Namazi v. Deputy Custodian Of Evacuee Property, Madras', AIR1951Mad930 . In 'Yick Wo, v. Hopkins', (1886) 118 U S 356: 30 Law Ed 220 an order of the city and county of San Francisco p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... capricious exercise of the power is no exercise at all. If no reasons are assigned, it is not possible to know or judge whether the order is a valid or mala fide or arbitrary order." Reliance is also placed on certain observations occurring in 'M. B. Namazi v. Deputy Custodian Of Evacuee Property, Madras', AIR1951Mad930 . Dealing with Section 20 of the Administration of the Evacuee Property Ordinance, No. XXVI of 1949 which provides that no intending evacuee shall transfer his property without the consent of the custodian, my Lord the Chief Justice referred to the absence of rules indicating on what grounds the transfer should be refused and then observed as follows: "It may be said that the Custodian would not ordinarily refuse to approve any transfer unless for proper grounds. But surely that would be gambling on the reasonableness of the custodian. As the section stands, there is nothing to prevent the Custodian from most unreasonably refusing to approve of any transfer by an intending evacuee." As against this the learned Advocate General relied on 'Railroad Commission Of Texas v. Rowan And Nichols Oil Co.', (1940) 310 U S 573: 84 Law Ed 1368, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of wells and there was no question of any arbitrary exercise of power. What was decided was only that the Courts were not competent to sit in Judgment on the propriety or fairness of the rules which had been duly framed under the statute. In this case no such rules have been framed. 35. In 'Secretary Of Agriculture v. Central Roig Refining Co.', (1950) 338 U S 604: 94 Law Ed 381, the validity of certain provisions in the Sugar Act was in question. For the purpose of controlling Sugar market the quota system was adopted. The Secretary of Agriculture was empowered to make allotments after taking into consideration, processing, past marketing and ability to market. The Act also fixed an annual quota of refined sugar which may be marketed from the offshore areas but there was no such restriction on the mainland refiners. The validity of these provisions was contested on the ground that fixing 1935 to 1941 as the basic period operated harshly on the new comers and that fixing of quotas only for offshore area refiners and not for the mainland refiners was discriminative and in violation of due process clause. In repelling this contention the Court observed: "To fix qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om those activities persons who are not prepared, or who are not able for any reason, to satisfy those conditions. In other words all regulations involve some degree of prohibition, and, further, all regulations operate upon persons." In that case there were elaborate rules prescribed for granting licence and the Court held that the discretion of the Board was not unlimited and arbitrary. In fact the observations quoted above were relied on by the learned Advocate General only to show that the power to regulate carries with it restriction in some form. 38. The result of the authorities may thus be summed up. The legislature can confer on a person or body of persons large powers for the purpose of administering the Act. But it must prescribe the principles on which these powers are to be exercised. If there are no rules for guiding and controlling the exercise of discretion by the person or body of persons, then the power must be held to be arbitrary and unreasonable. 39. Conformably to the above principles the learned Advocate General sought to establish that the discretion conferred on the Textile Commissioner under Clause 33(3) is not absolute and that in fact it is subje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Article 14 and void. 40. I shall now deal with Clause 12 (4). The petitioner contends that he has a fundamental right to acquire property under Article 19(1)(f) and to trade under Article 19(1)(g) and that Clause 12 (4) is an infringement of these rights and is, therefore, void. The point to be decided is whether the clause can be held to be saved by Article 19 (5) and (6) as being a reasonable restriction made in the interests of the general public. That the Control Orders have been made in the interests of general public cannot be and has not been controverted, but what is urged is that Clause 13 (4) absolutely prohibits the acquisition of property and, therefore, cannot be upheld as a restriction, much less reasonable restriction on the rights conferred under Article 19(1) Clauses (f) and (g). Reliance was placed on the decision of the 'Supreme Court in 'Chintaman Rao v. State Of Madhya Pradesh', 1950 S C J 571 , where it was held that a prohibition on the manufacture of beedies during agricultural season was void as being unreasonable. It may be conceded that the restrictions contemplated by Article 19(5) are such as are incidental to regulation of the rights conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 43. I agree with this contention. The prohibition on the right to acquire property enacted under Clause 12 (4) and the power to exempt or modify its operation conferred under Clause 33 (3) are inseparable parts of a single scheme of control. Is it likely that the authorities would have enacted such an absolute prohibition as is contained in Clause 12 (4) if they had not also coupled it with a wide power of exemption such as is conferred under Clause 33 (3)? I find it difficult to believe that they would have. And if an absolute prohibition can be justified under Article 19(5) only by the existence of a state of emergency, how is that to be reconciled with the grant of such an absolute power of exemption under Clause 33 (3)? If A is to be prohibited from acquiring power looms on the ground of national emergency, the prohibition, must apply equally to B and C and all the citizens. There cannot be an emergency as regards one citizen and not as regards others. Nor can an argument be founded on the setting of the two provisions under the Control Order. Clause 33 (3) confers a power to exempt not merely in respect of Clause 12 (4), but several other clauses which are all set out in Sc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... words only define the object of the control and not the mode and manner in which such object is to be carried out. This clause is of the same character as Clause 33 (3) and must for the same reasons be held to be raid. 44. The question is: what is the relief which should be granted to the petitioner. The prayer in the petition is that the respondent should allot and supply to the petitioner 400 lbs. of yarn per loom per month. For the reasons given by me (in C.M.P. No. 6181 of 1951) I am of opinion that such a relief could not be granted. But the application of the petitioner for supply of yarn should be directed to be considered by the Textile Commissioner and disposed of on principle consonant to Article 14. I, therefore, agree that an order should issue in both the applications in forms mentioned in the judgment of my Lord the Chief Justice. 45. Subsequent to the delivery of the judgments in these applications it was brought to our notice by the learned Advocate-General that on 9th July 1951 there was a notification by the Central Government under which for Clause 30 as it stood before, the following clause was substituted, namely : 30 (1) No producer shall sell or deliver a ..... 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