TMI Blog1959 (5) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... the Sugar Export Promotion Act, 1958 (30 of 1958), which shall hereafter be referred to as the Act. They question also the legality of certain orders passed by the second respondent purporting to be under the Act. 2. Before describing how this matter came before the Court, it is convenient to give the scheme of the Act and to set out some of its provisions. On June 27, 1958, the President promulgated the Sugar Export Promotion Ordinance, 1958, which was repealed by and re-enacted as the Act on September 16, 1958. The Ordinance was in the same terms as the Act, and it is not necessary to refer to the Ordinance separately, more so because by s. 14 of the Act which repealed the Ordinance, anything done or any action taken under the Ordinance is deemed to have been done or taken under the Act, and the Act itself is deemed to have commenced on the 27th day of June, 1958. 3. Both the Ordinance and the Act were passed to provide for the export of sugar in the public interest and for the levy and collection in certain circumstances of an additional duty of excise on sugar produced in India. To achieve this objective, the Act authorises the Central Government (as did the Ordinance pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ched from the factory for consumption in India, if the owner of a factory does not fulfil the demands under s. 6. It provides : (1) Where sugar delivered by any owner falls short of the export quota fixed for it by any quantity (hereinafter referred to as the said quantity), there shall be levied and collected on so much of the sugar despatched from the factory for consumption in India as is equal to the said quantity, a duty of excise at the rate of seventeen rupees per maund. (2) The duty of excise referred to in sub-section (1) shall be in addition to the duty of excise chargeable on sugar under any other law for the time being in force, and shall be paid by the owner to such authority as may be specified in the notice demanding the payment of duty and within such period not exceeding ninety days as may be specified in such notice. (3) If any such owner does not pay the whole or any part of the duty payable by him within the period referred to in sub-section (2), he shall be liable to pay in respect of every period of thirty days or part thereof during which the default continues a penalty which may extend to ten per cent of the duty outstanding from time to time, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mong the owners in proportion to the quantity of sugar delivered by them respectively during that year. (3) In making any distribution under this section, the export agency shall make such adjustments as may be necessary having regard to the grade of sugar delivered by any owner, the adjustments being made on the basis of sugar of ISS-E-29 grade and with reference to the price differential schedule for different grades of sugar which the Central Government may, by notification in the Official Gazette, publish in this behalf. (4) Notwithstanding anything contained in this section and subject to the rules which may be made in this behalf, the export agency may make on account payments to owners against documents of delivery of sugar furnished by them, and such payments shall be adjusted at the time of final payment. 12. In the remaining five sections, the Act provides for ancillary matters, the last (s. 14) incorporating the repeal of the Ordinance and savings. Section 10 reserves to the Central Government the power to give directions to the export agency, and s. 11 allows the Central Government to delegate, subject to conditions if any, its functions under the Act to an of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) A delivery order authorising the Central Excise Officer of your factory to deliver the quantity sold. (2) This delivery order will be sent through the Punjab National Bank Ltd., attached to a demand draft drawn on you for the amount of the sale proceeds payable to us. Please pay this on presentation. (3) The sale proceeds payable to us will be calculated as in the following examples :- Rs. Sale price at ₹ 36 per maund D-29 Less Excise Duty to be paid by you Less 'on account' payment of ₹ 10 per maund Amount for which draft will be drawn on you 15. After receiving the delivery order you will pay the Excise duty and deliver the sugar to the buyer. Grade differentials will be allowed as per the Government Notification GSR. 661 d/30th July fixing ex-factory prices. The sale transaction will be as between you and your buyer and the Export Agency cannot take any r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the earlier letters. It also stated that unless the remittance was received by December 5, 1958, the permission to sell the quota sugar for internal consumption would be withdrawn. Subsequent to this too, the export agency wrote to the L. K. S. Mills saying that a demand draft for ₹ 61,845.57 nP. was being sent, to which was attached the delivery order addressed to the Central Excise Officer of the factory for releasing the first installment of 1,500 bags. The L. K. S. Mills were asked to pay the excise duty and to clear the bags from bond and to intimate to the agency that they had done so. Similar documents were prepared for the other installments and forwarded through the Bank. The L. K. S. Mills, however, did not agree to this, and the export agency thereafter on December 18, 1958, sent a telegram that unless the drafts were retired immediately, the quota sugar should be kept ready for despatch so that delivery might be taken by the export agency. The export agency also informed the L. K. S. Mills that otherwise the name of the Mills would be communicated to the Chief Director, Sugar, as a defaulter. The export agency also sent an order for delivery of the quota sug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hase additional machinery, stores etc., for a sum of ₹ 5 lakhs, and that a sum of ₹ 3,43,500 was spent in connection with the repairs to the factory and wages for the period during which the factory was re-started. They further pointed out that they had suffered a loss of ₹ 2,40,000 in the last season and another loss of ₹ 50,000 on account of the strike of cane-growers in March, 1958; that all their sugar stock was pledged with the Punjab National Bank, Bijnor, against an advance of 75 per cent of the price; and that there were arrears of cess amounting to about ₹ 5,50,000 and that the lease money amounting to ₹ 6,10,000 for the next season was also due. They therefore, expressed their inability to send any sugar. They also stated that if they redeemed the pledged sugar even after paying the on account money to the Bank, the Bank would be receiving ₹ 15-2-0 per maund less than the controlled price of sugar. They further stated that it was not possible for them to sell sugar at the controlled price fixed by the Directorate and ended by saying that they were not in a position to despatch sugar, pointing out at the same time that the Act wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he sugar industry for an export programme does not mean that it cannot make a classification of the commodities, bearing in mind which commodity will have an easy market abroad for the purpose of earning foreign exchange. During the Suez crisis, sugar was exported in large quantities from this country, and earned 12.4 crores as foreign exchange. There is nothing on the record to show that export of other commodities was not also undertaken, though it was pointed out in arguments that manganese ore was also exported in a similar manner to earn foreign exchange. It is quite obvious that the Central Government cannot order the export of all and sundry manufactured commodities from the country, without being assured of a market in foreign countries. Necessarily, the Government can only embark upon an export policy in relation to these products, for which there is an easy and readily available market abroad. For this reason also, sugar produced by the vacuum pan process may have been selected, because such sugar is perhaps in demand abroad and not sugar produced by any other process. It must be realised that goods manufactured in our country have to stand heavy competition from goods pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted July 30, 1958. It is pointed out that by that Notification the price of sugar was increased by 50 nP. per maund on all internal sales to enable the factories giving their export quota to recoup themselves for the loss, which might be entailed. It was anticipated that the loss would be recouped if there was an increase of 50 nP. per maund in the price of sugar for internal consumption and the export quota was fixed at 2 1/2 per cent of the total production of a factory for 1957-58. The loss, it was expected, would be more than set off by the excess price which the producers would be able to get for every 20 maunds sold for internal consumption. It is also pointed out that Government at that time did not wish to take over the work of export on itself and specified as the export agency, the Indian Sugar Mills Association, a body composed of 95 per cent of the sugar mills in the country. The learned Attorney-General also points out that more than 95 per cent of the mills have stood by this arrangement, and did either supply their quota of sugar or sold it in the internal market and made available the money for purchase of sugar for export. Only a few mills in the country resorted t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... open to the Court to examine other laws on the subject, unless those laws be incorporated by reference. In our opinion, this is a fallacious argument. The Court in judging the reasonableness of a law, will necessarily see, not only the surrounding circumstances but all contemporaneous legislation passed as part of a single scheme. The reasonableness of the restriction and not of the law has to be found out, and if restriction is under one law but countervailing advantages are created by another law passed as part of the same legislative plan, the Court should not refuse to take that other law into account. 30. The existence of such other law is not difficult to establish. The Courts can take judicial notice of it. As was laid down by the Privy Council in Attorney-General for Alberta v. Attorney-General for Canada (1939) A.C. 117, the Courts in determining the effect of legislation, do take into account, any public general knowledge of which the Court would take judicial notice, and may in a proper case require to be informed by evidence as to what the effect of the legislation will be. Clearly, the Acts passed by the Provincial Legislature may be considered, for it is often ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct made it impossible that the descendants, however remote, of a person who was unable to attain citizenship himself could ever be able to attain citizenship in Ceylon no matter how long they resided there, but their Lordships' attention was subsequently drawn to the Indian and Pakistani Residents (Citizenship) Act, No. 3 of 1949, by which an Indian Tamil could by an application obtain citizenship by registration and thus protect his descendants, provided he had a certain residential qualification. It was suggested on behalf of the appellant that this Act might itself be ultra vires as conferring a privilege upon Indian Tamils within s. 29(2)(c) of the Constitution Order-in-Council, and that therefore it was inadmissible to rebut the inference that the legislature had intended by the Citizenship and Franchise Acts to make Indian Tamils liable to disabilities within the meaning of s. 29(2)(b), but their Lordships cannot accept this argument. If there was a legislative plan the plan must be looked at as a whole, and when so looked at it is evident, in their Lordships' opinion, that the legislature did not intend to prevent Indian Tamils from attaining citizenship provided tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he controlled price is a mere sham. Indeed, an examination of the correspondence in the first case clearly demonstrates that the Mills were devising one excuse or another to avoid the liability to supply the quota of sugar. First, they raised the contention that they did not have the requisite grade. Then they raised the contention that they could not sell sugar. Thereafter they asked for supply in installments, and when installments were fixed, they put forth the excuse of there being no wagons available. There next urged that the Bank was charging interest, and that interest should be waived before the documents would be retired. When interest was waived, they filed the petition in this Court. In these circumstances, in our opinion, there can be no ground for holding that there has been an infringement of the fundamental rights of the petitioners. The restriction was not unreasonable, because arrangement was made to save the owners of the factories from loss, and the loss entailed by the export of sugar was to be borne by the consumers in India and not by the producers. 37. There is one more circumstance which may be considered. The foreign export served the national interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uota of 50,000 tons has been exported, that it has earned ₹ 2.4 crores in foreign exchange, and that the exporters have been paid except for a small balance. 39. Section 7 is the penalty section. We heard considerable argument as to whether the section would apply to a case where no delivery was at all made, in view of the words : where sugar delivered by any owner falls short of the export quota. 40. No action has yet been taken against the Mills under the section; nor has any penalty been imposed. The question whether the section is ultra vires the legislature need not be considered here. 41. Section 8 deals with export of sugar or its sale by the owner or the export agency. It is stated that the section deals with sugar delivered to the export agency, and here there was no sugar delivered. The first sub-section deals with export, and the export agency can only export sugar delivered to it. The second sub-section authorises the export agency to sell the sugar for reasons given in the first sub-section. It also authorises the export agency to permit the owner to sell sugar in his custody. In the present cases, there was a demand for delivery of the sugar of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 46. I think these two applications should succeed. They raise the question whether the Sugar Export Promotion Act, 1958 is invalid as imposing an unreasonable restriction on the petitioners' right to carry on their trade. 47. Some of the petitioners are owners of factories manufacturing sugar by a process called the vacuum pan process and they carry on business as manufacturers of and dealers in sugar. For the purposes of this judgment these persons may be taken to be the petitioners. The principal respondent in these applications is the Government of India. The other respondent is the Indian Sugar Mills Association, an association of manufacturers of sugar by the vacuum pan process. 48. On June 27, 1958, the Government had promulgated an Ordinance. The impugned Act was passed on September 16, 1958 repealing the Ordinance and re-enacting its provisions and also providing that anything done under the Ordinance would be deemed to have been done under the Act as if it had come into force when the Ordinance had been promulgated. 49. As appears from its preamble, the Act was intended to provide for the export of sugar in public interest and it set up a machinery for that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... June 27, 1958, 50,000 tons of sugar was fixed under s. 4 as the total quantity for export for the period ending October 31, 1958. Export quotas were duly fixed for all factories including those of the petitioners. The petitioners were thereafter asked by the export agency to sell the sugar and pay the sale-proceeds to it. This they failed to do. It is said by the respondents that the petitioners were also asked to deliver the sugar and this also they failed to do. The petitioners set up various reasons justifying their failure to sell or deliver the requisite quantities of sugar. It is unnecessary to refer to these reasons for if the Act is invalid, as the petitioners contend the orders could not be made and no question would arise as to whether the petitioners had valid reasons for not carrying them out. It appears that the export agency felt that the petitioners were neither going to sell the sugar and pay the sale proceeds nor to deliver the sugar and it thereupon pointed out to the petitioners that they were by their conduct exposing themselves to the risk of having to pay the additional excise duty under s. 7. It was then that the present applications for appropriate writs res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is another aspect of the question which in my view decides it. It is quite plain that as things are, sugar can be sold abroad only at a loss. That clearly appears from the materials on the record and is not indeed disputed. I think it enough to refer to the Objects and Reasons of the Act and to a statement in the affidavit of Shri K.P. Jain, Chief Director, Directorate of Sugar, affirmed on February 13, 1959 and filed on behalf of the Government, to show that the Act contemplated that the export of sugar made under it would result in a loss. In the Objects Reasons of the Act it is stated, With a view to earning foreign exchange it is necessary to promote export of sugar. The export of sugar, however, involves a loss, even if excise duty and cane cess are remitted. 55. In paragraph 22 of Shri Jain's said affidavit it is stated, I further say that...the entire scheme envisaged in the Act depends on the pooling of the losses on export by all sugar factories in India, in proportion to their export quota. 56. We then get to this that on the respondents' own case the exports under the Act can be made only at a loss. The result therefore is that the Act com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me to pursue the matter further for it is not the respondents' contention that the restrictions are reasonable notwithstanding that they cause loss. On the other hand, the contention of the respondents is for reasons to be presently stated that the Act really caused no loss and that being so the restrictions imposed by it cannot be said to be unreasonable. I proceed now to consider the respondents' reason for saying that the Act imposes no loss on the sugar manufacturers including the petitioners. 59. It is first said that though the exports result in a loss now, it may in future bring in profits. That hope is clearly only a pious hope. And what is more, it is not a hope which has even been expressed in the affidavits filed on behalf of the respondents. On the contrary, these affidavits make it perfectly plain that in the foreseeable future there is no hope of export of sugar being made at a profit. Indeed, it is said in these affidavits that the scheme of the Act is based on the pooling of the losses caused by the exports made under it. It is hardly necessary to point out that if the exports could be expected to produce a profit in the near future, the coercive machine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns fixed by the Government was assessed and when the Central Government fixed the price of sugar for internal consumption under the provisions of the Essential Commodities Act and the Sugar (Control) Order, 1955, they gave adjustment in price by adding 50 nP. per maund in the ex-factory prices of sugar for internal sales. 62. It is said that the increase so made in the home price of sugar would completely wipe out the loss incurred on the export under the Act of 2 1/2 per cent. of the produce of a factory. I will accept this as a correct estimate. I will also ignore the petitioners' contention that they had not been able to sell the sugar in the home market at the increased price. 63. The argument then is that though the impugned Act produces a loss, that loss can be ignored because the Government has taken steps under another Act to recoup the loss so occasioned. It is said that in the circumstances that prevail, namely, the increase in the home price, the restrictions imposed by the impugned Act cannot be said to be unreasonable, for on the whole they occasion no loss. This is indeed the principal contention of the respondents to establish that the restrictions are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n to it by another Act which has the effect of wiping out the loss inflicted by the impugned Act, a circumstance which makes the restrictions imposed by the latter Act reasonable ? 68. It is said that this is so; that in judging the reasonableness of the restriction imposed by one Act, it is permissible to consider an order made by the executive Government under another Act. We were referred to the observations of Patanjali Sastri, C.J., in State of Madras v. V.G. Rao 1952CriLJ966 . The learned Chief Justice there stated at p. 607 : The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. 69. I respectfully agree with all that the learned Chief Justice said, but I am unable to see that this advances the present contention of the respondents. What is really relied upon is that portion of the learned Chief Justice's observation where he said that the prevailing conditions at the time should be taken in into account. Support is sought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w can an Act which is prima facie unreasonable - and it is on that basis that the present argument arises - be held to be reasonable because of something to which it gives no right and the existence of which depends entirely on the choice of the executive Government ? Is it to be said that the restrictions imposed by a statute are reasonable because the Government has, when the question cropped up, done something which makes the restrictions reasonable though it was not bound to do that and though it is free to undo that which it has done ? To say that would be to say that the Act his valid because the Government has for the time being chosen to make it so. This seems to me to be against all known principals of law. 71. Furthermore, if the respondent's contention was right a statute would then be legal when the Government chooses to do a thing and illegal when it undoes it and so on from time to time at the choice of the Government. That would be intolerable in any legal system. It was said that this is unavoidable and may happen in many cases. The following illustration was given. Suppose in famine conditions a statute was passed controlling free sale of foodstuff. Assume t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unable to agree that the Notification increasing the home price can be taken into consideration in deciding the reasonableness of the restrictions imposed by the impugned Act. It follows that these restrictions do cause loss to the sugar manufacturers and there is nothing to show that the restrictions are even so reasonable. 74. Then it is said that the Indian Sugar Mills Association of which the petitioners are said to be members, wanted that arrangements for export of sugar abroad be made and it was for that reason that the impugned Act was passed. It was suggested that the Association agreed to the Act being passed. It is therefore contended that the restrictions imposed by the Act must be presumed to be reasonable and the petitioners cannot be heard to say that they are not. Now the request by or the agreement of the Association is of course not the request by or the agreement of the petitioners. The Association has no authority to bind the petitioners by any request or agreement. The fact that the petitioners were members of the Association if that were so, does not give the Association the authority. There is no evidence that the petitioners had assented to the Association ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for home consumption. 76. It s clear from the suggestions thus made by the manufacturers that they wanted the burden on them to the relieved and export at Government's cost. In that year the Government in fact permitted an export of 10,000 tons and gave a subsidy of ₹ 2 per maund to cover the loss on the export. Later in the same year the Government reduced the price at which the sugar manufacturers could purchase the cane. 77. In the years 1952-53 to 1955-56 Indian imported large quantities of sugar and did not export sugar at all. It also appears that during these years the consumption of sugar in India was much more than the production. Hence, obviously the need for the import. So clearly in these years the sugar manufacturers did not need to export their sugar. The respondents do not say that during these years the sugar manufacturers had asked for arrangements for export being made. 1956-57 was the year of the Suez crisis. In this year a substantial quantity was exported and large profits could be made because price of sugar in some of the markets aboard had gone up due to the crisis caused by the Suez situation. The proposition then is that between 1952-53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bout 10,000 tons could be exported as in the meantime there was an appreciable rise in the sugar prices and the surplus stock was consumed in the home market. 81. The estimated figures for the year 1958-59 in tons appear to be as follows : production - 19,00,000 consumption - 21,00,000, export - 1,00,000. It would thus appear that the sugar industry in India has always been stable and did not require any export to make it stable. 82. What I think however puts the matter beyond doubts is s. 4 of the Act. Under that section, in fixing the total quantity of sugar to be exported in any season regard is to be had only to the quantity available in India, the quantity required for consumption in India and the necessity of earning foreign exchange. So in deciding the quantity to be exported no question of stabilising the industry or prices arises. Again, it is not out of the excess of the production over the internal consumption alone that the exports are to be made. In fact there has never really been any excess of production over consumption requirements. Indeed it is plain that if sufficient sugar were left to meet the home consumption, then the increased price would not help th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said Act and clause 5 of the said order, the Central Government issued a notification dated July 30, 1958, fixing the ex-factory price for Indian sugar Standard (ISS) D-29 grade. A few days before the said order was issued i.e., on June 27, 1958, the Central Government promulgated an Ordinance called the Sugar Export Promotion Ordinance, and it was subsequently converted into an Act (30 of 1958), which received the assent of the President on September 16, 1958. It is said that the Central Government in fixing the price for sugar produced during the season 1957-58, in vacuum pan sugar factories situate in the areas specified in the order had taken into account the possible loss the exporters might incur by reason of the application of the provisions of the impugned Act. Shri K.P. Jain, Chief Director in the Directorate of Sugar Vanaspati, Ministry of Food and Agriculture (Department of Food), in his affidavit says that the ex-factory price of sugar per maund fixed by the said order was made up of the following items : Average cost of production including margin of profit. ₹ 22.91 Excise duty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vidual statute impugned, and no abstract standard, or general pattern of reasonableness can be laid down as applicable to all cases. The nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict. In evaluating such elusive factors and forming their own conception of what is reasonable, in all the circumstances of a given case, it is inevitable that the social philosophy and the scale of values of the judges participating in the decision should play an important part, and the limit to their interference with legislative judgment in such cases can only be dictated by their sense of responsibility and self-restraint and the sobering reflection that the Constitution is meant not only for people of their way of thinking but for all, and that the majority of the elected representatives of the people have, in authorising the imposition of the restrictions, considered them to be reasonable. 91. If I may say so with respect, this passage summarizes the law on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such a foundation, a super-structure will have been built on shifting sands. To do that is to destroy the stability of legislation and to introduce an uncertain element therein. If two or more Acts were pars of the same scheme or plan, to implement the same or common objective, or if the impugned Act, though it was not originally conceived at the time when the earlier Act was passed, was only an extension or a further step by legislature for implementing the object of the earlier Act or if the legislature by express reference incorporated in the impugned Act the provisions of the earlier Act, it would be permissible to rely upon the said provisions of the earlier Act, not because they formed part of the prevailing conditions but because either the earlier Act formed part of the impugned Act by reference or both of them formed part of the same legislative plan. The illustrations are not exhaustive, but they all fall under one or other of the following two categories : (i) an earlier Act is made part of a new Act; and (ii) both Acts are parts of a legislative scheme or plan where both of them were conceived at the inception but passed in stages, or conceived at different times on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the operation within the Province of those banking institutions which had been called into existence and given the necessary powers there to conduct their business by the only proper authority, the Parliament of the Dominion, under s. 91 of the British North America Act, and the Bill was therefore ultra vires the Provincial Legislature. The Privy Council accepted the contention. For the purpose of ascertaining the true plan underlying the bill, the Judicial Committee compared the relative legislative lists, took judicial notice of other Acts and the object and purpose of the Act in question. Having regard to the said consideration, it came to the conclusion that it was a colourable legislation aimed at to prevent the operation within the province of the aforesaid banking institutions. When a statute is attacked on the ground that it is a colourable legislation, i.e., it assumed a form apparently falling within the legislative competence of the legislature but in effect and substance intended to reach institutions beyond its legislative competence, it is obvious that all the surrounding circumstances, including other acts operating in the Province, have to be scrutinized to unravel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tend to prevent Indian Tamils from attaining citizenship provided that they were sufficiently connected with the island. 94. In this case also the reliance on a subsequent Act was only to unravel the plan attributed to the Legislature of Ceylon to deprive the Indian Tamils of citizenship by passing the impugned Act. The said three decisions, therefore, are not, and cannot be, authorities for the proposition now contended. To unravel a plan of fraud on powers, it would be necessary to scrutinize all the documents, whether legislative or otherwise, which help to ascertain the truth. It may also be necessary to look into another Act to ascertain the pith and substance of an impugned Act. But the same principle cannot be invoked for ascertaining the reasonableness of legislative restrictions on fundamental rights. 95. Now coming to the facts of the present case, it is not suggested that the Essential Commodities Act, 1955, and the impugned Act form part of one scheme of legislation. Indeed the Essential Commodities Act was enacted to provide in the interest of the general public for control of production, supply and distribution of, and trade and commerce in, certain commoditie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n India in the season ending with the month of October falling within that year. Under s. 5, the Central Government is empowered to apportion the quantity of sugar fixed from time to time for purposes of export under s. 4 among the owners in proportion to the quantity of sugar produced, or likely to be produced, by them respectively during the season referred to above. Section 6 enjoins on the owners of sugar factories to deliver to the export agency, appointed under the Act, the sugar produced in their factories in such quantities, of such grade, in such manner, within such time and at such place, as may be specified by the export agency in that behalf. When such delivery is made, the owner ceases to have any more right over the sugar except to receive payment therefore. Section 8 empowers the export agency, after taking delivery, to export the sugar or permit the owner to sell the whole or any part of the export quota in his custody at a price approved by it on condition that the sale-proceeds are payable to it. Section 9 directs the export agency to make payments to the owners, who had delivered sugar to it, in the manner prescribed by the section. Out of the total sale-proceeds ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... auses (5) and (6) of Art. 19 of the Constitution. The restrictions must have a reasonable relation to the object which the legislature seeks to achieve and must not go in excess of that object. What is the object of the legislature ? The object of the legislature is to provide for the export of sugar in public interest. It cannot be, and indeed it is not, denied that at the time the Act was passed there was a sincere and serious national effort to industrialize our country with the avowed object of raising the economic standards of our people. One of the necessary conditions for industrializing our country is to start heavy industries, and that cannot be done unless the country earns foreign exchange to enable it to import plants for starting the same. It is also self-evident that it would be in the interests of sugar industry to build up a foreign market for that commodity. The object of the Act was, therefore, demonstrably to serve the national interest and the scheme evolved certainly had relation to the object sought to be achieved, for all the provisions of the Act were conceived in a genuine attempt to induce foreign export in sugar by co-operative effort. If so, the only obj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e State in evolving the scheme, which culminated in the passing of the Act. The State as well as the industry are equally interested to stimulate foreign trade and build up foreign market. To capture foreign market or to have a substantive share therein is not an easy task, as it depends upon many imponderables, namely, the availability of sugar, its demand, its comparative merits with the sugar produced in other markets, transport facilities, mutual agreement requirements, international affiliations etc. Initial loss must have to be borne to get a foothold and the clear objective will have to be pursued purposefully and tenaciously. To achieve the said objective, with the consent of the industry and on the basis of past experience, the Act was passed by the Parliament. The beneficial results flowing from the Act are significant. The State earns foreign exchange, and a foreign market is gradually built up for the future prosperity of the sugar industry. 98. In the affidavit filed on behalf of the respondents an attempt was made to support the Act on the ground that it was intended to serve a dual purpose of stablising the internal market and earn foreign exchange for the country ..... X X X X Extracts X X X X X X X X Extracts X X X X
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