DISTRICT COLLECTOR OF HYDERABAD & Ors. v. MIS. IBRAHIM & CO. ETC

The respondents moved petitions in the High Court of Andhra Pradesh challenging the validity of the order. The State resist ed the petitions principally on the ground that the order made by the State Governme.nt was in conformity with the provisions of the Sugar Control Order and was issued in pursuance of the policy laid down by the Central Goverlllllent to entrust the work of distribu tion of sugar exclusively to cooperative societies and thereby to eliminate in the public interest the agency of private dealers in lift ing and distributing sugar. It was urged that the respondents could not seek any relief complaining of infraction-of their rights under Arts. l4 and 19 because the emergency declared by the President in October 1962 had not been withdrawn. The petitions were heard by Gopalakrishnan Nair, J. The learned Judge held that the executive order was not supµorted either by the provisions of the Sugar Control Order, 1963, issued by the Central Government, or by the Andhra Pradesh Sugar Dealers Licensing Order, 196i3, that the step taken by the Govern ment was not permitted by law; that as a result of the order of the Government the licences held by the respondents were cancelled without following the procedure laid down in cl. 7 of the Andhra Pradesh Sugar Dealers Licensing Order; and that the provisions of the order could not be circumvented by executive instructions and since the order discriminated between the respondents and Central Consumers Cooperative Stores in that it conferred a mono ]:>Oly in disregard of the subsisting rights of the respondents and amounted to "hostile and invidious" discrimination in the admi- B c D E F G H' .. COLLECTOR v. !BRAHIM & CO. (Shah, J.) 50 I A nistration of the Sugar Control Order. He further held that since the Government had not taken action under the Defence of India Rules or under any Control Order made under those Rules, the respondents were not debarred tinder Arts. 358 & 359 of Constitution from claiming protection against impairment of their In appeal to a Division rights by the order issued by the State. B Bench of the High Court the grou, nds on which the decision was recorded by Gopalakrishnan Nair, J., were confirmed. In these appeals counsel for the State of Andhra Pradesh has not contended that the impugned order could be issued either under the Andhra Pradesh Sugar Dealers Licensing Order, 1963, or the Sugar Control Order, 1963, issued by the Central Government. Indisputably it is ·an executive order made by the State Govern ment. The State Government it is claimed acted in pursuance of the policy of the Central Government to distribute sugar through cooperative societies. But the order was still unauthorised. Under the Essential Commodities Act, 1955, the State Government had issued an order for distribution. of sugar through licensed dealers and the respondents had obtained licences in that behalf. Their licences could only be cancelled after making the enquiry accord- ing to the procedure prescribed by cl. 7 of the Sugar Dealers Licensing Order. The respondents were also recognised dealers within the meaning of the Sugar Control Order Central Government. The rights of the respondents could not be taken away by an executive order in a manner plainly contrary to the provisions .of the statutory orders. issued by It is true that under Art. 352 of the Constitution, the President declared a state of emergency on October 26, 1962. By Art 358 while a proclamation of emergency is in operation, nothing Art, 19 shall restrict the power of the State (as defined in Part III) to make any law or to take any executive action which the State would but for the provisions contained in that Part be competent to make or to take. By Art. 359 the President is authorised, where a proclamation of emergency was in operation, to declare that the right to move any court for the enforceme.nt of such of the rights conferred by Part III as may be mentioned shall remain suspended for the period during which the proclamation was in force or for such shorter period as may be specified in the order. On the issue of the proclamation ot emergency the State is. for the duration of the emergency, competent to enact legislation, not withstanding that it impairs the freedoms guaranteed by Art. 19 of the Constitution. The State is also competent to take executive action which the State would, but for the provisions contained in Art. 19 of the Constitution, be competent to take. The impugned order in this case was issued while the proclamation of emergency c D E F G H 502 SUPREME COURT REPORTS [1970] 3 S.C.R. was in operation. The respondents could not challenge the vali dity of any law enacted by the State Legislature so long as proclamation of emerge, ncy was in operation, on the ground that it impaired the freedoms guaranteed by Art. 19. They could not also challenge any executive action which, but for the provisions contained in Art. 19, the State was competent to take. In the present case, the State did not enact any legislation impairing the ;fundamental right of the respondents to carry on business which is guaranteed by Art. 19(1)(g), they proceeded to make a1n executive order. But the executive order immune from attack is only that order which the State was compete, nt, but for the provisions contained in Art. 19, to make. Executive action of the State Government which is otherwise invalid is not immune . from attack, merely because a proclamation of emergency is in operation when it is take,n. Since the order of the State Govern ment was plainly contrary to the statutory provisions contained in the Andhra Pradesh Sugar Dealers Licensing Order and the Sugar Control Order, it was not protected under Art. 358 of Constitution: Nor had it the protection under Art. 359. On November 3, 1962 the President issued an order in exercise of the power under Art. 359, that "the right of any person to move any court for the enforcement of the rights conferred by ·article 14, article 21 and article 22 of the Constitution shall remain suspended for the period during which the Proclamation of Emergency issued under clause ( 1) of article 352 thereof on the 26th October, 1962. is in force, if such person has been deprived of any such rights under the Defence of India Ordinance, 1962 ( 4 oi 1962) or ~ny rule or order made thereunder." Only if the impugned order was shown to be made under the authority reserved by the Defence of India Ordinance or rules made thereunder. the jurisdiction of the Court the guarantee under to entertain a petition for impaitment of Art. 14 may be excluded. But the action was not shown to be taken under the Defence of India Ordinance or under the rule or order made thereunder. Again it may be pointed out that under Art. 301 the freedom of trade, commerce and intercourse throughout the territory of India is declared free. That freedom is declared in the widest terms and applies to all forms of trade, commerce and intercourse. But it is subject to certain restrictions o;f which Arts. 304 and 305 are relevant. It is provided by Art. 304 : "Notwithstanding anything in article 30 I or article 303, the Legislature of a State may by law- ( a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A B c D :E r G H - A B c D E F G H COLLECTOR V. IBRAHIM&; CO. (Shah, J.) 503 ( b) impose such reasonable restrictions on the free- dom of trade. commerce· or intercourse with or within that State as may be required in the public interest : Provided that no Bill or amendment for the purposes of clause ( b) shall be introduced or moved in Legislature of a State without the previous sanction of the President." It is also provided by Art. 305 that the existing law or laws which may be made by the State providing for State monopolies, i.e. relating to any matter as is referred to in sub-cl. (ii) of cl. ( 6) of Art. 19, are outside the guarantee of Art. 301. In the present case the State had not assumed a monopoly to deal in sugar. It had granted monopoly to a Central Consumers Cooperative Stores which was not a corporation owned or controlled by the State within the meaning of Art. 19 ( 6) (ii) . The order was challenged on the ground that it trenches upon the freedom of trade and com merce guaranteed by Art. 301 of the Constitution. By Art. 304 even by legislature restrictions on the freedom of trade, commerce and intercourse with or within the State may only be imposed, if such restrictions are reasonable and are required the public interest and the Bili or amendment is introduced or moved in the Legislature of a State with the previous sanction of the President. Obviously the guarantee under Art. 301 cannot be taken away by executive action. The guarantee under Art. 301 which imposes a restriction upon legislative power of the Parliament or the State Legislature and the declaration of freedom is not merely an abstract declaration. There is no reason to think that while placing a restriction upon legislative power the Constitution guaranteed free dom in the abstract and not of the individuals. Article 301 of the Constitution is borrowed almost verbatim Commonwealth of Australia Constitution Act 63 and 64 Viet. c. individual In dealing with the contention that no 12 of 1900. right was guaranteed by s. 92 of the Commonwealth of Australia Constitution Act the Judicial Committee in Commonll'ea/th of Australia v. Bank of New South Wales(') observed at p. 305 : s. 92 of "The necessary implicatiens of these decisions (James v. Cowan-(1932) A.C. 542-and James v. The Commonwealth of Austra/ia-(1936) A.C. 578) are important. First may be mentioned an argument strenuously maintained on this appeal that s. 92 of the Constitution does not guarantee the freedom of indivi individual and James duals. Yet James was an fights. vindicated hard won freedom 0) L.R. t950 A. C. 235: 504 SUPREME COURT REPORTS [1970] 3 S.C.R. Clearly there is here a misconception. It is true as has been said more than once in the High Court, that s. 9Z does not create any new juristic rights but it does give the citizen of State or Commonwealth, as the case may be, the right to ignore, and, if necessary, to call on the judicial power to help him to resist, legislative or execu tive action which offends against the section. And this is just what James successfully did." Our Constituent Assembly borrowed the concept of freedom of trade, commerce and intercourse from the Australian Constitution. It is true that the limitations upon the amplitude of the guarantee are not expressed in s. 92 of the Australian Constitution, as are to be found in our Constitution. Again, there is no guarantee in the Australian Constitution of a fundamental right to carry on trade. But this departure from the scheme of the Australian Constitution <l_oes not alter the true character of the guarantee and it cannot be\inferred that the Coostitution imposed restrictions upon legisla tive power, but denied to the individuals affected by unauthorised a~umption of executive power the right to challenge the exercise of that power. A vital constitutional provision cannot be so con strued as to make a mockery of the declared guarantee and the If the constitutional restrictions on the power of the Legislature. power of the State Legislature is restricted in the manner provided by Art. 301, but within limits provided by Arts. 303 to 305, it would be impossible to hold that the State by executive order can do something which it is incompetent to do by legislation. Jn any view of the case, these appeals must fail and are dis missed. Only one respondent has appeared in this case, but even In the circumstances, he has not filed a statement of the case. there will be no order as to costs. V.P.S. Appeals dismissed. A B c E