Full Judgment Text
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PETITIONER:
K. JANARDHAN PILLAI & ANR. ETC. ETC.
Vs.
RESPONDENT:
UNION OF INDIA & ORS. ETC. ETC.
DATE OF JUDGMENT23/01/1981
BENCH:
VENKATARAMIAH, E.S. (J)
BENCH:
VENKATARAMIAH, E.S. (J)
SEN, A.P. (J)
CITATION:
1981 AIR 1485 1981 SCR (2) 676
1981 SCC (2) 45 1981 SCALE (1)193
ACT:
Kerala Essential Articles Control (Temporary Powers)
Act, 1961-Section 2(a) and Section 3-Raw cashewnuts-Whether
"foodstuff" within the meaning of section 2(a)(v) of the
Essential Commodities Act, 1955- State Government if
competent to declare raw cashewnuts as essential article-
Declaration, whether contravenes section 2(a) of the Kerala
Act.
HEADNOTE:
By an order made on March 20, 1976 the Kerala State
Government declared that raw cashewnut was an essential
article under section 2(a) of the Kerala Essential Articles
Control (Temporary Powers) Act, 1961 and thereafter
promulgated the Kerala Raw Cashewnuts (Procurement and
Distribution) Order 1977 under section 3 thereof, regulating
the procurement and distribution of raw cashewnuts in the
State of Kerala. The expression "essential article" is
defined in section 2(a) of the Kerala Act as "an article
(not being an essential commodity as defined in the
Essential Commodities Act, 1955) which may be declared by
the Government by a notified order to be an essential
article". Under Section 2(a) (v) of the Essential
Commodities Act, 1955 essential commodity means "foodstuffs,
including edible oilseeds and oils."
In their petitions under Art. 32 of the Constitution
the petitioners who were engaged in the processing of raw
cashewnuts urged that raw cashewnut being a foodstuff, which
was an essential commodity under the Central Act, the State
Government could not make a declaration that it was an
essential article under section 2(a) of the State Act and
that for this reason the declaration and the impugned order
were ultra vires the State Act.
On behalf of the State Government it was contended that
the expression "foodstuffs" meant only those articles which
could be directly consumed without any kind of processing
since the order regulated only the procurement and
distribution of raw cashewnuts which were used as industrial
raw material, they could not be called foodstuffs in the
strict sense and were not an "essential commodity" within
the meaning of that term under the Central Act.
Allowing the petitions,
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^
HELD: Raw cashewnut is a foodstuff under section
2(a)(v) of the Central Act and hence cannot be declared as
an essential article under section 2(a) of the Kerala Act.
No order could therefore be made by the State Government
under section 3 thereof in respect of raw cashewnuts.
Therefore the declaration made by the State Government to
the effect that raw cashewnut is an essential article under
the Kerala Act and the impugned order made thereunder are
liable to be quashed. [694 B-C]
The words in parenthesis in section 2(a) of the State
Act make it clear that the State Government can declare as
an essential article under the State Act
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only an article which is not an essential commodity under
the Central Act. It is a well known rule of interpretation
that associated words take their meaning from one another
and that is the meaning of the rule of statutory
construction noscitur a sociis. When the term ’foodstuffs’
is associated with edible oilseeds which have to be
processed before the oil in them can be consumed, it is
appropriate to interpret ’foodstuffs’ in the wider sense as
including all articles of food which may be consumed by
human beings after processing. [687 C]
Having regard to the fact that the object of the
Central Act is to regulate production, supply and
distribution of essential commodities amongst the people,
the expression ’foodstuffs’ should be given a wider meaning
as including even raw materials which ultimately result in
edible articles. [687 D-E]
The dictionary meaning of ’foodstuff’ is ’a substance
with food value’ and ’the raw material of food before or
after processing’. Therefore ’foodstuff’ need not
necessarily mean only the final food product which is
consumed. It also includes raw food articles which may,
after processing, be used as food by human beings.[688 F]
State of Bombay v. Virkumar Gulabchand Shah [1952]
S.C.R. 877 and Tika Ramji & Ors. etc. v. The State of Uttar
Pradesh & Ors. [1956] S.C.R. 393 at 418 referred to.
Although as a result of large exports of cashewnut it
is now in short supply and its price is beyond the reach of
the common man, it is an article of food eaten in raw form
and is used in various preparations. It is eaten in all
parts of the country though it is grown in a few States. It
is exported as foodstuff. It is, therefore, a foodstuff and
must be classified as an essential commodity.
[692 M-G]
There is no substance in the argument that cashewnuts
can be treated as an essential article only for the purposes
of export and not an essential commodity under the Central
Act. The Central Government can make an Order under the
Central Act even when an essential commodity is used for
industrial purposes or for purposes of export. Essential
commodities do not cease to be essential commodities under
the Central Act merely because they are exported after they
are processed in India. [693 B]
The argument that so long as the Central Government had
not made an order in respect of raw cashewnuts the State
Government can pass an order is not available in the
circumstances by reason of the definition of essential
article in the Kerela Act. [693 E]
JUDGMENT:
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ORIGINAL JURISDICTION: Writ Petition Nos. 116, 186-
189/77, 3935-63/78 3922-24/78, 1221/77, 3821-27/78, 3828-
31/78, 44-50/77, 4237/78,4400/78, 92-97/77.
(Under Article 32 of the Constitution)
F. S. Nariman, R. N. Banerjee, J. B. Dadachanji and K.
J. John, for the Petitioners in W.P. No. 116/77.
R. M. Poddar for Respondent No. 1 in W.P. No. 116/77.
678
Lal Narain Sinha Attorney Genl., P. K. Pillai and T. P.
Soundara Rajan, for Respondents 2-3 in W.P. No. 116/77.
N. M. Abdul Khader, M. A. Feroze and K. M. K. Nair, for
the Respondent.
R. N. Banerjee, J. B. Dadachanji and K. J. John, for
the Petitioners in W.P. Nos. 186-189/77.
Lal Narain Sinha Att-Genl. and R. M. Poddar, for
Respondent No. 1 in W.P. Nos. 186-189/77.
P.K. Pillai and T. P. Soundra Rajan, for Respondents 2-
3 in W.P. Nos. 186-1 89/77.
N. M. Abdul Khader, M. A. Feroze and K. M. K. Nair, for
the State.
F. S. Nariman, R. N. Banerjee, J. B. Dadachanji and K.
J. John, for the Petitioners in W.P. Nos. 3935-63/78.
N. M. Abdul Khader, M. A. Feroze and K. M. K. Nair, for
Respondent No. 1 in W.P. Nos. 3935-63/78.
A. S. Nambiar and P. Parameswaran, for Respondents 2-3
in W.P. Nos. 3935-63/78.
P. Govindan Nair and K. Sukumaran, for the Petitioners
in W.P. Nos. 3922-24/78.
K. M. K. Nair, for the Respondent in W.P. Nos. 3922-
24/78.
R. N. Banerjee, J. B. Dadachanji and K. J. John, for
the Petitioner in W.P. No. 1221/77.
K. M. K. Nair for Respondent No. 1.
A. S. Nambiyar for Respondent No. 2.
Miss A. Subhashini for Respondent No.5.
P. Govindan Nair and K. Sukumaran for the Petitioners
in W.P. Nos.3821-27/78.
K. M. K. Nair for Respondent No. 1 in W.P. Nos. 3821-
27/78.
A. S. Nambiar and P. Parameswaran for Respondents 2-3
in W.P. Nos. 3821-27/78.
P. Govindan Nair and K. Sukumaran for the Petitioner in
W. P. Nos. 3828-31/78.
K. M. K. Nair for Respondent No. 1 in W.P. Nos. 3828-
31/78.
679
A. S. Nambiar and P. Parameswaran for Respondent No. 2
in W.P. Nos. 3828-31/78.
R. N. Banerjee, J. B. Dadachanji and K. J. John for the
Petitioners in W.P. Nos. 44-50/77.
Miss A. Subhashini for Respondent No. 1 in W.P. Nos.
44-50/77.
K.M.K. Nair for Respondent No. 2 in W.P. Nos. 44-50/77.
P. Govindan Nair, Mrs. Baby Krishnan and Mrs. V. D.
Khanna, for the Petitioners in W.P. Nos. 4237/78.
K. M. K. Nair for the Respondent in W.P. No. 4237/78.
D. Govindan Nair and Mrs. Baby Krishnan for the
Petitioners in W.P. No. 4400/78.
K. M. K. Nair for the Respondent in W.P. No. 4400/78.
R. N. Banerjee, J. B. Dadachanji and K. J. John for the
Petitioners in W.P. Nos. 92-97/77.
Miss A. Subhashini for Respondent No. 1 in W.P. Nos.
92-97/77.
K. M. K. Nair for Respondent No. 2 in W.P. Nos.
92-97/77.
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The Judgment of the Court was delivered by
VENKATARAMIAH, J. The common question which arise for
consideration in the above writ petitions under Article 32
of the Constitution of India relates to the validity of the
declaration made by the State Government of Kerala on March
20, 1976 declaring that raw cashewnut was an essential
article, in exercise of the power under clause (a) of
section 2 of the Kerala Essential Articles Control
(Temporary Powers) Act, 1961 (Act 3 of 1962) (hereinafter
referred to as ’the Kerala Act’) and the Kerala Raw
Cashewnuts (Procurement and Distribution) Order, 1977
(hereinafter referred to as ’the Order’) made by the State
Government of Kerala in exercise of the powers conferred by
section 3 of the Kerala Act regulating the procurement and
distribution of raw cashewnuts grown in the State of Kerala.
The petitioners are persons engaged in the cashewnut
processing industry in the State of Kerala. Since the
impugned declaration and the Order seriously interfered with
the right of the petitioners to purchase sufficient
quantities of raw cashewnuts for processing in their
factories and imposed several other restrictions on them,
they have filed the above petitions. Although the validity
of several other orders was also questioned in the present
petitions, the petitioners confined their challenge only to
the impugned declaration and the
680
Order in the course of the arguments since according to them
it was not necessary to urge their contentions as against
those orders.
The recital in the preamble to the Order states that it
was being made in order to ensure the maintenance of
supplies of raw cashewnuts which was considered to be
essential for the continued employment of a large number of
workmen in the State of Kerala and for their equitable
distribution and availability at fair prices. It is further
recited that the Order was being made as the State
Government felt a doubt about the question whether the
Kerala Raw Cashewnuts (Marketing and Distribution) Order
1976 issued under the Defence and Internal Security of India
Rules, 1971, for the very same purpose would continue to
remain in force.
The main provisions of the Order broadly related to the
prohibition of sale of raw cashewnuts to any person other
than an agent authorised to purchase by clause 3 thereof,
appointment of Co-operative Societies as subagents,
imposition of restrictions on processing or conversion of
raw cashewnuts and their distribution amongst the occupiers
of cashewnut processing factories, appointment and powers of
Cashew Special Officer and other incidental and ancillary
matters. The explanatory note attached to the Order stated
that it was intended to regulate the procurement and
distribution of raw cashwnuts by the State Government.
The Order is issued by the State Government of Kerala
under section 3 of the Kerala Act, the object of which is to
provide, in the interest of the general public, for the
control of the production, supply and distribution of, and
trade and commerce in certain articles which, is the title
of the Act indicates, are considered to be essential for the
community. The Kerala Act as originally enacted was intended
to be in force for a period of five years from the date of
its commencement. By successive amendments, its life is
extended to twenty years from the commencement of the Act.
Although it makes provision for conferring power on the
State Government to make appropriate orders regarding
regulation of production, supply and distribution of
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essential articles substantially on the lines on which the
Essential Commodities Act, 1955 (Act 10 of 1955)
(hereinafter referred to as the Central Act’) passed by the
Parliament provides for the regulation of production, supply
and distribution of essential commodities as defined in the
Central Act. the Kerela Act does not itself specify any
article as an essential article. But the expression
’essential article’ is defined by section 2(a) of the Kerala
Act thus :
681
"2. Definition.- In this Act, unless the context
otherwise requires,
(a) "essential article" means any article (not
being an essential commodity as defined in the
Essential Commodities Act, 1955) which may be declared
by the Government by notified order to be an essential
article."
From the above definition it is clear that the State
Government can declare as an essential article under the
Kerala Act only an article which is not an essential
commodity as defined in the Central Act. When such a
declaration is made in respect of any article, the State
Government acquires the power to make an order under section
3 thereof in respect of such article. The State Government
is, however, precluded from declaring any article which is
an essential commodity under the Central Act as an essential
article and from making an order for the purpose of
controlling its production, supply and distribution. This is
obvious from the words in the parenthesis in section 2(a) of
the Kerala Act defining the word ’essential article’. That
the object of the Kerala Act is only to provide for
regulation of production, supply and distribution of an
article which is not an essential commodity as defined under
the Central Act is also clear from what is stated by the
Kerala Government in the letter dated December 5, 1961
addressed by the Law Secretary, Government of Kerala to the
Central Government seeking the assent of the President to
the Bill passed by the Kerala Legislature. The relevant part
of the letter reads:
"...................................
Sub: The Kerala Essential Articles Control
(Temporary Powers) Bill 1960.
I am to forward herewith two copies of the Kerala
Essential Articles Control (Temporary Powers)
Bill, 1960, as passed by the Legislative Assembly
and reserved by the Governor for the consideration
of the President.
2. The Madras Essential Articles Control and
Requisitioning (Temporary Powers) Act, 1949, as
amended by the Kerala Acts 24 of 1958 and 3 of
1959, was in force in the Kerala State till
25-1-1960 when it expired by efflux of time. The
Essential Commodities Act, 1955 (Central Act 10 of
1955) applies only in the case of essential
commodities specified in that Act. At present
there is no law in the State to control the
production, supply and distribution of, and trade
and commerce in, essential articles required for
industrial
682
and other purposes, which do not fall within the
ambit of the Central Act. For the implementation
of the scheme under the programme of
industrialisation during the Third Five Year Plan
it may become necessary to control the production,
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supply and distribution of, and trade and commerce
in, articles which are not essential commodities
and unless the Govt. have such powers,
difficulties are likely to arise.
3. The object of the present legislation is
to take power for the control of essential
articles which are not essential commodities
within the meaning of the Central Act. It empowers
Govt. to declare any article, not being an
essential commodities within the meaning of
Essential Commodities Act, 1955, to be an
"essential article" and to control, by notified
order, the production, supply and distribution of,
and trade and commerce in, any such article. This
is an enabling measure and is modelled on the
Central Essential Commodities Act. It is intended
to be in force only for a period of five years.
4. The subject-matter of the legislation
falls within the scope of entries 26 and 27 of the
State List in the Seventh Schedule to the
Constitution, namely:-
26. Trade and commerce within the State
subject to the provisions of entry 33 of
List III.
27. Production, supply and distribution of
goods subject to the provisions of entry
33 of List III.
Hence the State Legislature is competent to enact the
measure.
5. The provisions of the Bill may attract Articles
301 and 304(b) of the Constitution as imposing a
reasonable restriction on the freedom of trade and
commerce. Accordingly the previous sanction of the
President for the introduction of the Bill in the State
Legislature has been obtained as required by the
proviso to article 304(b) in the letter of the Ministry
of Commerce and Industry referred to as third paper
above".
One of the grounds urged on behalf of the petitioners
in support of these petitions is that raw cashewnut being a
foodstuff (which is an essential commodity under the Central
Act), the State Government of Kerala could not make a
declaration to the effect that it was an essential article
under section 2(a) of the Kerala Act and consequently the
impugned Order was outside the scope of the Kerala Act. On
683
behalf of the State Government, it is contended that raw
cashewnut is not a foodstuff and even if it is held to be a
foodstuff having regard to the nature and object of the
Order, it should be treated as being within the competence
of the State Government. The relevant part of section 2(a)
of the Central Act containing the definition of the
expression ’essential commodity’ read thus:
"2. In this Act, unless the context otherwise
requires,-
(a) "essential commodity" means any of the
following classes of commodities:-
(i) cattle fodder, including oilcakes and other
concentrates;
(v) foodstuffs, including edible oilseeds and
oils;
Since it is argued on behalf of the State Government
that foodstuffs’ only mean those articles which can be
directly consumed without any kind of processing and that
raw cashewnuts which are intended to be used as industrial
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raw material cannot, therefore, be called as ’foodstuffs’ in
the strict sense, it is necessary to examine the history of
legislation relating to the trade and commerce within a
State and production, supply and distribution of goods in
India.
Under the Government of India Act, 1935, entries 27 and
29 of List II in the Seventh Schedule read as follows:
"27. Trade and commerce within the Province; markets
and fairs; money lending and money lenders.
29. Production, supply and distribution of goods;
development of industries, subject to the
provisions of List I with respect to the
development of certain industries under Federal
control."
Entry 34 of List I read as:
"34. Development of industries where development, under
a Federal control is declared by Federal law to be
expedient in the public interest."
From the above entries it is clear that the subject of
trade and commerce within the Province and subject to entry
34 of List I, the subject of production, supply and
distribution of goods were within the competence of the
Provincial Government. As a result of the emergency
proclaimed by the Governor-General under section 102 of
684
the Government of India Act, 1935 on the outbreak of the
Second World War the Federal Legislature acquired the power
to make laws on all the subjects in the Provincial List. The
laws made by the Federal Legislature on the provincial
subjects after the Proclamation of Emergency were to cease
to have effect on the expiration of a period of six months
after the Proclamation of Emergency had ceased to operate
except as respects things done or omitted to be done before
the expiration of the said period. The Proclamation of
Emergency was revoked on April 1, 1946. Consequently all
laws made by the Federal Legislature on the subjects in the
Provincial List were to cease to have effect after the
expiry of September 30, 1946. During the period of emergency
the Federal Legislature had passed a law enabling the
Federal Government to issue Orders with respect to trade and
commerce within the Provinces and the production, supply and
distribution of several commodities which were considered to
be essential and those Orders were also to cease to have
effect on the expiry of September 30, 1946. Since it was
felt that the Federal Legislature should continue to have
power to make laws on the subject of production, supply and
distribution of certain essential commodities, on March 26,
1946 the British Parliament passed the India (Central
Government and Legislature) Act, 1946 (9 & 10 Geo. 6,
Chapter 39) amending, among others, sub-section (4) of
section 102 of the Government of India Act, 1935 as to the
effect of laws passed by virtue of the Proclamation of
Emergency. The relevant part of that Act read:
"2. (1) Notwithstanding anything in the Government
of India Act, 1935, the Indian Legislature shall during
the period mentioned in section four of this Act have
power to make laws with respect to the following
matters-
(a) trade and commerce (whether or not within a
Province) in, and the production, supply and
distribution of cotton and woollen textiles, papers
(including newsprint). foodstuffs (including edible oil
seeds and oils) petroleum and petroleum products, spare
parts of mechanically propelled vehicles, coal, iron,
steel and mica; and
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(b) ....................................
(c) ....................................
but any law made by the Indian Legislature which that
Legislature would not but for the provisions of this
section, have been competent to make shall, to the
extent of the incompetency, cease to have effect on the
expiration of the
685
said period except as respects things done or omitted
to be done before the expiration thereof."
Section 4 of that Act specified the duration of the
legislative power conferred on the Federal Legislature by
section 2 and section 5 prescribed the duration of laws
passed by virtue of a Proclamation of Emergency. It is seen
from section 2(1)(a) of the above British Act that for the
first time, the subject of foodstuffs (including edible oil
seeds and oils) was dealt with separately in a
constitutional document. The Governor-General in exercise of
the extended legislative power granted by the British Act
promptly issued within the specified period the Essential
Supplies (Temporary Powers) Ordinance 1946) (XVIII of 1946)
extending the controls in respect of certain essential
commodities including foodstuffs beyond the first day of
October, 1946 and the said Ordinance was repealed and
replaced by the Essential Supplies (Temporary Powers) Act,
1946 (Act No. XXIV of 1946) enacted by the Federal
Legislature in November, 1946. Section 2(a) of that Act
defined the expression ’essential commodity’ as meaning
’foodstuffs’ and certain other articles mentioned therein.
Section 2(e) defined ’foodstuffs’ as including edible oil
seeds and oils. The operation of the said Act was extended
by competent legislative acts upto March 31, 1950. Since by
Entries 26 and 27 of List II of the Seventh Schedule to the
Constitution, the subject of trade and commerce within the
State subject to the provisions of Entry 33 of List III and
the subject to production, supply and distribution of goods
subject to the provisions of Entry 33 of List III had been
assigned to the States and Entry 33 of List III only dealt
with trade and commerce in, and the production, supply and
distribution of the products of industries where the control
of such industries by the Union was declared by Parliament
by law to be expedient in the public interest, having regard
to the then existing conditions, Article 369 was enacted as
a temporary and transitional measure conferring legislative
power on the Parliament during a period of five years from
the commencement of the Constitution to make laws with
respect to the following matters as if they were enumerated
in the Concurrent List, namely:
(a) trade and commerce within a State in, and the
production, supply and distribution of, cotton and
woollen textiles, raw cotton (including ginned cotton
and unginned cotton or kapas), cotton seed, paper
(including newsprint), foodstuffs (including edible
oilseeds and oil), cattle fodder (including oil-cakes
and other concentrates), coal (including coke and
derivatives of coal), iron, steel and mica;
686
(b) offences against laws with respect to any of
the matters mentioned in clause (a), jurisdiction and
powers of all courts except the Supreme Court with
respect to any of those matters, and fees in respect of
any of those matters but not including fees taken in
any court.
It was provided that any law made by Parliament which
Parliament would not but for the provisions of Article 369
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of the Constitution have been competency to make would, to
the extent of the incompetency, cease to have effect on the
expiration of the period of five years from the commencement
of the Constitution except as respects things done or
omitted to be done before the expiration thereof. It may be
noticed that clause (a) of Article 369 of the Constitution
specifically referred to foodstuffs (including oilseeds and
oil) and cattle fodder (including oil-cakes and other
concentrates). By virtue of the power under Article 369, the
Parliament extended the life of the Essential Supplies
(Temporary Powers) Act, 1946 till January 26, 1955. As the
subjects referred to in Article 369 of the Constitution were
of national importance and it was thought that it was
desirable that the Parliament should also have concurrent
power to make laws with respect to them, the Constitution
(Third Amendment) Act, 1954 was enacted on February 22, 1955
substituting Entry 33 of List III by the following new
Entry:
"33. Trade and commerce in, and the production,
supply and distribution of,-
(a) the products of any industry where the control
of such industry by the Union is declared by Parliament
by law to be expedient in the public interest, and
imported goods of the same kind as such products;
(b) foodstuffs, including edible oilseeds and
oils;
(c) cattle fodder, including oilcakes and other
concentrates;
(d) raw cotton, whether ginned or unginned, and
cotton seed; and
(e) raw jute."
It was pursuant to the new Entry 33 of List III of the
Seventh Schedule to the Constitution that Parliament enacted
the Central Act (i.e. the Essential Commodities Act, 1955).
It is not disputed by the State Government that if raw
cashewnut is foodstuff within the meaning of the Central
Act, it cannot be declared as an essential article under the
Kerala Act. What is, however,
687
urged is that since the Order regulates only procurement and
distribution of raw cashewnut as industrial raw material for
processing in the factories it is not being dealt with as
foodstuff. Hence it should not be treated as an essential
commodity under the Central Act. There are at least two good
reasons to reject this contention advanced on behalf of the
State Government-first, the language used in section 2(a)
(v) of the Central Act and secondly the purpose of the
Central Act. Section 2(a) (v) of the Central Act reads:
’foodstuffs. including edible oilseeds and oils’. It is a
well known rule of interpretation that associated words take
their meaning from one another and that is the meaning of
the rule of statutory construction, noscitur a sociis. When
’foodstuffs’ are associated with edible oilseeds which have
to be processed before the oil in them can be consumed, it
is appropriate to interpret ’foodstuffs’ in the wider sense
as including all articles of food which may be consumed by
human beings after processing. It is in this wider sense
that the said term has been understood by Indian courts as
can be seen from some of the decisions to which we shall
presently refer. Secondly, having regard to the history of
legislation relating to foodstuffs dealt with above and the
object of the Central Act which regulates the production,
supply and distribution of essential commodities amongst the
poverty stricken Indian people, the expression ’foodstuffs’
should be given a wider meaning as including even raw
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materials which ultimately result in edible articles. Any
interpretation that may be given in this case should not be
governed by its consequence on the impugned Order but in the
light of the importance of the Central Act in the context of
the national economy. A narrow interpretation may result in
the exclusion of several articles from the purview of the
Central Act although nobody has entertained any doubt so far
about their being essential commodities.
We shall now see what cashewnut means. Cashewnut is an
edible seed or nut belonging to the family of anacardiaceae
and grows mostly in tropical and sub-tropical regions where
humidity is great. It is generally grown in the States of
Kerala, Karnataka and Tamil Nadu, in India, in East Africa
and in the tropics of Central and South America. Cashewnut
is shaped like a kidney or a large thick bean. ’It appears
as though one of its ends had been forcibly sunk into the
calyx end of a fleshy pear-shaped fruit, called the cashew
apple which is about three times as large as the nut and of
reddish or yellow colour. The cashew apple is much used
where the tree grows, in beverages, jams and jellies but is
unimportant commercially. The nut has two walls or shells,
the outer of which is smooth and glass-like over the surface
thin and somewhat elastic but stout and of olive green
688
colour until mature when it becomes strawberry roan. The
inner shell is considerably harder and must be cracked like
the shells of other nuts......... The fruits are picked by
hand and the nuts are first detached, then thoroughly dried
in the sun.......By improved methods of roasting, the nuts
pass through large revolving cylinders of sheet iron with
perforated sides, which are made to revolve above well-
controlled flames. The oil drains into containers below and
is salvaged...... Later, the inner shells are broken open by
hand labour and the kernels given further heating treatment
by which the skins are removed and the kernels made ready
for consumption’. (Vide Encyclopaedia Britannica 1962 Edn.
Vol. 4, pp. 958-959). It is not disputed that the raw
cashewnut with which we are now concerned is used by the
petitioners for processing in their factories in order to
make it fit for human consumption. It is also stated that
even the raw cashewnut kernel is eaten by human beings.
It is well known that the food eaten by human beings
consists of cereals like wheat, rice or other coerce grains,
pulses, oilseeds, vegetables, sugar, fruits and nuts, animal
foodstuffs and sea food like meat, beaf, mutton and fish and
dairy products like milk, butter, eggs etc. According to
Webster’s Third New International Dictionary, the word
’food’ means ’fodder’ also. One of the meanings of the word
’food’ given in that Dictionary is ’material consisting of
carbohydrates, fats, proteins and supplementary substances
(as minerals vitamins) that is taken or absorbed into the
body of an organism in order to sustain growth, repair, and
all vital processes and to furnish energy for all activity
of the organism’. In the same Dictionary ’foodstuff’ is
defined as ’a substance with food value’ and ’the raw
material of food before or after processing’. One of the
usages of the said word is given as ’a bountiful crop of
cereal foodstuffs’. Therefore, ’foodstuff’ need not
necessarily mean only the final food product which is
consumed. It also includes raw food articles which may after
processing be used as food by human beings.
The earliest of the Indian cases cited before us on the
interpretation of the expression ’foodstuffs’ is Shriniwas
Pannalal Chockhani & Ors. v. The Crown. In that case the
conviction of the appellant of an offence punishable under
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section 7 of the Essential Supplies (Temporary Powers) Act,
1946 had been challenged. The charge of which the appellant
had been found guilty by the judgment under appeal was that
he had transported ’bharda’ or ’chuni bharda’ which was a
foodstuff without the required permit. The contention of the
appellant was that it was just cattle feed which was not fit
for human consump-
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tion and therefore it could not be said that he had violated
the law on the footing that the material transported was
’tur dal’ a foodstuff the transport of which alone without a
permit was an offence. The said argument was rejected by the
Nagpur High Court with the following observations:
"The learned counsel for the appellants further
contended that as the Essential Supplies (Temporary
Powers) Ordinance, 1946 [XVIII (18 of 1946)] and the
Essential Supplies (Temporary Powers) Act, 1946 [XXIV
(24) of 1946], dealt with "foodstuffs" and not "cattle
feed" export of chuni, a cattle feed was not prohibited
under the Food-grains Export Restrictions Order, 1943.
The term "foodstuff" has not been defined either in the
Ordinance or in the Act. In common parlance, foodstuffs
mean "materials used as food". The term is not used
only for material which is immediately fit for human
consumption but it also applies to material which can
be used as food after subjecting it to processes like
grinding, cleaning etc. For instance, paddy as such is
not fit for human consumption but rice in it is, and
yet paddy is called foodstuff. So also tur. There is no
reason to suppose that the word "food stuffs" is not
used, in these laws, in this usual sense but is used in
the restricted sense of material which is fit for human
consumption immediately without subjecting it to any
process. If such a restricted meaning is accepted, it
would lead to evasion of the Law in question by mixing
some foreign matter with the stuff that is immediately
fit for human consumption. The test is not whether it
can be immediately used for human consumption but
whether it can be so used after subjecting it to the
usual processes. The uncleaned tur dal (ie. tur dal
without separating from it wastage and foreign matter)
which was being exported on 26-12-1946 in this case was
such a foodstuff and comes within the provisions of the
Essential Supplies (Temporary Powers) Ordinance 1946,
and the Essential Supplies (Temporary Powers) Act,
1946".
In the State of Bombay v. Virkumar Gulabchand Shah this
Court was called upon to decide whether ’turmeric’ was
’foodstuff’ in a case arising under the Essential Supplies
(Temporary Powers) Act, 1946. Vivian Bose, J. who delivered
the judgment after observing:
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"So far as "food" is concerned it can be used in a
wide as well as a narrow sense and, in my opinion, much
must depend upon the context and background. Even in a
popular sense, when one asks another, "Have you had
your food", one means the composite preparations which
normally go to constitute meal-curry and rice,
sweetmeats, pudding, cooked vegetables and so forth.
One does not usually think separately of the different
preparations which enter into their making of the
various condiments and spices and vitamins, any more
than one would think of separating in his mind the
purely nutritive elements of what is eaten from their
non-nutritive adjuncts.
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So also, looked at from another point of view, the
various adjuncts of what I may term food proper which
enter into its preparation for human consumption in
order to make it palatable and nutritive, can hardly be
separated from the purely nutritive elements if the
effect of their absence would be to render the
particular commodity in its finished state unsavoury
and indigestible to a whole class of persons whose
stomachs are accustomed to a more spicely prepared
product".
held:
"As we have seen, turmeric falls within the wider
definition of ’food’ and ’foodstuffs’ given in a
dictionary of international standing as well as in
several English decisions. It is, I think, as much a
"foodstuff", in its wider meaning, as sausage skins and
baking powder and tea. In the face of all that I would
find it difficult to hold that an article like turmeric
cannot fall within the wider meaning of the term
"foodstuffs".
Following the above decision of this Court, the High
Court of Calcutta held in Atulya Kumar De & Ors. v. The
Director of Procurement and Supply & Ors. that paddy was
foodstuff within the meaning of that expression used in the
Essential Supplies (Temporary Powers) Act, 1946 even though
paddy could not be consumed without further processing. The
relevant part of the decision runs thus:
"The first point taken is that the power conferred
by the Act (read with the notification) upon the State
of West Bengal is only in relation to foodstuffs and
that paddy is not foodstuff. It is stated that the
description of paddy at "Rice in
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the "husk" is a colourable attempt to avoid this
difficulty. In- ’The State of Bombay v. Virkumar
Gulabchand Shah’ (AIR 1952 S.C. 335), it was held that
turmeric is "foodstuff" within the meaning of the
Spices (Forward Contract Prohibition) Order 1944" read
with S. 2(a) of the Act. It was held that the term
"foodstuff" is ambiguous and may have a vide meaning or
a narrow one. Whether the term is used in a particular
Statute in its wider or narrower sense cannot be
answered in the abstract but must be answered with due
regard the background and context. Thus in-’James v.
Jones’ [(1894) 1 Q.B. 304], baking powder was held to
be an article of food while in-’Hinde v. Allmond’
(1918) 81 L.J.K.B. 893, it was held that tea was not.
Now the act had been passed to control the production
and distribution of essential commodities. What can be
looked upon more of an essential commodity than both
rice and paddy ? In West Bengal, the two things most
essential for the sustenance of human life are rice and
paddy. Mr. Mukherjee admits that rice is an essential
commodity & a foodstuff, but he says that paddy is not
because nobody can eat paddy. But that is a very narrow
view to take. Paddy is only a stage in the production
of rice and the one cannot be food without the other
being food as well. Nobody eats the husk in paddy; but
nobody eats the skin of mango or the shell of a egg and
yet they are unquestionably articles of food. In my
opinion paddy is ’foodstuff’ within the meaning of that
expression as used in the Act and the notification."
To the same effect is the decision of the Calcutta High
Court in Nathuni Lal Gupta & Ors. v. The State & Ors. in
which wheat and wheat products were held to be foodstuffs.
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The High Court of Punjab and Haryana in Sujan Singh Matu Ram
v. The State of Haryana and the High Court of Orissa in
Bijoy Kumar Routrai & Ors. v. State of Orissa & Ors. also
lay down the same principle.
In Tika Ramji & Ors. etc. v. The State of Uttar Pradesh
& Ors. this Court observed:
"The essential commodities therein comprised inter
alia foodstuffs which would include sugar as well as
sugarcane
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and both sugar and sugarcane therefore came within the
jurisdiction of the Centre."
The above observation makes it manifest that even a raw
material like sugarcane used in the manufacture of sugar is
a ’foodstuff’.
Younus v. Sub-Inspector of Police is a case in which
the question whether raw cashewnut was foodstuff or not
directly arose for consideration. The learned Judge who
decided the case held:
"The reasoning adopted for holding that wheat and
paddy are foodstuffs applies with equal force in the
case of cashewnuts. There is no scope for doubt that
cashew kernel is an eatable commodity both in its raw
form and also when fried. It is taken in as part of the
food and is also used in the preparation of food. That
its kernel should be separated from the shell or outer
covering or that it should be processed before use does
not make raw cashewnuts any-the-less "foodstuff."
It is also significant that ’raw cashewnut’ is included
in the group of edible fruits in Chapter 8 of section II
dealing with vegetable products of the First Schedule to the
Customs Tariff Act, 1975.
It was, however, urged that even though cashewnut was
an article which could be eaten, it was an article which was
eaten by very few persons on rare occasions and hence it is
difficult to conceive cashewnut as an essential commodity.
It is no doubt true that cashewnut having become expensive,
it is now more of a luxury. Due to export of cashewnut on a
large scale, it is a commodity which is in short supply in
the country and therefore the price at which it sells is
beyond the reach of the common man. But nevertheless it is
an article of food. It is eaten in raw form and after it is
fried. It is also commonly used in various preparations of
food like pulav, sweets etc. There is no basis for the
assertion that it is a rare commodity outside the State
where it is grown. It is eaten not only in Kerala but also
in other parts of the country. When cashewnut is exported,
it is exported as a foodstuff. Now it cannot be that
cashewnut eaten abroad is a foodstuff, and whatever is
consumed within the country is not a foodstuff. It is
therefore, a foodstuff and must be classified as an
essential commodity. Its importance as a foodstuff can also
be seen from the statements filed in these cases in which is
stated that in the State of Kerala in the year 1976-77 the
total quantity of raw cashewnut procured was in the order of
60,000 tonnes, the number of workers
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engaged in the cashewnut processing industry was about
1,20,000 and that there were 269 cashew factories.
It was next urged that cashewnut could be treated as an
essential article only for the purpose of export and not an
essential commodity under the Central Act. This again is not
correct. The Central Government can make an Order under the
Central Act even when an essential commodity is used for
industrial purpose or for purposes of export. Essential
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commodities do not cease to be essential commodities under
the Central Act merely because they are exported after they
are processed in India. Foodgrains (Prohibition of Use in
Manufacture of Starch) Order, 1971, The Fruit Products
Order, 1955, The Gur (Regulation of Use) Order, 1978,
Pulses, Edible Oilseeds and Edible Oils (Storage Control)
Order, 1977, Rice (Prohibition of Use in Wheat Products)
Order, 1971. Vegetable Oil (Standards of Quality) Order,
1972, Vegetable Oil Product Producers (Regulation of Refined
Oil Manufacture) Order, 1973 and the Essential Commodities
(Regulation of Production and Distribution for purposes of
Export) Order, 1966 demonstrate the diverse purposes for
which an Order can be made under the Central Act.
It was next urged that as long as the Central
Government had not passed an order in respect of the same
matter, it was open to the Government of Kerala to pass the
impugned Order. Reliance was also placed on the decision of
this Court in Tika Ramji’s case (supra), in which U.P.
Sugarcane Regulation of Supply and Purchase Order, 1954 was
upheld even though sugarcane was an essential commodity
under the Central Act. In that case this Court was concerned
with the question whether there was any repugnancy between a
Central law and a State law. We are not concerned here with
such a question. If a question of application of Article 254
of the Constitution had arisen, it would have been open to
consider whether there was any repugnancy at all between the
two laws having regard to the scope and extent of the field
occupied by the Central law and the State law. But the real
question which now arises for decision in these petitions is
whether the Kerala Legislature ever intended to treat any
article which comes within the scope of the Central Act as
an essential article. The language of section 2(a) of the
Kerala Act steers clear of all essential commodities under
the Central Act by excluding them from the operation of the
Kerala Act. The power of the Central Government to make an
order under the Central Act in respect of raw cashewnut
which is a foodstuff cannot be doubted. If that is so the
Kerala Act cannot apply to it. The argument that as long as
the Central Government had not made an Order in respect of
raw cashew-
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nut, the Kerala Government can pass an Order is not
available in the circumstances by reason of the definition
of the ’essential article’ in the Kerala Act. It might have
been open to consideration if the said definition had not
contained the words in the parenthesis.
On a careful consideration of the matter, we are
satisfied that raw cashewnut is a foodstuff falling under
section 2(a) (v) of the Central Act and hence cannot be
declared as an essential article under section 2(a) of the
Kerala Act. It follows that no Order can be made by the
Government of Kerala under section 3 thereof in respect of
raw cashewnut. The action of the Kerala Government is beyond
the power conferred on it by the Kerala Legislature.
In the result, we hold that the declaration made by the
Government of Kerala to the effect that raw cashewnut is an
essential article under the Kerala Act and the impugned
Order made thereunder are liable to be quashed and they are
accordingly quashed.
All the other contentions including those relating to
the alleged infringement of the fundamental rights of the
petitioners raised in these petitions are left open.
Before concluding, we propose to advert to the last
submission made before us on behalf of the State Government.
It was submitted that the cashewnut industry in Kerala was a
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labour-oriented industry and if the declaration and the
Order were struck down, a number of workmen would be
adversely affected. It was also submitted that the entire
economy of the State of Kerala which largely depended on the
export trade in cashewnuts would be disrupted. If any such
serious problem arises, it can always be set right by the
competent Legislature or the appropriate Government taking
needful remedial action in the light of Entry 33 of List III
of the Seventh Schedule to the Constitution.
The petitions are accordingly allowed. In the
circumstances of the case, there shall be no order as to
costs.
P.B.R. Petitions allowed.
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