Full Judgment Text
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PETITIONER:
KRISHNAN KAKKANTN
Vs.
RESPONDENT:
GOVERNMENT OF KERALA AND ORS.
DATE OF JUDGMENT: 11/10/1996
BENCH:
S.N. RAY, B.L. HANSARIA
ACT:
HEADNOTE:
JUDGMENT:
J U D G M E N T
G.N. RAY, J.
Leave granted.
Heard learned counsel for the parties. The
constitutional validity of the circular dated 19.5.1995
issued by the Secretary to the Government of Kerala
directing that for distribution of pumpsets under
comprehensive coconut Development Programme and other
similar schemes of the Agriculture Department and in order
to streamline the implementation of the schemes specifying
specific roles and responsibilities for different agencies
involved, M/S Kerala Agro Industries Corporation (KAICO and
Regional Agro Industries Corporation (RAIDCO) would arrange
supply of pump[sets in the districts of Kesarkoda, Kanner,
vyanad, Koznikoda, Malappuram, Palekkao, Trissur and
Kottayam and in the remaining districts, supply will be
effected by private dealers along with KAICO and RAIDCO,
since challenged by the appellants in O.P. No. 16115 of
1995, but upheld by the impugned judgment on the High Court
dated February, 1996 is in question in this appeal, Such
writ petition was disposed by a common judgment along with
other writ petitions being O.A. Nos, 13936 and 14454 of
1995, In the said other writ petitions, the constitutional
validity of the circular dated 30.3.1989 issued by the
Registrar of Co-operative Societies inter alia directing
that all the Land Development Banks, District Co-operative
Banks and Service Co-operative Banks in the State of Kerala
would patronise RAIDCO to the fullest extent in preference
to private dealers in the matter of purchase of Agro Machine
under the scheme financed by the Bank/Societies and at in
any rate not less than 75% of total requirement of such Agro
Machines should be purchased through RAIDCO, was challenged.
The High Court has also upheld the validity of such circular
by the impugned judgment.
It may be stated that in the circular dated 19.9.1995
issued by the Secretary to the Government of Kerala it was
also indicated that pumpsets and accessories of the farmer’s
choice alone should be supplied and after sale service
facility should be provided by suppliers/dealers. It was
also indicated that the cost of pumpsets and accessories
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would be supplied at a lesser price than that fixed by the
State level Technical Committee and necessary advance amount
would be provided to KAICO and RAIDCO for taking advance
action for implementing the scheme.
It will also be appropriate to state that in the
circular dated 30.3.1989 issued by the Registrar of Co-
operative Societies, it was indicated that RAIDCO was the
only co-operative in the state under the Co-operative
Department, having a net work of branches for distribution
of all sorts of pumpsets etc. RAIDCO has dealership of
almost all important pumpsets manufactures in the country
and RAIDCO was sole distributor for Villiers,
Petrol/Kerosene engines manufactured by M/s Enfield India
Ltd. In addition, RAIDCO has set up its factory at Palghat
with NCDC assistance for the manufacture of pumpsets in
collaboration with M/s Kirloskar Bros. Explaining the
justification of the said circular, it was also indicated:
"Though this is a Co-operative
Institution, it is felt that the
Co-operative bank including the
Land Development Banks in the State
do not patronise, this society
faces stiff competition with
private dealers. The District Co-
op. Bank, Cannanore and Kasargode
have taken policy decisions to the
effect that the loans sanctioned by
them to the primary societies, for
the purchase of Agricultural
implements shall be routed only
through this Co-operative. This
being a society assisted by the
Government substantially, it is
necessary in the interests of
Government also that it functions
properly with good business.
In the circumstances. all the
Land Development Banks. District
Co-op. Banks and Service Co-
operative Banks in the State are
directed to patronise RAIDCO to the
fullest extent in preference to
private dealers. At any rate not
less than 75% of the total
requirement of Agro Machineries
under the scheme financed by the
Banks/Societies should be purchased
through RAIDCO."
Mr. Venugopal, learned Senior counsel appearing for the
appellant, has submitted that the circular dated 19.5.95
issued by the Secretary to the Government of Kerala
directing that in eight districts mentioned in the circular
only RAIDCO and KAICO would arrange supply of pumpsets and
in other parts of the State of Kerala the said RAIDCO and
KAICO along with private dealers would arrange the
distribution of such pumpsets under Comprehensive Coconut
Development Programme and other similar schemes, offends
Articles 14 and 19(i) (g) of the Constitution.
Mr. Venugopal has contended that private dealers in the
State of Kerala have a fundamental right under Article
19(1)(g) of the Constitution to carry on the business or
sale of pumpsets and dealership in the pumpsets without
being subjected to any unreasonable restriction in such
trading activities. The aforesaid circular imposes embargo
on the farmers of eight districts covered by financial
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schemes introduced by the Government to purchase such
pumpsets from any dealer of their choice. They have been
compelled to select pumpsets to be offered by RAIDCO and
KAICO only even if better terms and conditions of sale and
after sales service are offered by private dealers.
Mr. Venugopal has submitted that it does not require
any imagination to accept that majority of the farmers will
take the financial assistance under the schemes introduced
by the Government for purchase of pump sets. If such
majority of consumers of pumpsets are compelled to purchase
from the said tow organizations, namely, RAIDCO and KAICO,
the private dealers right guaranteed under Article 19(1) (g)
to carry on trading activities without being subjected to
unreasonable restriction, is bound to suffer.
Mr Venugopal has further submitted that fundamental
right guaranteed under Article 19(1) (g) may not be an
absolute right and such right may be subjected to reasonable
restriction but such reasonable restriction may be imposed
by statutory law and regulation on cogent grounds justifying
the reasonable restriction imposed with reference to the
object for which reasonable restriction is imposed. In this
connection. Mr. Venugopal has relied on a decision of this
Court in Kharak Singh Versus State of U.P. (AIR 1963 SC
1295). A Constitution Bench of this Court considered the
validity of Regulation 236 clause (b) of U.P. police
Regulations. It has been held in the said decision that if
the petitioner who has challenged the constitutional
validity of the Regulation is able to establish that the
impugned Regulation constitutes an infringement of any of
the freedom guaranteed to him by the Constitution, then the
only manner in which this violation of the fundamental right
can be defended is by justifying the impugned action taken
by the police under the said Regulation by reference to a
valid law, i.e. be it a statute, a statutory law or a
statutory regulation. (emphasis supplied)
The regulation contained in Chapter XX of the U.P.
Police Regulations under which Regulation 237 is placed,
have no such statutory basis but are merely executive or
departmental instructions framed for the guidance of the
police officers. They are, therefore, not a law which the
State is entitled to make under relevant clauses (2) to (6)
of Article 19 in order to regulate or curtail fundamental
rights guaranteed by the several clauses under Article 19(1)
nor can the same be "a procedure established by law." within
Article 21 of the Constitution.
Mr. Venugopal has submitted that as the said circular
of the Government clearly impinges upon the right to trading
activities of dealers in pumpsets etc. and such restriction
against free and uncontrolled trading activities guaranteed
under Article 19 of the Constitution is sought to be
imposed, not through any statute or statutory rules and
regulations or by any procedure established by law, but only
on the basis of executive direction of the State Government,
the said unreasonable restriction sought to be introduced by
the said impugned circular must be held violative of Article
19(1) (g) of the Constitution.
Mr. Venugopal has contended that it has not been
demonstrated that as a matter of fact the private dealers in
the said eight districts were not supplying genuine pump set
etc. or they were charging price for such implements at a
rate higher that offered by RAIDCO or KAICO or that after
sales service of the private dealers is unsatisfactory
thereby causing hardship to the farmers purchasing pump
sets etc. from the private dealers. Accordingly, there can
not be any reasonable ground to give a favorable treatment
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to a particular dealer or dealers and by giving unjustified
favorable treatment to such dealers. an unfortunate
situation has been created by which right to free trading
activities of the dealers in pump sets etc. is seriously
infringed.
Mr. Venugopal has also submitted that a vast majority
of the purchasers of such pumps sets etc. are also being
deprived of their unfettered right to choose the dealers of
their choice of such pump sets because of the embargo on
such farmers who have been given financial assistance under
the schemes of the State Government that they are to take
delivery of pump sets only from two dealers namely RAIDCO
and KAICO. While the farmers covered under financial
assistance in areas outside the said eight districts are
free to choose their dealers and to strike better bargain in
an open competitive market, the farmers in eight districts
have been deprived of such free choice and consequential
opportunity of striking better bargain on account of open
competition. Mr. Venugopal has submitted that when
Government has taken a decision to give largesses to the
farmers by introducing benevolent schemes of financial
assistance, the Government cannot discriminate between
farmers of one area and farmers of another area in
controlling the recipients of such largesses. In this
connection reference to the decision of this Court in Ramana
Dayarm Shetty versus The international Airport Authority of
India (AIR 1979 SC 1628) has been made. In the said decision
this court has held:
"It must, therefore, be taken to be
the law that where the Government
in dealing with the public. Whether
by way of giving jobs or entering
into contracts or issuing quotas or
licences or granting other forms of
largess, the Government cannot act
arbitrarily at its sweet will and
like a private individual, deal
with any person it pleases, put its
action must be in conformity with
standard or form which is not
arbitrary, irrational or
irrelevant. The power of discretion
of the Government in the matter of
grant of largess including award of
job contracts. quota, licences etc,
must be confined and structured by
rational, relevant and non-
discriminatory standards or norm
and if the Government departs from
such standard or norm in any
particular case of cases, the
action of the Government would be
liable to be struck down, unless it
can be shown by the Government that
the departure was not arbitrary,
but was based on some valid
principle which in itself was not
irrational, unreasonable or
discriminatory".
Mr. Venugopal has submitted that there is no
demonstrable foundation on fact that there was impelling
reasons to treat the farmers of eight districts, who got
financial assistance under the schemes of the State
Government differently, thereby compelling them to take
delivery of pump sets from only two dealers. Hence, such
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action must be held to be arbitrary, capricious and
discriminatory without being informed by reason. The
circular is therefore liable to be struck down also on the
score of offending Article 14 of the Constitution. Mr
Venugopal has submitted that the impugned circular has
resulted in creating a discriminatory monopoly in favour of
only two dealers in the eight districts of the State in the
dealership business because by and large most of the farmers
purchasing pump sets etc. are covered by schemes introduced
by the Government. Mr. Venugopal, therefore, has submitted
that the hostile discrimination meted out to the farmers of
eight districts and also dealers in pump sets etc. without
any just reason, must be held violative of Articles 14 and
19 of the Constitution and should be struck down by this
Court by allowing this appeal.
Mr. K.N. Bhat, learned Additional Solicitor General
appearing for the State of Kerala, has however disputed the
contentions of Mr. Venugopal. He has submitted that no
action has been taken by the Government to regulate or
control the business of dealership of pump sets etc. in the
State of Kerala. Hence question of violating the fundamental
right guaranteed under Article 19 (i) (g) of the
Constitution does not arise. Mr. Bhat has submitted that
unless any action has a direct impact on the right to carry
on any trade or business, such action cannot be held to be
violative of fundamental right guaranteed under Article
19(i) (g). If the action of the executive only indirectly
creates some prejudice in carrying on any trade or business
such action per se does not offend Article 19(i) (g). In
support of such contention, Mr Bhat has referred to the
decision of this Court in Viklad Coal Merchant Patiala
versus Union of India (1984 (1) SCR 657 (682). In the said
case, the Coal Merchant challenged the vires of Section 27A
of the Indian Railways Act and circular issued thereunder
relating to preferential Traffic Schedule providing for
priorities for movement of different goods. A circular was
issued by the Ministry of Railways in connection with
movement of some goods including coal. The petitioners who
were coal merchants, alleged that sum total of various
restrictions imposed by giving abbreviation GX against all
way side stations in the coal belt and restricting loading
of coal in wagons from the stations categorised as GX and
introducing preferential Traffic Schedule, in their
cumulative effect resulted in total ban on transport of coal
by Railways at their instance and such actions were
violative of Articles 14 and 19(1) (g) of the Constitution.
Repelling such contention, it has been held by this Court
that whenever the court is called upon to examine the
complaint that restrictions imposed on the freedom to carry
on trade are unreasonable, it is necessary to find out what
is the trade and business of the complainant-petitioner and
to what extent the restriction, if any, is imposed upon the
freedom to carry on trade or business and then to determine
whether the restriction is’ reasonable or not. It is the
direct impact of the restriction on the freedom to carry on
trade that has to be kept in view and not the ancillary or
incidental effects of the governmental action on the freedom
to carry on trade.
(Emphasis supplied)
It has also been indicated that prima facie it appears that
petitioners business or trade as coal merchants is in no way
interfered with by the Railways by not being able to provide
transport facilities. Railway is not the only means of
transport. There are other means of transport by which coal
can be transported by the petitioners to their respective
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place of business. Even assuming that the direct impact of
the policy laid down by the Railway administration pursuant
to the orders of the Central Government under Section 27A
results in denial of the allotment of wagon to the
petitioners, the restriction will none-the -less be
reasonable because petitioners are not wholly denied the
allotment of wagons. (Emphasis Supplied)
Mr. Bhat has contended that trading activities in pump
sets etc have not been controlled or regulated. Even within
the area comprising the said eight districts, any dealer is
free to carry on its trading activities in respect of pump
sets. By the impugned circular, the State Government has
only ensured that farmers in the said eight districts who
have been given financial assistance under a scheme of the
Government, should take delivery of pump sets from RAIDCO
and KAICO, Any other farmer or purchaser is quite free to
choose his dealer. Such limited restriction is’ also not
there in respect of farmers, even though covered by the
financial assistance under the scheme of the Government, who
are outside the area comprising the said eight districts. It
is, therefore quite apparent that there is no total ban of
purchase of pump sets from private dealers in the State of
Kerala.
Mr. Bhat has submitted that it is quite open to the
Governments to select appropriate dealers in pump sets for
supply of pump sets to farmers or agriculturists to whom
financial assistance has been given under scheme of the
State Government. After all, the State Government will be
within its right to ensure supply of genuine pump sets at a
desired price and proper after sales service through its
approved dealers so that the schemes are effectively
implemented by appropriate utilization of the pump sets over
a reasonable period and, on such utilization, the concerned
farmer may day back the financial assistance received by
him.
Mr. Bhat has further submitted that the impugned
circular clearly indicates that for distribution of pump
sets under the schemes of the Government and for
streamlining the implementation of the schemes specifying
specific rules and responsibilities of different agencies
involved. the directions contained in the circular have been
given.
Mr. Bhat has also submitted that there is no compulsion
to any of the farmers to get covered under the scheme. If
any farmer within the said eight districts, feels that it
will be more advantageous for him to take delivery of pump
sets from a dealers, he may not avail the financial
assistance under the scheme. It is only when such assistance
is to be taken the choice of selecting dealer has not been
left to his discretion.
Mr. Bhat has contended that it is immaterial if some of
the dealers are prepared to supply pump sets on more
favorable terms. In the instant case, the Government has
felt that pump sets should be supplied to farmers covered
under the financial assistance scheme through the dealers of
its choice in eight districts. The choice of dealers has
also not been made on the josi dixit of the Governmental
authorities. The circular issued by the Secretary of Co-
operative Societies has indicated that RAIDCO is the only
state sponsored Co-operative Society having dealership of
almost all varieties of pump sets. It has been ensures that
both RAIDCO and KAICO will sell pump sets at a price lower
than that fixed by State Level Technical Committee and will
give proper after sales service. In the impugned circular,
it has been indicated that necessary advance amount will be
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provided to RAIDCO and KAICO for taking advance action for
implementing the scheme. Mr Bhat has submitted that it is
not feasible to give advance to large number of dealers. Nor
is it a practicable proposition to keep proper watch and
supervision in the functioning of large number of dealers.
Therefore selection of the said two dealers is neither
unreasonable nor capricious.
Mr. Bhat has also submitted that for the entire state
of Kerala, the said two dealers could have been selected by
the State Government as approved dealers. But as Co-
operative movement is less organised in areas outside the
said eight districts, the State Government did not feel any
necessity to ensure purchase of pump sets in such areas only
from said two dealers. Mr Bhat has, therefore, submitted
that any interference by this Court against the impugned
judgment is not called for and appeal should be dismissed.
Mr Dipankar Gupta, learned senior counsel appearing for
the other respondents, has also supported the contentions of
Mr Bhat. Mr. Gupta has submitted that RAIDCO is a state
owned co-operative society having large number of branches
in the State of Kerala. It has also the dealership of almost
all brands of pump sets. It also manufactures pump sets in
collaboration with Kirlosker,RAIDCO has elaborate
arrangement for after sales service. KAICO is also an
established Co-operative Society having dealership in pump
sets. The Government, providing finance to farmers and
agriculturists, providing finance to farmers and
agriculturist, certainly has anxiety to ensured that such
farmers and agriculturists should get supply of pump sets
from such dealer on which the Government may repose
confidence.
If on such consideration, the two dealers have been
selected for supplying pump sets in the said eight
districts, to the farmers and agriculturists, no exception
can be taken by alleging that such course of action
infringes Article 14 and 19 of the Constitution.
Mr. Gupta has submitted that dealership business in the
State of Kerala or in the region comprising the said eight
districts has not been regulated and controlled. It is still
open to all the dealers to carry on trading activities in
the dealership of pump sets in such areas. Mr Gupta has
further submitted that the executive instructive instruction
of the State Government in fixing two dealers in the eight
districts has been issued for streamlining and safeguarding
the interest of the Government because of large scale
malpractices prevalent and found to be indulged in by the
private pump set dealers contrary to the interest of the
economy of the State.
Referring to the counter affidavit of respondent No. 2
RAIDCO. Mr Gupta has submitted that is was brought to the
notice of the Agricultural Department of the State
Government that false invoice had been issued without
effecting actual sale of the pump sets with a view to draw
loans, subsidies and other financial benefit from the
Government. There had been newspaper report about this wide
spread manipulations and irregularities in the activities of
various private dealers in the matter of sale of pump sets
against subsidies and financial assistance from the
Government.
Mr. Gupta has also contended that it has been indicated
in the counter affidavit of respondent No.2 that co-
operative movements are stronger in northern regions
comprising the said eight districts where pump sets are sold
in large numbers. There was, therefore, a felt necessity to
fix approved dealers in such ares by the Government. Mr.
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Gupta has further contended that the dealers are not
recipients of loans or financial assistance from the
Government. The farmers have not raised any dispute that by
the impugned Government circular, they have suffered any
prejudice whatsoever, The selection of two dealers in
northern region of the State is not only within the right
and competence of the State Government but such selection is
not also otherwise arbitrary, capricious and unreasonable.
Hence, question of infringement of Articles 14 and 19 of the
Constitution does not arise. The appeal should, therefore,
be dismissed.
After giving our careful consideration to the facts and
circumstances of the case and submissions made by the
learned counsel for the parties, it appears to us that the
fundamental right for trading activities of the dealers in
pump sets in the State of Kerala as guaranteed under Article
19(1) (g) of the Constitution has not been infringed by the
impugned circular. Fundamental rights guaranteed under
Article 19 of the Constitution are not absolute but the same
are subject to reasonable restrictions to be imposed against
enjoyment of such rights. Such reasonable restriction seeks
to strike a balance between the freedom guaranteed by any of
the clauses under Article 19(1) and the social control
permitted by the clauses (2) to (6) under Article 19.
The reasonableness of restriction is to be determined
in an objective manner and from the standpoint of the
interests of general public and not from the standpoint of
the interests of the persons upon whom the restriction are
imposed or upon abstract consideration. A restriction cannot
be said to be unreasonable merely because in a given case,
it operates harshly and even if the persons affected be
petty traders (AIR 1958 SC 73- Hanif Versus State of Bihar).
In determining the infringement of the right guaranteed
under Article 19(1), the nature of right alleged to have
been infringed, the underlying purpose of the restriction
imposed, the extent and urgency of the evil sought to be
remedied thereby, the disproportion of the imposition, the
prevailing conditions at the time, enter into judicial
verdict (AIR 1981 SC 673 Laxmi ) versus State of U.P.; AIR
1968 SC 1323 Treveli Versus State of Gujarat and Herekchand
vs. Union of India. India. AIR 1970 SC 1453).
Under Clause (1) (g) of Article 19, every citizen has a
freedom and right to choose his own employment or take up
any trade or calling subject only to the limits as my be
imposed by the State in the interests of public welfare and
the other grounds mentioned in clause (6) of Article 19. But
it may be emphasised that the Constitution does not
recognise franchise or rights to business which are
dependent on grants by the State or business affected by
public interest Saghir vs. State of U.P. 1955 (1) SCR 707).
It may be indicated that where a right is conferred on
a particular individual or group of individuals to the
exclusion of others, the reasonableness of restrictions has
to be determined with reference to the circumstances
relating to the trade or business in question. Canalisation
of a particular business in favour of specified individual
has been held reasonable by this Court where vital interests
of the community are concerned or when the business affects
the economy of the country (P.T.C.S Vs. R.T.A. AIR 1960 SC
801: Meenakshi Mills Vs. Union of India, AIR 1979 SC 366 and
Lala Harichand Seroa Vs. Mizo District Council and Anr,
1967(1) SCR 1012).
It is true that even for imposing reasonable
restriction on the fundamental right guaranteed under
Article 19(1), the restriction is to be imposed under a
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valid law, be it a statutory law or statutory regulation,
and not by any executive instruction of the Government.
[Knarak Singh’s case (supra)].
But in the instant case, no fundamental right
guaranteed under Article 19(1) (g) of the Constitution has
been infringed. Hence, question of invalidity on account of
imposition of reasonable restriction on the exercise of such
right by executive order instead by a statute does not arise
in the facts of the case.
It may be indicated that although a citizen has a
fundamental right to carry on a trade or business, he has no
fundamental right to insist upon the Government or any other
individual for doing business with him. Any government or an
individual has got a right to enter into contract with a
particular person or to determine person or person with whom
he or it will deal.
In the instant case, the farmer or agriculturist who
has chosen to receive subsidies or financial assistance
under the schemes of the Government has an obligation to
accept the terms and conditions for such assistance. One of
such condition is that in the northern region of the state.
Pump set for which financial assistance has been given is to
be purchased from the approved dealers of the Government.
The private dealer cannot insist that the Government is also
to enter into contract with any such private dealer to make
it an approved dealer. Since the Government has every right
to select dealers of its choice for delivery or pump sets at
the price agreed upon and to render after sales service to
the purchasers of pump sets covered by its financial
assistance scheme. It is not open to challenge such
selection of dealers on the score that such selection
amounts to unreasonable restriction imposed on the dealers
of the State to carry on trading activities in pump sets. It
is nobody’s case that all the farmers and agriculturist have
been compulsorily covered under such schemes. On the
contrary, it is open to any farmer or agriculturist not to
volunteer for taking such assistance.
It has already been indicated that in Vikalad’s case
(supra), it has been held by this Court that infringement of
fundamental right under Article 19(1) (g) must have a direct
impact on the restriction on the freedom to carry on trade
and not ancillary or incidental effects on such freedom to
trade and not ancillary or incidental effects on such
freedom to trade arising out of any governmental action. It
has also been held in that case that unless the trader or
merchant is not wholly denied to carry on his trade, the
restriction imposed in denying the allotment of wagon in
favour of such trader or merchant to transport coal for
carrying put trading activities does not offend Article
19(1) (g) of the Constitution. No restriction has been
imposed on the trading activity of dealers in pump sets in
the State of Kerala including northern region comprising
eight districts. Even in such area, a dealer is free to
carry on his business. Such dealer, even in the absence of
the said circular, cannot claim as a matter of fundamental
right guaranteed under Article 19(1) (g) that a farmer or
agriculturist must enter into a business deal with such
trader in the matter of purchase of pump sets. Similarly,
such trader also cannot claim that the Government should
also accept him as an approved dealer of the Government. The
trading activity in dealership of pump sheets has not been
stopped or even controlled or regulated generally. The
dealer can deal with purchasers of pump sets without any
control imposed on it to carry on such business. The
obligation to purchase from approved dealer has been
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fastened only to such farmer or agriculturist who has
volunteered to accept financial assistance under the scheme
on various terms and conditions.
In our view the impugned circular does not offend
Article 14 of the constitution. The direction contained in
said circular cannot be held to be vitiated being
arbitrary,capricious or unreasonable. The impugned circular
specifically mentions that in order to implement the schemes
introduced by the Government for streamlining specific rules
and responsibilities of different agencies involved, the
directions contained in the circular have been given. It has
been placed on record that it was brought to the notice of
the agricultural department of the State Government that
false invoice had been issued by dealers with out effecting
actual sales with a view to draw loans, subsidies and other
financial benefits from the Government. Reports were
published in newspapers about wide spread manipulation and
irregularities in the activities of various dealers in the
pumpsets. It is also not in dispute that RAIDCO is only
government controlled co-operative society in the State of
which eighty per cent capital was subscribed by the
Government. The other approved dealer KAICO is also a Co-
operative society involved in dealership of pump sets. If
the State Government on consideration of such facts and
circumstances and to ensure genuine sale of pump sets at
proper price with effective after sales service has felt
that farmers covered by financial assistance scheme should
be fastened with an obligation to purchase pump sets only
from approved dealers in a region where according to State
Government there is a felt need of purchase from such
approved dealers, it cannot be held that such action of the
State Government lies in its ipsi dixit, without being
informed by any reason.
To ascertain unreasonableness and arbitrariness in the
context of Article 14 of the Constitution, it is not
necessary to enter upon any exercise for finding out the
wisdom in the policy decision of the State Government. It is
immaterial if a better or more comprehensive policy decision
could have been taken. It is equally immaterial if it can be
demonstrated that the policy decision is unwise and is
likely to defeat the purpose for which such decision has
been taken. Unless the policy decision is demonstrably
capricious or arbitrary and not informed by any reason
whatsoever or it suffers from the vice of discrimination or
infringes any statute or provisions of the Constitution, the
policy decision can not be struck down. It should be borne
in mind that except for the limited purpose of testing a
public policy in the context of illegality and
unconstitutionality, court should avoid " embarking on
uncharted ocean of public policy."
The contention that the impugned circular suffers from
hostile discrimination meted out to the farmers in northern
region of the State covered by the financial assistance
under the Governmental schemes, by fastening such assistance
with an obligation to purchase pump sets only from the two
approved dealers, cannot be accepted in the facts of the
case, The reasons for fastening the farmers of northern
region with the obligation to purchase pump sets from the
said two dealers have been indicated by Mr. Bhat and Mr.
Gupta and, in our view, it cannot be held that such
reasoning suffers from lack of objectivity. The law is well
settled that even in the matter of grant of largese, award
of job contracts etc, the Government is permitted to depart
from the general norms set down by it, in favour of
particular group of persons by subjecting such persons with
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different standard or norm, if such departure is not
arbitrary but based on some valid principle which in itself
is not irrational, unreasonable or discriminatory [Dayaram
Shetty’s case (supra)].
It may be stated here that Mr.Venugopal’s contention
that the impugned circular has resulted in black listing of
the private dealers of pump sets without even giving them an
opportunity of being heard cannot be accepted. In our view,
it cannot be reasonably contended that if the Government
selects a dealer as its approved dealer the same may mean
that all the other dealers have been black listed. The
question of black listing does not arise because it is
nobody’s case that all other dealers were previously
approved dealers of the Government but by the impugned
circular, they have been suddenly stripped of such status
without affording them an opportunity of being heard.
In the aforesaid facts, we do not find any reason to
inferfere with the impugned judgment of the High Court. The
appeal therefore fails and is dismissed without any order as
to cost.