Full Judgment Text
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PETITIONER:
SURESH KUMAR & ORS.DALMIA CEMENT (BHARAT) LTD. & ANR. ETC.
Vs.
RESPONDENT:
UNION OF INDIA & ORS.
DATE OF JUDGMENT: 25/04/1996
BENCH:
K. RAMASWAMY, S. SAGHIR AHMAD, G.B. PATTANAIK
ACT:
HEADNOTE:
JUDGMENT:
WITH
TRANSFER CASE [C] NO.177 OF 1988
T.C. [C] Nos. 178-189, CMP No. 10091/89, 14930/89, IA Nos.
5 & 6/90 in TC No. S.1-7/89, CPM No. 25857/88, CPM No.
17552/89, TC Nos. 25-26/89, CPM Nos. 5913-14/89, 8736/89,
TC No. 27/89, WP No. 1235/89, 1277/90, 1278/90, IA Nos. 1
& 5/89, in WP No. 922/90, 1164/90, IA No. 6/92, WP No.
921/92, IA Nos. 5-6/93 in T.P. No. 286/94, 294/94 W.P. Nos.
778/95 and 826/95.
J U D G M E N T
K. RAMASWAMY, J.
In this bunch of cases the petitioners are
manufacturers of cement, sugar and other commodities and
Plastic bags (for short, ’HDPE’). The HDPE industries are a
small-scale sector that secured loans from the banks. They
allege that due to operation of the Jute packaging Material
(compulsory Use in Packing Commodities) Act, 1987 (for
short, the ’Act’) their industries are running into losses
and many of them are compelled to close their business. The
capital obtained from the nationalised bends has become bad
debt. Repeal of the Act of gradually phasing out compulsory
packing of the commodities with gunny bags would relieve
hardships to them. The would relieve hardships to them. The
constitutionality of the Act and the Jute Packaging Material
(compulsory Use in Packing commodities) Rules and standing
order No. 539(E) dated May 29, 1987 are impugned as ultra
vires and mandatory direction to the respondents to forbear
enforcement thereof in packing their finished products with
jute bags etc., is sought for.
We have had the advantage of fearing galaxy of learned
senior counsel with their forensic legal skills to assail
the constitutionality of Section 3 to 5 of the Act and the
orders issued by the central Government on the anvil of
Articles 14, 19(1) (9) and 301 of the constitution and
their repudiation with equal vehemence by counsel appearing
for respondent. The petitioners’ fundamental premise is that
their right to carry on trade and business guaranteed by
Article 19(1) (9) and free flow of trade and commerce
throughout the territory of India under Article 301 has been
impeded by operation of the Act, the Rules and the orders
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issued by the central Government the restriction by way of
compulsory packing of their finished products with gunny
bags is an unreasonable restriction; further, it is not in
the interests of general consumer public. The word ’general’
qualifies the whole public; in other words, the restriction
must be in the interest of the entire general public,
namely, the consumers of diverse goods. It must not merely
be small section of the public, namely, the producer of
jute. The restriction also must be or the advancement of ,
or to benefit of the society as a whole. Packing with jute
bags made compulsion irrespective of costs, suitability,
availability, consumers, is arbitrary. Executive priority,
or preference to Jute sector at the cost, of and in total
disregard of the interests of other sectors like cement,
sugar or alternative industry or alternative industry or
general public would be unreasonable, arbitrary and total
prohibition. Therefore, the Act is illegal and void. No law
should impose restriction for the benefit of a small section
of the public at the detriment of an over-whelmingly large
majority of the people. The Act intends to benefit only a
small section of the society as is disclosed bu the
statement of objects and Reasons, namely, vague and
indeterminate 4 million rural agricultural families and 2.5
lacs industrial workers in the jute industry in comparison
with general consumers’ community for whose benefit the
Essential commodities Act, 1955 and the orders issued
thereunder was made regulating equitable distribution of the
essential commodities at reasonable price.
The compulsion to pack cement, sugar and other
essential commodities, with jute bags, not only, as stated
earlier, hampers free flow of trade and commerce but also
escalates the cost of the essential commodities. Jute bags
are unsuitable to particular commodity. Emphasis in this
behalf is laid on cement. Packing cement with jute bags
causes loss in weight during the course of handling in
transit, recurring wastage of raw material like minerals
and electricity, an d loss to the consumers was repeatedly
reiterated bu the counsel. The wastage worked out, for the
year 1987-88, is to the tune of approximately 3 million
tonnes of lime stone, a non-renewable natural resource, 240
million units of electrical energy land 0.5 million tonnes
of coal which is another non-renewable natural resource of
the country. The statistical data is only illustrative. On
the other hand, packing cement with HPDE prevents, apart
from cost factors, loss of the essential commodities,
pollution and health hazards to the workmen. The Act casts
no corresponding obligation on jute manufacturers to supply
gunny bags as per growing demand nor are they obligated to
pass on the benefits to the growers of raw jute. The report
of the High power committee of 1992 would show that the
growers are victims of exploitation at the hands of the
manufacturers to supply gunny bags as per growing demand nor
are they obligated to pass on the benefits to the growers of
raw jute. The report of the High power committee of 1992
would show that the growers are victims of exploitation at
the hands of the manufactures. They are not receiving any
benefit from the Act.
The Act does not provide any guidelines to protect the
interests of the growers. On the other hand, compulsory
packing of the commodities with jute bags is intended to
benefit only jute will owners who have already taken large
sums of money by way of subsidy from the central Government
and modernised their mills. Yet jute bags are not available
to the required demands, which would establish that they had
diversified the jute products. No guidelines are provided to
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strike a balance between the interests of the Jute Sector
and of the general consumers and producers of other
commodities.
The fact that the Government of India had issued orders
permitting the petitioners to purchase second-hand gunny
bags for packing the essential commodities is an admission
that the required quantity of qualitative jute bags are not
being produced. The study reports establish gradual decrease
in cultivation area of jute. The Jute industry has
diversified the manufacture of jute products in India which
are exported abroad. The jute industry is importing raw jute
from Bangladesh. The Act does not expressly intend to
operate as permanent measure, and being a temporary
enactment to tide over the business crisis in jute industry,
the Act is required to gradually phase out compulsion
packing of the commodities with jute bags proportionately.
The committee appointed by the central Government had
recommended to the central Government to phase out
compulsory packing of the essential commodities with jute
bags by the end of Eighth Five Years Plan, namely, 1995-96.
Instead of repealing the Act, fresh orders, the central
Government have imposed hundred per cent use of gunny bags
in sugar industry etc. No heed was paid by the central
Government to several representations made by the
manufacturers, individually and collectively, through their
associations. The High power committee’s report in para 6.3
has been repeatedly referred to and relied on by Sri G.L.
Sanghi. It reads thus:
" The Jute industry cannot be
artificially propped up by this
piece of legislation for an
indefinite period, in a liberalised
economy when free market forces
have come to operate. In any case,
this legislative measure was only
intended to provide support to the
industry as an interim measure for
a brief period during which the
industry was expected to
restructure and readjusts its
capacity linked to production value
added diversified products for the
domestic and international market.
The committee is award of the fact
that the constitutional validity of
the Jute packaging Act is pending
before the supreme Court of a
decision. Hence, without any
prejudice to the out come of the
court proceedings, the committee
recommend that the provisions in
there existing orders should be
diluted gradually in two or three
stages, and by 1994-95 it should be
rescinded altogether."
In addition, they relied on paragraphs 6.1; 2.9; 2.10;
9.1 and 9.6.
The standing Advisory committee constituted under
section 4 of the Act is not a representative committee nor
the manufacturers find their representatives in the
committee. The HDPE is much cheaper than the gunny bag. The
incidence of cost of the gunny bag being component of the
sale price of the essential commodity, needless burden would
be passed on to the consumers. In this regard, the sugar
industry pointed out that there is increase in the sugar
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factories and production of sugar industry pointed out that
there is increase in the sugar factories and production of
sugar over the years from 216 to 435 from 37.40 lac tonnes
to 146.35 lac tonnes respectively. On the other hand, there
is gradual decline in jute cultivated area from 11.03
hectors to 9.10 hector. Consequently, import of jute from
Bangladesh has been increased from 3.10 to 54 tonnes. It is
, contended that it is no longer feasible to obtain
sufficient quantity of ’A’ class bags fit for packing sugar.
The Act being a penal Act, the Rules made and the orders
issued thereunder are, therefore, arbitrary offending
Article 14.
Interplay of the operational efficacy of the Act, the
Rules and orders, on fundamental rights of the petitioners
to carry on trade or business guaranteed by Articles
19(1),14 and 301 of the constitution would be better
appreciated only if we have a grasp of their backdrop. India
lives in villages. agricultural economy is the bed-rock for
rural India. Property assures them social dignity and
economic equality. Agriculture is the main source for
economic sustenance and equality of status to the tillers of
the soil who too have fundamental rights to equality of
status and of opportunity and right to livelihood.
Agricultural operations are their prime source of livelihood
and sustained of the business and of urban population.
Professor Harold Laski, an inconoclastic humanist,
expressing his belief in Indian Independence and its
socialist destiny stated in his "Congress socialist" of
April 11, 1936, thus:
"Attainment of natural self-
government to mean no more than the
exchange of the control by British
capitalism for that by Indian
capitalism. Those who know the
normal life of the poor ...will
realise enough that without
economic security, liberty is not
worth living."
The Avadi Resolution of congress envisaged to redeem
the plight of the tiller of soil granting permanent tenures
and conferment title to the lands held under feudalistic
social order. Karachi resolution of 1931 assured that
"Political freedom must include real economic freedom of
starving millions". The founding fathers of the
constitution, therefore, in the objective Resolution,
speaking on behalf of, "we, the people of India", pledged on
their behalf to accord justice, social, economic and
political to all the citizens, equality of status and
opportunity and dignity of person with stated liberties.
In Kartar Singh Vs. State of Punjab [(1994) 3 SCC 569],
a constitution Bench of this court to which one of us, K.
Ramaswamy, J., was a member was to consider the inter-play
of life, liberty and equality. The evolution to the state
from police state to a welfare state accepted democratic
society to safe-guard the life, liberty and equality of the
citizens. The exercise of right to liberty is subject to
social control, lest it would become anti-social or would
undermine the security of the state. Indian democracy,
product of rule of law, aims not only to protect the
fundamental rights of its citizens but also to establish an
egalitarian social order. Individual has to live within the
social confines suppressing his unsocial and unbridled
growth for reconciling individual liberty with social
control. Liberty must be controlled in the interests of the
society. The societal interest must never br overbearing to
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justify total deprivation of individual liberty. Liberty
cannot stand alone. It must be paired with a companion
virtue; liberty and morality; liberty law; liberty and
justice; liberty and common good; liberty and responsibility
which are concomitants for orderly progress and social
stability. Man being a rational individual has to live in
harmony with the equal rights of others more differently for
the attainment of antithetic desires. Liberty would not,
therefore, be always an absolute licence but must arm itself
within the confines of law. In that case, the question was:
whether TADA Act is constitutionally valid? while declaring
part of the Act as invalid, the above statement of law came
to be laid therein. In Kesawananda Bharati vs. Union of
India [(1973) Supp. SCR 1], the Full court had held that
preamble of the constitution is integral part of the
constitution. In S.R. Bommai vs. Union of India [(1994) 3
SCC 1], the preamble has been held to be the basic structure
of the constitution.
The preamble of the constitution is the epitome of the
basic structure guilt in the constitution guaranteeing
justice-social, economic and political- equality of status
and of opportunity with dignity of person and fraternity. To
establish and egalitarian social order, the trinity, the
preamble, the fundamental Rights in Part III and Directive
principles of state policy (for short, ‘Directives’) in
chapter IV of the constitution delineated the socioeconomic
justice. The word ’justice’ envision in the preamble is used
in broad spectrum to harmonise individual rights with the
general welfare of the society. The constitution is the
supreme law. The purpose of law is realisation of justice
whose content and scope vary depending upon the prevailing
social environment. Every social and economic change causes
change in the law. In a democracy governed by rule of law,
it is not possible to change the legal basis of socio-
economic life of the community without bringing about
corresponding change in the law, endeavor needs to be made
to harmonise the individual interest with the paramount
interest of the community keeping pace with the realities of
ever changing social and economic life of the community
envisaged in the constitution. Justice in the preamble
implies equality consistent with the competing demands
between distributive justice with those of cumulative
justice. Justice aims to promote the general well-being of
the community as well as individual’s excellence. The
principal end of society is to protect the enjoyment of the
individuals subject to social order, well-being and
morality. Establishment of priorities of liberties is a
political judgment.
Law is the manifestation of principles of justice,
equity and good conscience. Rule of law should establish a
uniform pattern for harmonious existence in a society where
every individual would exercise his rights to his best
advantage to achieve excellence, subject to protective
discrimination. The best advantage of one person could be
the worst disadvantage to another. Law steps in to iron out
such creases and ensures equality of protection to
individual as well as group liberties. Man’s status is a
creature of substantive as well as procedural law to which
legal incidents would attach. justice, equality and
fraternity are trinity for social and economic equality. Law
is the foundation on which the potential of the society
stands. Law is an instrument for social change as also
defender for social change. In Madhu Kishwar & Ors. etc. v.
state of Bihar & Ors. [Writ petition (C) No. 5723 of 1982
dated April 17,1996], the question was: whether the tribal
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women are entitled to equality in matters of succession with
male members? One of us (K. Ramaswamy, J.) has held that
they are entitled to equality in matters of succession.
Social justice is the comprehensive form to remove
social imbalances by law harmonising the rival claims or
the interests of different groups and/or sections in the
social structure or individuals by means of which alone it
would be possible to build up a welfare state. The ideal of
economic justice is to make equality of status meaningful
and the life worth living at its best removing inequality of
opportunity and of status- social, economic and political.
The content ambit and interplay of justice and social
justice was elucidated in Consumer Education & Research
Centre & Ors. v. Union of India & Ors. [(1995) 3 SCC 42] by
a Bench of three Judges of this Court in paragraph 18 at
page 67. The court observed that the constitution is the
supreme law envisaging social justice as its arch to ensure
life to everyone to be meaningful and livable with human
dignity. Jurisprudence is the eye of law giving an insight
into the environment of which it is the expression. it
relates the law to the spirit of the time and makes it
richer. Law is the ultimate aim of every civilised society,
as a key system in a given era, to meet the needs and
demands of its time. Justice, according to law,
comprehensive social urge and commitment. Justice, liberty,
equality and fraternity are supreme constitutional values to
establish the egalitarian social, economic and political
democracy. Social justice, equality and dignity of person
are cornerstones of social democracy. social justice
consists of diverse principles essential for the orderly
growth and development of personality of every citizen.
Justice is the generic sense and social justice is its
facet, a dynamic device to mitigate the sufferings of the
disadvantaged and to eliminate handicaps so as to elevate
them to the level of equality to live life with dignity of
person, social justice is not a simple or single idea of a
society but is an essential part of complex social change to
relieve the poor etc. from handicaps, penury, to ward them
off from distress and to make their lives livable for
greater good of the society at large. social justice,
therefore, gives substantial degree of social, economic and
political equality, which is the constitutional right of
every of every citizen. In para 19, it is further
elaborated that social justice is one of the disciplines of
justice which relates to the society. What is due cannot be
ascertained by absolute standard which keeps changing
depending upon the time, place and circumstances. The
constitutional concern of social justice, as an elastic
continuous process, is to transform and accord justice to
all sections of the society by providing facilities and
opportunities to remove handicaps and disabilities with
which the poor etc. are languishing. It aims to secure
dignity of their person. It is the duty of the state to
accord justice to all members of the society in all facets
of human activity. The concept of social justice embeds
equality to flavour and enlivens practical content of life.
social justice and equality are complementary to each other
so that both should maintain their vitality. Rule of law,
therefore, is a potent instrument of social justice to bring
about equality in result. Article 1 of the universal
Declaration of Human Rights envisions that all human beings
are born free and equal in dignity and rights and each
should act towards one another in a spirit of brotherhood.
In that case the question was: whether rights to social
security is a fundamental right to workman? to make the life
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of the workman worth living with health, it was held that
right to health is a fundamental right and it is the duty of
the state and the employer to provide facility and
opportunities for ensuring sustained good health and leisure
to the workman as facet of right to life under article 21.
In Mrs. Valsamma Paul v. Cochin University & Ors. [JT
1996(1) SC 57], a Bench of this court has held that human
rights are derived from the dignity and worth inherent in
the human person. Human rights and fundamental freedoms have
been reiterated in the universal declaration of human
rights. Democracy, development and respect for human rights.
Democracy, development and respect for human rights and the
fundamental freedoms are inter-dependent and have mutual
reinforcement. Article 29(2) of the Declaration of Human
Rights provides that "in the exercise of this rights and
freedoms, everyone shall be subject only to such limitations
as are determined by law solely for the rights and freedoms
of others and of leading the just requirements of morality,
public order and general welfare in a democratic society."
The concept of equality and equal protection of law
guaranteed by Article 14 of the constitution in its propers
spectrum encompasses social and economic justice in a
political democracy as its species to eliminate inequalities
in status and to provide facilities and opportunities among
the individual and groups of people to secure adequate means
of livelihood which is the foundation for stability of
political democracy.
Social democracy means a way of life which recognises
liberty, equality and fraternity as principles of life. They
are the trinity. One cannot diverse from the other. Without
equality, liberty would produce supremacy of the few over
the many. Equality without liberty would denude the
individual of his initiative to improve excellence. Without
fraternity, liberty and equality would not nurture as their
natural habitat. Social and economic justice is a
constitutional right to socio-economic justice in the
trinity, the preamble, Fundamental Rights and Directives is
to make the quality of life of there disadvantaged people
meaningful. Equal protection in Article 14, therefore,
requires affirmative action by the state to those unequals
by providing facilities and opportunities. The question
therein was: whether right to reservation is available to
women belonging by birth to forward section of the society
but married to male member of disadvantaged section of the
society on par with the persons from the caste to which
reservation was provided ? In that context, the right to
socio-economic justice, equality and fraternity was
considered and the above law was laid down.
Gandhiji, the Father of the Nation, on the eve of
independence had stated that " independence did not mean
mere freedom from British Rule by breaking the bonds of
slavery but it meant more than that. It meant justice to all
citizens of India, irrespective of religion, caste, creed or
language, each getting his legitimate due". The 42nd
amendment Act of the constitution introduced, " secularism
and socialism" in the preamble which are implicit in the
Directives and the Fundamental Rights read together. Social
and economic justice in the context of our Indian
constitution must, therefore, be understood in a
comprehensive sense to remove every inequality and to
provide opportunity to all citizens in social as well as
economic justice means the abolition of those economic
conditions which ultimately result in the inequality of
economic values between mem. It means to establish a
democratic way of life built upon socio-economic structure
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of the society to make the rule of law dynamic.
Article 14 of the constitution is a shining star among
the fundamental rights which guarantees equality to every
citizen and equal protection of laws to all persons.
Equality before laws ins correlative to the concept of rule
of law for all-round evaluation of healthy social order.
Directives set forth social principles to eliminate
inequalities in income, in status and opportunity and to
provide facilities and opportunities to every citizen to
make the fundamental rights meaningful and the life of every
citizen worth living and at its best, with the dignity of
person and fraternity, lest they remain empty- vessels and
teasing illusions to majority population .
The constitution adopted mixed economy and the planned
development has become a constitutional scheme to realise
egalitarian social order. The second Five year plan
envisaged that "The patron of development and the structure
of the socio-economic relation should be so planned that
they result in appreciable increase in income and employment
but also in greater equality in income and wealth." The
Directives of the state policy have delineated in broad
spectrum socio-economic justice to all people. "The
socialistic patron of society is a more comprehensive
expression of the approach. Economic polity and
constitutional changes have to be planned in a manner that
would ensure economic advance along with democratic and
egalitarian lines."
In the Eighth Five Year plan 1992-97, the planning
commission, in its blue-print has stated on agricultural
economy and need for stepping up production in para 1.1.1
that agriculture and allied activities constitute the single
largest contributor to the Gross Domestic product(GDP),
accounting for almost 33% if the total. They are vital to
the national well-being as, besides providing the basic
needs of the society and the raw materials for some of the
important segment of Indian industry, they provide
livelihood for almost two thirds of the work force. The
share of the agricultural products in the total export
earnings, both in primary and processed forms, is very
significant. In paragraph 1.2.7 Jute and Mesta, it is stated
that the average production of jute and mesta in the seventh
plan was 8.8 million bales. Inadequate availability of
improved seeds and retting facilities are the main
constraints to increasing the production of quality jute and
mesta. Development of jute and mesta during the seventh
plan was undertaken through a special Jute Development
program, funded by the Ministry of Textiles. Use of natural
fiber as the packing material is on the revival trail and
diverse jute products are now exported. The minimum support
price policy to the farmers and the role of Jute corporation
of India (JCI) need to be reviewed for their effective
operation. It is stated in para 1.11.1 that the Eighth plan
aims at consolidating the gains from the base built over the
years in agricultural production sustaining the improvement
in productivity and production. To meet the increasing
demands of the growing population enlarging the income of
the farmers and realising the country potential by stepping
up agricultural exports effective steps are directed to be
taken. In paragraph 1.11.7, it is stated that marketing
infrastructure has to be further augmented and streamlined,
especially in respect of perishable commodities. In the
light of the technological advancement and gains,
agricultural produce requires to promote diversification
within and outside the country which gains importance in the
coming years. In paragraph 1.11.9, it is stated that the
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changes in the trade policies have vastly improved the
prospects for realising the full potential of the country
with its varied agro-climatic conditions from tropical to
temperate regions, in producing commodities for export.
Maximising the production of the traditional export
commodities etc. requires to be stepped up on modern
technologies and sustained efforts should be made in the
coming years. In paragraph 1.11.11, it is stated that the
promotion of initiatives outside the Government to further
socioeconomic development is of cardinal importance and is
central to the strategy of the Eighth plan. In paragraph
1.11.12, it is stated that many a programme and scheme will
have to be continued from the previous plans, with necessary
refinements or modifications to address themselves sharply
to the problems for their overcome. A policy was made in
eloquent terms promising in para 11 that "Government will
endeavour to create a positive trade or investment climate
for agriculture at par with industries to develop effective
systems and to bestow similar benefits on agricultural as
exit in industry. They issued and ensured that
agriculturists are not subjected to the regulatory and tax
collection machinery of Government."
Article 38 of the Constitution enjoins the state to
strive to promote the welfare of the people by securing and
protecting, as effectively as it may, the social order in
which justice-social, economic and political-shall, inform
all the institutions of the national life striving to
minimise inequalities in income and endeavour to eliminate
inequalities in status, facilities, opportunities amongst
individuals and groups of people residing in different areas
or engaged in different avocations. As stated earlier,
agriculture is the main stay to rural economic and
empowerment of the agriculturists. Agriculture, therefore,
is an industry. To the tiller of the soil, livelihood
depends on the production and return of the agricultural
produce and sustained agro-economic growth. The climatic
conditions throughout Bharat are not uniform. The climatic
conditions throughout Bharat are not uniform. They vary from
tropical to moderate conditions. Tillers of the soil being
unorganised sector, their voice is scarcely heard and was
not even remotely voiced in these cases. Their fundamental
right to cultivation is as a part of right to livelihood. It
is a bastion of economic and social justice envisaged in the
preamble and Article 38 of the constitution. As stated
earlier, the rights, liberties and privileges assured to
citizen are linked with corresponding concept of duty,
public order and morality. Therefore, the jural postulates
form the foundation for the functioning of just society. The
fundamental rights ensured in part III are, therefore, made
subject to restrictions i.e. , public order in the interest
of general public. In enliving the fundamental rights and
the public interest or public purpose in part IV Directives,
parliament is the best Judge to decide what is good for the
community by whose suffrage it comes into existence and the
majority political party assumed governance of the country.
The Directive principles are the fundamentals in their
manifestos. Any digression is unconstitutional. The
constitution enjoins upon the Executive, Legislature and the
Judiciary to balance the competing and conflicting claims
involved in a dispute so as to harmonise the competing
claims to establish an egalitarian social order. It is a
settled law that the Fundamental Rights and the Directive
principles are two wheels of the chariot; none of the two is
less important than the other. Snap one, the other will lose
its efficacy. Together, they constitute the conscience of
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the constitution to bring about social revolution under rule
of law. The Fundamental Rights and the directives are,
therefore, harmoniously interpreted to make the law a social
engineer to provide flesh and blood to the dry bones of law.
The Directives would serve the court as a beacon light to
interpretation. Fundamental Rights are rightful means to the
end, viz., social and economic justice provided in the
Directives and the preamble. The Fundamental Rights and the
Directives establish the trinity of equality, liberty and
fraternity in an egalitarian social order and prevent
exploitation.
Social justice, therefore, forms the basis of
progressive stability in the society and human progress.
Economic justice means abolishing such economic conditions
which removed the inequality of economic value between man,
concentration of wealth and means of production in the hands
of a few and are detrimental to the vast. Law, therefore
must seek to serve as a flexible instrument of socioeconomic
adjustment to bring about peaceful socio-econnomic
revolution under rule of law. The constitution, the
fundamental supreme lex distributes the sovereign power
between the Executive, the Legislature and the Judiciary.
The three instrumentalities, within their play endeavour to
elongate the constitutional basic structure built in the
preamble, Fundamental Rights and Directives, namely,
establishment of an egalitarian social order in which every
citizen receives equality of opportunity and of status,
social and economic justice. The court, therefore, must
strive to give harmonious interpretation to propel forward
march and progress towards establishing an egalitarian
social order.
From this perspective, let us consider the
constitutionality of the provisions of the Act. The
statement and objects and the preamble of the Act, would, in
unmistakable terms, indicate that it intends to provide
livelihood to nearly 4 million rural agricultural families
and 2.5 lacs industrial workers The ancient agro-based jute
industry occupied a significant position in our national
economy, in particular in the economy of the north-eastern
region of the country. It is agro-based and labour-intensive
industry. It is also an export-oriented one and its raw
material is based entirely on indigenous jute produced by
the above agricultural families. Parliament avowedly
intended to protect the interests of the persons involved in
jute production; jute industry, therefore, require
protection.
A balanced view of the developments in the national
economy requires to be taken into consideration to protect
the interests of the farmers who produce jute or any other
agricultural produce and in the interests of agro-based
industry of the country and workers who deliver finished
products. with that objective in view, the Act was made for
compulsory use of jute packing material in the supply and
distribution of certain commodities in the interest of
production of raw jute packing material and the persons
engaged in the production thereof for the matters connected
therewith. Section 3,4 and 5 reads thus:
"3. (1) Notwithstanding anything
contained in any other law for the
time being in force, the Central
Government, may, if it is
satisfied, after considering the
recommendations made to it by the
standing Advisory committee, that
it is necessary so to do in the
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interest of production of raw jute
and jute packaging material, and of
persons engaged in the production
thereof, by order published in to
time, that such commodity or class
of commodities or such percentage
thereof, as may be specified in the
order, be packed for the purposes
of its supply or distribution in
such jute packaging material as may
be specified in the order:
(a) the existing level of usage of
jute material;
(b) the quantity of raw jute
available;
(c) the quantity of jute material
available:
(d) the protection of interest of
persons engaged in the jute
industry and in the production of
row jute;
(e) the need for continued
maintenance of jute industry;
(f) the quantity of commodities
which, in its opinion, is likely to
be required for packing in jute
material;
(g) such other matters as the
standing Advisory committee may
think fit.
5. Where an order has been made
under Section 3 requiring any
commodity, class of commodities or
any percentage thereof to be packed
in jute packaging material for
their supply or distribution, such
commodity, class of commodities of
percentage thereof shall not, on
and from the date specified in such
order, be supplied or distributed
unsell the same is packed in
accordance with that order:
Provided that nothing in this
section shall apply to the supply
or distribution of any commodity
before that date such commodities
or three months from the aforesaid
date such if immediately before
that date such commodity before
that date such commodity, class of
commodities or percentage, thereof
were being packaging material other
than jute packging material."
Provided that until such time as
the standing Advisory committee is
constituted under section 4, the
central Government shall, before
making any order under this sub-
section(2) of section 4, and any
order so made shall cease to
operator at the expiration of three
months from the date on which the
standing Advisory committee makes
its recommendations.
(2) Every order made under sub-
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section
(1) shall be laid, as soon as may
be after it is made, before each
House of parliament, while it is in
session, for a total period of
thirty days which may be comprised
in one session or in two or more
successive sessions, and if, before
the expiry of the session
immediately following the session
or the successive sessions
aforesaid, both Houses agree in
making any modification in the
order or both Houses agree that the
order should not be made, the order
shall thereafter have effect only
in such modified form or br of no
effect, as the case may be; so,
however, that any such modification
or annulment shall be without
prejudiced to the validity of
anything previously done under that
order. (emphasis supplied)
4.(1) The Central Government shall,
with a view to determining the
commodity thereof in respect of
which jute packaging material shall
be used in their packing,
constitute a standing Advisory
committee consisting of such
Government the necessary expertise
to give advise in the matter.
(2) The standing Advisory committee
shall, after considering the
following matters, indicate its
recommendations to the central
Government, namely :
Sections 6 to 8 are machinery provisions. Section 9 to
11 are penal provisions. Section 16 gives power to the
Central Government, to exempt by notification published in
the official Gazette, any commodity or class of commodities
from the operation of any order made under section 3. The
order should be laid under sub-section (2) before each House
of parliament as provided therein. The orders issued under
section 3 are subject to modification by the parliament.
Section 17 gives rule- making power to the central
Government. Rules, namely, the Jute packaging Materials
(compulsory use in packing commodities) Rules, 1987 (for
short, the ’Rules’) were made. Rule 3 provides for
constitution of the commodities.
Sub-section (1) of section 3, with a non-obstante
clause, excludes, excludes the operation of any other law
for the time being in force and, regulates use of jute or
jute packaging material in supply and distribution of
certain commodities. It gives power to the Central
Government, on being satisfied, on consideration of the
recommendations made to it by the standing Advisory
Committee empowered to issue direction from time to time for
use of the packing material. The primary purpose and object
of such directions is to protect the interests of producer
of raw jute and jute making material. The Central Government
is enjoined to protect the interests of persons engaged in
the production thereof. Such orders should be published in
the official Gazette. The orders need to be passed from time
to time. From the date of such order specified therein, such
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commodity or class of commodities or such percentage
thereof, as specified in the order should be packed with
jute packaging material specified in there order for the
purpose of supply or distribution of such commodity or
commodities. Under the proviso, before making any order, the
matter as specified in sub-section (2) of section 4. The
Central Government, may make an order thereunder which shall
cease to operate at the expiration of 3 months from the date
of the recommendations of the standing Advisory committee.
Every such order shall be laid before each House of
parliament while it is in session, for a period of 30 days.
It would be open to the parliament to make any modification
to the order. Both the Houses of parliament may also agree
that such order should not be made. After making
modifications, if any, such amended or modified order will
be the operative order. Any action taken on the on going
order, before modification, shall be without prejudice to
the action already taken.
Under sub-section (1) of section 4, the central
Government should constitute a standing Advisory committee
consisting of such persons as have, in its opinion, the
necessary expertise to give advice in the matter with a view
to determine the commodity or class of commodities or
percentage thereof in respect of which jute packaging
material shall be used in the packing. The standing Advisory
committee, after considering the matters enumerated in
clauses (a) to (9), would furnish its recommendations to the
Government. Section 5 created embargo on the supply and
distribution of such specified commodity or class of
commodities or any percentage thereof with reference to
which an order under section 3 came to be made. Rule 3 of
the Rules carries out the purpose of section 4 in
establishment and constitution of the standing Advisory
committees consisting of chairman and members not exceeding
20, nominated by the central Government for a term of three
years. The date of the constitution of the committee and of
filling up of all the vacancies and manner in which it is to
be done is provided thereunder.
It is true that though a committee was constituted by
the central Government, in addition to the Advisor
committee which recommended to the Government to abolish
compulsory use of jute packing material by 1997, the
Government and the Advisory committee did not consider it
desirable to completely phase out compulsory use of Jute
packaging Material. It issued directions for compulsory
packing of the commodities with jute packaging material with
varying percentage. In the case of sugar, 100% use of jute
packaging material is insisted to be continued.
The question, therefore, is: whether direction issued
by the central Government for the compulsory packing of the
commodities with jute packaging material, [in respect of
sugar 100% use of the gunny bags and at varying percentage
for other commodities is unconstitutional? As stated
earlier, the Act aims to accord socio-economic justice to
the tillers of the soil by protecting the cultivation of raw
jute and employment of the workmen engaged in the jute
manufacturing industry. Jute is being produced and
manufactured in north-eastern states, West Bengal and
Andhara Pradesh etc. as mentioned in the affidavit. A
reading of the Debates on the floor of the parliament on
the Bill, does establish, cutting across the party lines,
all the members have spoken in favour of directing
compulsory use of jute packaging material (gunny bags) for
supply and distribution of the commodities. As stated
earlier, the object of the benign measure primarily is to
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protect the interests of growers of agricultural produce,
who cultivate of growers of agricultural produce, who
cultivate raw jute. Incidentally, the manufacturers and the
workman get benefit therefrom. Agricultural economy accords
to the grower socio-economic justice economy accords to the
grower socio-economic justice to provided dignity of person,
equality of opportunity to have his produce used in industry
etc. Agriculture is treated as industry on par with any
other any other industry. the state should provide. by
legislative or executive measure all facilities and
opportunities to get them due price for their products and
have them marketed for use in are made subjection to
parliamentary control and subject to modification by both
Houses.
Equally, the competing right to carry on trade or
business guaranteed to a citizen or person is also to be
protected. In the clash of competing rights of socio-
economic justice of the producers of the agricultural
commodities and of the individual right of a citizen to
carry on trade or business, the latter yield place to the
paramount social right. However, as rightly pointed out by
the counsel, a balances view has to be struck by the central
Government in directing use of jute packaging material at
the percentage of jute bags to be used for compulsory
packing of the commodities which is subject to parliamentary
control and approval. Parliament is the spokesmen to the
people where the need is felt most accute. When the orders
passed under section 3 are subject to modification by the
parliament, parliament preserved to itself a great salutary
control over executive exercise of power under section 3(1).
It is such a valuable public protection and safeguard kept
with the parliament itself. Parliament would be the best
Judge to discuss in each House as to what extent competing
interests of the agricultural industry and the industry
involved in commercial products need to be protected and
would guide the central Government appropriately by
resolution or otherwise. When parliament debates on the
subject, it focuses its attention on all its constituents
and it would be open to debate, on the subject by
participants from all the members of the parliament and
political parties and of shades of opinion. Parliament is
entitled to direct the Central Government to place on the
floor of each House the necessary factual material for
discussion. They are the best judges to direct the central
Government to act on their advice in a particular way, based
on the existing factual material. The parliament is
empowered to overrule of the central Government under
section 3(1) by disapproval.
It is a question of fact, to be considered in each
case, as to what percentage is required to be used it is
primarily of the central Government to be decide as
executive policy. The central Government is guided by the
material placed before it and the advice tendered to it by
the standing Advisory committee constituted under Section 4
of the Act. It depends upon the availability of the jute and
its products in the market, the quantum of raw jute produced
by the agriculturists, its demand in the market and its
capability for diversification into other industry for
ancillary use of the jute material and hosts of other
factors enter into the decision making process. The exercise
is required to be undertaken from time to time. The Act, the
Rules and the material placed before it by the Committee and
the advice tendered by the expert body form the basis. The
decision taken and directions issued cannot be said to smack
of arbitrariness. Guidelines are available under the Act and
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the Rules made in this behalf. They are Parliamentary
control. Paramount public interest is to provide economic
security and equality and justice to the producers of the
raw jute and the workers engaged in manufacturing and other
jute packaging material.
In Shri Sitaram Sugar Co. Ltd. & Anr. vs. Union of
India & Ors. [(1990) 3 SCC 223], the question arose; whether
fixation of price for sugar under Section 3 (3-C) of the
Essential Commodities Act, 1955 was an administrative or
legislative function and whether the Court could interfere
in fixation of price thereof? A Constitution Bench of this
Court had held that price fixation is legislative function.
In paragraph 57, it was held that judicial review is not
concerned with matters of economic policy. The Court does
not substitute its judgment for that of the Legislature or
its agents as to matters within the province of either. The
Court does not supplant the "feel of the expert" by it own
views. When the Legislature acts within the sphere of its
authority and delegates power to its agent, it may empower
the agent to make findings of fact which are conclusive
provided such findings satisfy the test of reasonableness.
In all such cases, judicial inquiry is confined to the
question whether the findings of fact are reasonably based
on evidence and whether such findings are sustainable at law
of the land. Judicial function in respect of such matters is
exhausted when the court finds rational basis to the
conclusion reached by the authority. In the matters of
policy and planning, it should adopt one or other system of
control in the best economic interest of the sugar industry
and the general public grouping sugar factories on
geographical-cum-agro-economic factors to determine the
price. It was held that the fixation of price to the sugar
was not amenable to judicial review.
In R.K. Garg etc. vs. Union of India & Ors. [(1981) 4
SCC 675], when Special Bearer Bonds (Immunities and
Exemptions) Act, 1981 was challenged in this Court under
Article 32 of the Constitution, this Court per majority, had
held that legislation particularly in economic matters, is
essentially empiric and it is based on experimentation.
There may be crudities, inequities and even possibilities of
abuse but on that account alone, it cannot be struck down as
invalid. These can always be remedied by the legislature by
passing amendments. The Court must, therefore, adjudge the
constitutionality of such legislation by the generality of
its provisions and not by its crudities. Laws relating to
economic activities should be viewed with greater latitude
than laws touching civil rights such as freedom to speak or
practise any religion. There is always a presumption in
favour of the constitutionality of the Act. Burden is on the
petitioner to show that there has been a clear transgression
of constitutional principles. The legislature understands
and correctly appreciates the needs of its own people; its
laws are directed to problems made manifest by experience
and its discrimination is based on adequate grounds. In
adjudging, the Court may take into consideration common
knowledge, matters of common report, the history of the time
and may assume every state of affairs which can be conceived
of as existing at the time of legislation. The Act was made
and held to be valid.
In Morey vs. Doud [354 Us 457 = L.Ed. 2nd 1485], in
dissenting judgment, Frankfaster, J. held that in the
utilities, tax, economic regulation cases judicial self-
restraint, if not judicial deference to legislative judgment
was emphasised. The court is always to remember that the
parliament has affirmative responsibility to solve problems
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that were felt most accute. In economic measure, the court
while claiming the constitutionality of a legislation must
defer to legislative judgment.
In Peerless General Finance & Investment Co. Ltd. &
Anr. VS. Reserve Bank of India [(1992) 2 SCC 343], one of
us, K. Ramaswamy, J., in a separate but concurrent judgment
held in paragraph 69 that it is well settled law that the
court is not tribunal from the crudities and inequities of
complicated experimental economic legislation. The
discretion in evolving economic measures, rests with the
policy makers and not with the judiciary. Indian social
order is beset with social and economic inequalities and of
status, and in our socialist secular, democratic republic,
inequality is an anathema to social and economic justice.
The Reserve Bank of India Act assigned the power to the
Reserve Bank of India to regulate monetary system and the
experimentation of the economic legislation, can best be
left to the executive unless it is found to be unrealistic
or manifestly arbitrary. Even id a law is found to be
wanting on trial, it is better that its defects are
demonstrated and removed by amendment than that law should
be aborted by judicial fiat. Such an assertion of judicial
power deflects responsibilities from those on whom a
democratic society ultimately rests. The court has to see
whether the scheme, measure or regulation adopted is
relevant or appropriate to the power exercised by the
authority. In that case, the directions issued by the
Reserve Bank of India for regulating the money circulation
were held valid.
In City of New Oreleans vs. Nancy dukes [427 US 297 =
49 L.Ed. 2nd 511 at 518), the dissenting view of
Frankfaster, J. was upheld and the court had stated that"
Morey was the only case in the last half century to
invalidate a wholly economic regulation solely on equal
protection and now we are satisfied that the decision was
erroneous".
In Charles Roberts & Co. Ltd. vs. British Railways
Board [(1965) 1 W.L.R. 396] , the chancery Division had
held that, in general, Judges are not qualified to the said
questions of economic policy and such questions by their
nature are not justiciable. But, in England, judicial review
of parliamentary enactment was not available. That decision
may not be of much assistance.
Robert Jackson, J. in H.P. Hood & sons vs. Dumond
(1949), had stated that our system is that every farmer and
every craftsman shall be encouraged to produce by the
certainty that he will have free access to every market in
the nation, that no home embargo will withhold his exports
and that no foreign state will by custom, duties or
regulation exclude them [vide: The Encyclopedia of American
Constitution on the chapter Economic Analysis and the
constitution at page 597]. At page 598, it is stated that "
since 1937, the court has consistently declined to
invalidate economic legislation on substantive due process
grounds and has stubbornly refused to subject such
legislation to even minimal review". Economic analysis is an
acquired taste; courts should not insist that legislature be
educated in basic economic concepts let alone that they keep
abreast of the current literature on externalities and
public goods. Most economists would acknowledge that a
legislature may properly choose to sacrifice economic
efficiency in order to achieve some desired distribution of
wealth among social groups. Even if a private conduct is
economically acceptable, a legislature could properly
conclude that the conduct is interpersonally unfair in the
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particular way, it enables to cause harm to people.
It would, thus, be clear that the Court is not will
equipped to adjudge crudities and inequities emerging from
economic legislation. The legislature is empowered to
experiment on economic legislation in its attempt to remove
inequalities in income or status or provide social and
economic justice to the society or a particular descernable
segments of society or toe remove the defect where the
legislature felt most acute. There is always presumption in
favour of constitutionality. The legislature appreciates the
needs of the people and directs the laws to the problems
made manifest by experience and discrimination is based on
adequate grounds. The court does not supplant the feel and
experiment of the expert by its own views. Court in
deference to legislative judgement, imposes self-restraint
to adjudge on crudities and experiment but concern on core
constitutionality.
Another serious contention of the petitioners is that
the Act is a class legislation intended to benefit a small
sector of jute or the producers of raw jute or their workmen
while the total impact on the consumers at large or right to
trade or business in another commodities is
disproportionately large. Therefore, the Act is ultra vires
as devoid of substance. The diversity is so vast that no
comparison would be possible in terms of population. In the
entire south India, paddy cultivation is primary economy
while in Kerala spices and in Andhra Pradesh, Karnataka and
Tamil Nadu sugarcane, Tobacco, pulses, cotton and other
commercial commodities would supplement paddy cultivation.
In Gujarat and Maharashtra, commercial crops would
supplement the paddy cultivation. In coastal Andhra Pradesh,
jute also is cultivated as a second crop. In other areas in
south Eastern region, as is evident, apart from agriculture,
jute also is the main agricultural product. In Uttar
Pradesh, sugarcane gets intensive cultivation apart from
paddy and wheat. In Gangatic platue, apart from agriculture
intensive sugarcane cultivation is the special feature. In
Punjab and Haryana, wheat and paddy are the main
cultivation. In Rajasthan, bazra, pulses etc. are
cultivated. Throughout the country but cultivation of
agriculture produce is the sole resource of the rural
population as majority is compared to urban population in
the country. It is, therefore, clear that raw agriculture
produce is an input of finished product for commercial
purposes and its regulation, by the Acts or Rules or orders,
cannot be assailed as ultra vires the legislature on the
basis of the population of the agriculturists when it
affects consumer public or manufacturers of finished
products whose business avocation incidentally gets
affected. On that account, the Act cannot be declared void
or Ultra vires the power of the parliament to enact the law.
The main Plank of the petitioners, to demolish the
validity of the Act as ultra vires of Article 19(1) (9) , is
founded on the ratio in Chintaman Rao vs. The state of
Madhya Pradesh [(1950) SCR 759]. The central Provinces and
Berar Regulation of Manufacture of Bidis (Agriculture
purposes) Act (LXIV of 1948), (pre-consolidation Act) was
made empowering the Deputy commissioner by a notification to
fix a period to be agricultural season with respect to
specifies villages to prohibit deployment of labour in bidi
manufacturing of bidis in certain villages which came to be
challenged under Article 32 of the constitution. This court
had held that the object of the statute being a measures to
provide supply of adequate labour for agricultural purposes
in the area of the province, the purpose would have been
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achieved by legislation restricting the employment of the
agricultural labour in the manufacture of bidis during the
aforesaid season without prohibiting altogether manufacture
of bidis themselves. Therefore, it was held that the Act has
no reasonable relation to the object in view and it did not
impose any reasonable restriction under Article 19(6) of the
constitution. Reasonable restriction cannot that there is a
limitation imposed in enjoyment of the right which should
not be arbitrary or excessive in nature beyond what is
required in the interest of the public. Reasonableness
implies intelligent care and deliberation, i.e., the choice
of a course which reason dictates an arbitrary or
excessively invades the right cannot be said to contain the
quality of reasonableness unless it strikes proper balance
between the freedom guaranteed under Article 19(1) (9) and
the social control permitted under clause (6) of Article 19,
must be held to be wanting to be reasonable. As pointed out
by this court, the legislature could have prohibited use of
labour during the particular period of agricultural season
in the area in which bidis are manufactured; instead the Act
permitted the offer to issue notification imposing total
prohibition on manufacture of bides. It was, therefore, held
that it was unreasonable restriction not saved by Article
19(6). Far from helping appellants, the ratio indicates that
if the Act strikes a reasonable balance between the exercise
of the fundamental rights and reasonable restrictions in the
interest of the general public, the Act would be valid. In
Narendra Kumar & ors. vs. The Union of India & ors. [1960
(2) SCR 375]. This court upheld imposition of total
prohibition in the purchase and import of copper and
fixation of the prices in view of policy of eliminating the
dealers from such trade as not violative of Article 19(a)
(9) of the constitution. It was held that restriction
includes total prohibition. In view of the foreign exchange
crunch, the prohibition on import of copper, lead etc. Was
upheld that the court is to see whether the test of
reasonableness is satisfied by considering the question in
the background of factual circumstances under which the
order came to be made, taking into account the nature of the
evil that was sought to be remedied by law, the ratio of the
harm caused to the individual citizens by the proposed
remedy, the beneficial effect reasonably expected to the
general public and whether the restrain caused by the law
was more than necessary in the interest of the general
public. In M/s. Dwarka Prasad Laxmi Narayan vs. Stateof
Utter Pradesh & Two ors. [(1954) SCR 803], it was held that
regulating the trade or business in normally available
commodities was unreasonable. U.P. coal control order had
given absolute power to the licensing authority to renew the
licence under the order. In that case, since the commodities
were freely available in the market, it was held that the
restriction was not a reasonable restriction under Article
19(6) of the constitution. It is not necessary to pursue
this reasoning after the Essential commodities Act, 1955 was
enacted giving power to regulate distribution, sale and
supply of the essential commodities to general public and
fixing prices thereof.
In Parvej Aktar & Ors. vs. Union of India & Ors. [JT
1993 (1) SC 453], a Bench of three Judges was to consider
the reservation of certain articles for exclusive production
by the hand-looms whether violative of Articles 19 and 14 of
the constitution. This court held that there is no question
of monopoly create in favour of the handloom industry.
Certain articles were reserved for the handloom on
traditional looms engaged since 1950. Recently, when the
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power-loom started manufacturing the items which were
traditionally being manufactured by the handlooms that
caused a serious inroad into the handloom industry.
Consequently, the stepped into the business and regulated
the use of certain specified articles for being manufactured
by handlooms with traditional methods. Same is the view in
G.T.N. Textiles Ltd. & Anr. vs. Assistant Directors, R.O.T.
Commissioner & ors. [JT 1993 (2) SC 416]. Therein, pack of
yarn was regulated by direction issued by notification by
the Textile commissioner to use certain percentage of
production in hank form. Clause 16 of the Textile (control)
order, 1986 was challenged as violative of Articles 19(1)
and 14 noticing that the Textile (control) order was issued
only in respect of packing yarn in hank form exclusively for
handloom sector which is the largest cottage industry in
India. The regulation was held to be not ultra vires
Articles 19 and 14 but a reasonable restriction under
Article 19(6).
In Municipal corporation of the city of Ahmedabad &
ors. vs Jan Mohammed Usmanbhai & Anr. [(1986) 3 SCC 20], a
constitution Bench of this court held that normally the
legislature is best judge of what is good for the community
but the court should not shirk its duty to determine the
validity of the law. In determining the reasonableness of
the restriction imposed by the law under Article 19(6), the
court cannot proceed on a general notion of what is
reasonable in the abstract or even on a consideration of
what is reasonable from the view of the person or persons on
whom the restrictions are imposed. The court has to consider
whether the restrictions are reasonable in the interest of
the general public. The question of the interest of general
public is of wide import comprehending public order,
economic welfare of the public, public security, morals and
the objects mentioned in the Directive principles. The test
of reasonableness has to be viewed in the context of the
issues which faced the legislature. In constructing such
laws and judging their validity, courts must approach the
problem from the point of view of furthering the social
interest which is the purpose of the legislation to promote.
They are not in these matters functioning in vacuo but as
part of society which is trying, by the enacted law, to
solve the problems and further the moral and material
progress of the community as a whole.
In Sushila Saw Mill vs. State of Orissa & ors. [(1995)
5 SCC 615], the orissa saw mills and saw pits (control) Act,
1991 and in particular section 4 thereof was challenged as
violative of Articles 19(1) (g) and 301 of the constitution.
Section 4 imposed restriction on establishing saw mill
within the notified prohibited zones. It was held that the
right to carry on trade or business is subject to public
interest. The restriction imposed total bar on saw mills
operating in the prohibited area. Prohibition was held not
violative either of Article 14 or 301. It was held that it
is class regulation to protect forest. Therefore,
prohibition on establishing saw mills within the prohibited
zone cannot be on geographical contiguity and was held to be
reasonable restriction in the interest of society. In State
of Kerala vs. Joseph Antony [(1994) 1 SCC 301], Kerala
marine Fishing Regulation Act, 1980 and the notification
issued under section 4(1) thereof, prohibiting fishing by
mechanized vessels in territorial waters by use of gears
like purse, seine, ring seine, pelagic trawl and mid-water
trawl etc. were challenged as violative of Article 19(1)
(g). In considering the above question, this court, in
paragraph 9, had held that the court has to keep the
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background facts of social and marine life at the back of
the mind of the court to appreciate the issue involved in
the case. After careful examination, this court had held
that the High court was not right in striking down the
notification on the ground that the Government had issued
two fresh notifications on the basis of the report submitted
by the special officers. In paragraphs 20, confining to the
fact of 98.5% of the fishing corporation who were engaged in
the traditional fishing were pushed below the poverty line.
Therefore, it was held that the Act was to protect their
rights. This court had upheld the regulatory measure.
In Kerala Swathanthra Malaya Thozhilali Federation &
ors. Kerala Trawlnet Board operators Association & ors.
[(1994) 5 SCC 23]. the Kerala marine Fishing Regulation Act,
1980 (10 of 1981) and the Rules made thereunder were
challenged on the ground that restrictions upon all the
boats or all the horse power of the engine and particulars
of fishing gear to be carried in boats going for bottom-
trawling beyond territorial waters, was impugned to be
violative of Article 19(1) (g). This court negatived the
contention holding that regulation was intended to ensure
livelihood to lacs and lacs of fisherman engaged in fishing
by traditional methods.
The next question is: whether the prohibition of 100%
use of gunny bags by sugar industry and 70% by the cement is
reasonable? It is true that the committee constituted by the
Government had recommended to phase out use of gunny bags on
the ground that in a free market. It is not justified
primarily to encourage free market. It is seen that the
state has not abandoned and cannot abandon the mixed economy
and power of regulation as mandated by constitutional
policy. The Act was made in implementation of socio-economic
equality and policies. Even a private industry by operation
of Directive contained in part IV, is bound to adopt them
implement them and the Government policies to establish an
egalitarian social order. The committee in its free market
frenzy became oblivion of the policy resolution of Eighth
Five year plan, the Trinity, Preamble, Fundamental Rights
and Directives. The executive policy of the state would be
cognizant to these mandated which should always bind the
Government and all agencies including private agencies. As
seen, the Advisory committee constituted under section 4 has
recommended 100% use of packing the sugar with gunny bags.
On consideration of the report, the Government had acted
upon the same. the economic policy to render socio-economic
justice to the growers of the raw jute and the workman is
based on the above constitutional policy. Lest the report of
the committee on the basis of the free market economy would
be in negation of the preamble, the Directive principles and
the Fundamental Rights to economic justice to the
agriculturists. So the contention is clearly unsustainable.
The standing Advisory commit, therefore, had properly
advised and the Government obviously has taken decision to
continue the policy of compulsory packing of commodities or
class of commodities with jute bags, regulated under section
3 the Act. The parliament did not negate the same.
The further contention that on account of the
regulation, HDPE industry has become unviable and is on the
brink of liquidation and the Act tends to create monopoly in
favour of private industry which does not get protection
under Art. 19(6), is untenable. This viability of the
respective industries. It would be for the central
Government and parliament and not for this court to take
into consideration declaring the Act as void. The court has
to see whether the Act serves public purpose and the
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restriction are reasonable. The Advisory committee goes into
factual details. The Government examines and takes policy
decision. It lays the order on the table of both the Houses.
The parliament controls exercise of policy. Restrictions
are in-built and self-evident.
Further contention that the jute is being import from
Bangladesh which would show that no adequate supply of jute
is available in India and that no gunny bags are adequately
available to meet the growing demand of sugar industry etc.
, cannot be given acceptance. It is state by the respondents
that imported jute from Bangladesh is a finer quality for
use as a component in exportable jute products but not for
domestic consumption. It is next contended that jute
production has fallen due to decrease in the cultivated area
of raw jute and the order to use gunny bags as arbitrary is
without force. From the report submitted by the jute
industry and from the Eight Five year plan material, it is
seen that considerable increase in the quantity of the jute
is produced. The further contention is that the Act is aimed
to benefit only the manufacturers of jute who has taken huge
sums as loans or subsidy from the central Government for
modernisation of their industry; They have diversified their
production for export. Neither the workman nor the growers
of the jute are benefited from the regulation. We cannot
decide the validity of the Act on that basis. May be that
there does not appear to be any control on the prices of the
raw jute supplied by the farmers to the jute factories. If
that is the situation, the Government should look into the
problem and met out justice to the producers for whose
benefits the Act was primarily enacted. Corrective steps
should be taken to protect the interests of the growers. For
the labour, they demands. But on that account, the Act
cannot be struck down.
The further contention that since the Act is a
temporary measure to benefit the jute industry, the
regulation should be phased out gradually, is without
substance. From the Eighth plan and the Resolution, it is
evident that the Government intends to continue the
regulation. The further contention that the jute products
are being diversified and the need for regulation,
therefore, no longer subsists , cannot be accepted. It is
for the Central Government to take into consideration, on
the basis of the material placed before it, as to what
extent the regulation would need modification. The further
contention is since no adequate supply of the jute bags is
available to meet the demand, the order is bad in law and
cannot be gone into to invalidate the Act on that basis. It
would be for the Central Government subject to parliamentary
control to take a decision and equally of the alleged
wastage.
Yet another contention that requires consideration is
that in the committee constituted under section 4(1) only
secretaries represented and no one represents the
petitioners in the committee and that, therefore, the Act is
void. This contention also cannot be accepted as sound
principle of law. However, as seen from the record, the
committee consists of the secretaries representing various
of industries through recognised office bearers of the
associations may be nominated or given notice before the
Advisory committee meets to place their view and material in
support thereof to evaluate the need for regulation and
extent of regulation thereof. The persons representing the
particular advice the Government before issuing
directions/orders under section 3. The provisions of the Act
contain guidelines as is self-evident. Socio-economic
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justice is the public policy. It is subject to parliamentary
control. They bear reasonable nexus to the object sought to
be achieved by the Act.
Considered from this perspective, we hold that the
provisions of sections 3, 4 and 5 are not violative of
Article 14 or 19(1) (g) of the constitution. The Act and
orders impose reasonable restriction saved by Article 19(6)
of the constitution.
There is no restriction on the stream of transport of
commodities or class thereof by the citizens nor is there
any impediment on its movement by the Act. The Act regulates
only packing of the commodities or class of commodities with
jute packaging material. Transportation on account thereof
stands no impediment for the said trade and commerce. The
commerce clause in Art.301, therefore, stands no impediment
for free flow of trade and commerce in the commodities for
free flow of trade and commerce in the commodities for class
of commodities covered by the provisions of the Act.
Considered from this perspective, we hold the Act is not
violative of Article 301 of the constitution.
The Transfer cases and writ petitions are accordingly
dismissed and the applications disposed of but, in the
circumstances, with costs quantified at Rs.10,000/- payable
to the supreme court legal Aid committee within a period of
three months from the date of receipt of this order. On
failure thereof, it would open to the supreme court Legal
Aid committee to have this order executed as decree
according to law.