1. Manufacture of syrup — Non-compliance with minimum fruit juice specifications under Fruit Products Order, 1955 — Challenge to order stopping manufacture and sale under Essential Commodities Act, 1955. (Para 1 , 2 , 3 )
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1964 Supreme(SC) 313
SUPREME COURT OF INDIA
23rd November 1964.
P.B. GAJENDRAGADKAR, C.J.I. M. HIDAYATULLAH, J.C. SHAH, S.M. SIKRI AND R.S. BACHAWAT, JJ.
The Hamdard Dawakhana (Wakt), Delhi and another, Appellants
Versus
The Union of India and others, Respondents.
Civil Appeal No. 934 of 1964.
Advocates appeared
Mr. G. S. Pathak. Senior Advocate, (M/s. Hardayal Hardy, B. Dutta and M. S. K. Sastri, Advocates and Mr. J. B. Dadachanji, Advocate of M/s. J. B. Dadachanji and Co. with him), for Appellants; Mr. D. K. Daphtary, Attorney General for India ( Mr. R. H. Dhebar, Advocate, with him), for Respondents.
Advocates:
B.DUTTA, CO., D.K.DAPHTARY, G.S.PATHAK, Hardayal Hardy, J.B.DADACHAN, M.S.K.Shastri, R.H.Dhebar
B.DUTTA, CO., D.K.DAPHTARY, G.S.PATHAK, Hardayal Hardy, J.B.DADACHAN, M.S.K.Shastri, R.H.Dhebar
The Central Government's power to regulate essential commodities under Section 3(1) of the Essential Commodities Act, 1955, includes the authority to impose qualitative standards on production, regardless of whether the product could also be regulated under other food-related laws.
Headnote:(A) Essential Commodities Act, 1955 - Sections 2 and 3 - Fruit Products Order, 1955 - Clauses 2, 11, and 16 - Qualitative regulation of essential commodities - Power of Central Government to regulate production, supply, and distribution - Whether a syrup containing fruit juices falls within the definition of "fruit product" - Whether a product can be exempted as a medicinal product without specific labeling - The power to regulate qualitatively under Section 3(1) of the Act is valid and includes setting standards for composition. (Paras 10, 11, 12)
(B) Administrative Law - Condition Precedent - Whether the failure to expressly state in a regulatory order that the government had formed the necessary opinion under Section 3(1) of the Act precludes the government from proving such opinion independently - A contention not raised before the High Court cannot be raised for the first time in appeal. (Para 16)
(C) Prevention of Food Adulteration Act, 1954 - Whether a qualitative regulation of an essential commodity must be issued under the Prevention of Food Adulteration Act rather than the Essential Commodities Act - Section 3(1) of the Essential Commodities Act provides wide powers to regulate production, including qualitative standards, regardless of whether other acts also deal with adulteration. (Para 17)
Facts of the case:
A manufacturer of a medicated syrup challenged an order to stop production and sale on the grounds that the product did not meet the minimum fruit juice percentage prescribed by a regulatory order issued under the Essential Commodities Act. The manufacturer contended that the product was a medicinal product and not a foodstuff or essential commodity, and thus outside the scope of the regulatory order. The High Court dismissed the writ petition.
Findings of Court:
The court found that the product falls within the definition of a "fruit product" as it contains fruit juices. The exemption for medicinal products was unavailable because the product labels did not explicitly state "For medicinal use only." The court also held that the power to regulate essential commodities under the Act includes the power to impose qualitative standards.
Issues: Whether the product in question is a "fruit product" under the regulatory order; whether the product is exempt as a medicinal product; and whether the qualitative regulation of an essential commodity is validly issued under the Essential Commodities Act.
Ratio Decidendi: Section 3(1) of the Essential Commodities Act empowers the Central Government to regulate the production of essential commodities both quantitatively and qualitatively. A product containing fruit juices falls under the definition of a fruit product, and exemptions for medicinal use are contingent upon strict adherence to specific labeling requirements.
Result: Appeal dismissed.
Legal Category Hierarchy
- administrative law
- constitutional law
- regulatory law
Table of Contents
2. Whether product is medicinal or a fruit product — Validity of qualitative regulations under Essential Commodities Act — Applicability of Prevention of Food Adulteration Act versus Essential Commodities Act. (Para 4 , 14 , 15 , 16 , 17 )
3. Qualitative regulation of essential commodities is permissible — Product containing fruit juice falls within Fruit Order purview — Absence of medicinal label precludes exemption under the Order. (Para 10 , 13 , 15 , 16 , 17 )
4. Section 3(1) of the Essential Commodities Act empowers the Central Government to regulate the production of essential commodities both quantitatively and qualitatively. (Para 10 )
5. Challenge to the order stopping manufacture and sale of the product dismissed; validity of the Fruit Products Order upheld. (Para 7 , 8 )
6. Does the Essential Commodities Act, 1955 allow the government to regulate the quality of production of essential commodities?
Yes, the power to regulate the production of an essential commodity under Section 3(1) of the Act includes the power to impose regulations that operate either qualitatively or quantitatively. (Para 10 )
7. When is a syrup exempt from the Fruit Products Order, 1955 on medicinal grounds?
A syrup is exempt if it is sold in bottles bearing a label containing the words For medicinal use only and does not exhibit any picture of fruits. (Para 13 )
8. Does a beverage containing fruit juices or pulp fall under the definition of a fruit product even if not specifically named?
Yes, the residuary clause in the definition of fruit products includes any other beverages containing fruit juices or fruit pulp, regardless of whether they are specifically listed. (Para 15 )
9. Is a regulatory order invalid if it does not explicitly state that the Central Government formed the necessary opinion under Section 3(1) of the Essential Commodities Act?
No, while the formation of an opinion is a condition precedent, the failure to mention it expressly in the Order does not preclude the government from proving the fact independently. (Para 16 )
Judgment
GAJENDRAGADKAR, C.J.I.- The two appellants, the Hamdard Dawakhana (Wakf), Delhi, and its Mutawalli Haji Hakim Hameed, represent the Hamdard Dawakhana institution which was initially established in or about 1906 as a Dawakhana and was subsequently declared and founded as a Wakf. Since its inception, the institution has been running dispensaries and clinics for the treatment of patients and has been manufacturing and supplying medicines and medicinal products according to Ayurvedic and Unani Systems of Medicines. Appellant No. 1 also manufactures medicated syrups which contain some fruit juices; for medicinal use and they are prepared according to a certain formula devised by it. "Sharbat Rooh Afza" which is a medicated syrup manufactured by appellant No. 1 is made of the following ingredients :-
"Kasni seeds, Khus Pumpkin Juice, Water melon Juice, Chharila, Ripe grapes, Spinach, Nilofar, Sandal, Gul Gaozaban, Coriandar, Carrot, Mint, Kulfa, Keora, Rose, Citrus flower, Orange Juice, Pine-apple Juice, Water, Sugar." The formula determining the ratio, and proportion in which each one of the ingredients has to be used, has been evolved by appellant No. 1 as a result of various experiments spread over a long period. The manufacture of this Sharbat began in 1920. It is intended to be used for common ailments; during hot season, particularly for ailments; like loss of appetite, sun stroke, nausea, sleeplessness, etc. This Sharbat Rooh Afza is not a foodstuff, and cannot be regarded as an essential commodity under s. 2 of the Essential Commodities Act, 1955 (No. 10 of 1955) (hereinafter called the Act ). In substance, this is the case as set out by the appellants in their petition.
2. Purporting to act under S. 3 of the Act, the Central Government trade an Order called the Fruit Product; Order. 1955 (hereinafter called the Fruit Order) under Notification No. S.R.O.1052 dated May 3, 1955. Under clause 3 of the Order, respondent No. 4, the Central Fruit Products Advisory Committee, has been constituted. It appears that on the 22nd September, 1956, the Central Government purporting to act under S. 3 of the Act, made certain amendments in the Fruit Order. The result of one of the amendments thus made was to direct that the minimum percentage of fruit juice in the final product of a fruit syrup as indicated in Part II of the Second Schedule to the Fruit Order should be raised from 10% to 25% . The change so made was notified to the appellants by respondent No. 2, the Marketing Development Officer, Fruit Products, Central Zone, Delhi, on January 29, 1957. As a result of this intimation, certain correspondence followed between the appellants and respondent No. 2. The appellants had urged in the course of this correspondence that Sharbat Rooh Afza did not fall within the scope of the Act and the Fruit Order.
3. On March 25, 1957, respondent No. 3, the Agricultural Marketing Adviser to the Government of India, New Delhi, invited a representative of the appellants for discussions, and as a result of the said discussions, Mr. Sood, the Marketing Development Officer, Delhi inspected the factory of the appellants and watched the process of manufacture of Sharbat Rooh Afza on April 29, 1957. Thereafter, on May 10, 1957, the appellants received a communication from Mr. Sood ordering the appellants to stop further manufacture and sale of Sharbat Rooh Afza forthwith on the ground that it did not contain the minimum percentage of fruit juice prescribed by the relevant clause of the Fruit Order. This communication mentioned the fact that the appellants had been specifically asked to prepare fruit syrups strictly in accordance with the specifications prescribed, but in utter disregard of the said instructions, the appellants had wilfully continued to contravene the provisions of the Fruit Order. That is why by virtue of the powers conferred on him by clause 13(f) of the Fruit Order, the present order was served on the appellants. It is this order wh
