Judgement

SHAH, J.: These appeals arise out of orders passed in petitions moved before the High Court of Orissa challenging the scheme adopted by the Government of Orissa for sale of Kendu leaves in which the State has assumed a monopoly of trading, by the Orissa Kendu Leaves (Control of Trade) Act 28 of 1961.

2. Kendu tree is a wild growth. Its leaf is used mainly in the manufacture of bidis. To regulate the trade in Kendu leaves the State of Orissa has adopted diverse executive and legislative measures. In exercise of the powers conferred by Section 3 (1) of the Orissa Essential Articles Control and Requisitioning (Temporary Powers) Act, 1947 the Government of Orissa issued the Orissa Kendu Leaves (Control and Distribution) Order, 1949, providing for the issue of licences to persons trading in Kendu leaves. The District Magistrates were authorised to fix the minimum rates for purchase of Kendu leaves and the Order provided that the licensees should purchase Kendu leaves from the pluckers or owners of private trees and forests at rates not below the minimum prescribed. A trader in Kendu leaves challenged the validity of the Act and the Order before the High Court of Orissa on the plea that the State Legislature was incompetent to enact the Act and that in any event the Act and the Order infringed the guarantee of fundamental freedom to carry on business under Article 19 (1) (g) of the Constitution. A Division Bench of the Orissa High Court upheld the validity of the Act: Jagdish Patel v. Patel Tobacco Co., & G. C.Sankar, AlR 1952 Orissa 260. The Court observed that the main purpose of the Order was to prevent indiscriminate and unrestricted competition in the trade in Kendu leaves and to protect the growers and pluckers from exploitation.

3. The Order of 1949 was replaced by another Order issued in 1960, but without any substantial changes in its principal provisions. Thereafter the State Legislure enacted the Orissa Kendu Leaves (Control of Trade) Act 28 of 1961. By Section 3 of the Act no person other than (a) the Government; (b) an officer of Government authorised in that behalf; (c) an agent in respect of the unit in which the leaves have grown shall purchase or transport Kendu leaves. By Section 4 it was enacted that the Government shall, after consultation with the Advisory Committee, fix the price at which Kendu leaves shall be purchased by any officer or agent from growers of Kendu leaves during any year. By Section 8 the Government was authorised to appoint agents for different units to purchase Kendu leaves. Section 10 provided that:

"Kendu leaves purchased by Government or by their officers or agents under this Act shall be sold or otherwise disposed of in such manner as Government may direct"

Out of the net profits derived by the Government, from the trade in Kendu leaves under the Act by Section 11 an amount not less than one half was to be paid to Samities and Grama Panchayats. Sections 14, 15 and 16 dealt with penalties, attempts and abutment of offences and procedure of Courts. Section 18 conferred upon the Government power to make rules for carrying out the purposes of the Act.

4. Agents were appointed by the Government of Orissa to purchase Kendu leaves. The agents were authorised under the agreements to purchase the Kendu leaves and also to trade in the Kendu leaves purchased.

5. A grower of Kendu leaves moved a petition in this Court contending that the principal provions of the Act infringed his fundamental rights under Article 19 (1) (f) & (g) and Art. 14, He challenge Sections 3 and 4 and Rule 7 (5) as infringing the fundamental right under Article 19 (1) (f) and (g) of the Constitution, and Sections 5, 6 and 9 as contravening the equality clause of the Constitution. This Court held in Akadasi Padhan v. The State of Orissa, 1963 Supp 2 SCR 691, that the Orissa Kendu (Control of Trade) Act, 1961, was a valid piece of legislation, and creation of a State monnpoy in Kendu leaves was protected by Article 19 (6) a