Judgment

SHAH, J.: These appeals are filed with special leave against the order of the High Court of Andhra Pradesh declaring G. O. M. No. 2976 dated December 30, 1964 "null, void and ultra vires".

2. The respondents are dealers in sugar and other commodities and carry on their business in the cities of Hyderabad and Secunderabad. The State of Andhra Pradesh issued the Andhra Pradesh Sugar Dealers Licensing Order, 1963 in exercise of the power conferred by Section 3 of the Essential Commodities Act, 1955. Under that order no person may carry on business as a dealer except under and in accordance with the terms and conditions of a licence issued by the specified authority. Grant and renewal of licence could be refused only on grounds reduced to writing and after giving opportunity to the party to state his case. The respondents were granted licences under the Andhra Pradesh Sugar Dealers Licensing Order, 1963. Shortly thereafter the Central Government, in exercise of the power conferred under sub-rule (2) of Rule 125 of the Defence of India Rules, 1962, promulgated the Sugar Control Order, 1963. By that order a recognized dealer was defined as a person carrying on the business of purchasing, selling or distributing sugar and licensed under the order relating to the licensing of sugar dealers for the time being in force in a State. The order provided for placing restrictions on sale, or agreement to sell or delivery by the producers, for controlling the production, sale grading, packing, making delivery, distribution etc. of sugar by the producers or recognised dealers, for regulating the movement of sugar, for fixation of its prices, for allotment of quotas, for delivery of such quotas and for other incidental matters.

3. The respondents being holders of licenses under the Andhra Pradesh Sugar Dealers Licensing Order, 1963, were treated as recognised dealers under the Sugar Control Order, 1963. The State Government allocated quotas of sugar received from the Central Government for distribution in different areas and nominated licensees or dealers to take delivery of the allotted quotas from the factories.

4. On December 30, 1964 the State Government ordered that the sugar quota allocated to "the twin cities of Hyderabad and Secunderabad" be given in its entirety to the Greater Hyderabad Consumers Central Co-operative Stores, Ltd., Hyderabad. On that account the respondents who held licences under the Andhra Pradesh Sugar Licensing Order for distribution of sugar and were also recognized dealers under the Sugar Control Order, 1963, were by an executive fiat prevented from carrying on their business in sugar.

5. The respondents moved petitions in the High Court of Andhra Pradesh challenging the validity of the order. The State resisted the petitions principally on the ground that the order made by the State Government was in conformity with the provisions of the Sugar Control Order and was issued in pursuance of the policy laid down by the Central Government to entrust the work of distribution of sugar exclusively to co-operative societies and thereby to eliminate in the public interest the agency of private dealers in lifting and distributing sugar. It was urged that the respondents could not seek any relief complaining of infraction of their rights under Articles 14 and 19 because the emergency declared by the President in October 1962 had not been withdrawn.

6. The petitions were heard by Gopalakrishnan Nair, J. The learned Judge held that the executive order was not supported either by the provisions of the Sugar Control Order, 1963, issued by the Central Government, or by the Andhra Pradesh Sugar Dealers Licensing Order, 1963, that the step taken by the Government was not permitted by law; that as a result of the order of the Government the licences held by the respondents were cancelled without following the procedure laid down in Clause 7 of the Andhra Pradesh Sugar Dealers Licensing Order; and that the provisions of the order