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Andhra Pradesh High Court
Judges : N.KUMARAYYA, P.SATYANARAYANA RAJU
District Collector, Hyderabad - Appellant
Versus
Ibrahim and Company - Respondent
Decided On : 06-23-65
SUGAR CONTROL ORDER - LICENSING OF DEALERS - MONOPOLY - VALIDITY OF GOVERNMENT ORDER - ESSENTIAL COMMODITIES ACT, 1955 (10 OF 1955), SEC. 3 - DEFENCE OF INDIA RULES, 1962, R. 125(2) - ANDHRA PRADESH SUGAR DEALERS LICENSING ORDER, 1963 - SUGAR CONTROL ORDER, 1963 - CONSTITUTION OF INDIA, ARTS. 14, 19, 358, 359.
Fact of the Case:
The petitioners, who were wholesale dealers in sugar, challenged the validity of a Government Order (G.O.) that granted exclusive monopoly to a cooperative society for the wholesale trade of sugar in the twin cities of Hyderabad and Secunderabad. The petitioners contended that the G.O. was not supported by any valid law and violated their fundamental rights under Articles 14 and 19 of the Constitution of India.
Finding of the Court:
The court held that the G.O. was not a delegated piece of legislation and did not purport to be made under any valid statute or order having statutory force. It was a mere executive instruction that interfered with the proper working of the Andhra Pradesh Sugar Dealers Licensing Order of 1963 and the Sugar Control Order (Central) of 1963. The court further held that the G.O. tended to hold in abeyance, defeat, or destroy the rights of the petitioners, which were expressly or by necessary implications recognized by the said Orders. It was also prone to set at naught the fundamental rights of the petitioners vouchsafed by the Constitution of India.
Issues: 1. Whether the impugned G.O. was supported by any valid law? 2. Whether the impugned G.O. violated the fundamental rights of the petitioners under Articles 14 and 19 of the Constitution of India?
Ratio Decidendi: 1. The court held that the G.O. was not supported by any valid law because: - It did not refer to any express provisions of law under which it was made. - It was not made in exercise of any inherent powers vested in the Government. - It was not a statutory order made under Section 3 of the Essential Commodities Act, 1955, or under any delegated authority. - It was not made under the Defence of India Rules, 1962, or under any Control Order made under those Rules. 2. The court held that the G.O. violated the fundamental rights of the petitioners under Articles 14 and 19 of the Constitution of India because: - It granted monopoly to a single cooperative society, thereby discriminating against the petitioners and other wholesale dealers in sugar. - It interfered with the petitioners' right to carry on trade and commerce.
Final Decision: The court dismissed all the appeals filed by the respondents and upheld the order of the trial court, which had issued a writ of mandamus directing the respondents to forbear from acting under the authority or in pursuance of the impugned G.O. and to refrain from interfering with the carrying on of the wholesale business in sugar by the petitioners under their licenses.
( 2 ) THE facts leading to these proceedings may be shortly stated. The petitioners who are 25 in number have been dealing from a long time in sugar along with other articles in the twin cities of Hyderabad and Secunderabad. In or about the year 1963 conditions of scarcity of the commodity in the markets all over made themselves felt. The Government of India, apprehending some serious situation wherein the purchasers and traders may try to push up the prices of sugar thought it expedient to advise the State Governments for taking measures to checkmate the probable activities of wholesale dealers in sugar by issuing Sugar Dealers Licencing Order on the lines adopted during the period 1959-61. The Government of Andhra Pradesh accepting the proposal promulgated with the prior concurrence of the Central Government the Andhra Pradesh Sugar Licencing Order, 1963, in exercise of its powers conferred by Section 3 of the Essential Commodities Act, 1955 (Central Act X of 1955 ). By virtue of this Order no person could carry on business as a dealer except under and in accordance with the terms and conditions of a licence issued by the licensing authority, the licensing authority being the District Collector having jurisdiction over the place of business or storage. Procedure in detail was laid down therein for the grant and renewal of the licence. Applications therefor had to be made to the licensing authority in the prescribed form and the licence thereupon had to be issued or renewed also on the prescribed form at the discretion of the licensing authority, which discretion should not be exercised arbitrarily. The licence issued immediately after the advent of the Order was to be valid till the 31st of March, 1963, whereafter it had to be renewed for a period of one year at a time. The terms and conditions of licence could not be contravened except on pain of suspension or cancellation of the licence, besides other action that could be taken under the Act. The grant of licence and renewal thereof could be refused only on grounds reduced to writing after giving opportunity to the party to state his case. The aggrieved party had a right of appeal. Thus, the issue or renewal of the licence was a quasi-judicial Act. The petitioners were granted licence for the year 1963-64. Hardly a few months passed by when the Central Government in exercise of its powers under Sub-rule (2) of Rule 125 of the Defence of India Rules, 1962 promulgated an Order called the Sugar Control Order of 1963 under a notification dated 17-4-1963. This order defined a recognised dealer 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 or Union territory. The petitioners, in so far as they were licensed under the State Licensing Order, were well within this definition. They were the "recognised dealers". This Order provides further measures: (1) placing restriction on sale, or agreement to sell or deliver by the producers; (2) for controlling the production, sale, grading, packing, marking, delivery, distribution etc. of sugar by the producers or recognised dealers; (8) for regulating the movement of sugar, (4) for fixation of its prices, (5) for allotment of quotas, (6) for delivery of such quotas and (7) for various other things. The Central
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