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2008 Supreme(Pat) 351

PATNA HIGH COURT
Navaniti Prasad Singh, J.
New Balaji Fertilizer
Versus
State Of Bihar
Criminal Writ Jurisdiction Case No. 8173 of 2007 ;
Decided On : FEBRUARY 18, 2008

The main legal point established in the judgment is that the direction issued by the Agriculture Production Commissioner, curtailing the right of the petitioners to do business at their respective place of business, was without legal sanctity, void ab initio, and violative of Art. 19(1)(g) of the Constitution of India.

Headnote:

Fertilizer Control Order - Business Restriction - FCO, 1985 - [Clause 7, 8, 9 of FCO, 1985] - The court discussed the provisions of the Fertilizer Control Order, 1985 and highlighted that the order requires registration of dealers, and the registering authority has no discretion in the matter. The court emphasized that the power to restrict or designate the place where the business of fertilizer can be carried out was not conferred upon the authorities under the FCO, 1985. It further stated that the direction issued by the Agriculture Production Commissioner was without legal sanctity, void ab initio, and violative of Art. 19(1)(g) of the Constitution of India.

Fact of the Case:

The petitioners, registered dealers in Fertilizer, were issued notices to relocate their business beyond two kilometers of the international border with Nepal within fifteen days, failing which their certificates of registration would be cancelled. The validity of this exercise of power was in question.

Finding of the Court:

The court found that the direction issued by the Agriculture Production Commissioner was without legal sanctity, void ab initio, and violative of Art. 19(1)(g) of the Constitution of India.

Issues: The issues revolved around the validity of the direction curtailing the right of petitioners to do business at their respective place of business and the authority of the Agriculture Production Commissioner to issue such a direction.

Ratio Decidendi: The court emphasized that the power to restrict or designate the place where the business of fertilizer can be carried out was not conferred upon the authorities under the FCO, 1985. It further stated that the direction issued by the Agriculture Production Commissioner was without legal sanctity, void ab initio, and violative of Art. 19(1)(g) of the Constitution of India.

Final Decision: The court held that the direction issued by the Agriculture Production Commissioner was without legal sanctity, void ab initio, and violative of Art. 19(1)(g) of the Constitution of India, and consequently set it aside. The consequential orders issued by the District Agriculture Officer were also quashed. The writ application stood allowed.

Judgment

1. The petitioners are registered dealers in Fertilizer under the provisions of the Fertilizer Control Order, 1985 (hereinafter referred to as "FCO, 1985") and as per their certificate of registration granted thereunder, they have their registered place of business situated within village-Jogbani, Police Station-Jogbani in the district of Araria. They have been issued notices by the District Agriculture Officer, Araria vthe registering authority under the FCO, 1985) that as the Agriculture Production Commissioner, Bihar has, by his communication dated 1.6.2007, directed that within two kilometers (later increased to six kilometers) of the international border with Nepal, no person should be allowed to do business in fertilizer. They must remove their respective places of business to beyond two kilometers of the international border within fifteen days otherwise their certificates of registration would be cancelled. These orders are Annexure-2 series. The order of the Agriculture Commissioner, Bihar has been annexed as Annexure-B to the counter affidavit by the State. Annexure-B to the counter affidavit states that pursuant to the request of the Commissioner, Customs, Patna noticing large scale smuggling of fertilizers from India to Nepal, this direction of prohibiting business in fertilizer within two kilometers of the international border is being issued. The letter of the Commissioner, Customs, Patna has been annexed as Annexure-A to the counter affidavit. It is the validity of this exercise of power which curtails directly the right of petitioners to do business at their respective place of business is in question.

2. Heard the parties and with their consent, the writ petition is being disposed of at the stage of admission itself.

3. The learned counsel for the State submits that looking to the rampant smuggling of fertilizers to Nepal, a scarcity of fertilizer is caused within Indian territory. Further, fertilizers are heavily subsidized by the Government of India for the welfare of the farmers of this country and if they are permitted to be smuggled out to Nepal then Central Government would lose substantial amount of money without any gain. Further, export of fertilizer is restricted and if people are permitted to smuggle fertilizers, they would be violating law. With these objects in mind, the Customs Department requested the State Government to issue remedial directions pursuant to which the Agriculture Production Commissioner, Bihar issued the said direction and pursuant thereto the impugned orders have been issued. It is, thus, submitted that the restriction, apart from being reasonable, is in public interest and, thus, is not violative of Art. 19(1)(g) of the Constitution of India having been saved by Art. 19(6) of the Constitution of India.

4. Learned counsel for the petitioners states that a reference to the FCO, 1985 would show that the said order is not a licensing order wherein before a person starts business, he must obtain a licence and so long as licence is not issued, he cannot carry on his business. He has drawn my attention to Clauses 7, 8 and 9 of FCO, 1985 which provides for registration of dealers intending to carrying on business of buying, selling or restoring for sale of fertilizer. Clause 9 is quite different from such licensing provisions. It provides that on receipt of an application for registration, the registering authority shall grant certificate of registration within thirty days and it is further provided that under what conditions, certificate of registration has to be refused. Thus, there is no discretion in the matter to the registering authority. The dealer is free to choose his place of business and for each place of business, he has to obtain a certificate of registration.

5. It is submitted that in case a restriction on the place of business is to be placed, as has been done, then the power must flow to the authorities from any statute or rules and regulations having force of





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