Validity of notification issued under Clauses 18 and 6 of Order, 1950.

These are two petitions filed under Article 226 of the Constitution. The petitioners 1 to 3 in C.M.P.No.5917 of 1951 are certain cotton growers in the district of Tinnevelly and petitioners 4 to 8 are merchants who are carrying on. business in cotton. These petitions have been filed by them questioning the validity of the two notifications S.R.O.Nos.379 and 388, dated 19th March, 1951, issued under clause 18 and clause 6 respectively of the Cotton Control Order, 1950.

The relevant portion of S.R.O.No.379 runs as follows:

“I hereby direct that notwithstanding anything contained in the Textile Commissioner’s Notification No.S.R.O.No.597 no person shall except in accordance with the permission in writing of the Textile Commissioner, the Director (Cotton) or an Assistant Director (Cotton) in the office of the Textile Commissioner transport or cause to be transported kapas or cotton by rail, road or water from any place within any of the areas described below to any place outside that area.”

Then follows a grouping of the cotton growing districts into five areas. We are concerned in these petitions with area No.5.S.R.O.No.388 provides that there should be no sale or purchase of cotton to any person in this area “unless such cotton is sold to anyone of the persons specified below”. Then follows a list of persons. These persons have been referred to in these proceedings as “Nominees”. For all the five areas similar notifications have been issued specifying nominees.

The complaint of the petitioners is that both these notifications prevent them from carrying on trade and violate their fundamental rights under Article 19(1)(g) and that they cannot be upheld under Article 19(5) as they are unreasonable and are not in the interests of the public.

We shall now consider the validity of S.R.O.No.379. In substance it prohibits the export of goods in any area to any place outside that area except with the permission of the Government. The object of this notification is clearly to regulate the supply and demand of cotton and to control the price and it cannot be doubted that it is in the interest of the public. It is argued that by reason of these restrictions the petitioners are prevented from disposing of the goods freely and for proper prices but as the prices are fixed and as the demand is much more than the supply it is difficult to see how the restrictions can adversely affect the interests of the petitioners. As pointed out in the counter affidavit the reference to Pakistan market rates in the affidavit of the petitioner suggests that the real complaint is that they are prevented from exporting their goods outside the country and making huge profits thereby. If the notification has the effect of preventing them from doing that it is in the interests of one public and is reasonable and must be held to fall within the Article 19(5). It is next contended that this notification is opposed to Article 301 which runs as follows:

“Subject to the other provisions of this Part trade and commerce and intercourse throughout the territory of India shall be free.”

It is argued that the right to free trade conferred by Article 301 would be taken away only by legislation by Parliament under Article 302 and that as there has been no such legislation the notification S.R.O.No.379 must be held to be bad but in the Control Order of 1949, clause 17 contains a similar prohibition and by virtue of Article 305 that clause will control Article 301. This objection must accordingly be over-ruled. In the result we hold that notification S.R.O.No.379. is valid and not unconstitutional.

We shall take up notification No. 388 for consideration. In this connection it is necessary to refer to some of the provisions of the Cotton Control Order of 1950. Clause 9 provides that no person shall produce, sell or carry on business in cotton except under licence in Form No. A and in accordance with the conditions therein. Under clause 10 any person, desiring a licence might appl