- (1.) This appeal under certificate is directed against the judgment of the High Court of Madhya Pradesh dismissing the writ petition filed by the appellants in that Court.
(2.) The appellants are a partnership firm carrying on the business of manufacturing and selling bidis and purchase, stock, transport and consume for that purpose considerable quantity of tendu leaves. In 1964, the State Legislature passed the Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Adhiniyam, 29 of 1964( hereinafter referred to as the Act), The Act received the Presidents assent on November 23, 1964 and was brought into force on November 28, 1964. The Act inter alia created a State monopoly in the trade of tendu leaves and under Section 5 (1) thereof prohibited anyone, excepting those mentioned therein either to purchase or transport tendu leaves, Sub-section (2) of Section 5, however, permitted a grower to transport them within the unit where they grow and a purchaser who has purchased them from the state Government, its authorised officers and agents for manufacture bidis or for exporting outside such unit under a permit and in accordance with the terms and conditions thereof. By virtue of Sec. 19 the State Government framed rules called the Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Niyamavali, 1965 (referred to hereinafter as the rules). Rule 9 of the said rules provided for an application for a transport permit in form M and the issuance of such permit in form N. The appellants accordingly applied for and obtained permits authorising them to transport tendu leaves purchased by them from the various forest units to their godowns situate outside those units, In the course of their business the appellants transport the said leaves first from the said units to their warehouses, from there to their branches and thereafter distribute them and tobacco to their sattedars, who are independent contractors, and who in their turn distribute the said leaves and tobacco to various mazdoors living in different villages for rolling the bidis. According to the practice of the appellants, the said sattedars enter into contracts with them under which the appellants supply to them the said leaves and the tobacco and the sattedars deliver to the appellants bidis rolled by the mazdoors in proportion to the quantity of the leaves and tobacco supplied to them. On June 4, 1965, the Divisional Forest Officer issued an order which forbade altogether movement of old tendu leaves and as regards new leaves provided that their movement from one village to another had to be covered by a permit. It also provided that permits would be necessary for bulk transport from warehouses to branches and from there to sattedars, and that such permits would be issued by range assistants and range officers on receipt of applications therefor. The appellants thereupon made a representation to the Divisional Forest Officer mentioning the several difficulties which would result from the said order and the said officer, by his order dated June 8, 1965, in partial modification of his said order, permitted branch managers of bidi manufacturing firms themselves to issue transport permits to sattedars. Finding, however, that instead of distributing the said leaves to the sattedars, the branch managers were issuing permits for bulk transport, the said officer on October 12, 1965 rescinded his order of June 8, 1965. The result was that the appellants were required to obtain permits for moving the tendu leaves from their branch offices to the sattedars. The appellants thereafter filed the said writ petition in the High Court claiming that under Section 5 and the said rules they were required to obtain permits only when moving the leaves purchased by them from units where they were grown to their warehouses and that once they were so moved to the warehouses there could be no restriction in their further movement from the warehouses to their branches and from there to their sattedars and the mazdoors. The appellants claimed a writ in the nature of mandamus for setting aside the said orders dated June 4, 1964 and October 12, 1965 and also for striking down Section 5 if it was construed as prohibiting, except under permit, movement of the said leaves from their warehouses to the branches and from thence to the sattedars and the mazdoors. The State Government, on the other hand, claimed that the restrictions against transport of the leaves were justified under Section 5 and the rules and were valid. The High Court held that on a proper construction of Sec. 5 (2) (b) a permit was necessary for transport of the leaves by a purchaser not only when he moved them from the units where they were purchased to a place outside but also when he moved them from one place to another outside the said unit, that Section 5 (1), being a provision creating the State monopoly in the trade of tendu leaves, was protected by the latter part of Article 19 (6) of the Constitution, that the restriction imposed by Sec. 5 (1) on transport was valid and that sub-s. (2) being merely a relaxation against the said prohibition was valid. It further held that the restrictions on transport of tendu leaves before and after the sale thereof by Government was an integral part of the trade monopoly intended to prevent surreptitious sales of tendu leaves by persons other than Government, their officers and agents that it was necessary to control the movement of the said leaves to prevent purchasers from surreptitiously purchasing and transporting them under cover of leaves purchased from Government by mixing the contraband with those lawfully purchased and that such control was basically and essentially necessary for creating the said monopoly. In the result, the High Court held that the said restrictions with regard to purchase as also transport were valid and the challenge against Section 5 and the said rules was not sustainable.
(3.) Counsel for the appellants raised the following contentions: (1) that S. 5 (2) (b) should be construed, though it is couched in wide language, to mean that it prohibits without permit movement of tendu leaves from the units where they are purchased to the warehouses of the purchaser outside such units, that that restriction alone was necessary for effectively implementing the State's monopoly in tendu leaves, and that once they were purchased and property in them had passed to the purchaser and the leaves were brought to his warehouse there could not longer be any necessity to restrict their movement from the stage of warehousing them to the stage of their consumption in manufacturing the bidis; (2) that neither Section 5(2) (b) nor the rules authorise restriction on the movement of these leaves once they were brought under a permit to the warehouse, and therefore, the order dated June 4, 1965 requiring the purchaser to obtain permits for transporting them from his warehouse to his branch and from there to the sattedars and the mazdoors was ultra vires the section and the rules; (3) that the restrictions as to transport were ancillary to and were for the effective enforcement of the trade monopoly and not an essential or integral part of the scheme of that monopoly, that they were, therefore, not protected by the latter part of Article 19 (6), or Article 304 (b), and have, therefore, to pass the test of reasonableness; and (4) that, if Section 5 were to be literately construed so as to mean that it authorises the restriction on movement after the leaves were warehoused requiring permits for their transport from stage to stage until they reached the mazdoors, the entire system of permits would become unworkable and the restrictions would have to be held as unreasonable; that such a construction rendering Section 5 and the rules unconstitutional on the ground of being violative of Article 19 (1) (f) and (g) and Arts. 301 and 304 could not have been intended by the legislature. Counsel for the State, on the other hand, maintained that the language of Section 5 was clear and unambiguous, that it forbade without permit transport at any stage right upto the stage of manufacture of the bidis and that those restrictions were the essential part of the scheme of the State monopoly and there, fore were protected by the latter part of Article 19 (6); and further that even if they were not, they were reasonable restrictions and therefore permissible.;