G.R.MAJITHIA, J. - (1.) THE petitioners have impugned the Milk and Milk Products Order, 1992 (for short, the Control Order) issued by the Government of India, Ministry of Agricultural (Department of Animal Husbandry and Dairying Department) New Delhi, in exercise of the powers conferred by S. 3 of the Essential Commodities Act, 1955, vide Notification No. S. O. 405(E) dated June 9, 1992, published in the Gazette of India Extraordinary, Part -II, Section 3, Sub -section (ii) in this petition under Arts. 226/ 227 of the Constitution of India.
(2.) THE challenge has been made to the Control Order on the ground that 'Agriculture' is in Entry 14 of List II (State List) of Schedule VII to the Constitution of India, 'Dairying' is included in Agriculture and, as such, it is the State which can legislate on matters relating to production and sale of milk in the geographical areas administered by the State of Punjab. The right of the petitioners to sell their milk to the purchasers of their choice has been curtailed by disallowing more than one person to set up purchasing unit in a particular area termed as 'milk -shed'. The price of milk purchased from the dairy farmers is less as compared to the sale price of milk in the metropolitan cities as well as other urban areas. The price of toned milk is Rs. 7/ - per litre in Delhi as against the price of milk paid to the dairy farmers in Punjab, which is only Rs. 3.50 per litre. All other industries are being de -licensed. The dairy industry as well as dairying is being throttled for the benefit of a few inefficient and corrupt co -operative Administrators as well as favoured dairy industries. Separate written statements - one on behalf of respondent Nos. 1 and 2 and the other on behalf of respondent No. 3 - have been filed. It is stated in the written statement filed on behalf of respondent Nos. 1 and 2 that initially the whole consideration for milk traders, milk product makers and the intermediaries was to make profit at the cost of the consumers as well as producers and in milk production there is flush session and lean session. The former is in the winter and the latter is in the summer. The dairy farmers had no access to market and the traders and manufacturers of milk products exploited the situation for their own advantage exploiting the respective situations about the milk supply rising in flush sessions and reducing in lean session. In this background, it was thought necessary to encourage co -operative efforts among the milk producers in order to eliminate exploitation at all levels in the matter of production and supply of milk. It has been a conscious and deliberate policy of the Government to encourage the co -operatives in dairy sector. The co -operative movement then spread across the length and breadth of the country under the operation "Flood Programme" which provided necessary infrastructure and support services to the farmer co -operatives and their members and their economic conditions improved substantially. The dairy co -operatives had in fact improved the economic conditions of the rural masses. The Operation Flood Programme through its network of rural co -operative societies provides the farmers not only an assured market for their produce but it also serves as a vehicle for the supply of inputs and important technology, which are crucial for the sustained production of milk by small and marginal farmers. Despite the efforts made by the co -operatives, there has still been scarcity of milk in the lean session (May to August) due to biological and natural factors and the State Government had all along been dealing with it by orders issued from time to time in different parts of the country for temporary prohibition on manufacture of milk products and export of milk outside the State under S. 3 of the Essential Commodities Act, 1955 (for short, the Act). With the National Milk Order coming into existence, it has become necessary to have the Order applicable to India as a whole in order to ensure that availability of milk is not adversely affected by large scale diversion of liquid milk into more profitable products. The regulatory measures of the nature of Milk and Milk Products Order was, therefore, found to be essential in public interest. The provisions for registration, standards, hygiene, etc. are equally made applicable to all (including the co -operative sector and Government dairies) under the Control Order. The Control Order seeks to regulate the production, supply and distribution of milk and milk products throughout the country with a view to maintain and increase the supply of liquid milk to the general public. The Control Order applies only to persons who handle or are equipped to handle milk in excess of 10,000 litres per day or milk products containing milk solids in excess of 500 tonnes per annum. The Control Order does not compel the milk producers to sell milk only to a particular class. The purchasers of milk who do not fall within the purview of the Control Order are free to purchase milk from any area or from any person they like. There is no individual milk producer in the country who produces more than 10,000 litres of milk per day. The Control Order does not seek to create monopoly for any person in the business of milk and milk products. The requirement of registration and consequent control regarding purchase of milk is confined to large units only. There is rationale in prescribing the requirement of registration of large units i.e. those units whose installed capacity for handling milk is in excess of 10,000 litres of milk per day or of milk products containing solids in excess of 500 tonnes per annum. Demarcation of geographical location known as 'Milk Sheds' for the purchase or procurement of milk by large scale operators who convert it into value added milk products is essential to maintain and to increase the supply of liquid milk from that area. The milk sheds will normally be in the neighbouring areas where the units are situated and, as such, it would be necessary to make the unit owners to participate in the development of production of milk in that area. The units with the demarcated milk shed areas will not be able to exploit the producers as he may not be free to bring in liquid milk from outside its milk shed areas without permission. Under the Control Order, the milk producers are free to sell milk to anyone inside and/or outside the milk shed. There is no compulsion on the producers even to become the members of the co -operatives.
(3.) THE Control Order is covered under Entry 33 (a) of List III (Concurrent List) of the VII Schedule to the Constitution. It will be useful to reproduce the relevant provisions of the Control Order: - "1. Short title, extent and commencement : - (1) This Order may be called the Milk and Milk Product Order, 1992. (2) It extends to the whole of India. (3) It shall come into force on the date of its publication in the Official Gazette. 2. Definitions : - In this Order, unless the context otherwise requires : - (a) 'Act' means the Essential Commodities Act, 1955 (10 of 1955); (b) to (e) xxx xxx xxx xxx (f) 'Milk' means milk of cow, buffalo, sheep, goat or a mixture thereof, either raw or processed in any manner and includes pasteurised, sterilized, recombined, flavoured, acidified skimmed, toned, double toned, standardised or full cream milk; (g) 'Milk Product' means cream, malai, curd, yoghurt skimmed milk curd, shrikhand, paneer or channa, skimmed milk paneer or skimmed milk channa cheese, processed cheese and cheese spread, ice cream, milk ices, condensed milk (sweetended and unsweetened), condensed skimmed milk (sweetened and unsweetened), whole milk powder, skimmed milk powder, partly skimmed milk powder, Khoya, Rabri, Kulfa, Kulfi, casein, infant milk food, table butter, deshi butter, ghee or butter oil, and includes another substance containing - on a dry weight basis not less than fifty per cent of milk solids (excluding added sugars), or any other substance declared by the Central Government, by notification as a milk product; (h) 'Milk shed' means an area geographically demarcated by the registering authority for the collection of milk or milk product by the holder of a registration certificate; (i) 'Milk Producer' means a person owning or keeping or otherwise having control of cow, buffalo, sheep or goat for the production of milk intended for sale or for conversion thereof to any milk product; ;