- (1.) THE petitioners, M/s Baldev Traders and a partner of the firm Baldev Kumar, have filed this writ petition under Article 226 of the Constitution of India challenging the Rajasthan Rice Procurement (Levy) Order, 1981.
(2.) THE State of Rajasthan in exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 read with the Government of India, Ministry of Agriculture (Department of Food) Order published under GSR 500, dated June 9, 1978, and with the prior concurrence of the Central Government made an order vide notification, dated October 13, 1981, known as the Rajasthan Rice Procurement (Levy) Order, 1981 (hereinafter referred to as "the Levy Order," ). Under the above Levy Order every whole-saler is required to sell to the State Government at the procurement price : (a) 50% of the total quantity of the rice held in stock by him at the commencement of this order; (b) 50% of the total quantity of the rice got milled by him everyday out of stocks of paddy beginning with the date of commencement of this order until such time as the State Government directs. Under clause 3 of the said Levy Order it has been laid down that quantity of rice for levy under clause 3 ( 1 ) (b)and 3 (2) (b) shall be calculated on the basis of out-turn ratio of 69% (Sixty nine percent)rice from paddy milled by Rice Mills every-day. Under clause 4 the rice required to be sold to the State Government under sub-clause (I) and (2) shall be delivered by the Miller of the whole saler to the public agency daily. Under clause 3 (6) it has been laid down as under : " No miller or whole-saler shall dispose of or otherwise part with the possession of any portion of the rice produced or manufactured or got milled or held in stock by him as aforesaid until he has delivered the levy due from him under sub-clause (1) & (2 ). " According to the petitioners the date October 13, 1981, on which the levy order came into force, the petitioners were in possession of 99 full bags and 3426 small bags (Katta) weighing 1600 quintals, 95 Kgs. and 600 Gms. of rice in their stock. The entire stock held in possession by the petitioners belonged to the persons mentioned in schedule annexed with the writ petition. The case of the petitioners is that they were selling the rice as commission agents of the persons mentioned in the schedule. They were not the owners of the rice in stock and were merely commission agents i. e. Artiyas. The petitioners have thus challenged the levy order as unconstitutional and contrary to the provisions of section 3 of the Essential Commodities Act (hereinafter referred to as "the Act"), and also violative of Article 14 of the Constitution of India. It is contended by learned counsel for the petitioners that the case of the petitioners is not covered under the provisions of the levy order as the petitioners are only commission agents and are not holding any stock of rice on their own behalf. The petitioners are merely acting as agents of third persons and are holding the stock of rice on behalf of third persons. It is argued that under section 3 sub-section (2) ( f) of the Act reads as under : Sec. 3 (2) (f)for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity, (a) to sell the whole or a specified part of the quantity held in stock or produced or received by him, or (b) in the case of any such commodity which is likely to be produced or received by him, to sell the whole or a specified part of such commodity when produced or received by him, to the Central Government or a State Government or to an officer or agent of such Government or to a Corporation owned or controlled by such Government or to such other person or class of persons and in such circumstances as may be specified in the order. It is submitted that the aforesaid provisions are not applicable to a person who holds the stock on behalf of third persons. The provisions of the levy order if they include commission agents are ultra-vires the provisions of section 3 (2) ( f) of the Act. It is contended that the petitioners charge only their commission at 2% on the sale. If the petitioners are called upon to deliver by way of levy in the purported exercise of powers flowing from the levy order, they would be liable to deliver the rice at the procurement price and on the other hand they will be liable to pay the sale-price to the real owners of the stock according to the contract between them. There is no provision in the Essential Commodities Act or in the levy order making the petitioners immune from extra liability to the real owners of the stock.
(3.) IT has also been contended that the levy order can only apply when fresh crop arrives in the market. IT cannot be applied to the goods in stock held by dealers but the State Government is enforcing the levy order for the stock held by the petitioners on the date of levy order coming into force. IT is also argued that there is no levy on the goods which are bought by the dealers after the commencement of the levy order either from the business community within the State or outside. Thus it creates discrimination and offends Article 14 of the Constitution of India. Learned Deputy Government Advocate, on the other hand, argued that the petitioners even in the capacity of the commission agents were "holding the rice in their stock" and they are fully covered under the provisions of Sec. 3 (2) (f) of the Act and the levy order. It is contended that the petitioners are admittedly whole-salers holding a valid licence of whole-saler under the Rajasthan Trade Articles (Licensing and Control) Order, 1980. The levy order clearly requires every whole-saler to sell to the State Government at the procurement price and as such the petitioners are fully covered under the provisions of the levy order. It is contended that holding in stock does not require the ownership by the dealer, but it also covers a dealer who is merely in possession of the stock. It is submitted that in case the petitioners in the capacity of commission agents are required to deliver the rice at the procurement price under a statute, there is no liability on them to pay the contractual price to their principals. The object of the Essential Commodities Act, 1955 is to provide for the control of the production, supply and distribution of, and trade and commerce in, certain commodities essential for human being in the interest of the general public. It essentially deals as one of the subjects "control of production, supply and distribution of essential commodities". In exercise of this power section 3 has been enacted in the Act. Under Sub-sec. (2) of Sec. 3 of the Act without prejudice to the generality of the powers conferred by subsection (1), an order made thereunder may provide under clause (f) for requiring any person holding in stock, or engaged in the production, or in the business of buying or selling, of any essential commodity,- (a) to sell the whole or a specified part of the quantity held in stock or produced or received by him Thus there can be no dispute that an order can be made under the aforesaid provision in relation to a person holding the essential commodity in stock. The levy order has been issued by the State Government in exercise of the powers conferred by section 3 of the Act read with the Government of India, Ministry of Agriculture (Department of Food) Order published in GSR 800 dated June 9, 1978 and with the prior concurrence of the Central Government. Under clause (1) of section 2 of the levy order whole-saler has been defined as under : " Wholesaler" means a dealer carrying on business in rice and holds a valid licence of wholesaler under the Rajasthan Trade Articles (Licensing and Control) Order, 1980. " The petitioners in para 1 of the writ petition itself have admitted that petitioner No. 1 is a registered partnership firm carrying on business in rice among other articles and is a wholesale licensee under the Rajasthan Trade Articles (Licensing and Control) Order, 1980. The levy order clearly requires a wholesaler to sell to the State Government at the procurement price 50% of the total quantity of rice held in stock by him at the commencement of this order. In my view the petitioners being wholesaler are clearly covered by the provisions of the Levy Order to sell to the State Government at the procurement price. The petitioners are admittedly in possession of the stock and as such they would be considered as holding the same in stock. Holding in stock does not necessarily mean that the person should have ownership over it. In K. K. Handique vs. The Member, Board of Agricultural Income-tax, Assam (1) it was held that the expression 'holding' connotes possession and title, but it has been further added "sometimes it is used only to mean actual possession. " Thus it cannot be said that the word 'holds' includes invariably both possession and title of the thing held. The meaning has to be found out in a particular context used in the statute. In a legislation like the levy order made under the Essential Commodities Act, the main idea is to meet urgent public need for food-grains. It works only a conversion of the commodity into its equivalent in cash and an investigation of ultimate title is neither relevant nor practical in case of a levy order. ;