DISTRICT COLLECTOR HYDERABAD Vs. IBRAHIM AND COMPANY

JUDGEMENT

(1.) These appeals arise out of a common order passed by our learned brother Gopalakrishna Nair, J. whereby he struck down on certiorari G. O. No. 2976, dated 30-12-1964 us bad in law and issued a writ of Mandamus in favour of all the Writ Petitioners directing the respondents, i.e., The District Collector, Hyderabad, the State of Andhra Pradesh and the Commissioner of Civil Supplies to forbear from acting under the authority or in pursuance of the said G. O. and refrain from interfering with the carrying on of the wholesale business in sugar by the petitioners firm under their licences.

(2.) The facts leading to these proceedings may be shortly stated. The petitioners who are 25 in number have been dealing from a long time in sugar along with other articles in the twin cities of Hyderabad and Secunderabad. In or about the year 1963 conditions of scarcity of the commodity in the markets all over made themselves felt. The Government of India, apprehending some serious situation wherein the purchasers and traders may try to push up the prices of sugar thought it expedient to advise the State Governments for taking measures to checkmate the probable activities of wholesale dealers in sugar by issuing Sugar Dealers Licencing Order on the lines adopted during the period 1959-61. The Government of Andhra Pradesh accepting the proposal promulgated with the prior concurrence of the Central Government the Andhra Pradesh Sugar Licencing Order, 1963, in exercise of its powers conferred by Section 3 of the Essential Commodities Act, 1955 (Central Act X of 1955). By virtue of this Order no person could carry on business as a dealer except under and in accordance with the terms and conditions of a licence issued by the licensing authority, the licensing authority being the District Collector having jurisdiction over the place of business or storage. Procedure in detail was laid down therein for the grant and renewal of the licence. Applications therefor had to be made to the licensing authority in the prescribed form and the licence thereupon had to be issued or renewed also on the prescribed form at the discretion of the licensing authority, which discretion should not be exercised arbitrarily. The licence issued immediately after the advent of the Order was to be valid till the 31st of March, 1963, whereafter it had to be renewed for a period of one year at a time. The terms and conditions of licence could not be contravened except on pain of suspension or cancellation of the licence, besides other action that could be taken under the Act. The grant of licence and renewal thereof could be refused only on grounds reduced to writing after giving opportunity to the party to state his case. The aggrieved party had a right of appeal. Thus, the issue or renewal of the licence was a quasi-judicial Act. The petitioners were granted licence for the year 1963-64. Hardly a few months passed by when the Central Government in exercise of its powers under Sub-rule (2) of Rule 125 of the Defence of India Rules, 1962 promulgated an Order called the Sugar Control Order of 1963 under a notification dated 17-4-1963. This order defined a recognised dealer as a person carrying on the business of purchasing, selling or distributing sugar and licensed under the Order relating to the licensing of sugar dealers for the time being in force in a State or Union territory. The petitioners, in so far as they were licensed under the State Licensing Order, were well within this definition. They were the "recognised dealers". This Order provides further measures: (1) placing restriction on sale, or agreement to sell or deliver by the producers; (2) for controlling the production, sale, grading, packing, marking, delivery, distribution etc. of sugar by the producers or recognised dealers; (8) for regulating the movement of sugar, (4) for fixation of its prices, (5) for allotment of quotas, (6) for delivery of such quotas and (7) for various other things. The Central Government or the Chief Director was the competent authority to issue directions or make orders in this behalf. It is they who by order would allot quotas of sugar to the specified States or areas. The State Government used to sub-allocate the total quota thus allotted to different areas or districts in their States and nominate licenced sugar dealers to take delivery of the allocated quantity from the concerned factories. The nominees of State Government who lift stocks direct from the factories would then distribute sugar to retailers at the prices to be fixed by the State Governments. In this way the quotas used to be allotted to the petitioners from time to time in varying measures upto Januaiy, 1965, they being fixed on the basis of the turnover of each dealer and the quantity of sugar available. The petitioners used to lift the allotted sugar at their cost from the factories concerned, and carry on trade or commerce in accordance with the licence and the provisions of law. While so, the State Government passed the impugned G. O. dated 30-12-1964 under which the entire quota of sugar allotted to the twin cities of Hyderabad and Secunderabad was directed to be handed over for wholesale trade, exclusively to the 4th appellant, the Co-operative Society, which was a recognised dealer just like the petitioners. It was mentioned in the G. O. that the Government had also decided that the Cooperative as wholesale dealers in the district should be given the monopoly distribution. The direct consequence of this G. O. is that the allotment of sugar to the petitioners was, stopped and the 4th appellant became the only recognised dealer entitled to lift the entire quota for purposes of distribution and sale in the twin cities. Thus the stocks which were necessary for carrying on trade as recognised dealers were no longer available to the petitioners, with the result that their trade in this commodity abruptly came to an end. The petitioners, through separate petitions, moved this court seeking a Writ of Mandamus against the respondents directing them to forbear from acting under the authority of or in pursuance of the said G. O. and to refrain from interfering with the carrying on wholesale sugar business by the petitioners. Firms under their licence.

(3.) These petitions were opposed by the 4th respondent and also the Government on the basis that the impugned G. O. was good and valid and was in conformity with the provisions of the Sugar Control Order, and that it was issued in pursuance of the policy laid down by the Central Government to entrust the work or distribution of sugar entirely to the Co-operative society and thereby eliminate in the public interest the unnecessary agency of the petitioners in lifting and distributing the sugar. It was also urged that the petitioners are not entitled to seek any relief complaining infraction of their right under Articles 14 and 19 of the Constitution of India. It was further urged that there was no contravention at all of Article 14 of the Constitution of India.