K. RAMANATHAN v. STATE OF TAMIL NADU & ANR.

The Judgment of the Court was delivered by

c SEN, J. This appeal by special leave directed against the judgment and order of the Madras High Court dated September 14, 1983 raises a question of some complexity. The question is as to whether cl. 3 (I A) of the Tamil Nadu Paddy (Restriction on Movement) Order, 1982 issued by the State Government under s. 3 of the Essential Commodities Act, 1955 read with the Government D of India, Ministry of Agriculture (Department of Food) Order, G. S. R, 800 dated June 9, 1978, with the prior concurrence of the Government of India, was ultra vires the State Government being in excess of its delegated powers. That depends on whether the delegation of a specific power under cJ. (d) of sub-s. (2) of s. 3 of the Act by the aforesaid notification issued by the Central Govern- ment under s. 5 to regulate the storage, transport, distribution, disposal, acquisition, use or consumption of an essential commodity, in relation to foodstuffs, carries with it the general powers of the Central Government under sub-s. (1) of s. 3 of the Act to regulate or prohibit the production, supply and distribution of essential com- F modities and trade and commercee therein. There is a conflict of opinion on this question between different High Courts. Hence we thought it fit to grant special leave and heard the appeal on merits. After hearing the parties, we dismissed the appeal by an order dated December 5, !983 for reasons to follow. The reasons therefore are set out below. G Briefly stated, the facts are these. rn the State of Tamil Nadu, there has been a system of imposing levy on purchase of paddy by traders in Togue since the year 1970. This was imposfd by cl. 3 (5) (i) of the Tamil Nadu Paddy and Rice (Licensing, Regulation & Disposal of Stock) Order, 1968 issued by the State Government under s. 3 of the Act with the prior concurrence of the Government H

k. RAMANATHAN V. TAMIL NADU (Sen, J.) 1033

There was a failure of monsoon in the State in the years 1981- 82 and the off take of rice in the fair price shops had increased from 34,000 tonnes in April to 8~.0(;0 tonnes in December 1982. Due F 'to failure of south-west monsoon in the year 1982 and consequent poor rainfall, the storage level in the Mettur reservoir fell. As a result of this there was a steep fall in kuruvai cultivation of paddy. In Thanjavur district alone, the acreage of paddy cultivation was reduced from 4. 5 lakhs acres to 2.97 lakhs acres. Added to this, the north-east monsoon in the State also failed causing a serious G fall in the production of paddy. In the circumstances, the State Government in the Food & Cooperation Department had no other alternative but to introduce a monopoly procurement scheme of paddy with a view to procure the maximum stock of paddy by banning the purchases by traders.

1034 SUPREME COURT REPORTS [1984] 2 s c.R..

A In exercise of the powers conferred under s. 3 of the Essential Commodities Act, 1955 read with the Government of India, Ministry of Agriculture (Department of Food) Order, G. S. R. 800 dated June 9, 1978, with the prior concurrence of the Government of India, the State Government promulgated the Tamil Nadu Paddy B (Restriction on Movement) Order, 1982 on October 22, 1982. Ct. 3 (1) of the Order provides :

''No person shall transport, ~move or otherwise carry or prepare or attempt to transport, move or otherwise carry, or aid or abet in the transport, movement or other- C wise carrying of paddy outside the State by road /rail or otherwise except under and in accordance with the condi- tions of a permit issued by an authorized officer."

On January 22, 1983, the State Government Department issued G. 0. MS. No. 42 for purchase of the entire marketable surplus of paddy in Thanjavur District by the Government through the Tamil Nadu Civil Supplies Corporation as an agent of the Government. On February 22, 1982, the State Government in the Food & Coop- eration Department issued another G. 0. Ms. No. 84 _extending the provision made with regard to Thanjavur district of Chidambaram and Kattumannarkoil taluks in South Arcot district and Musiri, E Kulithalai, Lalgudi and Tiruchirapalli taluks in Tiruchirapalli district.

On May 11, 1983, the State Government in the Food & Coop- eration Department issued G. 0. Ms. No. 293 introducing sub·cl. F (lA) to ct. 3 of the Order. The newly inserted cl. (1 A) is as follows:

"No person shall transport, move or otherwise carry or prepare or attempt to transport, move or otherwise carry, or aid or abet in the transport, movement or otherwise carrying of paddy outside the places notified under Clause 3 of the Tamil Nadu Paddy & Rice (Restriction of Rates) G Order, 1974 by road/rail or otherwise."

Thereafter, on June 20, 1983, the State Government in the Food & Cooprration Department by G. 0. Ms. No 413 made a further amendment to the newly introduced sub·cl. (lA) of cl. 3. H The amended cl. (lA) of ct. 3 ia follows :

K. RAMANATHAN v. TAMIL NADU (Sen, J.) 1035

A ''No. person shall transport, move or otherwise carry or prepare or attempt to transport, move or otherwise carry, or aid or abet in the transport, movement or other- • wise carrying of paddy outside the Thanjavur District, Chidambaram and Kattumannarkoil Taluks in South Arcot District and Musiri, Kulithalai, Lalgudi and Tiruchirapalli B Taluks in Tiruchirapalli District."

These various orders were issued by the state Government in exercise of the powers conferred by s. 3 of the Act read with the Government of India, Ministry of Agriculture (Department of Food) Order, G. S. R. 800 dated June 9, 1978 which is set out below : c

"MINISTRY OF AGRICULTURAL AND IRRIGATION (DEPARTMENT OF FOOD)

ORDER D New Delhi, the 9th June, 1978,

G. S. R. 800-In exercise of the powers conferred by s. 5 of the Essential Commodities Act, 1955 (10 of 1955), and in super- session of the Order of the Government of India in the late Ministry of Agriculture <Department of Food) No. G. S. R. 316 (E) dated the 20th June, 1972, the Central Government hereby directs that the powers conferred on it by sub-s. (1) of s. 3 of the said Act to make orders to provide for the matters specified in cls. (a), (b), (c), <d), (e), (f). (h), (i), (ii) and (j) of sub-s. (2) thereof shall, in relation to foodstuffs be exercisable ,also by a State Government subject to the conditions-

(1) that such powers shall be exercised by a State Govern· ment subject to such directions, if any, as may be issued by the Central Government in this behalf; 0 (2) that before making an order relating to any matter specified in the said cls. (a), (c) or (f) or in regard to distri- bution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, under the said cl (d), the State Government shall also obtain the prior concurrence of the Central Governmentj B and

i036 SUPREME COURT REPORTS (1985) 2 S.C.R.

A (3) that in making an order relating to any of the matter specified in the said cl. U) the State Government shall authorize only an officer of Government.

Sd{-K. Balakrishnan. • B Dy. Secretary to the Government of India (No.3 (Genl) (l)/78-D&R (1)-59)."

The appellant and various other agriculturists of Thanjavur district and the aforesaid traditionally rice growing areas of South Arcot and Thiruchirapalli districts challenge the constitutional c validity of cJ. 3 (lA) of the Order placing a complete ban on the transport, movement or otherwise carrying of paddy outside Than· javur district and the aforementioned taluks of South Arcot and Thiruchirapalli districts by petitions under Art. 226 of the Consti- tution in the High Court. There were as many as 300 writ petitions ·D in the High Court which were disposed of by the judgment under appeal. The validity of cl. 3 (1 A) of the Order was assailed on three main grounds : (I) CJ. 3 0 A) was wholly arbitrary and irra· tional and thus violative of Art. 14 of the Constitution. (2) Cl. 3 (IA) was in excess ofthe delegated powers conferred on the State Govern· ment under s. 3 of the Act by the aforesaid G. S. R. 800 dated E June 9, 1978 issued by the Central Government u11dcr s. 5 of the Act. And (3) The total ban on movement of paddy from out of Thanjavur dtstrict and the aforesaid taluks of South Arcot and Thiruchirapalli districts by cl. 3 0 A) of the Order was an unreason· able restriction on the freedom of trade and commerce guaranteed under Art. 19 0) (g) and also infringes the freedom of inter~State F trade, commerce and intercourse under Art. 301 of the Constitution. The High Court repelled all these contentions.

Shri P. Govindan Nair, learned counsel appearing for the appellant argued the case with much learning and resource. Learned counsel with his usual fairness did not advance some of G the contentions raised before the High Court as they were apparen- tly misconceived. He has confined his submissions to only two grounds, namely: (l)Cl. 3 (lA) of the impugned Order issued by the State Government under s. 3 of the Act read with G. S. R. 800 dated June 9, 1978 issued by the Central Government under s. 5 of the Act with the prior concurrence of the Government of India placing a ban on the transport, movement or otherwise carrying of II

K. R \MANATI:iAN v. Tt\MIL NADU (Sen, J.) 1037

A paddy from out of Thanjavur district, the two taluks of South Arcot district and the four taluks of Thiruchirapalli district, was ultra vires the State Government being in excess of the delegated powers. It is urged thatthe delegation of a specific power under cl. (d) of sub- s. (2) of s. 3 of the Act by the aforesaid notification issued by the

• . Central Government under s. 5 of the Act to regulate the storage, B transport, distribution, disposal etc. of an essential commodity, in relaston to foodstuffs, does not carry with it the general power of the Central Government under sub-s. ( l) of s. 3 to regulate or pro- hibit the production, supply and distribution thereof and trade and commerce therein. And (2) The word 'regulating' incl. (d) of sub- c s. (2) of s. 3 of the Act does not take in 'prohibiting' for the words 'regulating' and 'prohibiting' denote two distinct and separate attributes of power and they are mutually exclusive. Otherwise according to learned counsel, there was no point in the Legislature using both the words 'regulating' and 'prohibiting' in sub-s. (I) of s. 3 of the Act and the word~ 'regulating' and 'prohibiting' diffe- D rently in various clauses of sub-s. (2) thereof. It is urged that there cannot be a total prohibition on transport, movement or otherwise carrying of paddy out of the areas in question under ct. (d) of sub- s. (2) of s 3 but only regulation of such activities in the course of trade and commerce by grant of licences . or permits The learned counsel is fortified in his submissions by the decisions of the Punjab, E Allahabad and Orissa High Courts in Sujan Singh v State of Har- yana,(l) State Of Uttar Pradesh v. Suraj Bhan( 2 } and Bejoy Kumar Routrai v. State of Orissa( 3 ) and he questions the correctness of the decision of the Gujarat High Court in Nanalal Navalnathji Yogi Collestor of Bul sar& Ors.(4) taking a view to the contrary. We are afraid, we are unable to accept any of the contentions advanced by him.

In order to appreciate the contentions advanced, it would be conven.icnt to set out the relevant statutory provisions. Sub-s. (1) of s. 3 of the Act is in these terms : G

''3 (1). Power to control production, supply, distribution etc. of essential commodities-

(1). AIR [1968) Pun. 363 (2). AIR [,972] All. 401 (3). AIR (1976] Orr. 138 H (4). AIR [1981] Ouj. 87

10~8 SUPREME COURT RllPOR TS [1985] 2 s.c.a.

A If the Central Govsrnment is of opinion that it is necessary or expedient so to do for maintaining or increa· sing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, (or for securing any essential commodity for the defence of India or the efficient conduct of military operations) it may, ll by order, provide for regulating or prohibiting the produ· .. ction, supply and distribution thereof and trade and com- merce therein."

Sub-s. (2) of s. 3 of the Act, in~ofar as material, lays down : c "3. (2) Without prejudice to the generality of the powers conferred by sub-s. (1), an order made thereundf:r may provide-

(a) • • * * D (b) "' • • • (c) "' * "' ~

(d) for regulating by licences, permits or otherwise the storage, transport, distribution, disposal, acquisition, use or consumption of any essential commodity."

S. 5 of the Act provides :

"5. Delegation of powers-The Central Govern- ment may, by notified order, direct that <the power to make orders or issue notifications under s. 3) shall in rela- F tion to such matters, and subject to such conditions, if any, as may be specified in the direction, be exercisable also by-

(a) such officer or authority subordinate to the Central Government, or

(b) such State Government or such officer or authority subordinate to a State c;Jovernroent.

ns may be specified in the direction." li

rc. RAMANATHAN 1'. TAMiL NAOU (Sen, J,) 10~9

The infirmity in the argument lies in the erroneous assumption A that the source of power on authority to promulgate the impugned Order was derived by the State Government under cl.(d) of sub-s (2) of s. 3 of the Act by virtue of the delegation of power~ by the Centtal Government by the notification No G. S. R 800 dated June 9, 1978 under s 5 of the Act. The wurcc of power to promulgate an order of this description is derived from sub-s. (1 of s. 3 of the B Act, According to its plain language, the aforesaid notification No. G. S. R. 800 provides that in exercise of the powers conferred by s. 5 of the Act, and in supersession of the earlier order of the Government of India in the Ministry of Agriculture, Department of Food, No. G. S. R 316 dated June 20, 1972, the Central Govern- c ment directs that 'the powers co•1ferred on it by sub-s. (1) of s. 3 of the Act' to make orders to provide for matters specified in clauses (a), (b), (c), (d), (e), (f), (h), (i>, (ii) and (j) of sub-s. t2) thereof shall, in relation to foodstuffs, 'be exercisable also by a State Government subject to the conditions set out therein'. There must be some meaningful effect given to the words 'the Central Govern- D ment hereby directs that the powers conferred on it by sub-s. ( 1) of s. 3 of the Act to make orders etc....... shall be exercisable also by a State Government subject to the conditions set out therein'. On a plain construction, the first part of the aforesaid notification in specific terms provides for the delegation by the Central Govern- ment under s. 5 of the Act of the powers conferred on it by sub-s. E (1) of s. 3 of the Act. That power is general in its term~ and authorises inter alia the promulgation of any order providing for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commodity, insofar as it is necessary or expedient ~o to do for maintaining or increasing supplies or for securing their equitable distribution and availability at fair prices. The second part ot the notification directs that the power to make 'orders thereunder' i.e. the power under sub-s. (1) of s. 3 of the Act shall be exercisable also by a State Government, in relation to foodstuffs, with respect to 'such matters' viz. for the matters specified in clauses (a), (b), (c), (d), (c), (f), (h), (i), (ii) and (j) of sub-s. (2) thereof and subject to 'such condition~· set out therein. The aforesaid notification G. S. R. 800 dated June 9, 1978 issued by the Central Government was strictly in conformity with s. 5 of the Act. Of the three conditions , the one that is material for our purpose is condition 2 It provides that before making an order under cl. (d) of sub-s. (2) of s. 3 of the Act in regard to H

1040 SUPREME COURT REPORTS [1984i 2 s.c.it .... ) A distribution or disposal of foodstuffs to places outside the State or in regard to regulations or transport of any foodstuffs, the State Government shall also obtain the prior concurrence of the Central Government. 1t is manifest on a plain reading that the aforesaid notification No. l1. S. R. 800 dated June 9, 1978 was strictly in conformity with the requirements of s. 5 of the Act. •• B Learned counsel for the appellant h')wever strenuously con· tends that the delegation of powers by the Central Government under s. 5 of the Act must necessarily be in relation to 'such matters' and subject to 'such conditions' as may be specified in the notific- c ation. The whole attempt on the part of the learned counsel is to confine the scope and ambit of the impugned order to ct. (d) of sub·s. C) of s. 3 of the Act which uses the word 'regulating' and take it out of the purview of sub-s. (l) of s. 3 which uses the words 'regulating or prohibiting'. That is not a proper way of constru- ction of sub-ss (I) and (2) of s. 3 of the Act in their normal setting. D The restricted construction of s. 3 contended for by lt>arned counsel for the appellant would render the scheme of the Act wholly unwork· able. As already indicated . rhe source of power to make an order of this description is sub·s. (I) of s. 3 of tbe Act and sub·s. (2) merely pro·-,ides illustration for the general powers conferred by sub-s. (I). Sub-s. (2) of s. 3 of the Act commences with the words E 'Without prejudice to the generality of the powers conferred by sub-s. (1)'. It is manifest that sub·s. (2) of s. 3 of the Act confers no fresh powers but is merely illustrative of the general powers conferred by sub-s. (1) of s. 3 without exhausting the subjects in relation to which such powers can be exercised.

F The matter is no longer res Integra. The question directly arose for consideration by this Court in Santosh Kumar Jain v. The State( 1l. There, the Court wa1 considering the validity of the Sugar and sugar Products Control Order, 194 7 issued by the then Provincial Govern· ment of Bihar in exercise of the powers conferred on it by s. 3 of the Esiential Supplies fTemporary Powers) Act, 1946 by virtue of G the del.-gation of powers by the Central Government to make o.ders in relation to foodstuffs under cl. (j) of sub-s. (2) of s. 3 of that Act. Patanjali Shastri, J., speaking for the Court explaining the relevant functions of sub·ss. 0) and (2) of s. 3 of the Act, said :

(I) [1951) S.C.R. 303. H

JC. RAMANATHAN V. TAMIL NADU (Sen, J.) 1041

"It is manifest that sub-s. (2} of s. 3 confers no fur- A ther or other powers on the Central Government than what are conferred under sub-s. (D, for it is "an order made thereunder" that m11.y provide for one or the other of the matten specifically enumerated in sub-s. (2) which are only . • illustrative, as such enumeration is "without prejudice to tho generality of the powen conferred by aub-s. (1)". Sei- B zure of an article boing thus shown to fall within the pur- view of sub-s. (1), it must be competent for the Central Government or its delegate, the Provincial Government, to make an order for seizure under that sub-section apart from and irrespective of the anticipated contravention of any c other order as contemplated in cl. (jl of sub-s. <2)." ·

The Court drew support for this view from the decision of the Privy Council in Emperor v. S!bnath Banerjee.(1 ) The Federal Court in that case held r. 26 of the Defence of India Rules made under cl (j) of sub-s (2) of s. 3 of the Defence of India Act, 1939 to be ultra vtres, which decision was reversed by the Privy Council, The D Court quoted with approval the following observations of Lord Thankerton, J. delivering the judgment of Privy Council:

.. In the opinion of their Lordships, the function of sub- s. (2) is merely an illustrative one; the rule-making power is conferred by sub-s. 0), and "the rules" which are referred E to in the opening sentence of sub-s. (2) are the rules which are authorized by, and made under, sub-s. (I); the provi- sions of sub-s (2) are not restrictive ofsub-s. (I), as, indeed is expressly stated by the words "without prejudic~ to the generality of the powers conferred by sub-s. (1 )." F This accords with our view of the purport and effect of sub-ss. (1) and (2) of s. 3 of the Act.

In Atu/ya Kumar v. Director of Procurement & Supply(2), the chaJienge was to the validity of West Bengal Foodgrains (Intensive Procurement) Order, 1952 issued under s. 3 (1) of the Essential G Supplies (Temporary Powers) Act, i946 by virtue of delegation of powers by the Central Government under s. 5 of the Act which was

(l) LR [1945] 72 lA 241. (2). AIR [1953} Cal. 548. u

1042 SUPIU!ME CTURT REPORRS [1985] 2. S.C.R

A almost in identical term' with s. 5 of the Act. Sinha, J. (as he then was) held that the powers to promulgate the levy order was derived from 11ub-s. (I) of s. 3 of the Act; and that the power was general in terms and authorized Inter alia the promulgation of any order providing for regulating or prohibiting the production. supply

B and distribution of, and trade and commerce in, any essential commodity, insofar as it appears necessary or expedient to the State .• Government for maintaining or increasing supplies or for securing ~-

their equitable distribution and availability at fair prices. The learned Judge after referring to the Privy Council decision in Sibnath Baner • jee's case and that of this Court in Santosh Kumar Jain's case, observed : c "Sub-s. (2) of s. 3, commences with the words "without prejudice to the generality of the powers conferred by sub·s. (I) .... etc." This shows that sub-s. (2) confers no fresh powers but provides illustrations of the general powers con- ferred by sub·s. (1) ....... " D The learned Judge went on to observe :

"This is undoubtedly very incompetent drafting. But I think that the meaning is reasonably clear. The 'Matters Specified' in aub·s. (2), being "without prejudice'' to the E generality of the powers conferred by 5ub-s (l) must be held to include such powers. Thus it cannot be said that the general powers have not been conferred upon the State, but only those specified in cls. (a) to <j) of sub-s. (2). The only limitation is with regard to the kind of essential com- F modity concerned. The State has been given powers limited to 'foodstuffs' onty."

K. RAioiANATIIAN v. TAMlL NADU (Sen, J.) 1043

under s. S of the Act without deriving the general powers under A sub-s. (I) of s. 3 of the Act. We are of the considered opinion th8t the view of the Calcutta High Court accords both with reason and principle. The view to tbe contrary taken by the Punjab, Allahabad and Orissa High Courts in Sujan Singh's, Suraj Bhan's and B~joy Kumar Routrai's cases, supra, does not lay down good law. It must accordingly be held that although cl. (d) of nb-s. (2) of s. 3 8 of ~the Act deals only with a specific power. the general power to isiue the impugned order flows from the provisions of •ub-a. (1) of s. 3 which stands delegated to the State Government by virtue of the notification issued under s. S of the Act. c Upon that view, the question as to the conatruction of the word 'regulating' occuring incl. (d) of sub-s. (2) of s.3 of the Act does not really arise. However, since the question has been raised at the Bar we think it proper to deal with it. As a matter of con,truction, Shri P· Govindan Nair, learned counsel for the appellant contend• that the words 'regulating' and pro~ibiting' connote two distinct and separate attributes of power which are mutually exclusive and the-refore the word 'r~gulating' used in cl. (d) cannot be given the same meaning as 'prohibiting'. He urges that ia a sound rule of construction to give the ilame meaning to the same word occurring in different part~ of an Act of Parliament. For the purpose of alcertaining the true mcanini of the word 'regulating' in the context of c::I. (d) of sub-s. (l) of s. 3, he has referred to us the different clauses of that sub-section. A perusal of the various clauses (a) to (j) indicates that while cis. (a), (d) and (g) speak of the power to prohibit, and the remaining cis. (b), (c), (f), (h), {i), (ii) and (j) though they do not mention that they are illustrative of the power p to regulate impliedly partake of the character of that power. If tho contention of the learned counsel were to be accepted, it would imply that the Centru.l Government derives its power under s~b-s. ( 1) of s. 3 of the Act as the power to promulgate any order provi- ding for regulating or prohibiting the production, supply and distribution of, and trade and commerce in, any essential commo- G dity insofar as it appears necessary or expedient so to do, for main- taining or increasing supplies or for securing their equitable di1tribution and availability at fair prices If the Central Govem- ment were to make an order under sub-s. (I) in respect of the matters specified in .cl. .(d),. it may not only regulate or contro] the storage, trans port, d 1stnbut10n etc. of an essential commodity including the "

1044 SUPUMII COURT kEPORTS ll985j 2 S.C.R.

A movement of such food~tuffs by grant of licences, permits or other- wise, but also place a ban on the movement of wheat from one place to another; but the State Government under cl. (d) has only a regulatory power in relation thereto i.e. to make an order only for regulating the movement of wheat from one place to another by issue of the permits, licences or otherwise as provided for by cl. 3 of 8 the impugned Order but could not have issued cl. 3 (I A) placing a ban on movement of wheat from one placo to another. Although by force of logic one may be driven to that conclusion that the State Government has power to promulgate cl. 3 of the impugned Order but not cl. 3 (lA), there is no reason for us to give such a c restrictive meaning to the word 'regulating' appearing incl. (d) of sub-s. (2) of s. 3 of the Act. It would seem that the rule of con- struction ia clearly well recognized thct a word may be used in two different ienses in the same ~ection of an Act.

The world 'regulation' has not that rigidity of meaning as D never to take in 'prohibition'. I must depend on the context in which it is used iti the .statute and tbe object sought to be achieved by the legislation. For a time different views were expressed on the question whether the word 'regulation' in Art. 19(2) to 19(6) includes 'prohibition' till the Court in Narendra Kumar v. Union of Indfa( 1) answered it in the affirmative. E Shri P. Govindan Nair, learned counad for the appellant however contends that the word 'regulation' should not be confused with the expression 'reasonable re•trictions' occurring in Art. 19(2) to (6) of the Constitution and therefore the view taken in Narendra Kumar's case i1 not applieable. According to him, the ~ord 'regu- F lation' in cl. (d) of aub-a. '2) of s. 3 of the Act does not take in 'prohibition'. He 11eb to draw a distinction between prohibition . or prevention of certain activities and their regulation or govern- ance. It is said that a power to regulate or govern would imply continued exiatence of th~tt whililh is to be regulated or governed; and to be inconsistent with absolute prohibition. He therefore G submits that cl. 3 (lA) or the Order was ultra vires because the State Government had only power under cl. (d) or sub-a, (2) .of i. 3 of tho Act to regulate production, supply and distribution of, and trade and commerce in, e1sential commodities like foodstuffs by

(1) [1960) 2 SCR 361. H

K. RAMANATHAN 11. TAMIL NADU (Sen, J.) 1045

grant of permits, licences or otherwise, in contradistinction to the A power of ths Central Government under sub-s. Cl) of s. 3 to regu- late or prohibit such production, supply and distribution of, and trade and commerce in, essential commoditie11.

Learned counsel for the appellant placed reliance on the deci- B sion of tho Allahabad High Court in Sura} Bhan's case which proceeds up,m a decision of this Court in State of Mysore v. H. Sanjeevia~(l) holding that power to regulate does not inclllde power to prohibit or restrict. In Sanjeeviah's case, the question arose whether two provisos framed by the State Gove1 nment under s. 37 of the Mysore Forest Act, 1900 which empowered the making of rules to regulate the transit of forest produce which placed absolute c prohibition ~gainst transportation of forest produce between sunset and sunrise and a qualified prohibition in certain circumstances, was beyond the rule-m!lking power of the Stste Government. The contention on behalf of the State was that the two provisos were regulatory and prohibitory- In repel!ing the contention, the Court D observed :

"The power which the State Government may exercise is the power to regulate transport of forest produce, and not the power to prohibit or restrict transport. Prima facie, a rule which totally prohibits movement of forest E produce during the period between sunset and sunrise is prohibitory or restrictive of the right to transport forest produce."

These observations do not lay down any rule of universal application. F

The word 'regulation' cannot have any rigid or inflexible meaning as to exclude 'prohibition'. The word 'regulate' is difficult to define as having any precise meaning. It is a word of broad import, having a broad meaning, and is very comprehensive in scope. There is a diversity of opinion as to its meaning and its G appHcatJOn to a particular state of facts, some Courts giving to the term a somewhl.t restricted, and others giving to it a liberal, cons~ truction. The different shades of meaning are brought out in Corpus Juris Secundum, vol. 76 at p. 61 I : H {J) f J967) 2 S.C.R. 36L

1046 SUPREHB COURT REPORTS [1985] 2 s.c.R. A "Regulate" is variously defined as meaning to adjust; to adjust; order, or gov:-rn by rule, method, or established mode; to adjust or control by rule, method, or established mode, or governing principles or laws: to govern: to govern by rule; to govern by, or subject to, certain rules or restric- B tions; to govern or direct according to rule; to control, govern, or direct by rule or regulations. "Regulate" is also defined as meaning to direct; to direct by rule or restriction; to d1rect or manage according to certain standards, laws, or rules; to rule; to conduct; to fix or establish; to restrain; to restrict." c See also :Webster's Third New International Dictionary, Vol. II, p. 1913 and Shorter Oxford Dictionary, Vol. II, 3rd edn., p. 1784.

It has often been said that the power to regulate does not necessarily include the power to prohibit, and ordinarily the word 'regulate' is not synonymous with the word 'prohibit'. This is true in a general sense and in the sense that mere regulation is not tbe same as absolute prohibition. At the same time, the power to regu- late carries with it full po>:'er over the thing subject to regulation and in absense of restrictive words, the power must be regarded as plenary over the entire subject. It implies the power to rule, direct and control, and involves the adoption of a rule or guiding principle to be followed, or the making of a rule with 1espect to the subject to be regulated. The power to regulate implies the power to check and may imply the power to prohibit under certain circumstances, as where the best or only efficacious regul&tion consists of suppre- F ssion. It would therefore appear that the word 'regulation' cannot have any inflexible meaning as to exclude 'prohibition'. lt has different shades of meaning and must take its colour from the con- text in which it is used having regard to the purpose and object of the legislation, and the Court must necessarily keep in view the mischief which the legislature seek'l to remedy.

The question essentially is one of dcgne and it is impossible G to fix any definite point at which 'regulation' ends and 'prohibition' begins. We may illustrate how different minds hav~ differently reacted as to the meaning of the word 'regulate' depending on the context in wbich it is used and the purpose and object of the legis- 1-1

K. RAMANATHAN v. TAMIL NADU (Smt, /.) 1047

lation. In Slattery v. Naylor,( 1 ) the question arose before the Judi· A cial Committee of the Privy Council whether a bye-law by reason of its prohibition internment altogether in a particular cemetry, was ultra -vires because the Municipal Council had only power of regula-. ting internments whereas the bye-law totally prohibited them in the .. cemetry in question, and it was said by Lord Hobhouse, delivering the judgment of the Privy Council : B

"A rule or bye-law cannot be held as ultra vires more!y because it prohibirs where empowered to regulate, as regulation often involved prohibition."

In contrast in Municipal Corporation of the City of Toronto c v. Virgo,( 2) where the question for decision was whether a section or a bye-Jaw prohibiting hawkers from plying their trade, was com- petently and validity made, Lord Davey delivering the judgment of the Privy Council while laying down that a power to make a bye- D law to 'regulate' and 'govern' a trade does not authorize the prohi· bition of such trade, and added :

"There is a marked distinction between the prohibition or prevention of a trade and the regulation or governance of it, and, indeed, a power to regulate' and 'govern' seems E to imply the continued existence of that which is to be regulated or or governed.''

The predominant object of the Act, as reflected in the pream· ble is to provide, in the interests of the general public, for the con- F trol of the production, supply and distribution of, and trc~de and commerce in, certain essential commodities. It is a piece of socio- economic legislation enacted in the national interest to secure control over the production, supply and distribution of, and trade and commerce in, essential commodities. The various Control Orders issued by the Central Government under sub·s. (1) of s. 3 of the Act or by the State Government under s. 3 read with s. 5 have introdu· G ced a system of checks and balances to achieve the object of the legislation i.e. to ensure equitable distribution and availability of essential commodities at fair prices. Special public interest in an industry e.g. that it i11 engaged in the. production of a commodity,

(1) LR [188!!] AC 446 H {2) LR (1896] AC 8$

1048 st:JPREMB COUR'I REPORTS (1985} 2 S.C.R.

A vitally essential to the community, may justify the regulation of its production, supply and distribution and its trade and commerce, provided such regulation is not arbitrary and has a rational nexus with the object sought to be achieved.

The power to regulate or prohibit the production, ~upply and •• B distribution of, and trade and ::ommerce in, essential commodities may be exercised in innumerable ways. One of the ways in which such regulation or control over the production, supply and distribution of, and trade and commerce in, an essential commodity like foodstuffs may be exercised by placing a ban on inter· S1ate or intra· State move- ment of foodstuffs to ensure that the exc~ss stock of foodstuffs held c by a wholesale dealer, commission agent or retailer is not trans· ported to places outside the State or from one district to another with a view to maximise the procurement of such foodstuffs from the growers in the surplus areas for their equitable distribution at fair prices in the deficit areas. The placing of such ban on export D of foodstuffs across the State or from one part of the State to a no· ther with a view to prevent outflow of foodstuffs from a State which is a surplus State prevents the spiral rise in prices of such foodstuffs by artificial creation of shortage by unscrupulous traders. But such control can be exercised in a variety of ways otherwise than by placing compulsory levy on the producers, for example, by fixing a E controlled price for foodstuffs, by placing a limit on the stock of foodstuffs to be held by a wholesale dealer, commission agent, or retailer, by prohibiting sales except in certain specified manner, etc. These are nothing but regulatory measures.

We find no lawful justification for giving a restricted meaning F to the word 'regulating' in cl. (d) of sub s. (2) of s. 3 of the Act as not to take in 'prohibiting'. In State of Tamil Nadu v. M / S Hind Stone and Ors.(l} Chinnappa Reddy, J. referred with approval the observations of Mathew, J. in G.K. Krishnan v. State ofTamil . Nadut2) laying down that the word 'regulat•on' has no fixed conno- tation and that its meaning differs acLording to the nature of the thing to which it is applied. The learned Judge also observed : G

"In modern statutes concerned as they are with econo- 1 rnic and social activities, 'regulation' must, of necessity,

<t) [1981] 2 sec 205 t2) [1975] 2 SCR 715

K. RAMANATHAN v. TAMIL NADU (Sen, J.) 1049

receive so wide an inter-pretation that in certain situations, it must exclude competition to the public sector from the private sector. More so in a welfare State. It was pointed out by the Privy Council in Commonwealth of Australia v. Bank of New South 'Wales [1949] 2 AIL ER 755 (PC)-and we agree with what was stated therein-that the problem whether an enactment was regulatory or something more or whether a restriction was direct or only remote or only incidental involved, not so much legal as political, social or economic consideration and that it could not be laid down that in no circumstances could the exclusion of competition so as to create a monopoly, either in a State or C Commonwealth agency, be justified.''

In Krishan La/ Praveen Kumar & Ors. v. State of Rajasthan &:Ors.,(I) Suraj Mal Kai/ash Chand & Ors. v. Union of India &: Ors.,(1 ) and Bishamber Dayal Chandra Mohan &: Ors. y. State of U.P. & Ors.(3 ) the Court has held that a restriction placed on move- D ment of wheat from one State to another and/on movement of wheat from one district to another under cl. (d) of sub-s. (2) of s. 3 of the Act, to be regulatory in character.

Surely when a part of the country is verging on conditions of acute shortage or even famine, it is expected of the government to procure foodstuffs from surplus areas and transport the same for distribution in deficit areas. In the State of Tamil Nadu like some other Stat\!S, the two things most essential for the sustenance of human life are rice and paddy. It is amply borne out from the material on record that due to the failure of the south-west and north-east monsoons in successive years, and the consequent poor rainfall, there was a steep fall in production of paddy. In the circumstances, the State Government had no other alternative not only to reimpose compulsory levy on the producers of paddy to the extent of 50%, but also to introduce a scheme for a mono- poly purchase of paddy by the Government with a view to build up its buffer stock for distribution through the public distribution

<o [J 981] 4 sec s.so (2) [19BIJ 4 sec H4 (3) [1982] 1 SCR 137 ii

lOSO sUPREME COURT REPORTS [1985] 2 s.c.:R

A system throughout the State. If one part of the State is faced with a famine or even acute shortage of foodstuffs, it is not unreasonable for the Government to acquire foodstuffs from the surplus areas and distribute the same in areas where they are most needed. The source B of power to issue an order under d. (d) of sub-s. (2} of s. 3 of the Act being relatable to the general powers of the Central Govern- . ' ment under sub-s. (l) of s. 3, there is no reason for us to give a restricted meaning to the word 'regulating' incl. (d) of sub-s. (2) of s. 3 of the Act so as not to take in prohibiting'. For the reasons aforesaid, the appeal must fail. c

A.P.J. Appeal dismissed.