K RAMANATHAN Vs. STATE OF TAMIL NADU

JUDGEMENT

(1.) 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(1A) 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 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 cl. (d) of sub-s. (2) of S. 3 of the Act by the aforesaid notification issued by the Central Government 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 commodities and trade and commerce 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, 1983 for reasons to follow.. The reasons therefor are set out below.

(2.) Briefly stated, the facts are these. In the State of Tamil Nadu, there has been a system of imposing levy on purchase of paddy by traders in vogue since the year 1970. This was imposed by Cl. 3(5)(i) of the Tamil Nadu Paddy and Rice (Licensing, Regulation and Disposal of Stock) Order, 1968 issued by the State Government under S. 3 of the Act with the prior concurrence of the Government of India. Cl. 3(5)(i). empowered the State Government to impose and collect up to 50% of the stocks by way of levy on purchases of paddy by traders on payment of price specified from time to time. The said Order was replaced by the Tamil Nadu Paddy and Rice (Regulation of Trade) Order, 1974 issued under S. 3 of the Act with the prior concurrence of the Government of India. Cl. 5(1) of this Order empowers the State Government to impose and collect levy up to 50% of the purchase of paddy and rice by the dealers other than retail dealers and they are paid prices notified by the Government. This clause was subsequently amended in 1976. The power to impose and collect levy on the purchase of paddy and rice was exercised by the State Government under S. 3 of the Act with a view to procure the stock for distribution of rice to about 118 lakhs family card-holders throughout the State through nearly 17,800 fair price shops. A review of the food situation in the latter half of 1980 and the beginning of 1981 revealed that the stock of paddy and rice with the Government was not adequate to meet the requirements under the public distribution system. The State Government in the Food and Cooperation Department accordingly, decided to enforce the levy on traders by G.O. Ms. No. 33 dated January 1, 1981 and to collect 40% levy on the purchases of paddy and rice by dealers even though it had the power to impose levy up to 50% at prices fixed by it from time to time. Thereafter, the Government in the Food and Cooperation Department by G.O.M.S. No. 765 dated October 1, 1981 increased the levy from 40% to 50% from Kuruvai season 1981.

(3.) There was a failure of monsoon in the State in the years 1981-82 and the offtake of rice in the fair price shops had increased from 34,000 tonnes in April to 85,000 tonnes in December 1982. Due 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 4.25 lakh acres to 2.97 lakh acres. Added to this, the northeast monsoon in the State also failed causing a serious fall in the production of paddy. In the circumstances, the State Government in the Food and 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.