AHMEDABAD GRAIN MERCHANT ASSOCIATION Vs. STATE OF GUJARAT

JUDGEMENT

(1.) The petitioners have questioned the constitutionality of the provisions of Clause 24 of the Gujarat Essential Articles (Licensing Control and Stock Declaration) Order, 1981 and the validity of the order dated 18.9.1984 issued by the respondent No. 2, the Deputy Food and Civil Supplies Controller, by which the practice adopted in the trade known as "Dami" was directed to be abolished.

(2.) According to the petitioners who are grain merchants doing the business in the city of Ahmedabad, there was a tradition in the wholesale food grains market since 1954, of the wholesalers levying a small charge of Rs. 1.60 paise per hundred rupees as "Dami", which word is derived from the word "Dam", which means price or value. According to the petitioners, in 1976 there was some dispute between wholesalers and the retailers about the levy and collection of 'Dami' and the matter came to be referred to the Food and Civil Supplies Department for restraining the wholesalers from collecting the same. However, the Government did not interfere at that time. Again in 1982-83, the dispute was raised and according to the petitioners the Government ultimately succumbed to the pressure of the semi-wholesalers and the retailers and constituted a fact finding committee in order to ascertain whether the system of 'Dami' had any impact on the interest of consumers and the supply of the essential commodities. By a circular dated 20th October, 1983, the Government appointed the committee which submitted its report in July, 1984. According to the petitioners the said committee found that the system of 'Dami' did not have any impact one way or the other on either the price at which the consumer gets the article or the supply of the essential articles in question. It is alleged that the Government, under pressure, issued order dated 18.11.1984, restraining the wholesalers from levying and collecting Dami. The order was purported to have been issued under Clause 24 of the said Control Order, 1981. It is contended that these directions constitute an unreasonable restriction on the fundamental rights of the petitioners to carry on their business guaranteed by Art. 19(l)(g) of the Constitution of India. It is also alleged that the directions are arbitrarily given being contrary to the report which was submitted which indicated that the practice of 'Dami' did not affect the supply or distribution of goods. By an amendment made in the petition, the petitioners have challenged the validity of Clause 24 of the said Control Order on the ground that it violates Arts. 14 and 19(l)(g) of the Constitution.

(3.) The respondent No. 3 - Ahmedabad Retail Grain Merchants Association contested the petition by contending in their affidavit-in-reply that 'Dami' system was a vice that had crept in only in the Ahmedabad grain market and no such practice was prevalent in respect of the other commodities or in any other city of Gujarat. It is stated that the abolition of 'Dami' system was beneficial to the public because it would assist reduction in prices and remove price fluctuations in food grains. The Gujarat Fair-price Shop Federation which had a membership of more than 9,000 retailers in Gujarat had passed a resolution for removing the 'Dami' system and the retailers had submitted their representation to the Government for the purpose. It is contended that the wholesalers are levying 'Dami' charges as a type of fixed profit. It is contended that the abolition of 'Dami' system was convenient to businessmen and would help in fair and equitable distribution of grains. According to the respondent No. 3, every year about Rs. 4 to 6 crores were being recovered as 'Dami' charges which was a tacit way of profiteering and was against the interest of the consumers and that this also affected the fair and equitable distribution of grains. According to the respondent No. 3, it was a profit fixed above any competition adversely affecting the consumers. The Committee gave a report with various appendices showing the price variations, profits, comparative profits etc. According to the respondent No. 3, in the light of the facts and circumstances placed before the Government, it had passed an order abolishing 'Dami' system for protecting the rights and interest of the consumers.