R LAKSHMINARAYANAN Vs. V A MARUTHAPPA NAINAR

JUDGEMENT

(1.) THE short question for consideration by the Full Bench in this batch of writ appeals is, whether a licensee of an existing rice mill has locus standi to apply for a writ of certiorari to quash the grant of a permit for the establishment of a new rice mill in the locality, under the Rice-Milling Industry (Regulation) Act, Act 21 of 1958 (hereinafter referred to as the Act.) The appeals have been preferred from the dismissal of petitions for certiorari on the ground that an existing rice mill owner is not a person aggrieved by the grant of permit to another, and has no standing to apply for certiorari. In Kuppusami Pillai v. State of Madras, W. P. 2332 of 1966 (Mad), Kailasam, J. , observed that the mere fact that a person who has a mill in close proximity to the one to which licence has been granted is likely to suiter financial loss is not sufficient to make him an aggrieved person entitling to maintain a writ petition challenging an order of the licensing authority granting permit to a new applicant. In taking this decision, the learned Judge considered that the matter was not res integra but governed by the decision of a Division bench of this Court in Lakshmiammal v. Vaithilingam W. A. 195 of 1962 (Mad ). Proceeding the learned Judge held that the decision of Rajagopalan, J. , in Abdul mazid v. State of Madras, taking a contrary view could not, in view of the decision of the Division Bench, be said to be good law. But the contrary view finds confirmation in the observations by another Division Bench in thiruvengada v. Muthu Chettiar W. A. 150 of 1968 (reported in

(2.) THE Rice Milling Industry (Regulation) Act 1958, is an Act to regulate the rice milling industry in the interests of the general public. Manifestly, it is a restriction in the carrying on of business of rice milling. Section 8 of the Act prohibits the establishment of any new rice mill by any person or authority after the commencement of the Act except under and in accordance with a permit granted under Section 5 of the Act, The permit has to be followed by securing a licence under Section 6 for carrying on rice milling operation. There is a prohibition against an owner of a rice mill changing the location of the whole or any part of the rice mill, and against expansion of the rice mill except with permission. Severe penalties, imprisonment and fine, are provided by Section 13 for contravention of provisions of Section 8. Section 5 (1) requires an application to be made to the Central Government for the grant of a permit for the establishment of a new rice mill or for re-commencing rice milling operation in a defunct rice mill Under statutory powers, the Central Government has delegated its functions to the State board of Revenue. Section 5 (4) requires a full and complete investigation to be made in the manner prescribed, before the grant of a permit. The investigation should have due regard to the number of rice mills operating in the locality, the availability of paddy in the locality, the availability of power and water supply for the rice mill in respect of which a permit is applied for and the type of the rice huller type, sheller type or combined shelter huller type. The investigation has also to be directed to ascertain whether the functioning of the rice mill would cause substantial unemployment in the locality and other matters that may be prescribed. The rules made under the act bring out more clearly the object of the Regulation. They emphasise that the investigation shall be made with a view to ascertaining whether the grant of a permit is necessary for ensuring adequate supply of rice. Information has to be gathered as to the pattern of trade and commerce in rice in the locality, the effect that the operation of the new or the defunct rice mill may have on the local economy, and the necessity or otherwise for an addition to the productive capacity of the existing rice mills in the locality. The enquiry inter alia must be directed to ascertain whether hand pounding industry in the locality is already well organised and whether the establishment of a new rice mill is likely to affect adversely that industry. The object of the Act, it is manifest, is not to give monopoly in rice mill business, but to regulate the rice mining industry in the interests of the general public. At the same time, it emerges from the statutory provisions and rules that the grant of a permit is not arbitrary, but should have due regard to the local potential for entertaining a new rice mill or what may be called local economic expediency, namely, the availability of paddy in the area to be hulled, the existing number of rice mills which serve the public need, the availability of power and water supply for the efficient running of the rice mills and the adverse effect a new rice mill may have on allied industries like hand pounding industry. Rice milling industry is thus a controlled business and there is a restriction on the citizen's right to carry on the business or occupation of rice milling. The regulation purports to impose reasonable restrictions in the interests of the general public. In the cases before us, the existing rice mill owners carrying on business under the Regulation complain that the regulation or rules made thereunder have been violated by the administrative agencies, authorised to grant permits, by granting fresh permits when not warranted under the regulation and rules made thereunder. This contravention of the regulation or rules, it is their case, prejudicially affects them, the local economy being disturbed.

(3.) THE Full Bench reference is confined to a very narrow question but counsel would raise other points. Inter alia Mr. V. K. Thiruvenkatachari, learned counsel appearing for the respondent in one of the cases, would contend for invalidating the Act itself. It is said that the Act unreasonably restricts lie carrying on of a common occupation and is, therefore, violative of the rights guaranteed under article 19 (1) (g) of the Constitution. Reference is made to the opinion of the supreme Court, United States, expressed in New State Ice Co. v. Liebmann 285 us 262 at 277, 279 = 78 L Ed 747; that a regulation which has the effect of denying or unreasonably curtailing the common right to engage in a lawful private business, such as manufacturing ice, cannot be upheld consistent with the fourteenth Amendment, it is urged that, if Act 21 of 1958, and rules made thereunder could be utilised by as existing rice mill owner to prevent a competitor from entering into the business, the Act should be struck down as not regulating the rice milling industry, but as precluding persons from engaging in the industry. In view of the limited nature of the question under consideration in this reference, we leave open the question of vires of the Act. Nor is it necessary for us to examine whether existing rice mill owners are entitled to notice on an application for a permit to instal a new rice mill in the locality and whether the authority, when overruling objections raised by existing rice mill owners who intervene must give reasons for doing so.