NATIONAL PESTICIDES COMPANY Vs. STATE OF MADHYA PRADESH

JUDGEMENT

(1.) THE petitioners in this petition are formula tors who carry on the business of manufacture of pesticides. The basic raw materials used by the petitioners in their manufacturing units are technical grade pesticides. Technical grade pesticides are by dilution converted into lower grade pesticides which are used for spraying or dusting on the crops. The petitioners are registered under the Insecticides Act, 1968. The manufacturers who manufacture technical grade pesticides within the country use 50 per cent of their product for formulating units established by them or by their associates. We were informed that under the licences the manufacturers are obliged to part with the remaining 50 per cent of the product to the Government of India for allotment to formulators who are not associated with the manufacturers. The Government of India in 1974 devised a scheme for distribution of 50 per cent of the technical grade pesticides manufactured by indigenous units which under the licences the units were required to supply for use by the non associate formulators. The Government of India in the Ministry of agriculture in consultation with the Ministry of Petroleum and Chemicals, decided that this 50 per cent of the technical grade pesticides be allotted to the States for distribution to non associate formulators nominated by the state Governments. The petitioners used to receive their requirement of technical grade pesticides on allotment by the State Government from the manufacturers. By an order passed on September 1978 (Annexure P-3), the director of Agriculture, Madhya Pradesh, allotted the entire quota of technical grade pesticides for the quarter ending October-December 1978 in favour of respondents 3 and 4 who are respectively a Government Company and Apex Co-operative Society. By this petition under Article 226 of the constitution, the petitioner challenge this order of allotment.

(2.) LEARNED counsel for the petitioners contended before us that in passing the impugned order of allotment, the Director of Agriculture did not follow the directions issued by the Central Government on the subject of distribution of technical grade pesticides. It was also contended that in selecting the respondents and in denying to the petitioners any share in the quota, the Director violated the petitioners' fundamental rights under artical 14 of the Constitution. It was further contended that one of the technical grade pesticides was parathion which was allotted to respondent no. 3 even though the said respondent has no licence for formulation of parathion.

(3.) ENTRY 52 of List I to the Seventh Schedule confers exclusive power on Parliament to make laws with respect to "industries, the control of which by the Union is declared by Parliament by law to be expedient in the public interest. " Parliament enacted the Industries (Development and Regulation) Act, 1951. Section 2 of the said Act declares that it is expedient in the public interest that the Union should take under its control the industries specified in the First Schedule to the Act. Section 18g empowers the central Government for securing the equitable distribution and availability at fair prices of any articles relatable to any schedule industry, to provide by notified order for regulating the supply and distribution thereof and trade and commerce therein. Item 19 (11) of the First Schedule specifies the industries of "insecticides, fungicides, weedcides and the like. " parliament then enacted the Insecticides Act 1968, "to regulate the import, manufacture, sale, transport, distribution and use of insecticides with a view to prevent risk to human beings or animals, and for matters connected therewith. " Section 3 (e) of the Act defines "insecticide" to mean (i) any substance specified in the Schedule; or (ii) such other substances as the central Government may include in the Schedule from time to time; or (iii) any preparation containing any one or more such substances. The pesticides in respect of which this petition has been filed are included in the schedule to this Act and, therefore, they are insecticides within the meaning of the Act. Section 9 of the Act deals with registration of insecticides by manufacturers. Section 13 provides that any person desiring to manufacture or to sell, stock or exhibit for sale or distribute any insecticide has to apply for licence to the licensing officer. Section 34 confers power on the central Government to give such directions to the State Government as may appear to the Central Government to be necessary for carrying into execution in the State any of the provisions of this Act or any rule or order made there under. Section 36 confers power on the Central Government to make rules. In particular, the Central Government may make rules to prescribe "the conditions to be observed in regard to import, manufacture, sale, transport, distribution, storage or use of an insecticide. "