PRABHUDAYAL AGARWALLA Vs. UNION OF INDIA

JUDGEMENT

(1.) Petitioners are owners of Husking Machines fixed with different types of hullers and run their business of husking paddy at different places in West Bengal. All of them are holders of licence granted under the Rice-Milling Industry (Regulation) Act, 1958, and which is valid upto March 31, 1975. On 31st October, 1974, the Government of West Bengal in exercise of powers conferred by Clause (1) of Article 213 of the Constitution, promulgated an Ordinance viz. The Rice Milling Industry (Regulation) (West Bengal Second Amendment) Ordinance, 1974, whereby the Rice Milling Industry (Regulation) Act, 1958, in its application to West Bengal has been amended. By Section 3 of the Ordinance a new Section 6-A has been inserted in the Rice Milling Industry (Regulation) Act, 1958. The said Ordinance was published in the Calcutta Gazette extraordinary issue dated 31st October, 1974. The new Section 6-A (3) (a) provides that the licencee shall recover from every customer not less than 60% of the charges for milling rice in kind, i.e. in rice and Section 6-A(3)(b) provides that the licencee shall deliver to the State Government 5 tonnes of rice of fair average quality within the 30th day of April every year at such price as may be fixed by the State Government under any law for the time being in force. The District Controller of Food and Supplies Malda, issued on 18-11-1974 a general cyclostyle order whereby he directed the owner of the existing husking mill whether he holds a licence under the Rice Milling Industry (Regulation) Act, 1958 or not shall make an application in the prescribed pro forma (Form A) to the Licensing Officer by 29-11-1974 for the grant of a fresh licence for carrying on rice milling operation failing which current licence granted to the owners of husking mills under the principal Act shall lapse. It is stated by the petitioners that the Act 21 of 1958 was enacted to regulate the rice milling Industry in the interest of the general public and it was declared under Section 2 of the said Act that it was expedient in the public interest that the Union should take under its control the Rice Milling Industry. The said declaration having been made by the Union, Parliament has the exclusive power to make laws in respect of rice milling under entry No. 52 of Schedule VII, List No. 1 to the Constitution and the State Legislature under entry No. 24 of Schedule VII, List No. II does not retain the competence and power to legislate upon the rice milling Industry so long as the said declaration is effective and is in force. In any event, the power of the State Legislature to legislate upon the rice milling industry under entry No. 24 of List 2 of Schedule VII is subject to entry No. 52 of List 1 of Schedule VII to the Constitution. The licence granted to the petitioners under Section 6 of the Central Act cannot be declared to have lapsed and to be invalid unless an application is made for a fresh licence within the time specified under Sub-section (1) of Section 6-A of the said Act as introduced by Section 3 of the said Ordinance. The licence granted to the petitioners under Section 6 of the said Act would be revoked or suspended or amended only in accordance with the provision of Section 7 of the said Act and by the appropriate authority specified under the said Act. The petitioners challenge the said ordinance on the ground that it is beyond the legislative competence of the State Legislature to enact such a legislation and is, therefore, illegal, invalid, inoperative and ultra vires the Constitution in India. The petitioners being aggrieved by the impugned ordinance moved this Court under Article 226 of the Constitution and obtained these Rules.

(2.) In affidavit-in-opposition filed on behalf of the State and affirmed by Kashinath Mukhopadhyay, the District Controller of Food and Supplies, Malda, it is stated that the major impediment to the State Government's rice procurement programme in the recent years has been the operation of a large number of hullers (Paddy Husking Mills) both licensed and unlicensed. The owners of these hullers are reported to be clandestinely carrying on in the name of customers milling, a regular rice trade and helping the producers to dispose of the stock in the form of rice. Large quantities of paddy and rice, which would otherwise become available to the State Government procurement agents are thus sold in the open market at high rates. It has, therefore, become urgently necessary that the hullers are brought under the discipline of levy. Theoretically the owner of a husking mill mills paddy on customer's account only and has no right to part with any portion of the stock he mills. Therefore, a levy is imposed on him, he has to be enabled to acquire some stock. This can be done by providing for his milling charges to be realised in kind i.e. in rice. In view of serious practical difficulties in regular collecton, in small lots of rice realised by the husking mills from the customers as milling charges, it was considered expedient and desirable to impose levy at a flat rate per unit per annum to be delivered within a specified date every year. After considering all aspects of the matter, the State Govt. decided immedia-rely to enforce the aforesaid scheme of imposition of levy on the husking mills and the Rice Milling Industry (Regulation) Act, 1958, was amended for its application to the State of West Bengal by promulgation of an Ordinance on 31st August, 1974, being the Rice Milling Inustries (Regulation) (West Bengal Second Amendment) Ordinance 1974.

(3.) After the promulgation of the Rice Milling Industry (Regulation) (West Bengal Second Amendment) Ordinance, 1974, the legislature of the Stare of West Bengal bas passed a Bin modifying some of the provi-sions of the Ordinance and the said Bill is now awaiting assent of the President of India.