AMICUS AI
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • s. 3 of the Essential Supplies (Temporary Powers) Act of 1946,
  • Act XVIII of 1947, and s. 3 of that Act
Are you a practicing lawyer?
Enhance your digital presence and reach by creating a Casemine profile.
Upload pleading to use the new AI search
Cites
Cited by
Citation Codes
Equivalent Citations
citation codes
Case Number
Advocates
Judges
Acts
  • s. 3 of the Essential Supplies (Temporary Powers) Act of 1946,
  • Act XVIII of 1947, and s. 3 of that Act
Smart Summary

Structured Summary of the Legal Opinion

Factual and Procedural Background

The petitioners are Dhanraj Mills, users in their mills of imported foreign cotton of two varieties: Kampala and Tanganyika. The Government of India had imposed controls on the sale of cotton; mills could only receive cotton as permitted by Control Orders issued by the Central Government. Respondent No. 1 (the Deputy Chief Controller) allocated certain bales of Kampala and Tanganyika cotton to the petitioner for the year 1948–1949, the allocation being made with reference to consumption for the three years ending December 1942. The petitioner applied for allocations for 1949–1950 and alleged that the quantities of Kampala and Tanganyika cotton allocated to them were less than what they applied for and less than what they were entitled to. The petitioner further alleged that respondent No. 1 reserved more Tanganyika cotton for the Government than Kampala cotton; because the petitioner used more Tanganyika cotton, their share of Tanganyika was reduced. There was a suggestion (not clearly or explicitly pleaded) that respondent No. 1 had been advised by the Indian Cotton Import Advisory Committee, whose majority were consumers of Kampala cotton, and that this influenced allocations. The petitioner sought a writ in the nature of mandamus or, alternatively, any appropriate direction under Article 226 of the Constitution.

The petition was dismissed by the learned Judge below, Mr. Justice Tendolkar. The petitioners appealed. The appeal was argued for the appellants by Mr. Pritt (attorneys Dastur & Co.) and for the respondents by Mr. Maneksha (attorneys M. V. Jayakar).

Legal Issues Presented

  1. Whether the Textile Commissioner (or the relevant authority) had a statutory duty to allocate specified quantities of imported cotton to the petitioner such that a writ of mandamus could be issued to compel allocation — specifically whether the word "may" in clause 14 of the Cotton Control Order of 1949 should be read as "must".
  2. Whether the allocation complained of violated Article 14 of the Constitution (equality before the law / equal protection) because of alleged unfair or discriminatory administration in the allocation process.
  3. Whether the Cotton Control Order of 1949 (and clause 14 relied on by the petitioner) applied to the allocations of imported East African cotton, or whether allocations were governed by a different statutory scheme (namely the Import Trade Control Order made under Act XVIII of 1947, s. 3).
  4. Whether an individual officer's allegedly mala fide, arbitrary or capricious act in exercising statutory discretion can be challenged successfully under Article 14 (and, relatedly, whether Article 226 is an appropriate remedy for such an allegation).

Arguments of the Parties

Appellant's Arguments (Mr. Pritt for Dhanraj Mills)

  • Relied on the Cotton Control Order of 1949 issued under s. 3 of the Essential Supplies (Temporary Powers) Act, 1946, and in particular clause 14 of that Order.
  • Argued that clause 14 uses the word "may" but should be read as imposing a statutory obligation ("must") on the Textile Commissioner to allocate cotton; thus a mandamus should issue to compel allocation of specified bales.
  • Alternatively argued that even if clause 14 did not impose such an obligation, the Textile Commissioner's allocation must comply with Article 14 of the Constitution; the allocation constituted unfair discrimination against the petitioner and violated the petitioner's fundamental rights.
  • Suggested (imperfectly pleaded) that advice from the Indian Cotton Import Advisory Committee, whose majority were consumers of Kampala cotton, led to biased allocations favoring reservation of Tanganyika cotton for the Government.

Respondents' Arguments (Mr. Maneksha for Deputy Chief Controller and others)

  • Submitted that the Cotton Control Order of 1949 (clause 14) did not in fact apply to the allocations of imported East African cotton complained of by the petitioner.
  • Explained that allocations of imported cotton were governed by a separate statutory regime: Act XVIII of 1947 (s. 3) and the Import Trade Control Order promulgated on March 6, 1948, together with the Notification of July 1, 1943 (under the Defence of India Rules) which included raw cotton in the schedule.
  • Clarified that respondent No. 1, acting under the Import Trade Control Order, issues licences to persons to import raw cotton and imposes conditions (including that goods covered by the licence shall not be disposed of without the written permission of the licensing authority); respondent No. 1 directs licence-holders to sell imported cotton to mills specified by him.
  • Emphasized that the so-called "allocation" is effectively the privilege of the petitioner to purchase from licence-holders as permitted by respondent No. 1; there is no statutory obligation on respondent No. 1 to insist that any particular licence-holder sell any particular quantity to the petitioner.
  • Pointed out the petitioner's bond/letter of undertaking (signed when applying) by which the petitioner agreed to accept any allotment of African cotton that may be made to him up to the stated quantity; this demonstrates there is no guaranteed minimum allotment and that allocation is at respondent No. 1's discretion.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Yick Wo v. Hopkins Principle that a law fair on its face but administered with an "evil eye and unequal hand" so as to create practical, illegal discrimination violates equal protection. The Court described Yick Wo as a case where an apparently neutral ordinance was administered as a policy of discrimination (directed against the Chinese). The opinion used Yick Wo to show that when administrative action reflects a State policy of discrimination, Article 14 principles can be invoked; but it distinguished Yick Wo from the present case because here there was no pleaded State policy of discrimination.
Tarrance v. Florida Principle that discrimination in empanelling juries can amount to denial of equal protection; used to illustrate that administrative practices amounting to State policy of discrimination can violate equal protection. The Court distinguished this case on the facts: Tarrance arose in the context of an appeal against a conviction alleging discriminatory jury selection, and the Court noted that success on such a claim requires proof of State policy. The opinion treated Tarrance as not supporting a petition based solely on an allegation of an individual officer's mala fide act without proof of a discriminatory State policy.

Court's Reasoning and Analysis

The Court proceeded by first asking counsel (Mr. Pritt) to assume that all facts pleaded in the petition were established, and treated the argument effectively on a demurrer basis to test whether, even on those facts, any relief could be granted.

1. Applicability of the statutory scheme: The Court found that the Cotton Control Order of 1949 (clause 14) relied upon by the petitioner did not, in fact, govern the allocation of imported East African cotton in this case. Instead, allocations of imported cotton were governed by the Import Trade Control Order made under Act XVIII of 1947, s. 3 (and related notifications under the Defence of India Rules). Under that regime respondent No. 1 issues licences to importers and can impose conditions including that imported goods not be disposed of without written permission; respondent No. 1 thereby directs licence-holders to sell to mills specified by him.

2. Nature of the allocation and statutory obligations: The Court analyzed the form of the bond (letter of undertaking) signed by the petitioner when applying for allocation. The bond bound the petitioner to accept any allotment of African cotton made to him up to the quantity he had specified; no minimum was guaranteed. From this the Court concluded that the decision what to allot rested in discretion with respondent No. 1 and that there was no statutory obligation entitling the petitioner to insist upon a particular quantity or to compel a specific licence-holder to sell a specified quantity to him. Thus, even if clause 14 of the Cotton Control Order were read as imposing an obligation, it was not the operative law for these allocations.

3. Article 14 analysis and distinction between law and administration: The Court explained the distinction between an unlawful statute and unlawful administration. If the law itself discriminates, it may be challenged under Article 14. Likewise, if administrative action reveals a State policy of discrimination (administration with an "evil eye and unequal hand"), this may found an Article 14 challenge (as in Yick Wo). However, where an individual officer allegedly acts mala fide, arbitrarily or capriciously in exercising discretion, that act is contrary to the law but is not the same as showing a State policy of discrimination. The Court held that protection against a dishonest, arbitrary or capricious officer is not protection sought under Article 14; and, in the Court's words, "that protection cannot be sought under art. 14 or under art. 226" in the circumstances alleged here.

4. Application to the petitioner's case: The petitioner did not plead or establish that the law governing imported cotton was discriminatory on its face nor that there was any State policy directing discriminatory allocations. The allegation against respondent No. 1 was of a specific mala fide or capricious exercise of discretion; even if proven, the Court held that this would not entitle the petitioner to relief under Article 14 or under the petition as framed. Given that (a) the relevant statutory scheme vested discretion in respondent No. 1, (b) the petitioner had accepted by bond the discretionary nature of allotments, and (c) there was no pleaded State policy of discrimination, the Court concluded that the petition could not succeed even assuming the pleaded facts to be true.

The Court therefore agreed with the reasoning and conclusion of the learned Judge below (Mr. Justice Tendolkar) who dismissed the petition.

Holding and Implications

Holding: The appeal is dismissed and the order of the Court below dismissing the petition is affirmed. The appeal is dismissed with costs.

Implications:

  • The direct effect is that the petition by Dhanraj Mills seeking mandamus or other relief in respect of allocations of Kampala and Tanganyika cotton fails; the petition stands dismissed and the lower court's dismissal is affirmed.
  • The Court found that the allocations at issue were governed by the Import Trade Control Order under Act XVIII of 1947 and related notifications, not by clause 14 of the Cotton Control Order of 1949; there was no statutory right in the petitioner to insist upon particular allocations beyond the discretionary regime described.
  • The opinion holds (on these facts) that allegations of an individual officer's mala fide or arbitrary exercise of discretion, absent proof of a State policy of discrimination, do not found a successful challenge under Article 14 as pleaded in this petition. The Court did not purport to lay down a new expansive principle of law beyond the conclusions reached on the facts of this case.
  • No broader precedent-extending holding was announced by the Court; the decision affirms the lower court's dismissal and applies existing distinctions between unlawful statutes, discriminatory administrative policy, and the remedyability of individual mala fide administrative acts as addressed in the opinion.

Case Disposition and Representation

Result: Appeal dismissed. (Appeal dismissed. A.J.P.)

Attorneys for appellants: Dastur & Co.

Attorneys for respondents: M. V. Jayakar.

    Dhanraj Mills, Ltd. , (Original Petitioners) v. B.K Kocher And Others

    Chagla, C.J:—

    The petition from which this appeal arises is an entirely hopeless one and Mr. Pritt with all his ingenuity has tried to make it as presentable as possible. The petitioners are the Dhanraj Mills and they used in their mills imported foreign cotton of two varieties, Kampala and Tanganyka. A control has been imposed by the Government of India on the sale of cotton and mills can only receive cotton as permitted by the various Control Orders issued from time to time by the Government of India. The grievance made by the petitioner in his petition is that he was allocated by respondent No. 1, who is the Deputy Chief Controller, certain bales of cotton of the Kampala and Tanganyika varieties for the years 1948-1949. This allocation was made on the basis of the consumption of the mills of this cotton for a period of three years ending with December 1942. The petitioner applied for allocation of these two varieties of cotton to respondent No. 1 also for the years 1949-1950 and, without going into figures, broadly the petitioner's contention is that he has been allocated cotton of the Kampala and Tanganyika varieties which is less than what he applied for and to which he was entitled. His further contention is that respondent No. 1 reserved for the use of the Government of India more cotton of the Tanganyika variety than of the Kampala variety. As it happens, the petitioner used more cotton of the Tanganyika variety than of the Kampala variety and, therefore, his share of the Tanganyika cotton was less than what he applied for. His further grievance is that even with regard to the Tanganyika variety he has received less than he was entitled to according to his quota, even on the assumption that the reservation made of the Tanganyika variety by respondent No. 1 was a proper reservation. He has also made an allegation, not very clearly, nor very explicitly, but still the suggestion is there that respondent No. 1 has been advised in making the allocation by a committee called the Indian Cotton Import Advisory Committee and the majority of the members of this Committee are consumers of Kampala cotton and, therefore, it was to their advantage that there should be more reservation of the Tanganyika variety rather than of the Kampala variety. On these facts the petitioner asked for a writ in the nature of mandamus against the respondents, and in the alternative any appropriate order or direction under art. 226 of the Constitution.

    Mr. Pritt, who opened the appeal before us, argued it on the assumption that all the facts pleaded in the petition had been established. We asked him to argue as if he was arguing on a demurrer because we felt that it would be difficult for Mr. Pritt to substantiate his case that even if all the facts alleged by him had been established he was entitled to any relief on this petition. In opening the appeal Mr. Pritt drew our attention to the Cotton Control Order of 1949 issued by the Central Government in exercise of the powers conferred upon it by s. 3 of the Essential Supplies (Temporary Powers) Act of 1946, and he relied on cl. 14 of that Order which provides that the Textile Commissioner may, with a view to securing a proper distribution of cotton or with a view to securing compliance with this Order, direct any person holding a stock of cotton or any class of such persons to sell to such person or persons such quantities of such description of cotton as the Textile Commissioner may specify, and the rather seemingly attractive argument advanced by Mr. Pritt was that the expression “may” in cl. 14 should be read as “must”, that there was a statutory obligation upon the Textile Commissioner to allocate to the petitioner certain bales of cotton according to his requirements, and the Textile Commissioner having failed to discharge his statutory obligation, the Court was entitled to issue a writ of mandamus against the Textile Commissioner ordering him to allocate certain bales of cotton to the petitioner. In the alternative Mr. Pritt contended that even if no obligation could be spelt out in the language used in cl. 14, there was an obligation upon the Textile Commissioner to act in conformity with art. 14, of the Constitution, and inasmuch as the allocation made by him constituted an unfair discrimination against the petitioner, his order was contrary to art. 14, the petitioner's fundamental right was violated, and he was entitled to come to this Court.

    We were preparing ourselves to answer these ingenious arguments, when Mr. Maneksha drew our attention to the fact that this particular Order on which Mr. Pritt relied had no application whatever to the facts set out in the petition or the grievance made by the petitioner in his petition. It appears that the allocation that has been made from time to time of East African cotton in favour of the petitioner has not been done under cl. 14 of this order at all. It is perfectly true that the Textile Commissioner has power under this Order to allocate cotton both of the indigenous variety and of foreign variety, but in fact the Textile Commissioner has not been exercising his powers under this clause in respect of imported cotton. With regard to imported cotton, the control is exercised under a different piece of legislation altogether. We have on the statute book Act XVIII of 1947, and s. 3 of that Act provides that the Central Government may, by order published in the official Gazette, make provision for prohibiting, restricting or otherwise controlling, in all cases or in specified classes of cases, and subject to such exceptions, if any, as may be made by or under the Order, and among other things import and export of goods of any specified description; and exercising their power under this section the Central Government have promulgated an Order which is known as Import Trade Control Order, on March 6, 1948 and this order provides that any officer issuing a license under cls. (viii) to (xiv) of the Notification of the Government of India dated July 1, 1943, may issue the same subject to one or more of the conditions stated below, and one of the conditions is that goods covered by the license shall not be disposed of or otherwise dealt with without the written permission of the licensing authority or any person duly authorised by it. Turning to the Notification of July 1, 1943, that was a Notification issued under the defence of india rules and that prohibited the bringing into British India by sea, land or air from any place outside India of any goods of the description specified in the schedule in that Order, and when we turn to the schedule we find that raw cotton was one of the articles which was so prohibited. It is respondent No. 1 who, acting under this Import Trade Control Order of March 6, 1948, issues licenses to various persons in Bombay permitting them to import raw cotton from East Africa, and one of the conditions that he imposes upon the persons to whom he issues licenses is that they will not dispose of or otherwise deal with the cotton imported by them without his written permission. He, therefore, directs these license holders to sell the cotton imported by them to various mills specified by him. Having ascertained from the petitioner what his requirements were from year to year and taking into consideration the requirements of different mills in Bombay, respondent No. 1 then calls upon various license holders to sell cotton to different mills. Therefore, what the petitioner chooses to call an allocation under cl. 14 of the Cotton Control Order is in reality not an allocation made by the Textile Commissioner at all, but is the privilege given to him to purchase from the license holders cotton permitted by respondent No. 1. If these be the true facts and if this be the law which is applicable to the facts of the case, it is difficult to understand how the petitioner can make any grievance of the fact that respondent No. 1 has not asked a particular license holder to sell a particular quantity of cotton to the petitioner. It is not suggested that there is any statutory obligation upon respondent No. 1 to insist upon any particular license holder to sell any particular quantity of cotton to the petitioner. Not only is there no statutory obligation upon respondent No. 1, but there is not even any right in the petitioner to insist upon obtaining any particular quantity from respondent No. 1 or from anyone else. In this connection it may be desirable to see the form of the bond which the petitioner has to sign when he makes an application for the allocation of certain quantity of cotton which he has to state as his requirement. In this form of the bond he agrees and undertakes to accept any allotment of African cotton that may be made to him up to the quantity specified by the petitioner. Therefore, the obligation upon the petitioner is to accept any quantity given to him by respondent No. 1. Only the top limit is laid down which is his requirement. There is no obligation upon him to accept anything more than what he has himself asked for. But there is no bottom limit laid down in the allocation which respondent No. 1 might make in his favour. He must accept whatever is allotted to him. Therefore this letter of undertaking signed by the petitioner makes it clear that it is left entirely to the discretion of respondent No. 1 to allot to him such cotton as he thinks proper. This letter also clearly shows that there is no right in the petitioner to insist upon obtaining the full quota as asked for by him when he made his application setting out his requirement.

    With regard to art. 14 of the Constitution, although Mr. Pritt has argued it on the basis that the Cotton Control Order applies, it would not be fair to him not to deal with this point because we have now found that some other piece of legislation applies to the facts of this case, and therefore we shall very briefly deal with the argument advanced by Mr. Pritt. Article 14 ensures to all persons residing in India equality before the law and equal protection of the laws within the territory of India, and there is a prohibition against the State preventing them from denying to any person equality before the law and the equal protection of the laws. It is not suggested by Mr. Pritt that the law enacted by the Union Government is not a law which gives equal protection to all the subjects or that the law as such unfairly discriminates between one section of the public and another or one class of subjects and another. The grievance of Mr. Pritt, if any, is that in the administration of the law in this particular case the allocation has been made in a manner which has unfairly discriminated against his client. This raises a rather important question as to whether art. 14 as it is enacted applies to administrative orders. There can be no doubt that if a law is so passed as to make discrimination or deny its application equally to all subjects, such a law can be challenged under art. 226 as offending against art. 14 of the Constitution. But the matter is not free from doubt when we come to executive or administrative orders. Can a subject say that although the law is perfectly valid it does not offend against art. 14 of the Constitution, but an officer in administering the law is acting contrary to the provisions or the principle underlying art. 14, Mr. Pritt says that if discretion is vested in an officer by a statute, in the exercise of that discretion he must act in conformity with art. 14. If an officer is given the discretion to issue licenses, in issuing licenses he cannot discriminate between one section of the public and another. If he does so, his order is liable to be challenged under art. 226.

    Now, a clear distinction must be borne in mind between the law and the administration of the law. If the law itself permits discrimination, even though the law may appear to be fair and undiscriminatory, the Court may interfere and say we are more concerned with how the law actually works rather than how it appears in black and white in the statute book. One may even have a case where in exercising the discretion vested in officers under the statute the state may, as a policy of administration, require its officers to exercise the discretion unfairly and unequally. We can imagine that even in such a case the Court may interfere and say that although administrative orders are being challenged, the administrative orders suggest behind them a policy of the State of discrimination. But to our mind the position is different when a subject comes to the Court and challenges a specific act of an individual officer as ??? in contravention of art. 14. The Officer in acting contrary to art. 14 is really acting contrary to the law and not in conformity with or in consonance with the law. When the ??? invests an officer with a discretion, the law assumes that ??? officer will exercise the discretion bona fide and not dishonestly, arbitrarily or capriciously, and if he exercises the discretion dishonestly, arbitrarily or capriciously, he is really going contrary to the law. In such a case the subject comes to Court not for protection under art. 14, but for protection against the dishonest, arbitrary or capricious act of the officer. The court is not powerless to give the subject protection against a dishonest officer, but that protection cannot be sought under art. 14 or under art. 226. We are only concerned in this case with the question as to whether the petitioner has a right to maintain a petition against, what he chooses to call, a dishonest exercise of his discretion by an officer. There is no suggestion here that the State as a policy has laid down that licenses should be issued or quotas should be allotted not in a fair manner but in order to benefit a particular class of citizens. As we said and as we repeat, the only charge, and even that is not properly or fully laid, is against respondent No. 1 that he in exercising the discretion to allot has been swayed by certain unfair considerations.

    The authorities on which Mr. Pritt has relied do not really support his contention that a specific mala fide act of an officer can be challenged by a petition in support of the fundamental right guaranteed to the citizen under art. 14. He has relied on two or three American cases, and the leading case on which he has laid considerable emphasis is the case of Yick Wo v. Hopkins. When we look at that case we find that what was challenged in that case was not any administrative or executive order, but an ordinance passed by the City of San Francisco which required all persons desiring to establish laundaries in frame houses to obtain the consent of certain municipal officials and it was found that in giving consent the municipal officials had acted unfairly and that the policy of the administration was directed exclusively against a particular class of persons viz., the Chinese. On those facts the Supreme Court held that though a law be fair on its face and impartial in appearance, yet, if it is administered by public authority with an evil eye and unequal hand, so as practically to make illegal discriminations between persons in similar circumstances, material to their rights, the denial of equal justice is still within the prohibition of the Constitution. Therefore here we have a case where although the law superficially seemed to be fair and equal, in its actual administration it was found to be unfair and unequal. The other case is the case of Tarrance v. Florida. That was a case where a coloured person went in appeal to the Supreme Court against his conviction for murder alleging that negroes were discriminated against in the selection of grand and petit jurors, and the Supreme Court took the view that if that fact had been established the negroes would have been denied the protection of equality of law under the provision of the American Constitution corresponding to art. 14. It is true that in a sense what was challenged here was not any law but the administrative action on the part of the County Commissioners in the State of Florida who prevented negroes from being empannelled as jurors. But the case is clearly distinguishable because it was not on a petition for a writ that the aggrieved party went to the Supreme Court. The aggrieved party went to the Supreme Court in appeal against a conviction alleging that he did not get a fair trial because his right to have a jury in which negroes were represented was denied to him, and even here the judgment of the Supreme Court suggests that before the appellant could succeed the Court would have to be satisfied that it was the policy of the State of Florida to prevent negroes from acting on the jury.

    Therefore, as the petitioner has failed to show either that the law with regard to control of imported cotton is discriminatory or does not give equal protection to all the subjects, his petition must fail to the extent that he attempts to come under art. 14 of the Constitution. The petition must equally fail even if he succeeds in establishing that respondent No. 1, in the orders that he has issued, has acted mala fide or capriciously or arbitrarily. There is no suggestion that in doing so respondent No. 1 was carrying out any policy of the administration or there came any orders from the State that he should act mala fide, arbitrarily or capriciously. The very fact that the allegation is made that he acted mala fide, clearly suggests that the petitioner realised that his conduct was not in conformity with the law under which he was acting. When one acts mala fide, obviously one acts contrary to the manner in which the law expects one to act. We have not thought it necessary to go into the facts of this petition because the view taken by us is that even if the facts alleged in the petition had been established by the petitioner, he would not be entitled to the relief he seeks on the petition. That was the view taken by the learned Judge below, Mr. Justice Tendolkar, who dismissed the petition, and we are in agreement with the decision he came to.

    The result is that the appeal fails and must be dismissed with costs.

    Attorneys for appellants: Dastur & Co.

    Attorneys for respondents: M.V Jayakar.

    Appeal dismissed.
    A.J.P
    Use AI to get other relevant cases.

    Comments

    Dhanraj Mills, Ltd. , (Original Petitioners) v. B.K Kocher And Others
    (Feb 28, 1951)