Lal Ragho Shah v. State Of Madhya Prad...

1. This order will also govern the disposal of Miscellaneous Petition No. 82 of 1966.

2. These are two petitions under Article 226 of the Constitution by growers of Tendu leaves challenging the validity of Section 5 of the Madhya Pradesh Tendu Patta (Vyapar Viniya-man) Adhiniyam. 1964, (hereinafter referred to as the Act). In Miscellaneous Petition No. 161 of 1965 the petitioner. Lal Ragho Shah, has also questioned the validity of Sections 9, 10 and 18 of the Act. The petitioners pray that the provisions, the validity of which they challenge, be declared to be invalid and the opponent State be restrained from enforcing them.

3. The Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1964, is a legislation enacted

"for regulating in the public interest the trade of Tendu Leaves by creation of State monopoly in such trade"

. Section 5(1) of the Act provides that on the issue of a notification under Sub-section (8) of Section 1 bringing the Act into force in any area, no person, other than the State Government or an officer of the State Government authorised in writing in that behalf or an agent in respect of the unit in which the leaves have grown, shall purchase or transport Tendu leaves. The other sub-section of section 5 contains a provision dealing with the transport of Tendu leaves in certain circumstances. Section 3 enables the State Government to divide the area, in which the Act has to be brought into force, into such number of units as it may deem fit. The next Section (Section 4) inter alia lays down that the State Government may, for the purpose of purchase of, and trade in, Tendu leaves on its behalf, appoint agents in respect of different units. Under sections 6, 7 and 9, tendu leaves are purchased from growers by the State Government or its authorised officers or agents at a price fixed by it in consultation with an Advisory Committee constituted under Section 6. Section 9 also gives to the State Government or its authorised officer or agent the power to refuse to purchase any leaves which in their opinion are not fit for the purpose of manufacture of Bidis. Any person aggrieved by the rejection of his Tendu leaves can make a complaint to the Divisional Forest Officer concerned. On receipt of such a complaint, and after holding an enquiry into the complaint, if the Divisional Forest Officer finds that the leaves were wrongly rejected, then, if he considers the leaves in question still suitable for the manufacture of Bidis, purchase them and pay the price and compensation according to section 9 (3) (a), or, if he considers that the leaves in question have since become unsuitable for manufacture of Bidis, direct the payment to the person aggrieved of the amount mentioned in Clause (b) of Section 9 (3). Under Sub-section. (4) of Section 9, the State Government can appropriate the leaves offered for sale if there is reason to believe that the leaves appertain to forests or lands belonging to the State Government. But this it can do only after paying the collection charges. Section 10 of the Act is concerned with the registration of growers of Tendu leaves. Section 12 prescribes that Tendu leaves purchased by the State Government or by its officer or agent shall be sold or otherwise disposed of in such manner as the State Government may direct Section 18 bars a suit and other legal proceedings in respect of the acts done in good faith.

4. The validity of Section 5 was considered and upheld by this Court in Vrajlal Mantlal and Co. Firm v. State of M. P., 1966 MP LJ 806 (AIR 1966 Madh-Pra 301). In that case, it was observed :--

"The monopoly in the trade of Tendu leaves in favour of the State has been created by the restrictions imposed on the purchase or transport of Tendu leaves by Section 5 (1). That the monopoly has been created by Section 5 (1) cannot be doubted in view of the statement made by the Supreme Court in Akadasi v. State of Orissa, AIR 1963 SC 1047, with reference to the analogous provision contained in Section 3 (1) of the Orissa Kendu Leaves (Control of Trade) Act, 1961, namely, "By imposing restrictions on the purchase or transport of Kendu leaves Section 3 has created a monopoly". Now, Article 19(6) of the Constitution, as amended by the Constitution (First Amendment) Act, 1951, inter alia lays down that nothing in Sub-clause (g) of Article 19(1) shall prevent the State from making any law relating to the carrying on by the State of any trade, business, industry, etc., whether to the exclusion, complete or partial, of citizens or otherwise. This provision precludes the Court from questioning the reasonableness of a law which creates a monopoly in favour of the State itself to carry on a trade to the exclusion of the citizens. Section 5 (1) of the Act being a provision creating a monopoly in favour or the State in the trade of Tendu leaves is thus completely protected by the latter part of Article 19(6) of the Constitution. If the restriction imposed by Section 5 (1) on the transport of Tendu leaves is thus valid, then it follows that Sub-section (2), which only liberalises the restriction in regard to transport, is a fortiori valid .

A reference was then made to the exposition given in AIR 1963 SC 1047 with regard to the meaning of the expression "a law relating to" used in Article 19(6) of the Constitution, and on the basis of it it was held that -

". . . . that a restriction on the transport of Tendu leaves even before or after the sale of leaves by the Government is an integral and essential part of the creation of the monopoly. When the Act creates a monopoly in favour of the State in the purchase of Tendu leaves and their sale or disposal thereafter, competing open or surreptitious sales of Tendu leaves cannot clearly be permitted. All the Tendu leaves grown in the area to which the Act has been extended must be available to the State. In order to ensure this, it is necessary to prohibit the transport of Tendu leaves by unauthorised persons before they are collected or purchased by the Government. It is equally necessary to control the movement of Tendu leaves after they are sold by the Government so that the purchaser may not purchase surreptitiously Tendu leaves and transport them under the cover of Tendu leaves purchased from the Government by mixing the contraband Tendu leaves with those purchased from the Government"

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5. The petitioners now attack the validity of Section 5 on the ground that the provision is violative of Article 14 of the Constitution. In neither of the petitions the grounds resting on Article 14 of the Constitution aave beea narrated with any precision and no details and particulars have been given to show how Section 5 offends Article 14. Be that as it may, if we understood rightly Shri Shukla, learned counsel for the petitioners, he seemed to argue that there was unreasonable discrimination between the growers of Tendu leaves who were required to sell Tendu leaves to the Government or its authorised officers or agents at a fixed price, and the Government who after purchasing the leaves sold them at a much higher price.

6. In our judgment, there is no substance in this contention. Section 5 or any other provision of the Act does not make any classification between the growers as those who are required to sell their Tendu leaves to the Government or who are not or those who are required to sell them at one price and others who are obliged to sell at another price. Section 5 uses the words "no person" without any qualification, and prohibits all persons, other than those mentioned therein, from purchasing or transporting Tendu leaves. Under Sections 6, 7 and 9, the Government or its authorised officer or agent is bound to purchase, at a price fixed under Section 7, Tendu leaves offered for sale by a grower. The price that is fixed under Sections 6 and 7 for the purchase of Tendu leaves grown in a unit and which is operative for a certain period is uniformly applicable to all growers in the unit offering for "sale Tendu leaves grown by them. Indeed, learned counsel for the applicants did not suggest that discrimination lay in the selection of Tendu leaves offered for sale by the growers or in the price paid to them. What he contended was that Sections 5, 6, 7, 9 and 12, which read together granted a power to the State Government to purchase Tendu leaves from growers at a fixed price and later on to sell them at any price, were violative of Article 14 of the Constitution. The argument is altogether fallacious and totally ignores the fact that the grower retains no right in Tendu leaves once they are sold and delivered to the Government or its authorised officers or agents. The Act is not intended to regulate the sale of Tendu leaves. It is not one enacted purely to provide an agency for sale. ft has been enacted "for regulating in the public interest the trade of Tendu leaves by creation of State monopoly in such trade".

Before the Act was passed, the sale of Tendu leaves by growers and their purchase by Bidi-manufacturers disclosed the existence of many malpractices which not only deprived the growers of a fair market price for their Tendu leaves but also deprived the Stale Government of the value of Tendu leaves grown in forests or lands belonging to the State Government. It was for removing these anomalies and malpractices prevailing in the sale and purchase of Tendu leaves and to put the trade of Tendu leaves on a firm and enduring basis in the interest of national economy that the Act was passed. After the Government purchases the leaves, the growers cease to be the owners thereof, and if the Government sells or disposes of them in any manner, it does so like any other owner selling or disposing of his property. No doubt the sale and disposal of Tendu leaves by the Government has to be in conformity with the provisions of the Act and the rules made thereunder. It cannot sell Tendu leaves arbitrarily for any price. The Government may sell the Tendu leaves at a price higher than that actually paid for purchasing them from the growers. But it is difficult to see how Article 14 of the Constitution is contravened when the leaves purchased from the growers are sold at a price higher than that paid for them.

In our opinion, in the matter of purchase of Tendu leaves from growers and their sale afterwards by the Government there is no "classification'. Even if it be assumed that there is some sort of "classification" by which the Government is enabled to sell Tendu leaves at a price higher than the price fixed for purchasing them from the growers, then the differentia has a rational relation to the object sought to be achieved by the Act, namely, "regulating in the public interest the trade of Tendu leaves by creation of State monopoly in such trade". In our view, the challenge to the validity of Section 5 on the ground of infringement of Article 14 must fail.

7. Learned counsel for the applicants then submitted that the impugned act, and section 5 in particular, was destructive of the freedom of trade and commerce and thus offended Article 301 of the Constitution, it was said that the growers are not free to sell their Tendu leaves to anybody other than the Government or its authorised officers or agents. The short answer to this contention is furnished by Article 305 of the Constitution, which says inter alia that nothing in Article 301 shall prevent the Legislature of a Shite from making any law relating to any such matter as is referred to in Sub-clause (ii) of Clause (6) of Article 19 of the Constitution. As has been pointed out by the Supreme Court in the case of Akadasi, AIR 1963 SC 1017 (supra) and by this Court in 1966 MP LJ 806: (AIB 1966, Madh-Pra 301) (supra), Section 5(1) of thy Act is completely protected by Article 19(6)(ii) of the Constitution. It would be pertinent to point out that in the case of Tika Ramji v. State of U. P., AIR 1956 SC 676, it was urged in the Supreme Court that the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, was void ax it offended Article 301 of the Constitution in that the cane-growers were not free to sell their sugarcane to anybody other than the occupier of a factory or even to him except, through the agency of a Cane-growers' Co-operative Society and were not entitled to sell their sugarcane to anyone outside the Stale. The Supreme Court rejected this contention and held that such restrictions in the matter of sale were reasonable in the public interest and the validity of the U. P. Sugarcane (Regulation of Supply and Purchase) Act, 1953, could not be challenged in view of Article 304(b) of the Constitution.

8. The further contention advanced on behalf of the petitioners was that neither in Section 9 nor in any other provision of the Act was any guidance to be found in regard to the position of the grower of Tendu leaves whose leaves are rejected for purchase on the ground that they are not fit for the purpose of manufacture of Bidis and when the rejection of leaves on this ground is upheld by the Divisional Forest Officer concerned. It was said that such a grower did not get any value for the Tendu leaves grown by him and also could not sell them to anybody. It was also said that the power given by Sub-section (4) of Section 9 to the Government to appropriate Tendu leaves offered by a grower on the ground that the leaves appertain to forests or lands belonging to the State Government, was coufiscatory. It is not necessary to deal with these contentions for the simple reason that leaves offered by the petitioners for sale were neither rejected nor appropriated. That being so, the arguments raised on behalf of the petitioners in regard to Section 9 are suppositions. It is wed settled that no Court should express any opinion on hypothetical questions which do not arise in the proceedings before it.

9. Learned counsel did not press before us the question of the validity of Sections 10 and 18 of the Act raised in M. P. No. T61 of 19565.

10. For all these reasons, both these petitions are dismissed with costs. Counsel's fee is fixed in each case at Rs. 150. The outstanding amount of security deposit, if any after deduction of costs, shan be refunded to the petitioner in each case.