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Shri Rangaswam1, Textile Commissioner And Others v. Sagar Textile Mills (P) Ltd. And Another
Factual and Procedural Background
The Central Government, acting under Section 3 of the Essential-Supplies (Temporary Powers) Act, 1946, issued the Cotton Textiles (Control) Order, 1948. Clause 20 of this Order empowers the Textile Commissioner to issue binding directions to manufacturers regarding the production of cloth or yarn. The Textile Commissioner issued a notification prohibiting the printing of any border or heading on sarees and related goods without limiting the prohibition to a specific period. The affected manufacturers challenged this notification before the High Court, which declared it ultra vires. The present appeals were filed by the authorities against that decision, leading to the Supreme Court’s judgment delivered by Y. V. Chandrachud, J.
Legal Issues Presented
- Whether the Textile Commissioner, when issuing directions under Clause 20 of the Cotton Textiles (Control) Order, 1948, is legally obliged to specify the period during which those directions will remain in force.
Arguments of the Parties
The opinion does not contain a detailed account of the parties' legal arguments.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| State of Uttar Pradesh v. Jogendra Singh, AIR 1963 SC 1618; (1964) 2 SCR 197 | The word “may” can be construed as “must” or “shall” when a power is coupled with a duty. | The Court relied on this principle to hold that the Textile Commissioner’s discretionary power to issue directions includes a mandatory duty to specify the operative period. |
Court's Reasoning and Analysis
1. The Court reiterated that where a statutory power is accompanied by an obligation, the term “may” should be read as “shall.” Therefore, Clause 20 imposes not only a power but also a duty upon the Textile Commissioner.
2. Because directions under Clause 20 directly affect manufacturers and the public, they must be subject to periodic review. Such review is feasible only if each direction is expressly limited to a determinate period.
3. An indefinite prohibition risks remaining in force long after its practical justification has disappeared, contrary to the purpose of the Control Order.
4. Manufacturers require certainty about the duration of any production embargo so they can organize their affairs in alignment with both commercial and public-interest considerations.
5. Applying these principles, the Court concluded that the impugned notification, which imposed an open-ended ban on printing borders or headings on sarees, violated Clause 20 because it failed to specify a time limit.
Holding and Implications
Holding: The Supreme Court affirmed the High Court’s judgment and declared that the notification prohibiting printing on sarees “for an indefinite period” is ultra vires Clause 20 of the Cotton Textiles (Control) Order, 1948. The appeals were dismissed with one set of costs awarded to the respondents.
Implications: The Textile Commissioner must henceforth specify a definite operative period whenever issuing directions under Clause 20. Indefinite prohibitions are invalid. The ruling safeguards manufacturers against perpetual restrictions but does not establish a broader precedent beyond interpreting the specific statutory power in question.
Y.V Chandrachud, J.— Under the power conferred by Section 3 of the Essential-Supplies (Temporary Powers) Act, 1946, the Central Government issued an Order called “The Cotton Textiles (Control) Order, 1948”. Clause 20 of that Order, as amended, reads thus:
“20. (1) The Textile Commissioner may from time to time issue directions in writing to any manufacturer or class of manufacturers or the manufacturers generally regarding the classes or specifications of cloth or yarn, and the maximum or the minimum quantities thereof, which they shall or shall not produce during such periods as may be specified in the directions, and they shall comply with such directions.
20. (2) In the exercise of the powers conferred upon him by sub-clause (1) the Textile Commissioner shall have regard to the capacity of the producer to produce cloth and yarn of different descriptions or specifications and to the needs of the general public.”
The question for our determination in these appeals is whether, if the Textile Commissioner decides to issue appropriate directions to any manufacturer or class of manufacturers, it is obligatory upon him to specify therein the period for which the directions will remain in operation.
2. As held by this Court in State of U.P v. Jogendra Singh AIR 1963 SC 1618, (1964) 2 SCR 197 at 202, (1963) 2 Lab LJ 444 it is well settled that the word “may” is capable of meaning “must” or “shall” in the light of the context and that where a discretion is conferred upon a public authority coupled with an obligation, the word “may” which denotes discretion should be construed to mean a command. Considering the purpose of the relevant empowerment and its impact on those who are likely to be affected by the exercise of the power, we are clear that the power conferred on the Textile Commissioner to issue directions is coupled with the duty to specify the particular period for which the directions shall be operative. Directions of the kind envisaged by clause 20 are influenced and justified by exigencies which render it imperative that the directions be reviewed from time to time. That becomes feasible only if the directions are limited expressly to a determinate period of time at the end of which a fresh review of facts and circumstances becomes obligatory. There is a fear that a direction not limited in point of time may continue to operate even after it has outlived its utility for the reason merely that the need to review it is not clearly perceived. Besides, the manufacturers must know, in order that they may organise their business in their own interest as well as in the interest of the community at large, as to how long any particular embargo is going to be operative.
3. Accordingly, we affirm the judgment of the High Court though on the ground only that the impugned notification insofar as it prohibits the printing of any border or heading on sarees etc. for an indefinite period is ultra vires clause 20 of the Cotton Textiles (Control) Order, 1948, since the aforesaid clause casts an obligation or a duty upon the Textile Commissioner to specify the period during which the prohibition shall remain in force. We express no opinion on the other points, including Point 6 urged before the High Court for its consideration.
4. The appeals are accordingly dismissed. The appellants will pay one set of costs of these appeals to the respondents.
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