# GODAWAT PAN MASALA PRODUCTS LP. LTD. AND ANR v. UNION OF INDIA AND ORS

- **Citation:** [2004] Supp. 3 S.C.R. 239
- **Court:** Supreme Court of India
- **Decided:** 2004-08-02
- **Case number:** Civil Appeal No. 4674 of 1998
- **Bench:** K.G. Balakrishnan, B.N. Srikrishna
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/godawat-pan-masala-products-lp-ltd-and-anr-v-union-of-india-and-ors-19988
- **Pages:** 52

## Headnote

B
Prevention of Food Adulteration Act, 1954-Sections 2((1a), 7(iv), 23
and 24-Cigarettes and Other Tobacco Products (Prohibition of
Advertisement and Regulation of Trade and Commerce, Production,
Supply and Distribution) Act, 2003-Constitution of India, 1950-Articles C
14 and 19(J)(g)-Ban on Gutka and Pan Masala-By Notifications of State
Government-Tobacco products covered by subsequent Act of 20030ther tobacco products not banned-Opportunity of being heard not given
to the affected persons before issuing Notifications-Ban challengedHigh Court upheld validity of Notifications-On appeal held; Notifications D
are ultra vires the Act and void and violative of Articles 14 and 19(1)(g)
of Constitution and violative of Principles of Natural Justice-The State
Authorities had no power to prohibit the manufacture, sale, storage or
distribution of the articles-Such power lies with Central Government
under Rules framed under Section 23-2003 Act dealing with the articles
being directly in conflict with the Act and being a special act and of later E
origin overrides the provisions of the Act with regard to power to prohibit
the articles-Power of State is descernible under Section 24(2) and is of
transient nature-Rules made under Section 24 are subservient to Rules
derivable under Section 23-Notification is unreasonable and excessive in
nature-Maharashtra Prevention of Food Adulteration Rules, 1962-Goa, F
Daman and Diu Prevention of Food Adulteration Rules, 1982.
Interpretation of statutes :
Legislative intent of statute-Ascertainment of-Held: Should be G
ascertained not merely by construing a particular clause but the scheme
of the entire statute.
Administrative Law :
Principles of Natural Justice-Compliance-Need for-In case of H
239
240
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A conditional legislation-Held, compliance of the principles is necessary in
such cases.
Various State Governments issued Notifications u/s 7(iv) of
Prevention of Food Adulteration Act, 1954 by which manufacture,
B sale, storage and distribution of Pan Masala and Gutka were banned
for different periods in the interest of public healtil. Appellantsmanufactures of Pan Malala and Gutka, challenged the Notifications.
Different High Courts upheld the validity of the Notifications. Hence,
the present appeals. Some Associations and Co-operative Societies of
arecanut growers and some manufacturers and sellers of Pan Malasa
C and Gutka filed Writ Petition in this Court challenging another
Notification issued u/s 7(iv) of the Act to the same effect.
Appellants/Petitioners contended that State Government did not
have power to issue an order of Prohibition as the power to declare
D a substance as injurious to health lies only with the Central Government
under Section 23 of the Act; that sinire the manufacture of the product
is undertaken under a licence issued by Central Government, it is not
open to State Government to prohibit the manufacture by au
administrative order so long as terms of licence and conditions
E stipulated in the statute are not violated; that power of State Government
to frame rules under Section 24 is extremely narrow and limited to the
field not covered by Section 23; that Section 7 is not declaratory of the
power of any authority, but merely of the consequences of certain acts;
that the Act is concerned with the prevention of adulterated articles
of food and not intended to prohibit any article used as food or
F otherwise; that Notification issued by State of Maharashtra operates
extra territorially, and, to that extent, is ultra vires of the powers of
the State; that by enacting Cigarettes and Other Tobacco Products
(Prohibition of Advertisement and Regulation of Trade and Commerce,
Production, Supply and Distribution) Act, 2003 (Act 34 of 2003)
G Parliament has evinced its intention to occupy whole field with regard
to tobacco products; that while Central legislation prohibits the sale
of tobacco only to persons below 18 years of age, the wholesale

## Text

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c
GODAWAT PAN MASALA PRODUCTS LP. LTD. AND ANR.
A
v.
UNION OF INDIA AND ORS.
AUGUST 2, 2004
[K.G. BALAKRISHNAN AND B.N. SRIKRISHNA, JJ.]
B
Prevention of Food Adulteration Act, 1954-Sections 2((1a), 7(iv), 23
and 24-Cigarettes and Other Tobacco Products (Prohibition of
Advertisement and Regulation of Trade and Commerce, Production,
Supply and Distribution) Act, 2003-Constitution of India, 1950-Articles C
14 and 19(J)(g)-Ban on Gutka and Pan Masala-By Notifications of State
Government-Tobacco products covered by subsequent Act of 20030ther tobacco products not banned-Opportunity of being heard not given
to the affected persons before issuing Notifications-Ban challengedHigh Court upheld validity of Notifications-On appeal held; Notifications D
are ultra vires the Act and void and violative of Articles 14 and 19(1)(g)
of Constitution and violative of Principles of Natural Justice-The State
Authorities had no power to prohibit the manufacture, sale, storage or
distribution of the articles-Such power lies with Central Government
under Rules framed under Section 23-2003 Act dealing with the articles
being directly in conflict with the Act and being a special act and of later E
origin overrides the provisions of the Act with regard to power to prohibit
the articles-Power of State is descernible under Section 24(2) and is of
transient nature-Rules made under Section 24 are subservient to Rules
derivable under Section 23-Notification is unreasonable and excessive in
nature-Maharashtra Prevention of Food Adulteration Rules, 1962-Goa, F
Daman and Diu Prevention of Food Adulteration Rules, 1982.
Interpretation of statutes :
Legislative intent of statute-Ascertainment of-Held: Should be G
ascertained not merely by construing a particular clause but the scheme
of the entire statute.
Administrative Law :
Principles of Natural Justice-Compliance-Need for-In case of H
239
240
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A conditional legislation-Held, compliance of the principles is necessary in
such cases.
Various State Governments issued Notifications u/s 7(iv) of
Prevention of Food Adulteration Act, 1954 by which manufacture,
B sale, storage and distribution of Pan Masala and Gutka were banned
for different periods in the interest of public healtil. Appellantsmanufactures of Pan Malala and Gutka, challenged the Notifications.
Different High Courts upheld the validity of the Notifications. Hence,
the present appeals. Some Associations and Co-operative Societies of
arecanut growers and some manufacturers and sellers of Pan Malasa
C and Gutka filed Writ Petition in this Court challenging another
Notification issued u/s 7(iv) of the Act to the same effect.
Appellants/Petitioners contended that State Government did not
have power to issue an order of Prohibition as the power to declare
D a substance as injurious to health lies only with the Central Government
under Section 23 of the Act; that sinire the manufacture of the product
is undertaken under a licence issued by Central Government, it is not
open to State Government to prohibit the manufacture by au
administrative order so long as terms of licence and conditions
E stipulated in the statute are not violated; that power of State Government
to frame rules under Section 24 is extremely narrow and limited to the
field not covered by Section 23; that Section 7 is not declaratory of the
power of any authority, but merely of the consequences of certain acts;
that the Act is concerned with the prevention of adulterated articles
of food and not intended to prohibit any article used as food or
F otherwise; that Notification issued by State of Maharashtra operates
extra territorially, and, to that extent, is ultra vires of the powers of
the State; that by enacting Cigarettes and Other Tobacco Products
(Prohibition of Advertisement and Regulation of Trade and Commerce,
Production, Supply and Distribution) Act, 2003 (Act 34 of 2003)
G Parliament has evinced its intention to occupy whole field with regard
to tobacco products; that while Central legislation prohibits the sale
of tobacco only to persons below 18 years of age, the wholesale ban
by the Notification is without any qualification; that in conflict between
powers exercisable under two central statutes dealing with the same
H subject, the later enactment would prevail as the later enactment
GODA WAT PAN MASALA PRODUCTS LP. LTD. v. U.O.l.
241
would be deemed to have impliedly repealed the previous one; Act 34 A
of 2003 being a special law intended to deal with tobacco and its
products, and the 1954 Act being a general law, the special law will
displace the general law to the extent of inconsistency; that Notification
was unreasonable and excessive restriction on the Fundamental Right
to carry on trade or business guaranteed under Article 19(1 )(g) of the B
Constitution; that if Section 7(iv) is construed as giving the authority
to ban the articles of food, even if not adulterated, it would be ultra
vires the legislative competence of Parliament; that if the provisions of
Section 7(iv) are not read down as conferring powers on the Authority
to deal with emergent situations the Section would be conferring''
arbitrary powers on the Authority and would be procedurally unfair; C
that business of Pan Masala and Gutka being recognized as legitimate
by other statute, Section 7(iv) enabling the Authority by a Notification
to bring to standstill a business, would have to be held to be arbitrary,
unfair and an abridgment of fundamental rights guaranteed under
Article 14 of the Constitution; that Pan Masala or Gutka does not D
amount to 'food' within meaning of its definition u/s 2(v) of the Act;
that principle of natural justice was violated as the parties were not
given opportunity of being heard before issuing the Notification; and
that Pan Masala or Gutka are not res extra commercium.
State contended that Section 7(iv) is not an independent source E
of power; that constitutional validity of Section 7(iv) was never in
dang.~r as it could be supported on the doctrine of pith and substance;
that all provisions of a statute have to be read harmoniously and any
interpretation has to be ex visceribus actus is trite doctrine of construction
of statute,;; that the impugned act was a legislative act and not F
administrative act, therefore the question of giving a hearing before
taking a policy decision to ban Pan Masala did not arise.
Allowing the appeals and writ petitions, the Court
HELD 1.1. The impugned Notifications are ultra vires the G
Prevention of Food Adulteration Act, 1954 and, hence, bad in law. The
State Food (Health) Authority has no power to prohibit the manufacture
for sale, storage, sale or distribution of any article, whether used as an
article or adjunct thereto or not used as food. Such a power can only
arise as a result of wider policy decision and emanate from
Parliamentary legislation or, at least, by exercise of the powers by the H
242
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A Central Government by ·framing rules under Section 23 of the Act.
(290-D; 289-H; 290-AJ
1.2. Section 7(iv) of the Act is not an independent source of power
for the State Authority. The source of power of the state Food (Health)
Authority is located only in the valid Rules made in exercise of the
B power under Section 24 of the Act by the State Government, to the
extent permitted thereunrler. The power of the Food (Health) Authority
under the Rules is only of transitory nature and intended to deal with
local emergencies and can last only for a short period while such
emergency lasts. This conclusion is also supported by the legislative
C history prior to the amendment by Act 49 of 1964, in clause (iv) of
Section 7 the words used were "with a view to preventing the outbreak
or spread of infections diseases." The powers of banning an article of
food or an article used as ingredient of food, on the ground that it is
injurious to health, belongs appropriately to the Central Government
to be exercised in accordance with the Rules made under Section 23
D of the Act, particularly, sub-section (lA)(f). (289-D-G)
1.3. The expression "for the time being" used in clause (iv) of
Section 7 of the Act is significant and indicates the transient nature of
the power that is conferred on the Food (Health) Authority under the
E Rules to ban or otherwise take any o~her appropriate action in relation
to an article of food even if it be "in the interest of public health."
[266-D-E)
Pukhraj Jain v. Padma Kashyap and Anr., (1990) 2 SCC 431 and
Jivendra Nath Kaul v. Collector/District Magistrate and Anr., [1992) 3,
F sec s16, referred to.
1.4. Clause (iv) of Section 7 and clause (c) of sub-section (1) of
Section IO of the Act and their interplay unmistakably suggest that
the power conferred on the Food (Health) Authority and the food
inspector, being derived from the Rules made in exercise of the
G powers exercised under Section 24 of the Act are necessarily subservienit
to the powers derivable from the Rules made under Section 23 of the
Act. Hence, neither the Food (Health) Authority, nor the food inspectv•r
can be said to have such power which could be available to nie
Central Government by prescription of a rule in exercise of power
H under Section 23(1A)(f). [267-H; 268-A-B(
GODA WAT PAN MASALA PRODUCTS J.P. LTD. v. U.0.1.
243
State of Orissa v. MA. Tulloch and Co., (1964] 4 SCR 461; UP. A
State Electricity Board and Ors. v. Hari Shanker Jain and Ors., (1979] l
SCR 355; Gujarat State Cooperative Land Development Bank Ltd. v. P.R.
Manded and Ors., (1979] 2 SCR 1023; The LIC of India v. D.J. Bahadur
and Ors., (1981] l SCR 1083; Jain Ink Manufacturing Co. v. LIC of India
and Anr., (1981] l SCR 498; Prof Sumer Chand v. Union of India and B
Ors., (1994] l SCC 64 and Allahabad Bank v. Canara Bank and Anr.,
(2000) 4 sec 406, relied on.
Gandhi Irwin Salt Manufacturers Association v. The Government of
Tamil Nadu, (1996) Madras 109, disapproved.
Deep Chand v. The State of UP. and Ors, [1959) Supp. 2 SCR; Ch.
Tika Ramji and Ors. v. The State of UP.· and Ors., [1956) SCR 393;
Zaverbhai Amaidas v. The State of Bombay, (1955] l SCR 799 and Vijay
Kumar Sharma and Ors. v. State of Karnataka and Ors., (1990) 2 SCC
562, referred to.
1.5. If the provisions of Section 7(iv) of the Act are not read down
c
D
as conferring powers on the authority to deal with an emergent
situation, the Section would be conferring arbitrary powers on the
Authority and would be procedurally unfair. This is particularly so in
the face of the statutory provision under which licences have already E
been granted to the manufacturers of Pan Masala and Gutka for
manufacture of the articles. There is already a provision in the
statutory scheme for cancellation and suspension of a licence. Without
going through such procedure, the power in the State Authority to
suddenly bring out the result of cancellation or suspension of the
licence, without procedural safeguards, would certainly be arbitrary F
and liable to be hit by Article 14 of the Constitution of India. For this
reason also, the power under Section 7(iv) needs to be read down as
conferring powers on the authority only to deal with an emergent
situation. [279-C-E]
State of Karnataka and Anr. v. Shri Ranganatha Reddy and Anr.,
(1978] 1SCR641; B.R. Enterprises and Ors. v. Staie of UP. and Ors.,
(1999] 9 SCC 700 and State of A.P. v. Natural Thermal Power Corpn.
Ltd. and Ors., [2002] 5 SCC 203, referred to.
G
1.6. A decision for banning an article of food or an article H
244
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A containing any ingredient of food injurious to health can only arise as
a result of broadly considered policy. If such a power be conceded in
favour ofa local Authority like the Food (Health) Authority, paradoxical
results would arise. The same article could be considered injurious to
public health in one local area, but not so in another. The constitution
B of the provision of the statute must not be such as to result in such
absurd or paradoxical consequences. Hence, for this reason also, the
power of the State (Health) Authority is a limited power to be
exercised locally for temporary duration. (284-B-Cj
1.7. It cannot be said that the power of the state Food (Health)
C Authority is much wider and could extend even to articles which may
not amount to food or ingredients of food, or even if they are not
injurious to health, as long as the test of "in the interest of public
health" is satisfied. (284-E-F)
D
1.8. Court cannot conceive of such wide ranging power vested in
a local Authority without there being sufficient guidelines as to the
manner of deciding the policy and implementing it elucidated in the
statute itself. There is no indication in the Act as to how the order made
by the Food (Health) Authority would be brought into force. This is
a pointer to the fact that the orders made by the Food (Health)
E Authority are only transitory and intended to deal with emergent local
situations. (284-F-G; 286-G-Hj
1.9. The purpose of the Act, as its title suggests, is to prevent
adulteration of food. Any attempt to travel beyond these parameters
F must necessarily be looked at askance by the Court. (286-E ·Fl
Dineshchandara Jamnadas Gandhi v. State of Gujarat, [ 19891 1 SCC
420, relied on.
1.10. The words "in the interest of public health" used in clause
G (iv) of Section 7 of the Act cannot operate as an incantation or mantra
to get over all the constitutional difficulties posited. In any event, the
collocation of the words in the statutory scheme suggests not a matter
of policy, but a matter of implementation of policy. For this reason also
the impugned Notification must fail. [281-C-D]
H
I. I I. The statute must be read as a whole and one provision of
GODA WAT PAN MASALA PRODUCTS J.P. LTD. v. U.O.l.
245
the Act should be construed with reference to other provisions of the A
same Act so as to make a consistent, harmonious enactment of the
whole statute. The Court must ascertain the intention of the legislature
by directing its attention not merely to the clauses to be construed, but
also to the scheme of the entire statute. The attempt must be to
eliminate conflict and to harmonise the different parts of the statute B
for it cannot be assumed that Parliament had given by one hand what
it took away by the other. [265-G-H; 266-A)
Commissioner of Income Tax v. Hindustan Bulk Carriers, [2003] 3
SCC 57; C.lT. Central, Calcutta v. National Taj Traders, [1980) 2 SCR
277 and O.P. Sing/a and Anr. v. Union of India and Ors., [1984) 4 SCC C
450, relied on.
1.12. Undoubtedly, if Section 7(iv) is read in isolation, it gives the
impression that this is an independent source of power, not subject
to any !imitation other than the guideline "in the interest of public D
health". But, when the scheme of the Prevention of Food Adulteration
Act is analysed in the light of its preamble and the Statement of Objects
and Reasons, it becomes clear that there is no independent source of
power under Section 7(iv) . Had it been so, there was no need for the
rule making power of the State Government under Section 24(2)(a) to
define the powers and duties of the Food (Health) Authority or local E
authority and Local (Health) Authority under the Act. The interplay
of Sections 23(1A)(f) and 24(2)(a) read with the existing Rules in the
different States, even after the amendment of Section 7(iv) by Act 49
of 1964, leads to conclude that it cannot be said that all provisions of
a statute have to be read harmoniously; that any interpretation has to F
be ex visceribus actus, is a trite doctrine of construction of statutes.
[274-G; 275-A-C]
1.13. The power of the State under Section 7(iv) of the Act is
statutory; absolute to the extent provided therein and limited to the
extent indicated by Section 23(1A) of the Act. When a contingency G
envisaged by Rule 3 of Maharashtra Prevention of Food Adulteration
Rules, 1962, and corresponding Rule in Goa, Daman and Diu Prevention
of Food Adulteration Rules, 1982, or one similar thereto, arises and
it becomes necessary for the Food (Health) Authority to take immediate
steps, the Food (Health) Authority is empowered to prohibit "for the H
246
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A time being" the concerned injurious article and to take any appropriate
step "in the interest of public health". (274-G; 275-A-8)
1.14. The provisions of the Cigarettes and Other Tobacco Products
(Prohibition of Advertisement and Regulation of Trade and Commerce,
B Production, Supply and Distribution) Act, 2003 (Act 34 of 2003) are
directly in conflict with the provisions of Section 7(iv) of the Prevention
of Food Adulteration Act, 1954. The former Act is a special Act
intended to deal with tobacco and tobacco products particularly, while
the latter enactment is a general enactment. Thus, Act 34 of 2003 being
a special Act, and of later origin, overrides the provisions of Section
C 7(iv) of the Prevention of Food Adulteration Act, 1954 with regard to
the power to prohibit the sale or manufacture of tobacco products
which are listed in the Schedule to Act 34 of 2003. [290-8-D)
1.15. There is a plethora oflegislation dealing with tobacco products,
D gutka and pan masala and the fact that licences have been issued to the
appellants to manufacture the concerned articles, which does not lead
to the conclusion that the trade or business in the concerned articles is
an activity which is "criminal in propensity, immoral, obnoxious,
injurious to the health of general public" or that the ban is a result of
E 'public expediency and public morality'. (282-D-E]
2.1. The impugned Notification is certainly an administrative act
and not a legislative act. Inasmuch as by an executive act the manufacture
for sale, storage, sale or distribution of the concerned article has been
banned so as to interfere with the fundamental rights of the appellants
F guaranteed under Articles 14 and 19 of the Constitution of India, the
impugned Notification is illegal and unconstitutional. (281-8-C]
Maneka Gandhi v. Union of India, (1978] 1 SCC 248; Kanti Lal
Babula/ v. HC. Patel, (1968] l SCR 735; Ajay Hasia and Ors. v. Khalid
Mujib Sehravardi and Ors., (1981] 1 SCC 722 and Delhi Transport
G Corporation v. D.T.C. Mazdoor Congress and Ors., (1991) Supp. 1 sec
600, followed.
Mis. Dwarka Prasad Laxmi Narain v. State of UP. and Ors., (1954)
SCR 803 and B.B. Rajwanshi v. State of UP. and Ors., [1988] 2 SCC
H 415, referred to.
GODA WAT PAN MASALA PRODUCTS J.P. LTD. v. U.0.1.
247
2.2. It is permissible under Article 19(6) to impose a reasonable A
restriction "in the interest of gene1 al public". Assuming that such a
restriction can be imposed, even if by legislation intended to prohibit
manufacture, sale or storage of articles harmful or injurious to health,
the restriction has to be commensurate with the danger posed. On a
conspectus of the facts, Court cannot uphold the prohibition imposed B
by the impugned Notification as a restriction which can pass the rest
of reasonableness under Article 19(6) of Constitution of India for two
reasons. First, there is no demonstrated danger to the public health by
magnesium carbonate by consumption of Rajnigandha pan masala;
secondly, even if there were, the prohibition could only have extended C
to pan masala containing magnesium carbonate and could not be wider
than that. (273-F-H; 274-A)
2.3. The States did not ban chewing tobacco or other tobacco
products which contain almost cent per cent tobacco, but they banned
the sale of gutka which contains only about 6 per cent of tobacco and D
pan masala, which contains no tobacco whatsoever, even accepting on
the correctness of the material presented. Further, th~ literature
produced by the States indicates that pan masala is addictive amongst
children and, therefore, likely to be injurious to their health in the long
run. Assuming this to be true, the restriction could only have been on E
sale to under-aged persons and not by way of a total ban. The
impugned Notification is violative of the fundamental right of the
appellants guaranteed under Article 19(l)(g), both because it is
unreasonable and also because it is excessive in nature. A contrast with
the provisions of the Act 34 of 2003 in this regard would drive home
the point. The impugned Notification fails on the test of reasonable F
restriction. (275-H; 276-A-C; 277-AJ
Mohd. Faruk v. State of Madhya Pradesh and Ors., (1970] 1 SCR
156, relied on.
3. It cannot be said that the substance banned by the impugned G
Notification is treated as res extra commercium. In the first place, the
gamut of legislation enacted in this country which deals with tobacco
does not suggest that Parliament has ever treated it as an article
res extra commercium, nor has Parliament attempted to ban its use
absolutely. The legislative policy, if any, seems to be to the contrary. H
248
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A In any event, whether an article is to be prohibited as res extra
commercium is a matter of legislative policy and must arise out of an
Act of legislature and not by a mere Notification issued by an executive
Authority. (278-F; 279-A-B)
Khoday Distilleries Ltd. and Ors. v. State of Karnataka and Ors,,
B (19951 1 sec 574, referred to.
4. It cannot be said that pan masala or gutka does not amount
to "food" within the meaning of definition in Section 2(v) of the Act.
(283-C]
C
P.K. Tejani v. MR. Dange, AIR (1974) SC 228, referred to.
C.A. Nos. 12746-747of1996 dated 6th November, 2003 decided by
Supreme Court, distinguishe.d.
5.1. It cannot be said that because the Notification is generally
D intended, it is necessarily a legislative act and therefore there was no
question of complying with principles of natural justice. If that were
so, then every executive act could masquerade as a legislative act and
escape the procedural mechanism of fair play and natural justice.
E
(288-B-C]
5.2. Conditional legislation can be broadly classified into three
categories: (l) when the legislature has completed its task of enacting
a statute, the entire superstructure of the legislation is ready but its
future applicability to a given area is left to the subjective satisfaction
of the delegate (2) where the delegate has to decide whether and under
F what circumstances a legislation which has already come into force is to
be partially withdrawn from operation in a given area or in given cases
so as not to be applicable to a given class of persons who are otherwise
admittedly governed by the Act; (3) where the exercise of conditional
legislation would depend upon satisfaction of the delegate on obj_~ctive
facts placed by one class of persons seeking benefit of such an exercise
G with a view to deprive the rival class of persons who otherwise might
have already got statutory benefits under the Act and who are likely to
lose the existing benefit because of exercise of such a power of the
delegate. In the third type of cases the satisfaction of the delegate must
necessarily be based on objective considerations and, irrespective of
H whether the exercise of such power is judicial or quasi-judicial function,
GODA WAT PAN MASALA PRODUCTS LP. LTD. v. U.0.1.
249
still it has to be treated to be one which requires objective consideration A
of relevant factual data pressed into service by one side, which could be
rebutted by the other side, who would be adversely affected if such
exercise of power is undertaken by the delegate. (288-D-G; 289-A-B]
Union of India and Anr. v. Cynamide India Ltd. and Anr., [1987] 2
sec 720; State of Tamil Nadu v. K Sabanayagam and Anr., (1998] 1 sec B
318 and Tulsipur Sugar Co. Ltd. v. The Notification Area Committee Tutsi
Pur, (1980] 2 SCC 295, referred to.
5.3. Even if the impugned Notification falls into the last of the
above category of cases, whatever the material the Foods (Health) C
Authority had, before taking a decision on articles in question, ought
to have been presented to the appellants who are likely to be affected
by the ban order. The principle of natural justice requires that they
should have been given an opportunity of meeting such facts. This has
not been done in the present case. For this reason also, the notification D
is bad in law. (289-B-C]
6. There is a distinction between "making law" and "commencement
of the operation of an Act" and a situation of conflict can arise even
when a law has been made and not brought into force. (272-EJ
Pt. Rishikesh and Anr. v. Sa/ma Begum, (1995] 4 SCC 718, relied
on.
P.N. Krishna Lal and Ors. v. Government of Kera/a and Anr., 11995]
Supp. 2 SCC 187, cited.
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 4674 of
1998.
From the Judgment and Order dated 18/19.9.2002 of the Bombay
High Court in W.P. No. 2024/2002.
•·-
WITH
Civil Appeal Nos. 4677/2004, 4676/2004, 4675/2004, 4678/2004,
4679/2004.
AND
E
F
G
H
250
SUPREME COURT REPORTS (2004] SUPP. 3 S.C.R.
A
Writ Petition (C) No. 173 of 2003.
Shanti Bhushan, J. Bhushan, R.F. Nirrnan, Kapil Sibal, Anil B.
Diwan, S.K, Pathak, Ms. S. Pathak, Ejaz Maqbool, Ms. Indu Malhotra, Ms.
D. Vishwanathan, N. Talwar, D. Krishnan, Ms. V. Bhargava, Ms. Nina
B Gupta, Ms. Bina Gupta, S. Parekh, K. Javeri, Fatek, Lalit Chauhan, P.D.
Gupta, Pramod Dayal, P. Sharma, K.R. Nagaraja, Ms. E.R. Sumathy, K.
Vijayan, A.P. Jain, Mrs. Savita Aggarwal, Hari and Punit D. Tyagi for the
Appellants.
Mrs. K. Amareshwari, A.N.S. Nadkarni, Adv. Gen. for State of Goa,
C U.U. Lalit, A. Pednekar, S.S. Shinde, A. Singh, P. Keswani, Mukesh K.
D
Giri, R.K. Rathore, Ms. Pinky Anand, Ajay Sharma, D.S. Mahra, B.
Ramana Murthy, G. Prabhakar, Mrs. Anil Katiyar, R.K. Adsure, Dhruv
Mehta, M. Choudhary and Ms. Shalini Gupta for the Respondents.
The Judgment of the Court was delivered by
SRIKRISHNA, J. : Leave granted in the special leave petitions and
the writ petition is admitted.
These appeals and writ petition arise from different areas and, though
E marginally differing on facts, raise substantially similar issues oflaw. They
can, therefore, be conveniently disposed of by a common judgment.
The common issue raised for consideration of this Court in all these
cases is the validity of notifications issued by the Food (Health) Authority
under Section 7(iv) of the Prevention of Food Adulteration Act, 1954
F (hereinafter referred to as the 'Act') by which the manufacture, sale,
storage and distribution of pan masala and gutka (pan masala containing
tobacco) were banned for different periods. We shall take the facts in the
civil appeal arising out of special leave petition No. 24449 of 2002 as
typical of the cases .
.. 1,· , .
Facts :
Civil Appeal arising out of SLP (C) No. 24449 of 2002.
The appellants manufacture gutka within the state of Maharashtra,
H which is stored in convenient godowns and sold both within and outside
GODAWATPAN MASALA PRODUCTS l.P. LTD. v. U.0.1. [SRIKRISHNA, J.) 251
the state of Maharashtra. By a notification dated 23rd July, 2002 issued A
by the Commissioner, Food and Drug Administration and Food (Health)
Authority for the State of Maharashtra, the manufacture, sale, storage and
distribution of pan masala and gutka (pan masala containing tobacco) were
banned for a period of five years with effect from I st August, 2002. The
appellants challenged the validity of this notification by a writ petition No. B
2024 of 2002 before the High Court of Judicature at Bombay. By its
judgment dated I 8th/19th September, 2002, the division bench of the
Bombay High Court dismissed the writ petition upholding the validity of
the notification. Aggrieved thereby, the appellants challenge the said
judgment by the present appeal.
c
Writ Petition No. 173 of 2003 :
Petitioners Nos. I to 5 are associations and cooperative societies of
arecanut growers, petitioners No. 6 and 7 are engaged in the manufacture
and sale of pan masala and gutka in the State of Karnataka. They are D
aggrieved by a notification dated 27th February, 2002, issued by the
competent officer appointed as Food (Health) Authority for the State of
Andhra Pradesh under Section 7(iv) of the Act, by which the sale of all
brands of pan masala (containing tobacco) and chewing tobacco/zarda/
khaini under any brand name was prohibited "in the interest of public
health" in the entire state of Andhra Pradesh with immediate effect.
E
The petitioners also challenge another notification dated 19th
November, 2001 issued by the Director for Public Health and Preventive
Medicine and State Food (Health) Authority, Government of Tamil Nadu,
under Section 7(iv) of the Act directing that no person shall himself or by p
any person on his behalf, manufacture of sale or store, sell or distribute:
(I) chewing tobacco; (ii) pan masala; (iii) gutka, containing tobacco in any
form or any other ingredients injurious to health, under what~ver name or
description in the State of Tamil Nadu. This notification is purpo1ted to
have been issued in the "interest of public health", for a period of five yeal1; G
with effect on and from 19th November, 200 I.
The third notification which is challenged in the writ petition is the
notification dated 23th July, 2002 issued by the Commissioner offood and
Drug Administration and Food (Health) Authority for the State of
Maharashtra. By the said notification, issued purportedly in exercise of the H
252
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
A powers under Section 7(iv) of the Act, "in the interest of public health'',
the sale of gutka and pan masala, containing tobacco or not containing
tobacco, is prohibited for a period of five years effective from I st August,
2002. The notification directs that "no person shall himself or any person
on his behalf, shall manufacture for sale or store, sell or distribute gutka
B or pan masala, containing tobacco or not containing tobacco, by whatevi:r
name called.
He fourth notification challenged in the writ petition is the notification
dated 24th January, 2003 issued by the Directorate of Food and Drugs
Administration and Food (Health) Authority for the State of Goa. By this
C notification, purportedly issued under Section 7(iv) of the Act, the "sale
of gutka and pan masala, containing tobacco or not containing tobacco, by
whatever name called," is prohibited within the state of Goa and it is
directed that "no person shall himself or any person on his behalf, shaiil
manufacture for sale or store, sell or distribute gutka or pan masala
D containing tobacco or not containing tobacco, by whatever name called".
The prohibition in the notification is made effective from 26th January,
2003.
All the four notification are under challenge.
E Civil Appeals arising out of S.L.P. Nos. 23635102, 24292102. 533103,
834103 and 2186103
The appellants are engaged, inter alia, in the manufacture and trade
of pan masala and gutka, pan masala containing tobacco and other allied
F tobacco products. They sell their products all over India including Stat·e
of Mahanishtra. They have a wide network of dealers through whom their
products are sold to the public at large in the state of Maharashtra. They
also have operating depots in the state of Maharashtra. The appellants
challenge the notification dated 23rd July, 2002, issued by the Commissioner,
Food and Drtig Administration and Food (Health) Authority for the stat1e
G ofMahat.l~'htrn,,The High Court by its common judgment dated 18th/I 9th
September, 2002 negatived the challenge.
Civil Appeal arising out of S.L.P. No. 24292 of 2002
H
The appellant cany on the business of manufacture and sale of pan
GODA WAT PAN MASALA PRODUCTS 1.P. LTD. v. U.OJ. (SRIKRISHNA, J.) 253
masala, gutka and other tobacco related items. Aggrieved by the notification A
dated 19th February, 2002 issued by the Food (Health) Authority, State of
Andhra Pradesh, prohibiting the sale of pan masala under any brand name
with a emblem of gutka, containing tobacco, within the state of Andhra
Pradesh, with immediate effect, and the notification dated 27th February,
2002 issued by the same authority which prohibited the sale of all brands B
of pan masala containing tobacco and chewing tobacco/zarda/kliaini under
any brand name in the entire State of Andhra Pradesh, with immediate
effect, the appellant challenged the validity of both notifications before the
High Court of Andhra Pradesh. The divisions bench of the High Court by
its judgment dated 16th August, 2002 dismissed the writ petition. Being C
aggrieved thereby, the appellant is before this Court.
Core Issue:
These appeals and the writ petition raise the common· issue as to the
power of the Food (Health) Authority to issue an order of prohibition, D
whether permanently or quasi-permanently, under Section 7(iv) of the Act.
Challenge:
The broad ground of challenge formulated by the appellants/petitioners
are as under :
I.
The Act vests the power to declare a substance as injurious to
health only with the Central Government under Section 23 of
the Act and no such power is vested with the State Government.
2.
Each of the manufacturers has bee issued a licence to manufacture
the banned product by the Central Government under the
provisions of the Act. As long as the conditions stipulated in
the licence are fulfilled, and there is no violation of the terms
E
F
of the licence or the provisions of the concerned statute, it is not
open to the state Government, by·any administrative order, to G
prohibit the manufacture of the concerned product undertaken
under a licence issued by the Central Government.
3.
The power of the State Government to frame rules under Section
24 of the Act is extremely narrow and limited to the field which H
254
A
B
SUPREME COURT REPORTS [2004) SUPP. 3 S.C.R.
is not covered by Section 23, the exclusive domain of the
Central Government.
4.
The Act is concerned with the prevention of adulterated articles
of food and not intended to prohibit any article used as food or
otherwise.
5.
The impugned notification dated 23rd July, 2002, issued by the
State of Maharashtra operates extra territorially, and, to that
extent, is ultra vires of the powers of the State.
C
6.
By enacting the Cigarettes and other Tobacco Products
D
E
(Prohibition of Advertisement and Regulation of Trade and
Commerce, Production, Supply and Distribution) Act, 2003,
(Act 34 of 2003), Parliament has evinced its intent to occupy
the whole field with regard to prohibition of advertisement and
regulation of trade and commerce, production, supply and
distribution of tobacco products. While the central legislation
prohibits the sale of tobacco products only to persons below age
of 18 years, the impugned notification purports to impose a
wholesale ban without any qualification. Thus, there is a conflict
between the powers exercisable under two central statutes
dealing with the same subject and, therefore, provisions of the
Act 34 of 2003 must prevail.
Legal provisions :
F
In order to appreciate the contentions of the learned counsel, it will
be necessary to briefly notice the relevant provisions of the Act. As the
preamble of the Act indicates, "it is an Act to make provision for the
prevention ofadulteration of food." Section 2(ia) defines what is 'adulterated
food'. Broadly speaking, the definition covers situations where a food
article is sub-standard, or contains injurious ingredients or has become
G injurious to health by reason of packing or keeping under unsanitary
conditions or having become contaminated or is otherwise not fit for
consumption. The definition also extends to cases of articles which fall
below the prescribed standards of purity or quality. The Act also deals with
misbranding of food articles, which is not of concern to us for the present.
H For the purpose of administration of the Act, any urban or rural area may
GODAWATPAN MASALA PRODUCTS J.P. LID. v. U.0.1. [SRIKRISHNA, J.) 255
be declared by the Central Government or the State Government by a A
notification to be a 'local area' for the purpose of the Act In relation to
such local area, an officer is appointed by the Central Government or the
State Government by notification in the Official Gazette to be in-charge
of the Health administration in such area with such designation as specified
therein and such officer is defined to be a 'Local (Health) Authority' by B
Section 2(viiia). Section 2(vi) defines 'Food (Health) Authori~' as the
Director of Medical and Health Services or the Chief Officer in-charge of
Health administration in a State, by whatever designation he is known, and
includes any officer empowered by the Central Government or the State
Government, by notification in the Official Gazette, to exercise the powers C
and perform the duties of the Food (Health) Authority under the Act
with respect to such local area as may be specified in the notification.
Section 7, upon which most of the arguments turn, needs to be noticed.
Section 7 reads as under :
"7. Prohibitions of manufacture, sale, etc., of certain articles, D
food.- No person shall himself or by any person on his behalf
manufacture for sale, or store, sell or distribute -
(i)
any adulterated food;
(ii) any misbranded food;
(iii) any article of food for the sale of which a licence is
prescribed, except in accordance with the conditions of the
licence;
(iv) any article of food the sale of which is for the time being
prohibited by the Food (Health) Authority in the interest of public
health;
E
F
(v) any article of food in contravention of any other provision G
of this Act or of any rule made thereunder; or
(vi) any adulterant.
Explanation. -
For the purposes of this section, a person shall
be deemed to store any adiili~~t~d food or misbranded food or H
A
256
SUPREME COURT REPORTS [2004] SUPP. 3 S.C.R.
any article of food referred to in clause (iii) or clause (iv) or clause
(v) if he stores such food for the manufacture therefrom of any
article of food for sale."
Section 22A empowers the Central Government to give such directions as
B it may deem necessary to a State Government regarding the implementation
of the Act. Section 23 empowers the Central Government to make rules
to carry out the provisions of the Act. In particular, and without prejudice
to the generality of the. rule making power, the power of the Central
Government includes the one in clause (f). Section 24 of the Act is the
section which grants rule making power to the State Government. The State
C Government may, after consultation with the Committee, and subject to the
condition of previous publication, thereunder make rules for the purpose
of giving effect to the provisions of the Act in matters not falling within
the purview of section 23. Sub-section (2) of Section 24 grants power to
the State Government to make rules with regard to the powers and duties
D of the different authorities under the Act. Prescription of forms of licences
for the manufacture for sale, storage, sale and distribution of articles of
food, the conditions subject to which such licences may be issued and the
fees payable therefor, analysis ofany article of food or matter and provision
for further delegation of power by the State Government to the Food
E (Health) Authority or the subordinate authorities are the matters covered
within this delegated power.
Part IX of the Prevention offood Adulteration Rules, 1955 {hereinafter
referred to as the 'Rules') deals with the conditions for sale and licence.
Rules 49 and 50 lay down detailed conditions applicable to different types
F of licences granted for manufacturing of different products used as food
articles.
In Appendix B there is prescription of definitions and standards of
quality of different food articles. Of relevance to us is paragraph A.30
G which deals with pan masala. Paragraph A.30 reads thus :
"A.30 PAN MASALA means the food generally taken as such or
in conjunction with pan, it may contain -
Betelnut, lime, coconut, catechu, saffron, cardamon, dry fruits
H
mulathi, sabermusa, other aromatic herbs and spices, sugar,
GODA WAT P_AN MASALA PRODUCTS J.P. LTD. v.