# I: BISHAMBHAR DAYAL CHANDR OTHERS ETC E A MOHAN AND . TC v. STATE OF UTTAR PRADESH & ORS

- **Citation:** [1982] 1 S.C.R. 1137
- **Court:** Supreme Court of India
- **Decided:** 1981-04-21
- **Bench:** A. P. Sen, Baharul [Slam
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/i-bishambhar-dayal-chandr-others-etc-e-a-mohan-and-tc-v-state-of-uttar-pradesh-8263
- **Pages:** 39

## Headnote

1137
Uttar Prruinh Food Grains D~al~n ( Llc~lfs.
ll!ld
.
Ord~r, 1976 and Ullar Prad~sh Food Grai~s ( p VII
Re3trlctwn on Hoordillf)
Ordtr, 1978, clause (4) a.r amood~d by Notlfi:a~;o:e::::~~~~=1r.r;,adt)
dartd April 21, 1981-Ttllpr/nttr Musagt ls.su~d bu IM St
G
( -J/BO
March J/ 1981
d'
·'
~
au
OYtrnmtlfl datetl
,
regar: 1118 en,orcetMnl of t/w Ordn,_cq1Utitl4li lUll
fd'
t/
Articles U, 19(/)(g), /62, JOOA ll!ld 301 o/tk CoiUrftUJioll of /;Ia. 1a' tty oConztllllliolt of India, Article 32-Juri$1/ktioll of the Supnmt Court 10
illrlstiKate Into facu, up/a/ned.
"
Worth Qlll/ pltrasu-" Law" occurrill/f ;, Artic/4 300A "at Q/IY time'' Qfld
rtLJsonah/e ustrktion'', m~ani11g of,
In exercise or the powers vestetl under the Essential Commodities Act, 1951,
the State Government of Uuar Pratl~h issued two orders, namely (I} the Uttar
Prade$h Food Grains Dealers (Licensing and R~triction on Hoarding) Order,
1976 and (2) the Uttar Pradesh Food Grains (Procurement and Regulation of
Trade) Order 1978. By irs teleprinter messase dated M:ucll 31, 1981 to all the
. I ~egional Food Controllers, the State Government issued certain further instruc-
.t ~IOns '?r ~ffectivc enforcement of the two 01ders aod io parricular regulatin~ the
.J( tDICr·dJstnct and outside the State-movement of wheat by traders on pnvatc
account, By a Notification No. P-XXIX-Food·S·S(42)/80 dared April21, 1981,
clause (4) of the
t97tl Order, was amended providing that no wholesale
dealer, commission asent, or 1 retuiler shall have in stock wheat more than 250
quintals, 2SO quintals and 20 qui mats IC'pc<:tively, at any time, since it was of
0~1n!on that it was occcssary or 0,.pedieot so to do for sccurins the equitable
dtstnbutlon and availability ot foodgrsiDI at fair prices.
Pursuant to the powcu vc.trd in !hem, the Senior Marketing Inspector and
1~ Chief Murk~tioalnspector, Aara, Intercepted aod seized the truds laden
wu~ Wheat o( tho petitioners wh" oru wholcs.1~ dcalen of foodgrains from the
tlnron Territory of Delhland the States of PunJ'Ib and Haryaaa at the check
Post at Saiyan 00 the border between tbe Slates of Uuar Pradesh and Madhya
Pradesh, and after brinaina thcnt back to the_ ~ucchasc point at Ag~ un_loaded
tha Wheat from the said trudts. While the peuuoners moved an apphcatron for
tbc release o( the ac:iud wheat before the Additional District Maaisuate (Civil
Supplies), Aara, tho Marketina Inspectors not only lodged Fint Information
B
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SUPREME COURT REPORTS
[1982} 1 s.c.R.
Reports but obtained an interim order on M;ay 23, 1981 for the sale of the seized
wheat as it was subject to speedy and natural decay. The seized wheat had been
purchased by the State Government on Government account at the procurement
price and the sale proceeds were credited into the treasury.
The petitioners challenged the teleprinter message dated March 31, 1981
and the Notification dated April 21, 1981 on the following grounds : (1) The
Notification fixing the maximum limit of wheat permitted to be possessed by a
wholesale dealer at 250 quintals, at a time, is an unreasonable restriction on the
freedom of trade guaranteed under Article 19(1 )(g) of the Constitution; (2) there
is no distinction made between a wholesale dealer and a commission agent in as
much as the maximum limit of wheat allowed to be possessed by them is the
same, i.e., 250 quintals at a time and the fixation of such limit in the case of a
wholesale dealer is arbitrary, irrational and irrelevant and thus violative of
Article 14 of the Constitution; (3) the instructions conveyed by the State Government by its teleprinter message dated March 31, 1981, placing restrictions on
movement of wheat by traders on private account from the State of U.P. to
various other States and on inter-district movement of wheat within the State,
were violative of their fundamental rights under Article 19(1)(g) and Article 301
of the Constitution; (4) the seizure of the consignments of the wheat, while

## Text

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..
I:
BISHAMBHAR DAYAL CHANDR
OTHERS ETC E A MOHAN AND
. TC.
v.
STATE OF UTTAR PRADESH & ORS.
November S, /98!
[A. P. SEN AND BAHARUL [SLAM, JJ.J
1137
Uttar Prruinh Food Grains D~al~n ( Llc~lfs.
ll!ld
.
Ord~r, 1976 and Ullar Prad~sh Food Grai~s ( p VII
Re3trlctwn on Hoordillf)
Ordtr, 1978, clause (4) a.r amood~d by Notlfi:a~;o:e::::~~~~=1r.r;,adt)
dartd April 21, 1981-Ttllpr/nttr Musagt ls.su~d bu IM St
G
( -J/BO
March J/ 1981
d'
·'
~
au
OYtrnmtlfl datetl
,
regar: 1118 en,orcetMnl of t/w Ordn,_cq1Utitl4li lUll
fd'
t/
Articles U, 19(/)(g), /62, JOOA ll!ld 301 o/tk CoiUrftUJioll of /;Ia. 1a' tty oConztllllliolt of India, Article 32-Juri$1/ktioll of the Supnmt Court 10
illrlstiKate Into facu, up/a/ned.
"
Worth Qlll/ pltrasu-" Law" occurrill/f ;, Artic/4 300A "at Q/IY time'' Qfld
rtLJsonah/e ustrktion'', m~ani11g of,
In exercise or the powers vestetl under the Essential Commodities Act, 1951,
the State Government of Uuar Pratl~h issued two orders, namely (I} the Uttar
Prade$h Food Grains Dealers (Licensing and R~triction on Hoarding) Order,
1976 and (2) the Uttar Pradesh Food Grains (Procurement and Regulation of
Trade) Order 1978. By irs teleprinter messase dated M:ucll 31, 1981 to all the
. I ~egional Food Controllers, the State Government issued certain further instruc-
.t ~IOns '?r ~ffectivc enforcement of the two 01ders aod io parricular regulatin~ the
.J( tDICr·dJstnct and outside the State-movement of wheat by traders on pnvatc
account, By a Notification No. P-XXIX-Food·S·S(42)/80 dared April21, 1981,
clause (4) of the
t97tl Order, was amended providing that no wholesale
dealer, commission asent, or 1 retuiler shall have in stock wheat more than 250
quintals, 2SO quintals and 20 qui mats IC'pc<:tively, at any time, since it was of
0~1n!on that it was occcssary or 0,.pedieot so to do for sccurins the equitable
dtstnbutlon and availability ot foodgrsiDI at fair prices.
Pursuant to the powcu vc.trd in !hem, the Senior Marketing Inspector and
1~ Chief Murk~tioalnspector, Aara, Intercepted aod seized the truds laden
wu~ Wheat o( tho petitioners wh" oru wholcs.1~ dcalen of foodgrains from the
tlnron Territory of Delhland the States of PunJ'Ib and Haryaaa at the check
Post at Saiyan 00 the border between tbe Slates of Uuar Pradesh and Madhya
Pradesh, and after brinaina thcnt back to the_ ~ucchasc point at Ag~ un_loaded
tha Wheat from the said trudts. While the peuuoners moved an apphcatron for
tbc release o( the ac:iud wheat before the Additional District Maaisuate (Civil
Supplies), Aara, tho Marketina Inspectors not only lodged Fint Information
B
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l) .(
\ .
E
F
G
H
A
8
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D
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F
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1138
SUPREME COURT REPORTS
[1982} 1 s.c.R.
Reports but obtained an interim order on M;ay 23, 1981 for the sale of the seized
wheat as it was subject to speedy and natural decay. The seized wheat had been
purchased by the State Government on Government account at the procurement
price and the sale proceeds were credited into the treasury.
The petitioners challenged the teleprinter message dated March 31, 1981
and the Notification dated April 21, 1981 on the following grounds : (1) The
Notification fixing the maximum limit of wheat permitted to be possessed by a
wholesale dealer at 250 quintals, at a time, is an unreasonable restriction on the
freedom of trade guaranteed under Article 19(1 )(g) of the Constitution; (2) there
is no distinction made between a wholesale dealer and a commission agent in as
much as the maximum limit of wheat allowed to be possessed by them is the
same, i.e., 250 quintals at a time and the fixation of such limit in the case of a
wholesale dealer is arbitrary, irrational and irrelevant and thus violative of
Article 14 of the Constitution; (3) the instructions conveyed by the State Government by its teleprinter message dated March 31, 1981, placing restrictions on
movement of wheat by traders on private account from the State of U.P. to
various other States and on inter-district movement of wheat within the State,
were violative of their fundamental rights under Article 19(1)(g) and Article 301
of the Constitution; (4) the seizure of the consignments of the wheat, while they
were in transit in the course of inter-State trade and commerce from the Union
Territory of Delhi and the States of Punjab and Haryana to various destinations
in the States of Maharashtra and Madhya Pradesh, was without "the authority
of law'' and in violation of Article JOOA or the Constitution; (5) the restriction
must be by "law" or by an "order" having the force of law and not by recourse
to the executive authority of the State under Article 162 of the Constitution, that
is, by an executive action. The teleprinter messag~: of the State Government
dated March 31, 1981 on the basis of which the seizures were effected in truth
and substance, had no legal sanction and cannot be construed to be a notified
order within the meaning of sub. section (l) read with sub-section (5) of section
3 of the Essential Commodities Act; it was nothing but an executive direction.
No executive action which operates to the prejudice of the citizens can be taken
without the authority of law. The seizures effected were not in compliance with
the instructions contained in the teleprinter message and not for breach of the
two control Orders and, therefore, it was nothing but a "colourable eltercise" of
power. The real purpose of the seizure was procurement of wheat in furtherance
of the directives of the Central Government without any legal sanction, since the
farmers were not willing to sell their wheat at the procurement price; and (6)
under sub. section 2(ii) of section 6A of the Act there being no control price for
wheat, the wheat should have been sold by public auction by the Additional
District Magistrate while passing an interim order.
Dismissing the petitions, the Court
HELD: 1:1. The restriction imposed by the State Government on wholesale dealers of wheat is neither arbitrary nor is of an eltcessive nature beyond
what is required in the national interest. To check speculative tendencies of the
wholesale.traders and others who manipulate the market by withholding stocks
of a commodity and to obviate blackmarketing, the stock limit of wheat was lilted
for wholesale dealers at 250 quintals at a time, as in the case of a commission
agent, the underlying idea beini that the wholesale dealers should be allowed to
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BISHAMBHAR DAYAL v. U.P. STATE
I t39
continue their trading activities within reasonable limits. The fixation of stock
limit at 250 quintals implies that wholesale dealers can have at any time, in
stock, a wagon-load of wheat. The words "at any time" mean "at any given
time", which means that a wholesale dealer should not have in stock more than
250 quintals at a time. But there is nothing to prevent a wholesale dealer from
entering into a series of transaction during the course of the day. [1173 A-E]
1:2. The State Government had adopted va~ious measures in the interest
of the general public for the control of production, supply and distribution of,
and trade and commerce in, essential commodities. The Order fixing a stock
limit introduces a system of checks and balances to achieve the object of the
legislation, that is, to ensure equitable distribution and availability of essential
commodities at fair prices. Looking to the prevailing conditions, the imposition
of such restrictions sati~fies the test of reasonableness
The fixation of such
stock limit is not arbitrary or irrational having no nexus to the object sought to
be achieved and is, therefore, intra ·;ires of Article 14. The limitation imposed
fixing a stock limit for a wholesale dealer at 250 quintals is also a reasonable
re~triction within the meaning of Article 19(6) of the Constitution. [!174 A-D]
2:1. The teleprinter message No. PP-1061/XXIX-Food-5 dated 31st March,
1981 was in the nature of executive instruction of the State Government to the
Regional Food Controllers of the various regions to be more vigilant and to
secure ~ue observance of the control orders. [1156 B, E-F, 1163 C]
2:2. The instructions conveyed by the State Government by the impugned
teleprinter message imposing the requirement for the making of an endorsement
by the Deputy Marketing Officer or the Senior Marketing Officer or the physical
verification of stocks of wheat during the course of transit, are not a 'restriction'
or an 'intrusion' on the fundamental right to carry on trade or business
guaranteed under Article 19(1)(g) or on the freedom of trade, commerce and
intercourse under Article 301. These are nothing but regulatory measures to
ensure that the excess stock of wheat held by a wholesale dealer, commission
agent or a retailer is not transported to a place outside the State or from one
district to another. Even if these requirements are considered to be a 'restriction'
on inter-State or intra-State trade, that is, across the State or from one part of
the State to another, the limitation so imposed on the enjoyment of the right
cannot be considered to be arbitrary or of an excessive nature and thus violative
of Article 19(1)(g) or Article 301 of the Constitution. There being no ban on
the export of wheat from the State of Uttar Pradesh to variou~; other States or
from one district to another within the State, subject to the making of an
endorsement by the Deputy Marketing Officer or the Senior Marketing Officer
concerned, the Petitioners who an: wholesale dealers of foodgrains in the State
or. ?"ttar. ~radesh ~re, therefore, free to carry on their business within the permiSSible hm•ts, that 1s, they may carry on their trade or business or enter into
inter-State or intra-State transactions of wheat subject to the stock limit of 250
quintals, at a time.
[ 1174 D-H, 1175 A-B]
2:3. The teleprinter message dated March 31, 1981 was a direct sequel to
the Centre's directives contained in its earlier teleprinter message and intended
or meant to achieve three main objectives, namely, (i) to provide price support
in wheat to purchasers with a view to sustain, maintain and maximise the proA
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SUPRilME COURT REPORTS
[1982] 1 s.C.R.
curement of wheat; (ii) to prevent hoarding and black-marketing; and (iii) to
provide for equitable distribution and availability of wheat at fair prices. The
directions were obviously meant to subserve the object of the legislation and
were in public interest. The State Government was committed to provide price
support in whe:~.t to producers and hence to maximise procurement of wheat,
there is nothing unusual on the State Government issuing such executive
instructions. [1156 E·F, 1160 D-E]
2:4. Even assuming that the impugned teleprinter message is not relatable
to the control Orders, the State Government undoubtedly could, in exercise of
the executive power of the State, introduce a system of verification on movement
of wheat fwm the State of Uttar Pradesh to various other States at the check post
on the border and place restrictions on inter-district movement of wheat by
traders on private account within the State. [1156 E-F]
Ram Jawaya Kapur v. State of Punjab [1955] 2 SCR 225 and Naraindas
lndurkhya v.LState of Madhya Pradesh & Ors., [1974] 3 SCR 624, explained and
followed.
3:1. The State Legislature is competent to enact a law on the subject
covered by Entry 33, List HI, regulating trade and commerce in, and the production, and supply and distribution of •·foodstuffs".
fhe Essential Commodities
Act, 1955 was enacted by Parliament in ('Xercise of concurrent jurisdiction under
Entry 73, List II, of the Seventh Schedule to the Constitution as amended by the
Constitution (Third _Amendment) Act, 1954. The exercise of such concurrent
jurisdiction would not deprive the State Legislature of its jurisdiction thereunder.
The executive power of the State which is coextensive with the legislative power
is subject to the limitation contained in Article 162 which directs that in any
matter with respect to which the legislature of a State and Parliament have power
to make laws, the executive power of the State shall be subject to, and limited
by, the executive power expressly conferred by the Constitution or by any Jaw
made by Parliament upon the Union of authorities thereof. [1158 F-H, 1159 A-B]
3:2. The State in exercise of its executive powers is charged with the duty
and the responsibility of carrying on the general administration of the State.
So long as the State Government does not go against the provisions of the constitution of any law, the width and amplitude of its executive power cannot be
circumscribed. If there is no enactment covering a particular aspect, certainly
the Government call carry on the administrative directions or instructions, until
the legislature makes a law in that behalf. Otherwise the administration would
come to a standstill. .£1157 B·C]
3:3. The executive power of "search and seizure" is a necessary concomitant of a welfare State. It tends to promote the well being of the nation. Many
questions arising in the field of search and seizure are factual in nature, involving
varying degrees of difference among the infinitely diverse facts. It is a limitless
area where not only every factual variation presents a new constitutional question,
but it is a peculiar field in which the decisions of courts do not help in clarifying
the law. The decisions in the field are of little precedental value, because the
more the cases that are decided the more issues arise, through possible factual
variation. (1159 B·E]
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DISHAMBHAR DAYAL V. U.P. STATE
1141
4:1. The quintessence of the Constitution is the rule of the law. The State
or its executive officers cannot interfere with the rights of otht:rs unless they can
point to some specific rule of law which authorises their acts. [1161 A]
Stale of Madhya Pradesh v. Thakur Bharat Singh, [1967] 2 SCR 454, Satwant
Singh Sawhney v. Dr. Ramarathnam, Assistant Passport Officer, Government .of
India, New Delhi & Ors., [1967] 3 SCR 525 at 542; Smt. Indira Nehru Gandhi v.
A
Shri Raj Narain, [1976] 2 SCR 347 at 524, reiterated.
B
4:2. The Essential Commodities Act, 1955 is a "Jaw" within the meaning
of Article 302 of the Constitution imposing reasonable restrictions on the right
to carry on trade and commerce as guaranteed by Article J9(1)(g) and Article
301 of the Constitution. The object of the Act is to provide, in the interest of
the general public for the control, production, supply ·and distribution of, and
trade and commerce in, certain essential commodities.
1161 D-E]
5. From the point of view either of Entry 54 List II or of Article 301 of the
Constitution, the State Legislature is competent to set up the check posts and
barriers on the State's borders, designed and meant to prevent evasion of sales
ta~~: and other dues. Just as inter-State trade and commerce must pay its way
and be subject to ta~~:ation, persons engaged in inter-state trade or commerce are
equally subject to all regulatory measures. The check posts or barriers set up by
the State Government under section 28 of the U.P. Sales Tax Act, 1948, which is
legally accepted as valid and also considered not a restriction or impediment to
the freedom of trade, commerce and intercourse granted under Article 301 of the
Constitution, can certainly be utilised as a machinery for due observance of the
laws, for eumple, for verification and control of movement of wheat by traders
on private account from the State of Uttar Pradesh to various other States.
[1159 F, 1160 B-D]
6:1. The fundamental right to carry on trade or business guaranteed under
Article 19(l)(g) or the freedom of inter-State trade, commerce and intercourse
under Article 301 of the Constitution, has its own limitations. The liberty of an
individual to do as he pleases is not absolute. It must yield to the common
good. Absolute or unrestricted individual rights do not and cannot exist in any
modern State. There is no protection of the rights [themselves unless there is a
measure of control and regulation of the rights of each individual in the interests
of all. Whenever such a conflict comes before the Court, it is its duty to har·
monise the exercise of the competing rights. The Court must balance the individual's rights of freedom of trade under Article 19(1 )(g) and the freedom of interState trade and commerce under Article 301 as against the national interest.
Such a limitation is inherent in the exercise of those rights. [1!64 E-H]
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6:2.
Under Article 19(1l(g) of the Constitution, a citizen has the right to
G
carry on any occupation, trade or business and the only restriction on this unfettered right is the authority of the State to make a law imposing reasonable
restrictions under clause (6}.
[1165 A]
6:3. The expression "reasonable restriction" signifies that the limitation
imposed on a person in enjoyment of the right should not be arbitrary or of an
excessive nature, beyond what is required in the interests of the :>ublic. The test
pf. reasonableness. wherever prescribed1 should be applied to ea,ch individual
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SUPREME COURT REPORTS
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statute impugned, and no abstract standard, or general pauern of reasonableness
can be laid down as applicable in all cases. The restriction which arbitrarily
or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balanc~ between the freedom guaranteed
in Article 19(1} {g) and the social control permitted by clause (6) of Article 19, it
must be held to be wanting in that quality. [1165 B-D]
6:4. Several steps taken, in the instant case, like prevention of movement
of stock of wheat to various other States, movement of wheat from one district
to another within the State only after the verification of the transaction and due
endorsement by the Deputy Marketing Officer or th : Senior Marketing Officer
concerned and also the physical verification at the check post on the State's
borders etc. were designed to prevent a price rise in wheat in the State of Uttar
Pradesh and to prevent outflow of wheat from the State to various other States
and from one district to another district within the State. The whole object was to
ensure that the wholesale dealers in foodgrains did not corner stocks of wheat
for the purpose of speculation, and hence the steps taken were reasonable and
in the interests of the general public. If, therefore, the seizure can be justified on
the basis of any valid law, it cannot be held to be illegal.
[1165 D-H]
7:1. Article 301 imposes a limitation on all legislative power in order to
secure that trade, commerce and intercourse throughout the territory of India
shali be free.
Although Article 301 guarntees that trade, commerce intercourse
throughout the country shall be free, the righ(to carry on inter-State trade and
commerce may be subject to reasonable 1estrictions in the interests of the
general public. [1165 A, 1166 A, C]
7:2. The word 'free' in Article 301 does not mean freedom from laws or
from regulations. Article 301 guarantees freedom of trade, commerce and
intercourse throughout the country from any State barriers. The whole object
was to bring about the economic unity of the country under a federal structure,
so that the people may feel that they are members of one nation. One of the
means to achieve this object is to guarantee to every citizen in addition to the
freedom of movement and residence throughout the country, which is achieved
by Article l9(1)(d) and (e) is the freedom of movement or passage of commodities
from one part of the country to another. This freedom of trade, commerce and
intercourse throughout the country without any "State barriers" is not confined
to inter-State trade but also including intra-State trade as well.
In other words,
subject to the provisions of Part XIII, no restrictions can be imposed upon thtl
flow of trade, commerce and intercourse, not only between the State and another,
but betw<:!n ar1y two pJints within th~ territory of India whether any State border
has to be crossed or not. [1166 D-H]
7:3. The regulatory measme or me'l.sure> impo>ing compensatory taxes do
not come within the purview of th~ restrictions contemplated by Article 301. The
regulatory measures should, however, be such as do not impede the freedom of
trade, commerce and intercourse.
[1166 H, 1167 A]
8:1. In view of the provisions of clause (3) of the 1976 Order read with
clauses {4) & (6) of the 1978 Order, the validly seized e:tcess stock of wheat lying
with such dealer, that is, a wholesale dealer, commission agent or a retailer, in
truth and substance, became their"unlicensed stock". Here, if really the Delhi
traders had purchased the excess stock of wheat from wholesale dealers, com·
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BISHAMBHAR DAYAL V. U.P. STATE
1143
mission agents or retailers in the State of Uttar Pradesh, as is alleged, it is
possible to contend that there was a contravention of 'the provisions of clause (4)
of the 1978 Order. The question whether the seizure was for any contravention
of any order issued under section 3 of the Act has to be determined by the
Additional District Magistrates (Civil Supplies), Agra, on the evidence adduced
by the parties before him. The facts being controverted, the petitioners have no
right to relief under Article 32 of the Constitution. [1168 D-H, llfi9 A-B)
8:2. Supreme Court can neither act on documents which are yet to be
proved nor can they pronounce upon the genuineness of the transactions covered
by them or record any finding on the basis of the documents when the facts are
in dispute. [1169 E)
8:3. Normally, it is not the function of Supreme Court to investigate into
facts in p!Oceediogs under Article 32 of the Constitution when they are controverted with a view to discerning the truth. The matter must, in a situation like this,
be left to the fact-finding body. For the establishment of their right to relief
under Article 32, the petitioners must establish the necessary facts before the said
Additional District Magistrate in the proceedings under section 6A of the
Essential Commodities Act. If they fail to get relief in such proceedings, their
obvious remedy lies in a suit for damages for wrongful seizure. [1171 A-C)
9:1. The State Government cannot while taking recourse to the executive
power of the State under Article 162 of the Constitution deprive a person of his
property. Such power can be exercised only by authority of Jaw and not by a
mere executive fiat or order. Article 162 being subject to other provisions of the
Constitution, is necessarily subject to Article 300A. [1169 F-G]
A
B
c
D
Wazir Chand v. The Stale of Himachal Pradesh, [1955] 1 SCR 408; Bishan
E
Das and Ot~rs v. The State of Punjab and Others, [1962] 2 SCR 69, referred to.
• )
9:2. The word 'law' in the context of Article 300A must mean an Act of
Parliament or of a State Legislature, a rule, or a statutory order, having the
force of law, that is positive or State-made law. [1169 G·H]
9:3. The effect of the Constitution {Pourth) Amendment Act, 1955, is that
there can be no 'deprivation' unle~s there is extinction of the right to property.
Here, no doubt, the wheat hnd to be sold, as it was subject to spee-dy and natural
decay, but the petitioners an.: entitled to the sale proceeds, if ultimately it is
found by the Additional District Magistrate (Civil Supplies), Agra, that there
wa~ no contravention by them of an order issued under section 3 of the Act.
It IS true that the seizure was with intent to confiscate under section 6A of the
Act, but that would not make the seizure illegal, if, ultimately, it is found that
there was con~ravention of an order issued under section 3 of the Act. If the
facts were not ·~ controversy and if the petitioners were able to prove that there
was wrongful se•_zure of wheat by the State Government of Uttar Pradesh at the
check post of Satyan on the border, whil¢ in transit, in the course of linterState trade and commerce from the Union Territory of Delhi perh
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ey
wou
e entit_e to the return of th.: seized wheat, or, in the alternative, to the
payment of pCice thereof.
(1170 D-H, 1171 A]
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SUPREME COURT REPORTS
[1982j1 S.C.R.
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9:4. The question that the seizures were in reality for procurement of wheat
in furtherance of the directive of the Central Government, and not for breach
of the two Control Orders and, therefore, were nothing but a 'colourable exercise
of power', is dependent on facts to be found on investigation. Further, the
question that there being no control price for wheat, the wheat should have been
sold by public auction, is again a question that must be raised before the Additional District Magistrate (Civil Supplies), Agra, in the proceedings pending
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before him under section 6A of the Act. [1171 C-D]
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ORIGINAL JURISDICTION :
Food Grains Matters.
A. Movement by Road:
(a) WP. Nos. 2907-2908, 3234, 3238-39, 3164, 3254, 3630·
31, 3686, 3783, 3816, 4816, 4929-31, 4836-38, 49965001, 15051-54, 5089-93, 5136-46, 5247, 3160, 3634,
4494,4616, 4967, 5362-71, 5416-20, 5447-50, 5716-17,
5840, 6015, 6587-89 & 6609-14/8].
(b) WP. Nos. 5062, 5157·58, 5451 & 5615-17/81.
(c) WP Nos. 5097, 5042, 5098, 5017, 5214 & 6135-36/81
& 7003/81.
(d) WP. Nos. 3421, 3407, 3408-13, 3422, 3536, 3561-64,
5238, ! 3824, 5466, 5544, 6009, 6130-31, 6572-74 &
6582-83/81.
(e) WP. Nos. 4904-4905, 5080, 5094, 5239-45, 5358-59,
5395, 5483, 5484-88, 5489-92,
5734-39, 6584-86 &
6817-21/81.
(f) WP_ Nos. 4960-62, 4958-59, 5129-33, 5219-20, 533133, 5518-19, 5526, 5428-31 & 5527/81.
(g) WP. Nos. 4526, 4926, 4995, 5046, 5048-50, 5100, 5101.
5136-46, 5402-11' 5436-38, 5560, 5520-21' 5562, 5558, .
5556, 5559, 5550, 5546-47, 5552, 5555, 5553-54, 5511,
5482, 5618-19, 5809-20, 6132-33, 6244, 6273-75, 626772, 5512-14,5515,6570 and 5562/81, 7027-29 and 703234/81.
(h) WP. Nos. 5221, 5380-83, 5129-33, 5421-22, 5440, 550710, 5662, 5806-5807, 6245, 6246, 6265, 6398 and
6684{81.
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fUsliAMBHAR DAYAL v. U.P. STAtE
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(i)
VVP.
~os. 3592, 3353t 5396, 6016,
6247-48, 6616,
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6668 and 6798/81.
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( j) VVP. ~os. 5003, 4453, 4455-56, 5346-48, 4955, 5082-89,
5577-80, 5581 and 5724/81.
(k) VVP. Nos. 3489 and 4293/82.
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(l)
VVP. No. 4818/81.
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(m) WP. Nos. 2916, 2932, 3242, 3297-3302, 3334-43, 3475,
4098-4100, 4136, 4304, ~.4\87, 4777, 5007-17, 5027-34,
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5352-55, 5473-79, 5604-5608, 5740-42, 5743-44, 5821,
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6012-13 and 5583-92/81.
(n) WP Nos. 5391 and 5525/81.
.
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(o) WP No. 5443/81.
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(p) WP. Nos. 5444, 5663 and 6266/81.
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(q) WP. No. 5464/81.
(r) WP. Nos. 5451 and 5564-66/81.
(s) WP. No. 5807/81.
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(t) WP. Nos. 5571-75, 5622-29 and 6014/81.
(u) WP. Nos. 5718-l9/81 and 6943/81.
-..
(v) WP. No. 5568-69/81.
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B. Restriction on Quantum of Food-Grains which can be held:
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(a) WP. Nos. 2932, 3776-3780, 4140-45, 4326-28, 4876-
~
4902, 4670-78 and 5473-79/81.
(b) WP. No. 5480(81.
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(c) WP. Nos. 4955-56, 5330, 5392, 3823 and 6278/81.
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(d) WP. Nos. 5529-30/81.
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{e) WP. Nos. 5531-32/81.
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su:PttEME cou&r REi>oRts
[1982]1 s.C.k.
(f) WP. Nos. 5841-50/81.
{g) WP. Nos. 5656-58/81.
(Under Article 32 of the Constitution of India)
Hari Sarup, M.N. Phadke, Soli J. Sorabjee, J.P. Goyal
and C.M. Lodha, (M/s. B. Datta, R.A. Gupta, Miss Kamini
Jaiswal, Rajiv Dutta, Manoj Swarup and Miss Lalita Kohli,
R.S. Sharma, R.K. Jain, Pankaj Jain, P.K. Jain, K.K. Jain,
K.B. Rohatgi, B.R. Kapur, B.S. Tawakley, S.R. Srivastava,
N.N. Sharma, A.K. Goel, Mitter and Mitter and Co., S.K.
Jain, Rajesh Jain, Mukul Mudgal, M. Qamaruddin, Mrs.
M. Qamaruddin, Anis Suhrawardhy, A.P. Mohanty, K.K.
Gupta, Ravi Prakash Gupta, C.K. Ratnaparkhi, S.C. Birla,
M.C. Dhingra, and S.K. Gambhir for the appearing Petitioners.
G.N. Dikshit, O.P. Rana, Mrs. Shobha Dixit, R.N.
Poddar, G. Gopalakrishan, A. V. Rangam, B.D. Sharma,
D.P. Mohanty and A. Shroff for the Respondents.
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The Judgment of the Court was delivered by
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SEN, J. The issue in this and the connected 505 petitions under
Art. 32 of the Constitution is of far-reaching significance. It raises
questions of the highest importance as to the scope and extent of the
executive power of the State under Art. 162 of the Constitution, in
relation to regulation and control of trade and commerce in foodstuffs. It necessarily involves a claim by the petitioners who are
wholesale dealers of foodgrains that the exercise of such governmental power conflicts with the rule of law and is in flagrant violation of the freedom of trade, commerce and intercourse guaranteed
under Art. 301 of the Constitution and the fundamental right to
carry on trade and business guaranteed under Art. 19 (1) (g) of the
Constitution. These petitions fall into two distinct and separate
categories, one by the wholesale dealers of foodgrains from the Union
Territory of Delhi and the neighbouring States of Punjab and
Haryana, and the other by the wholesale dealers of foodgrains from
the State of Uttar Pradesh.
)
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BISHAMBHAR DAYAL V. U.P. STATE (Sen. J.,)
1147
The short question that falls for consideration in some of the
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.writ petitions by wholesale dealers of foodgrains from the Union
·Territory of Delhi and the State of Punjab and Haryana is whether
.the action of the State Government of Uttar Pradesh in setting up
'check-posts on its borders and the stoppage ~nd seizure of wheat in
transit through the State of Uttar Pradesh during the course of inter-
:state trade and commerce to various destinations in the States of
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Madhya Pradesh and Maharashtra at the check-post at Saiyan on
the borde~. between the States of Uttar Pradesh and Madhya Pradesh •
on tne strength of its instructions conveyed by its teleprinter message
dated March 31, 198l, was in violation of Art. 301 of the Constitution.
· '·
In a majority of the writ petitions by wholesale dealers from
the State of Uttar Pradesh, two questions arise, (I) whether Notifi-
·cation No. P-XXIX-Food-5-5 (42)/80 dated April 21, 1981, issued by
the State Government of Uttar Pradesh, in exercise of the powers
conferred by s. 3 read with s. 5 of the Essential Commodities Act, 1955
(hereinafter referred to as the Act), by which 'c1.4 of the Uttar
Pradesh Foodgrains (Procurement and Regulation of Trade) Order,
1978, ~has been amended, providing that
no wholesale dealer,
commission agent or retailer shall have in stock wheat more than 250
quintals, 250 quintals and 20 quintals respectively, at any time, anfringes the fund a mental right to carry on trade or business guaranteed
under Art. 19 (1) (g) and (2) whether the governmental instructions
conveyed by its teleprinter message dated March 31, 1981, placing
restrictions on movement of wheat by traders on private account
from the State of Uttar Pradesh to various other States and on interdistrict movement of wheat within the State, were in breach of the
fundamental right under Art. 19 (1) (g) read with Art. 301· of the
Constitution,
The following are the facts and circumstances so far as necessary to show as to how the legal questions are presented. It would
be convenient first to deal with the writ petitions filed by the wholesale dealers of foodgrains from the Union Territory of Delhi and the
States of Punjab and Haryana seeking a declaration that the impug~
ned action of the State Government of Uttar Pradesh in setting up
check-posts on the borders of the State and directing seizure of
wheat in transit through the State, on the strength of the impugned
teleprinter message, conflicted with the guarantees of inter-State
trade and commerce dealt with by Art. 301 of the Constitution.
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SUPReME COUin REI'OR.IS
[1982] 1 s.c.R.
Facts in all these cases are more or less similar. The petitioners who are wholesale dealers of foodgrains from the Union
Territory of Delhi and the States of Punjab and Haryana allege that
between April 29-30, 1981, they, acting as commission agents,
purchased wheat from the open market in Delhi and elsewhere and
despatched the same by trucks to various destinations in the State of
Maharashtra and to some places in the State of Madhya Pradesh.
According to them, the trucks laden with wheat were accompanied
by relative bills, goods receipts, inter-State transit passes etc., duly
crossed the check-post at Faridabad and were also allowed to
cross the check-post at Kotwan on the border between the Union
Territory of Delhi and the State of Uttar Pradesh and were on their
way to thei! respective destinations. They allege that the Senior
Marketing Inspector, Agra, intercepted the trucks in question at
the check-post at Saiyan on the border between the State of Uttar
Pradesh and Madhya Pradesh between April 30, 1981, and May 2,
1981. The seized trucks were brought back to the purchase point
at Ag1 a and the wheat was unloaded. Thereupon, the petitioners
rushed to Agra and made an application on May 4, 1981, under s.6A
read with ss. 3 and 7 of the Act before the Additional District
Magistrate (Civil Supplies), Agra, for the release of the seiz~d wheat.
In the said application, the petitioners, inter alia, claimed and unequivocally stated that there was no ban on export of wheat from the
Union Territory of Delhi to other States, that the wheat in question
was neither purchased at Agra, nor was it being transported from
Agra to any other district in Uttar Pradesh, that Agra was a place
in transit, and that the instructions of the State Government
contained in the impugned teleprinter message dated March 31, 1981
did not constitute a validly notified order under sub-s. (5) of s. 3 of
the Act.
The Chief Marketing Inspector, Agra, had in the meanwhile
seized 42 trucks laden with wheat either at the check-post at Saiyan
or at Agra and lodged first information reports at the Saiyan police
station or at the Civil Lines police station in respect of the consign·
ments alleging that the movement of wheat was in contravention of
the impugned teleprinter message and was therefore seized, and in
three of them it was alleged that the wheat had been purchased at
Agra. On the report of the Chief Marketing Inspector, the AddiM
tiona! District Magistrate (Civil Supplies), Agra drew up proceedings
under s. 6A of the r Act ~and directed the police to complete the
investigation within 15 days.
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BISitAMBAHR DAYAL v. i;.P. STATE (Sen, J.)
1149
On May 23, 1981, the Additional District Magistrate (Civil
Supplies), Agra under sub-s. (2)(i) of s. 6A of the Act passed interim
orders for the sale of the seized wheat as it was subject to speedy
and natural decay, at the request of the Senior Marketing Inspector,
similar to the one reproduced below :
These proceedings under s.6A of the Essential Commo·
dities Act started on the report of SMI Saiyan dated
30.4.1981 ( Paper No. 1 ) whereby it was brought to the
notice of this Court that truck nos ..... were caught carrying
120 quintals ...... of wheat respectively beyond Saiyan border
outside the State in contravention of the order!; issued by
the Government vide telex No. 1061/29-Food-5 dated
31.3.1981 F.I.R. was lodged at P.S. Saiyan in respect of the
above contravention. Notice under s. 6B of the EC Act was
issued to the O.Ps ...... who were driving the trucks at the
time of search and seizure.
Replies were filed by the owners of the wheat contending that the said rules were not part of any Control Order
under Section 3 of the EC Act nor they bad any legal
sanction for want of publication in the Official Gazette.
The O.Ps. have pleaded that they were taking their goods in
transit through Agra and in fact the movement of wheat so
made by them wa:. inter-state movement which was not
banned by the Central Government or State Government.
I heard the learned counsels on behalf of the O.Ps. and
the learned PO as well. In these proceedings final orders
cannot be passed at this stage as the matter is still under
investigation .
PO directed to put up progress of investigation within
15 days from now.
In the meanwhile I order that the wheat seized by SMI
Saiyan be got purchased at the Official Price so that the
same does not get damaged. The sale proceeds be got
deposited in Government Treasury under proper Head of
Account.
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1150
SUPREME COURt REPORTS
[ 1982]1 s.c.ft.
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This interim order is being passed under sub-s.
(2) (i)
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vf s.6A of the Essential Commodities Act, 1955.
File be
put up after 15 days along with report of prosecuting office
regarding progress of investigation.
Sd/-
N. N. Varma
Addl. Collector, Agra
23.5.1981
The seized wheat has been purchased by the State Government on
Government account at the procurement price and the sale proceeds
credited into the Treasury.
The State Government has filed a counter-affidavit of the Chief
Marketing Officer, Lucknow, in all these cases as also the affidavits
of the Senior Marketing Inspectors at Agra controverting the allegations made by the petitioners. It is stated that the source of the
power to effect the seizure was not the impugnecl teleprinter message,
but the power of search and seizure conferred on an E~f01;cement
Officer und~r cl. 6 of the U.P. Foodgrains Dealers (Lice~s!~g and
Restrictton on Hoarding) Order, 1976 and under cl,6 of the Uttar
Pradesh Foodgrains (Procurement and Regulation of Trade) Order,
1978 (hereinaft~r called the 1976 ,Order and 1978 Order respectively),
both of which were issued by the State Government, in exercise of
the powers under s .. 3 of the Act, read with Government of India,
Ministry of Agriculture (Department of Food). Notification No. G.
S.R. 888 dated June 28, 1961, No .. GSR 316 (E) dated June 20, 1972,
No. GSR 452 (E) dated October 25, 1972, No. GSR 168 (E) dated
March 13, 1973 and No. GSR 800 dated June 9, 1978 respectively,
since it was of opinion that it was necessary or expedient so to do for
securing the equitable distribution and availability of foodgrains at
fair prices. The State Government contends that the impugned teleprinter message dated March 31, 1981 was in the nature, of an executive instruction issued by the State Government under its undoubted
powers under Art. 162 of the Constitution for the due observance of
the provisions of the two Control Orders. It is said that no person
can carry on business in foodgrains as a dealer or as a ,commission
agent except under and in accordance with the terms and condJtions
of a valid licence issued in that behalf under ct. 4 of the '1976 Qrder.
It is also said that no wholesale dealer, commission agent odrader
can have in stock more than 250 quintals, 250 quintals and 20 quintals respectively, at any time. It is asserted that the State Govern-
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thSHAMBBAR DAYAL v. U.P. STATE (Sen, J.)
1 t5i
ment has the right to set up check-posts for the purpose of verifiA
cation so that there is no contravention of the provisions of the two
Control Orders, particularly with a view to ensure that excess
quantity of wheat is not transported in violation of the 1978 Order
to other districts or other States.
The State Government in the counter-affidavit of the Chief
Marketing Officer, Lucknow, specifically denies the allegations made
by the petitioners that the 42 trucks laden with wheat seized at the
check-post at Saiyan on the border between the States of Uttar
Pradesh and Madhya Pradesh or at Agra were in transit during the
course of inter-State trade and commerce.
With regard to the seizure of the wheat, it is averred in para
13 of the counter-affidavit:
"The correct fact is that the authority on the bona fide
apprehension that the wheat so moved actually was purcha-
. sed from the State of Uttar Pradesh from nearby places
and the same was being moved to other States on the garb
of outside wheat.