# STATE OF M.P. & ORS v. M/S. CHHOTABHAI JETHABHAI PATEL & CO. & ANR

- **Citation:** [1972] 2 S.C.R. 838
- **Court:** Supreme Court of India
- **Decided:** 1971-12-10
- **Bench:** S. M. Sikri, J. M. Shelat, I. D. Dua, H. R. Khanna, G. K. Mitter
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/state-of-m-p-ors-v-m-s-chhotabhai-jethabhai-patel-co-anr-5574
- **Pages:** 7

## Headnote

·Madhya Pradesh Tendu Patta (Vyapo·r Viniyaman) Adhiniyam, 1964
-Section 5-Whether restrictions on transport of tendu leaves imported
from outside the State is violative of Part XIII of the Constitution.
The respondent, a partnership firm of which the ·second respondent was
a partner, carried on business as manufacturers of bidis at various places
in the State of Madhya Pradesh. Being unable to secure sufficient tendu
leaves locally, the firm took leases for the collection of such leaves in
Bihar & Maharashtra.
They actually imported tendu leaves under two
railway consignments from Biha'r.
They informed the Divisional Forest
Officer about the same and asked permission for transpon of the leaves
and to utilise them in their factories. By letter, the D.F.O. informed the
respondents that the leaves must not be moved for bidi manufacture until
]Y.'rmission is given.
Rcsponcrents obeyed the order; but in spite of that,
the Sub-divisional Forest Officer seized two quantities of such leaves and
filed a complaint alleging contravention of s. 5 of Madhya Pradesh Tendu
Patta (Vyapar Viniyaman) Adhiniyam, 1964.
The respondent filed a petition under Art. 226 of the Constitution for
a writ of certiorari quashing the complaint. The contention of the respondents was that the Act did not prohibit import of tendu leaves from
outside nor_ was there any restriction on a manufacturer to consume the
same for the manufacture of bidis or the Rules made under the Act did
not regulate the transport of the tendu leaves imported from outside.
The State however, contended that transport of tendu leaves whether
grown locally or imported from outside was completely prohibited under
s. 5 of the Act, except by a license-holder in terms of .a permit issued.
S. 5 ( 1) provides that no person other than the State Government or an
C'fficer of the State Government etc. shall purchase or transport tendu
kaves. Further, the Act did not prohibit impon of tendu leaves and so
the Act is not violative of Arts. 31, 301 and 304 of the Constitution and
the control of movement of tendu leaves 'lfter their import was in no way
repugnant to Arts. 301 and 304 of the Constitution. The State contended
that unless the State had the poW.r to check the purChase of tenqu leaves
from outside the State and to restrict the transport thereof within the State,
the monopoly of State trading in tendu leaves would not be effective. The
High Court rejected these contentions of the State and hence the appeal.
Dismissing the apJ>Oal,
HELD : (I) All the relevant provisions of the Act and the rules made
thereunder show that the legislature intended that everybody growing
leaves within th<> State should offer the same to it dr its agents in different
units for sale and the State was bound to purchase every single lot of
usable tendu leaves.
Prima fade trade in tendu leaves could consist of
dealing in those leaves, i.e., their purchase and sale but transport of the
leaves onc)e p.urchased or sold would not prima facie be an orgariic or
integral part of dealing in those leaves. f842 DJ
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M.P. STATE v. CHHOTABHAI (Mitter, J.)
839
Vraj/al Mani/al v. M.P. State [19701 I S.C.R. 400, filjlowed.
(ii) In the present case, the transport of tendu leaves purchased outside but consigned to places within the State to be used for the manufacture of bidis is not integrally connected with the State monopoly as envisaged in the Act.
The Act ought not to be construed so as to ban
import of tendu leaves from outside the State or restrict their movement
once they are within the State unless cleat language was used in that
behalf. (844 CJ
Akadasi Padhan v. Stat~ of Orissa, (1963] Supp. 2 S.C.R. 691, referred
to.
CIVIL APPELT-ATE JURISDICTION: Civil Appeal No. 684 of
1968.
Y. S. Dharmadhikari, Advocate-General for the . State of
Madhya Pradesh and I. N. Shroff, for the appellants.
M. C. Seta/vad, Rameshwar Nath and S. K. Dho/akia, for
respondent No. 1.

## Text

838
STATE OF M.P. & ORS.
v.
M/S. CHHOTABHAI JETHABHAI PATEL & CO. & ANR.
December 10, 1971
[S. M. SIKRI, C.J., J. M. SHELAT, I. D. DUA, H. R. KHANNA
AND G. K. MITTER, JJ.)
·Madhya Pradesh Tendu Patta (Vyapo·r Viniyaman) Adhiniyam, 1964
-Section 5-Whether restrictions on transport of tendu leaves imported
from outside the State is violative of Part XIII of the Constitution.
The respondent, a partnership firm of which the ·second respondent was
a partner, carried on business as manufacturers of bidis at various places
in the State of Madhya Pradesh. Being unable to secure sufficient tendu
leaves locally, the firm took leases for the collection of such leaves in
Bihar & Maharashtra.
They actually imported tendu leaves under two
railway consignments from Biha'r.
They informed the Divisional Forest
Officer about the same and asked permission for transpon of the leaves
and to utilise them in their factories. By letter, the D.F.O. informed the
respondents that the leaves must not be moved for bidi manufacture until
]Y.'rmission is given.
Rcsponcrents obeyed the order; but in spite of that,
the Sub-divisional Forest Officer seized two quantities of such leaves and
filed a complaint alleging contravention of s. 5 of Madhya Pradesh Tendu
Patta (Vyapar Viniyaman) Adhiniyam, 1964.
The respondent filed a petition under Art. 226 of the Constitution for
a writ of certiorari quashing the complaint. The contention of the respondents was that the Act did not prohibit import of tendu leaves from
outside nor_ was there any restriction on a manufacturer to consume the
same for the manufacture of bidis or the Rules made under the Act did
not regulate the transport of the tendu leaves imported from outside.
The State however, contended that transport of tendu leaves whether
grown locally or imported from outside was completely prohibited under
s. 5 of the Act, except by a license-holder in terms of .a permit issued.
S. 5 ( 1) provides that no person other than the State Government or an
C'fficer of the State Government etc. shall purchase or transport tendu
kaves. Further, the Act did not prohibit impon of tendu leaves and so
the Act is not violative of Arts. 31, 301 and 304 of the Constitution and
the control of movement of tendu leaves 'lfter their import was in no way
repugnant to Arts. 301 and 304 of the Constitution. The State contended
that unless the State had the poW.r to check the purChase of tenqu leaves
from outside the State and to restrict the transport thereof within the State,
the monopoly of State trading in tendu leaves would not be effective. The
High Court rejected these contentions of the State and hence the appeal.
Dismissing the apJ>Oal,
HELD : (I) All the relevant provisions of the Act and the rules made
thereunder show that the legislature intended that everybody growing
leaves within th<> State should offer the same to it dr its agents in different
units for sale and the State was bound to purchase every single lot of
usable tendu leaves.
Prima fade trade in tendu leaves could consist of
dealing in those leaves, i.e., their purchase and sale but transport of the
leaves onc)e p.urchased or sold would not prima facie be an orgariic or
integral part of dealing in those leaves. f842 DJ
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M.P. STATE v. CHHOTABHAI (Mitter, J.)
839
Vraj/al Mani/al v. M.P. State [19701 I S.C.R. 400, filjlowed.
(ii) In the present case, the transport of tendu leaves purchased outside but consigned to places within the State to be used for the manufacture of bidis is not integrally connected with the State monopoly as envisaged in the Act.
The Act ought not to be construed so as to ban
import of tendu leaves from outside the State or restrict their movement
once they are within the State unless cleat language was used in that
behalf. (844 CJ
Akadasi Padhan v. Stat~ of Orissa, (1963] Supp. 2 S.C.R. 691, referred
to.
CIVIL APPELT-ATE JURISDICTION: Civil Appeal No. 684 of
1968.
Y. S. Dharmadhikari, Advocate-General for the . State of
Madhya Pradesh and I. N. Shroff, for the appellants.
M. C. Seta/vad, Rameshwar Nath and S. K. Dho/akia, for
respondent No. 1.
The Judgment of the Court was delivered by
Mitter, J. This is an appeal from a judgment of the Madhya
Pradesh High Court quashing the proceedings initiated on the complaint filed by the Divisional Forest Officer, Saugor in the Court of
the Magistrate of the First Class Saugor for imposition of a penalty
on the respondents.
The matter arises thus. Chhotaqhai Jethahhai Patel, a partnership firm of which the second respondent, Jhaverbhai Bhulabhai
Patel is a partner, carried on business on a fairly large scale as
manufacturers of bidis at various places in the State of Madhya
Pradesh including Saugor. Being unable to secure sufficient quantities of tendu leaves grown in the forest units in the State, the firm
took leases for the collection of such leaves in the States of Bihar
and Maharashtra. They actually imported tendu leaves under two
railway consignments from Bihar to Saugor. They informed the
Divisional Forest Officer about the same and asked for permission
for transport of the leaves and to utilise the said leaves for manu·
facture of bidis in their factories. By letter dated July 27, 1965
the said Forest Officer intimated the firm that the imported leaves
were not to be moved for bidi manufacture until permission was
accorded for so doing. The respondents' grievance was that notwithstanding the above co=unication and in spite of the fact that
they had not moved the imported leaves from their godowns, the
Sub Divisional Forest Officer Saugor seized two quantities of such
leaves of 9007 bags imported from Garwah Road, Bihar and 256
b!lgs of tendu leaves imported from Bindoumaganj, Bihar and
fo!Iowed the same np by filing a complaint alleging contravention
of s. 5 of the Madhya Pradesh Tendu Patta (Vyapar Viniyaman}
~40
SUPREME COURT REPORTS
[1972] 2 s.c.R.
Adhiniyam, 1964, hereinafter referred to as the ~ct.. The respondents filed a petition under Art. 226.of the Constitution before the
High Court for the issue of a writ of certiorari quashing the complaint. The contention of the res.pondents (importer~ <?f the !eaves)
before the High Court was that the Act did not prohibit the nnport ·
of·tendu leaves from places outside the State nor was there any restriction on a manufacturer importing such leaves with the express
object of consumption of the same in his factory for the manufacture of bidis and in any event the Act or the Rules made thereunder did not purport to regulate the transport of tendn leaves
imported from places outside the State.
On behalf of the State it was contended that transport of tendu
leaves whether grown in the State or outside the State was completely rrohibited by s. 5(2) of the Act and regulat1jon and control
of transport of such imported leaves was necessary for the successful working of the State monopoly in the trade of tendu leaves
envisaged by the Act. Further the Act did not prohibit the import
of tendu lcayes and was not therefore violative of Arts. 31, 301
and 304 of the Constitution and the control of movement of tendu
leaves after their import from another State was in no way repugnant to Arts. 301 and 304.
The High Court rejected the contentions of the State. Hence
the appeal.
In order to find out \Vhether the action of the Forest Officer
was justified, we have to look into the relevant provisions of the
Act and the rules framed thereunder. The Act as its preamble
shows is one to make provision for regulating in the public interest
the trade of tendu leaves by creation of State monopoly in such
trade. By s. 1 (2) it was to extend to the whole of the State and
under sub-s. (3) of s. i it was to come into force in such area or
areas and on such date or dates as the State Government may, by
notification, specify. The broad scheme of the Act appears to be
as follows.
Under s. 3 the State Government was empowered to
divide every specified area defined in cl. (h) of s. 2 into such
number of units as it may deem fit. S. 4 empowered the State
Government to appoint agents in respect of different units for the
purpose of purchase of and trade in tendu leaves on its behalf.
Under s. 5(1);
"On the issue of a notificattion under sub-section (3)
of section 1 in any area no person other than,-
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(a) the State Government;
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(b) an officer of State Government authorised in
writing in that behalf; or
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M.P. STATE v. CHHOTABHAI (Mitter, J.)
841
(c) an agent in respec~ of the unit in which the leaves
have grown;
shall purchase or transport tendu leaves."
Th~ two Explanations to this sub-section show that purchase of
tendu leaves from tlie State Government or its officers or agent's
was \Jot to be deemed to be a purchase in contravention of the Act
and a person having no interest in a holding but acquiring the
right to collect tendu leaves grown on such holding was to be
deemed to have purchased such leaves in contravention of the Act.
Sub-s. (2) of the section allowed a grower of tendu leaves to transport them from any place within the unit wherein such leaves had
grown to any other place in that unit and tendu leaves purchased
from the State Government or any .officer or agent of the Government by any person for manufacture of bidis within the State or
by any person for sale outside the Stat.e could be transported by
such person in accordance with the terms and conditions of a permit to be issued in that behalf. S. 7 empowered the State Government to fix prices at which tendu leaves were to be purchased by
it or its agent and under s. 9 the State Government or their authorised officer or agent was to be bound to purchase at the price fixed
under s. 7 leaves offered for sale a~ the depot, subject to the right
of rejection of such leaves as were not fit for the manufacture of
bidis. Under s. 11 all manufacturers of bidis and all exporters of
tendu leaves had to get themselves registered in such manner as
might be prescribed. s. 12 enabled the State Government to sell
or dispose of tendu leaves purchased by it or its agent as therein
prescribed. Under s. 15 any person contravening any of lhe provisions of the Act or the rules thereunder was liable to punishment,
both with imprisonment and fine and tendu leaves in respect of
which such contravention took place were liable to forfeiture by
Government. S. 19 gave the Government power to make rules to
carry out the provisions of the Act.
Rule 4 framed under the Act lays down the kinds of transport
permit~ which may be issued. They are to be of four types (i) for
transport from collection depot to storage godown; (ii) for transport from one storage godown to another or to distribution centre;
(iii) for transport from a distribution centre to Sattedars or
Mazdoors, and (iv) for transport outside the State. The application for a transport permit is to be under rule 9 in form 'M' and
the permit to be issued is to be in form 'N'. F'onn 'M' gives the
quantity of tendu leaves purchased, the place or places where they
were stored, the destination to which they were to be transported
and the place or places where transported leaves were to be stored.
Similar particulars are to be contained in a permit in fonn 'N'.
842
SUPREME COURT REPORTS
(1972) 2 S.C.R.
It was contended on behalf of the State that the High Court
had gone wrong in taking the view that the object of the Act was
confined to trading in t.endu leaves grown in the State as disclosed
by the above provisions. It was urged ·that the embargo on purchase and transport of tendu leaves by s. 5 was necessary for creation and preservation of the State monopoly in tendu leaves. It
was submitted that there was nothing in the Act which on the face
of it showed !hat tendu leaves mentioned in the different provisions
were to be confined to leaves grown in the State. It was further
submitted 1hat unless the State had the power to check thc:1 purchase of tendu leaves from outside the State and in any event to
restrict the transport th~re;of within the State, the monopoly
would not be effective.
It was urged further that transport of
goods within the State was so essentially integrated with the trade
in the goods that the restriction on transport should be upheld in
the interest of the State monopoly.
We find ourselves unable to accep~ the contentions put forward
by counsel on behalf of the State. All the relevant provisions of
the Act and the rules referred to above show that the legislature
intended that everybody growing leaves within the State should
offer the same to it or its agents in different units for sale and the
State was bound to purchase every single lot of tendu leaves unless the same could be said to be unfit for the manufacture.of bidis.
Prima facie trade in tendu leaves as was held by this Court in
Vrajlal Mani/al v. M. P. State(') would consist of dealing in those
leaves i.e. their purchase and sale but "transport of the leaves once
purchased or sold would not prima facie be an organic or integral
part of dealing in those leaves." It was further held in that case :
". . a permit system which regulates the movement
of leaves purchased by a.manufacturer of bidis from the
unit where they are purchased to his warehouse, then to
the branches and to the S<j.litedars cannot up to that stage
be regarded as unreasonable in the light of the object of
the Act, the economic conditions prevailing in the State
and the mischief which it seeks to cure. At the same
time to expect the manufacturer to get permits issued to
his sattedars for distribution by them to the innumerable
mazdoors of comparatively small quantities of these
leaves would not only be unreasonable but frustrating."
In that case there was no question of import of any tendu leaves
from outside the State or the issue of any permits in that regard.
What was objected to was the insistence upon transport permits
for the leaves to be distributed by the manufacturers to his innumerable sattedars and mazdoors under s. 5 of the Act. It was held
that though the section "is couched in apparently wide language,
(!) [1970J l S.C.R. 400 at 408.
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M.P. STATE v. CHHOTABHAI (Mitter, J.)
843
the very object of the Act, as disclosed by its loi;ig title, contains
inherent limitations against an absolute or as stnctly regulali:d a
ban as it would at first·reading of the section appear." Though
the Court there upheld the provisions relating to the creation of
the monopoly in the public interest in the matter of sale and purchase of tendu leaves, it was not disposed to uphold the restrictions
on movement to· the extent it was sought to be enforced by the
State in that case.
In coming to the above conclusion the Court relied on the
dictum in Akadasi Padhan v. State of Orissa(1 ) :
"A law relating to· a State monopoly cannot, in the
context, include all the provisions contained in the said
law whether they· have direct relation with the creatiO!ll
of the monopoly 0r not. .
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. the said expiwsion should be construed to mean the law relating to the
monopoly in its absolutely essential features. If a law
is passed creat;ing a State monopoly, the Court should
enquire what are the provisions of the said law which
are basically and essentially necessary for creating the
State monopoly. It is only those essential and basic
provisions which are protected by the latter part of Art.
19(6). If there are other provisions made by the Act
which are subsidiary, incidental or helpful to the operation of the monopoly, they do not fall under the said
part and their validity must be judged under the first
part of Art. 19(6). In other words, the effect of the
amendment· made in Art. 19( 6) is to protect the law
relating to the creation of monopoly and that means that
it is only the provisions of the law which are integrally
and essentially connected with. the creation of the monopoly that are prntecttd. The rest of the provisions
which may be incid.ental do not fall under the latter part
of Art. 19( 6) and would inevitably have to satisfy the
test of the Jirs~ gan of Art. 19(6)."
It is settled law that where two constructions of a legislative
provision are possible one consistent with the constitutionality of
the measure impugned and the other offending the same, the Court
will lean towards the first if it be compatible with the object and
purpose of the impugned Act, the mischief which it sought to
preve~t ascertaining from relevant factors its true scope and
meamng.
It was in the light of this principle that the High Court
observed:
"If s. 5 of the Act or any of its provisions were to be
construed as prohibiting the impon of tendu leaves into
(I) [1963] Supp. 2 S.C.R. 691.
844
SUPREME COURT REPORTS
[1972] 2 S.C.R.
the State or restricted within the State of imported
leaves, then the provision would clearly be. invalid as
violative of Arts. 301 and 3Q4 of the Constitution."
Without expressing our views on tiie subject we hold that the
entire provisions of the Act and the rules are consistent with and
aim at the State monopoly in the trade of tendu leaves in case of
leaves grown or produced in the State and the legislature never
intended that the mono_poly should be operative even to the extent
of banning import of tendu leaves from outside or stalling the
tendu leaves once they found their way into the State from outside.
The transport of tendu leaves purchased outside but consigned to places within the State to be used for the manufacture
of bidis is not integrally connected with the State monopoly as
enyisaged in t'he Act. It stands to reason that manufacturers of
bidis in the State of Madhya Pradesh would not think of importing
tendu leaves from distant places like· Bihar and Maharashtra if
they could help it and it must be the exigencies of the situation
which drives a manufacturer of bidis to such course of action. In
any event, the Act ought not to be construed so as to ban import
of tendu leaves from outside the State or restrict their movement
once they were within the State unless clear language was used in
that behalf. If and when such express embargo is imposed, a
question may arise as to whether it offends the different provisions
of Part XIII of the Constitution.
In the result the appeal fails and is dismissed with costs.
s.c.
Appeal dismissed.
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