# SYED AHMED AGA ETC v. STATE OF MYSORE & ANOTHER

- **Citation:** [1975] Supp. 1 S.C.R. 473
- **Court:** Supreme Court of India
- **Decided:** 1975-05-02
- **Case number:** Writ Petitions Nos. 137 and 203 of 1971
- **Bench:** H. R. Khanna, M. H. Beg Andy. V. Chandrachud
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/syed-ahmed-aga-etc-v-state-of-mysore-another-6538
- **Pages:** 16

## Headnote

Constitution-Articles 19(1) (g), 304(b) & 32-Whether a 32 petition maintainable to chalfenf(e oon-conipliance with proviso to Article 304(b)--Mysore
Silk Worm Seed & Cocoon (Regulation of Production, Supply & Distribution)
Act. · 1960--A1nendn1ents whether requires
fresh
sanction rl the President
under Article 304(b)-lncrease in quantum of pe1Ullty whether amounts to
-473
A
B
additional restrict~ons-Nature of penalty.
C
The petitioners challenged the validity of amendments made to Mysore Silk
Worm Seed and Cocoon (Regulation of Production, Supply and Distribution)
Act, 1960, on the ground that the -amendments imposed aditional restrictions
upon the rights of the petitioners to carry on trade and business without obtaining the Presidential sanction required by proviso to Art. 304(b) of the Constitution.·
The Principal Act had received the sanction of the President. 1bc reasonaD
bleness of any restrictions e~ther of th~ principal Act or of the amendments has
net been challenged. It is not disputed that the Presidential sanction was not
obtained for th~ amendments.
The respondents contended-
( I) No petition under Article 32 of the Constitution can lie to challenge
restrictiom covered by Article 304(b), since the freedom of trade
envisaged
E
by Article 304(b) is different from freedom of trade guaranteed by Art. 19(1)
(g).
(2) The amendments did not impose additional restrictions on the
petitiooers' right to carry on trade and business. Amendments merely introduced
the restrictions which were contained in the principal Act and the statutory roles
1nade thereunder and therefore did not impose any additional restrictions.
Section 12 of the princ!ral Act reads as under :
"12. Penalties---(!)
Any person who contravenes the provisigns
of section 3 er 4 shall be punishable with fine which may extend to
one hundred rupees.
(2) any rearer who contravenes the provisions of section 6 or 7 or
any other provision of this Act or any rule, order or notification! made
thereunder, shall be punishable with fine which may extend to fifty
rupees.
(3) Any licensed buyer who contravenes the provisions ·of sections
7 or 8 or any other provision of this Act or any rule, order or notifi-~
cation made thereunder, shall be punishable with fine which may extend
to two hundred and fifty rupees.
(4) Save as otherwise provided in sub-section (!), (2) and (3),
any person who contravenes any of the provisions Of this Act or of
any rule. order or notification thereunder, shall be punishable with
fine which may extend to t\vo hundred and fifty rupees.
(5) (a) Without prejudice to any punishment under the preceding
sub~sections the Director
of
Sericulture
in
Mysore
may,
after
giving a reasonable opportunity to the person conc.erned to be heard
suspend or cancel the licence granted to any person for preparing silk~
worm seed if such person is convicted at least twice for an offence
under this Act.
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B
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SUPREME COURT REPORTS
(1975] SUPP· S.C.R.
. (b) Any person aggrie\'e<l by the suspension or cancellation of
a. licence under clause (a) may :.ippeal to the Government within such
time as may be prescribed and the decision of the Government on
such appeal shall be final and shall not be 'called in question in anv
Couri of Law".
·
Amendments to section 12 \Vere made by section 7 and 8 of the ,-\mending
Act which read as under :-
"7. Amendment of section 12. Jn s-ection 12 of the rincipal Act,-
(1) in suf>..section (1), for the words "one hundred rupees··, the
words "two hundred rupees" shall be substituted;
(2) in sub-section (2), for the words and figures ;.section 6 or 7
qr any other provision of this Act or any rule, ordler or notification
made thereunder", the words, figures, brackets and letter,
"section
6'1 or clause (a) of sub-section (I) of section T' shall be substituted;
(3) after sub-section (2), the following sub-section shall be inserted. namely :-
"(2A) Any person who contrav~nes the provisions of clause (b)
of sub-section (1) of secti

## Text

_Characters 0–39,898 of 43,682. This is a partial read: ask again with offset=39898 for what follows._

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•
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SYED AHMED AGA ETC.
v.
STATE OF MYSORE & ANOTHER
May 2, 1975
[H. R. KHANNA, M. H. BEG ANDY. V. CHANDRACHUD, JJ.]
Constitution-Articles 19(1) (g), 304(b) & 32-Whether a 32 petition maintainable to chalfenf(e oon-conipliance with proviso to Article 304(b)--Mysore
Silk Worm Seed & Cocoon (Regulation of Production, Supply & Distribution)
Act. · 1960--A1nendn1ents whether requires
fresh
sanction rl the President
under Article 304(b)-lncrease in quantum of pe1Ullty whether amounts to
-473
A
B
additional restrict~ons-Nature of penalty.
C
The petitioners challenged the validity of amendments made to Mysore Silk
Worm Seed and Cocoon (Regulation of Production, Supply and Distribution)
Act, 1960, on the ground that the -amendments imposed aditional restrictions
upon the rights of the petitioners to carry on trade and business without obtaining the Presidential sanction required by proviso to Art. 304(b) of the Constitution.·
The Principal Act had received the sanction of the President. 1bc reasonaD
bleness of any restrictions e~ther of th~ principal Act or of the amendments has
net been challenged. It is not disputed that the Presidential sanction was not
obtained for th~ amendments.
The respondents contended-
( I) No petition under Article 32 of the Constitution can lie to challenge
restrictiom covered by Article 304(b), since the freedom of trade
envisaged
E
by Article 304(b) is different from freedom of trade guaranteed by Art. 19(1)
(g).
(2) The amendments did not impose additional restrictions on the
petitiooers' right to carry on trade and business. Amendments merely introduced
the restrictions which were contained in the principal Act and the statutory roles
1nade thereunder and therefore did not impose any additional restrictions.
Section 12 of the princ!ral Act reads as under :
"12. Penalties---(!)
Any person who contravenes the provisigns
of section 3 er 4 shall be punishable with fine which may extend to
one hundred rupees.
(2) any rearer who contravenes the provisions of section 6 or 7 or
any other provision of this Act or any rule, order or notification! made
thereunder, shall be punishable with fine which may extend to fifty
rupees.
(3) Any licensed buyer who contravenes the provisions ·of sections
7 or 8 or any other provision of this Act or any rule, order or notifi-~
cation made thereunder, shall be punishable with fine which may extend
to two hundred and fifty rupees.
(4) Save as otherwise provided in sub-section (!), (2) and (3),
any person who contravenes any of the provisions Of this Act or of
any rule. order or notification thereunder, shall be punishable with
fine which may extend to t\vo hundred and fifty rupees.
(5) (a) Without prejudice to any punishment under the preceding
sub~sections the Director
of
Sericulture
in
Mysore
may,
after
giving a reasonable opportunity to the person conc.erned to be heard
suspend or cancel the licence granted to any person for preparing silk~
worm seed if such person is convicted at least twice for an offence
under this Act.
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B
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SUPREME COURT REPORTS
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. (b) Any person aggrie\'e<l by the suspension or cancellation of
a. licence under clause (a) may :.ippeal to the Government within such
time as may be prescribed and the decision of the Government on
such appeal shall be final and shall not be 'called in question in anv
Couri of Law".
·
Amendments to section 12 \Vere made by section 7 and 8 of the ,-\mending
Act which read as under :-
"7. Amendment of section 12. Jn s-ection 12 of the rincipal Act,-
(1) in suf>..section (1), for the words "one hundred rupees··, the
words "two hundred rupees" shall be substituted;
(2) in sub-section (2), for the words and figures ;.section 6 or 7
qr any other provision of this Act or any rule, ordler or notification
made thereunder", the words, figures, brackets and letter,
"section
6'1 or clause (a) of sub-section (I) of section T' shall be substituted;
(3) after sub-section (2), the following sub-section shall be inserted. namely :-
"(2A) Any person who contrav~nes the provisions of clause (b)
of sub-section (1) of section 7 or sub-section (2) of that section shall
be punishable with imprisonment which may extend td three months or
with fine which may extend to five hundred ntpees or with both" ;
(4) for
sub-section (3),
the following
sub-section shall
be
substituted, namely :-
"(3) Any person who contravenes the provisions of section 8 shall
be punishabJe with fine which may extend to two hundred and fifty
n.tpees" ;
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(5) in sub-section (4), for the words, brackets and figures "subsections (1). 2) and 3)", the words, brackets, figures and letter "subsections (!), (2), (2A) and (3) shall be substituted".
"8. Insertion of ne\v sections l 2A and 12B-After section 12
of the Principal Act, the following sections shall be in~rted, namely :-
"12A. Abetment-Whoe\'er abets any offence punishable under
this Act shall be punished with the punishment provided in this Act
for such offence.
12B. Certain offences to be cognizable-The offences under subsection (2A) of section 12 shall be cognizable"'.
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HELD : A citizen is entitled to come to Court with the allegation that
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bis fundamental right to carr}' on business or trade is affected adversely by a
provision which does not legally exist The restrictions contemplated by Article
304 (b) may be of a character different from those of an ind.ividual citizen's
right to trade, but it cannot be denied that their impact on individual's right
is very often direct. [477A·B]
HEI.D FURTHER : Stringent reguiations were already existing under the
H principal Act and the ntles framed thereunder. No additional restriction is im·
posed by th~ Amending Act 4(1):
N~w section 7(2) merely makes evasio.n
of the requirement to conduct business 1n the cocoon market of an area mo1e
difficult.
[481C-D, 482-D]
The amendments to section 12 increase the quantum of penalties.. But the
increase in the penalties is such, in view of the change of the value 1n mon~y,
as not to amount. to an appreciable increase in restri.cti.on even from th~ point
of view of a person who wants to break the restnct1ve laws.
Penalties are
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SYED AHMED AGA.V. MYSORE (Beg, J.)
475
really part of the procedure. for _the enforcement of restrictions. They do not
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creat,e new offences.
They only make vioJation of whatever restrictions on
trade and commerce were there more onerous.
They, therefore) cannot be
looked upon as additional restrictions upon freedom of trade and commerce.
I484B-DJ
HELD FURTHER : Amendments requiring some more persons to take out
licences, vtho may not have Q.een previously covered- by provisions relating to
Jicences does not constitute a r~al increase in restriction upon commerce. If the
substance of the statutory nde is converted into a statutory provision. there can
hardly he sai<l to be additional restrictions impos~ by the amending J..aw. What
may be n restriction of his choice, from the point of view of an individual citizen
-engaged in a trade may not be a restriction on inter-state or intra-state commerce viewed from the angle of the trade as a bole. Jt is only an additional
restriction from the special point of view of Art. 304(b) which requires Presidential sanction. [487C-E]
Petition dismissed.
ORIGINAL JURISDICTION: Writ Petitions Nos. 137 and 203 of 1971.
Petitions under Art. 32 of the Constitution of Jmlia.
A. K. Sen, K. R. Chaudhuri and K. Rajendra Choudhary, for the
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:petitioner (In Petition No. 137).
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K. · K. Chaudhuri and K. Rajendra Chowdhary, for the petitioner
(In petition No. 203).
·
F. S. Nariman, Additional-Solicitor
General of
India and M.
Veerappa, for the respondents (In petition No. 137).
M: Veerappa, for respondents (In Petition No. 203).
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The Judgment of the Court was delivered by
BEG, J. The two writ Petitions
before us under Article 32 of
the Constitution of India by persons carrying on the business of silk
worm cocoon. rearing and reeling challenge the validity of various
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.amendments of the Mysore Silkworm Seed and Cocoon (Regulation ·
of Production, Supply and Distribution) Mysore Act 5 of 1960 (her~
inafter referred to as 'the Principal Act') by the Mysore Silkworm Seed
and Cocoon (Regulation of Production,. Supply and Distribution)
(Amendment) Act, 1969 (hereinafter called as the 'Amending Act').
The petitioners alleged that their fundamental rights guaranteed by
Art. 19(1) (g) of the Constitution have been illegally interfered with
G
'by these amendments in so far as the amendments impose additional
restrictions upon these rights without having secured the Presidential
:sanction required by the proviso to Article 304(b) of the Constitution.
Article 304 of the Constitution reads as follows :
"304. Notwithstanding anything in Article 301 or article
303, the Legislature of a State may by law-
( a) impose on goods imported from other States or the
Union territories any tax to which similar goods manufactured or prod~c~ i~ that State arc subject, so, however, as not to discnmmate between goods so imported
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476
SUPREME COURT REPORTS
[1975] SUPP· s.c.R.
A
and goods so manufactured or produced ; and
B
(b) impose such reasonable restrictions on the freedom
of trade, commerce or intercourse with or within that
State as may be required in the public interest :
Provided that no Bill or amenmcnt for the purposes of
clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of
the President".
It will be seen that Article 301 of the Constitution provides :
c "Subject to the other provisions of this Part, trade, commerce and
intercourse throughollt the territory of Iridia shall be free".
Article
302 limits the powers of Parliament to impose "restrictions on the
freedom of trade, commerce or intercourse between one State and
another or within any part of the territory of India", to such restrictions "as may be required in the public interest".
Restrictions falling
under Art. 304(b) must not only be reasonable but are expressly
D required to be in public interest. It is in order to ensure that purposes
of Art. 304(b) are satisfied that a bill in a State Ugislature has to
obtain the previous sanction of the President. It is worth-remembering
that Art. 255 of the Constitution provides for a retrospective curing
of the defect of want of previous sanction by the president so that,
where this requirement has been overlooked before· an enactment,
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public interetit may not suffer by any want of sanction.
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The only question, on merits, which has been argued before us
on behalf of the petitioners is : Do the changes introduced by the
Amending Act amount to such additional restrictions as to require the
sanction of the President even though the Principal Act had received
such sanction at the appropriate stage ? The reasonableness of any
restrictions, new or old, has not been challenged before us.
AU that
is urged is that the additional restrictions introduced by the Amending
Act were bound to obtain the previous sanction of the President
before they are introduced in. the form of a Bill in the Legislature
of a State because that is the Constitutional mandate.
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As the restrictions covered by Article 304(b) have to be
those
on "freedom of trade and commerce", which is a broader and some- .
what different concept than that of an individual citizen's freedom
to trade and carry on business, guaranteed by Article 19(l)(g), a
preliminary objection has been raised, on behalf of the State of
Mysore, that no petition under Article 32 of the Constitution can lie
to challenge such restrictions as they could not be on rights p:uaranH teed by Article 19( 1) (g). Reliance was placed on Ram Chandra
Pillai & Ors. v. State of Orissa & Ors., ( 1) where there is an observation indicating that the petitioner under Article 32 could not rely upon
the guarantee of freedom of inter-State or intra-State trade, embodied
in Article 301 of the Constitution. because " ... it is not a fuHdamentaI
(t) r 10%) s.c.R. 2s.
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SYED AHMED AGA V. MYSORE (Beg, J.)
477
right conferred by Part III of the Constitution which can be enforced
A
by a petition under. Article 32". That was a case relating to a preConstitution enactment so that Article 305 of the Constitution was
held to provide a complete answer to the petitioners' claim. We do
not think that the mere fact that the legality of an enactment is challenged for non-compliance with the proviso to Article 304(b) of the
Constitution would take aw"ay the character or substance of a petiB
tioner's claim when a citizen comes to Court with the allegation that
his fundamental right to carry on business or trade is affected adversely
by a provision which does not legally exist. No doubt the restrictions
contemplated by Article 304(b) may be of a character different from
those on an individual citizen's rights to trade but it cannot be /
denied that their impact on individual rights is often very direct. The ' C
stage for considering the reasonableness of a direct or indirect restriction of a fundamental right arises only where the restriction is otherwise valid,
As this Court has repeatedly .held, restrictions which
have no authority or sanction of law to back them would, per se,
be bad restrictions. The question of reasonableness of a restriction
on indiviaual rights to carry on trade could only arise where the purported law docs not fail on other tests.
D
Learned Counsel for the petitioners had relied upon the case of
Himmatlill. Harilal Mehta v. the State of Madhya Pradesh & Ors.,(')
where a reference was made to Mohd. Yasin v. The Town Area Committee Jalalahad & Anr.(2) He also urged, on the strength of District
Collector of Hyderabad and Ors. v. M/s. Ibrahim & Co. etc., (3) that
Ai ticle 301 of the Constitution guarantees not merely freedom of trade
and commerce in the abstract.
In other words, individuals affected
by the violation of the guarantees under Articles 301 and 304 could
also complain, at the same time, of infringement of their right guaranteed under Article 19 (l) (g) of the Constitution provided a breacb
of the former involves violation of the latter also as it would brdinarily
do. Therefore, we overrule the preliminary objection.
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The State of Mysore has tried to justify the want of Presidential
sanction to an:iei;dment~ on the ground that t~ey do, not impose
a?d1t1onal restr.1ctI_ons but ar~ covered by the ob1ects and the provisions of the Pnnc1pal Act which had already obtained the Presidential
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sanction at the appropriate stage.
Indeed, the amendments, it was
urged, merel;i gave an enacted form to what were previously statutory
rules ".llli?ly made und.er the. authority conferred by Section
18
of
tne Pnnc1pal Act. This Sectmn provides as follows :
"18. Power of Government to make rules ... ( l) The
Government may subject to the condition of previous publication, by notification, make rule to carry out the purposes
of this Act.
·
(I) [19541 S.C.R. 1122.
(2) (1952] S.C.R. 572.
(3) (1970] 3 S,C.R .. 498.
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SUPREME COURT REPORTS
[1975] SUPP· S.C.R.
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.
(2) In particular and without prejudice to'the generahty of the foregomg power, such rules may provide for-
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(a) the duties and powers of oftkers authorised to enforce the provisions of this Act and the manner of
constitution of market committees an'd the powers
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;md duties of such committees;
(b) the qualifications of persons
who produce or prepare silkworm seed for rearing of silkworms and
other persons to whom licences under this Act may
be granted;
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,_
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(c) the grant of licences and the imposing of conditions
in respect of the same and fees for the grant of such
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licence;
(d) the sanitary arid other conveniences that should be
provided for at the production and distribution cenA
tres of silkworm seed ;
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(e) the grant of duplicate licences and the renewal of
licences and fees for the same ;
(f) appeals from any order under this Act, the authority
to which such appeals shall lie, the time within which
such appeals should be made and the procedure for
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dealing with such appeals ;
(g) the forms of licences to be granted, returns to be
submitted and accounts to be maintained under this
Act;
(h) the fee payable by the licensed buyer in respect of
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cocoons purchased by him in the cocoon market,
such fee not exceeding two per cent of the purchase
price;
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(i) the particulars to be furnished by any person of the
occurrence of silkworm disease in silkworm or silkworm seed, and the steps to be taken for the prcven-
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tion or eradication of such disease;
(j) generally regulating the procedure to be followed in
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proceedings nnder this Act;
(k) any other matter which may be prescribed under this
Act.
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(3) All rules made under this Act shall be laid as
soon as may be after they are made before each House. of
the State Legislature while it is in session for a total penod
of thirty days which may be comprised in on.e session or !n
two or more 'essions and if before the expiry of the said
periqd, either House of the State Legislature makes any
modification in any rule or directs that any rule shall not
have effect and if the modification or direction is agreed to
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SYED AHMED AGA V. MYSORE (Beg, J.)
4 79
by the other House, the said rule shall thereafter have effect,
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only in such
modified
form or be
of no
effect,
as the case may be; so however that any such modification
or annulment shall be without prejudice to the validity of
anything previously. done under that rule."
The argument before us on behalf of the State is that no amendments falling beyond the purview of the Principal Act and the rules
framed thereunder were made, and, therefore, no fresh restrictions
could be said to have been introduced by change of form or even
of some substance of those restrictions because they were all, in any
da.sc, within the purposes of the Principal Act which had already
received Presidential sanction.
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According to the State, the Principal Act was introduced principally with the object of improving and maintaining the quality of
silk which is manufactured; and, in order to be able to do this, it was
submitted, it was necessary to keep a record of all those who breed
silkworms in the State of Mysore so that a watch may be kept over
the genetic purity of silkworms. It was stated that there is no control
over pierced cocoons which become useless for purposes of reeling.
Hence, "cocoon" is defined in the Act as a product of mulberry silkworms "either green or stifled, dried or in. any other state or condition, but does not include pierced cocoon". Anyone wanting to use
silk for purposes other than reeling could use pierced cocoons. The
"cocoon market" is defined in Section 2(b) of the Principal Act as
a market established under Section 10 which provides that the
Government may, for regulation and distribution of silkworm seed,
by notification, specify the places at which cocoon markets, cocoon
market yatds, and stores may be located, fix the sericultural areas
to be served by each cocoon market where silkworm. cocoon produced
by such areas may be sold, and assign zones and markets in which
any licenced buyer may carry on his business. It is also provided in
Section 10 that all transactions in the cocoon market shall be by
vpen auction on payment of cash, Silkworm are defined as mulberry
silkworms. Silkworms seeds are defined as cocoons of all kinds (excluding cross-breed cocoons) used or reared for purposes of production. A rearer is a person defined as engaged in rearing silkworms
for the production of silkworm c9coons, whether for reproduction or
reeling. The preamble of the Act shows that it is intended to consolidate the laws "providing for the regulation, of the production, supply, and distribution of silkworm seed and cocoon in the State of.
Myso~".
It is urged on behalf of the State that the. whole object of this
m.acID:nery of .regulation and control of production, supply, and distnbut10n of silkworm seed and cocoons was that, by ensuring the
big~ standard of puritv and quality of Mysore silk, to promote the
business. and trade of the Mysore State in silk products, and, thereby,
to contnbute to the growth and freer flow of trade. It is stated by
the petitioners themselves that almost 7 per cent of the population of
Mysore State is engaged in various processes conn~cted with the
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480
SUPREME COURT REPORTS
(1975] SUPP· S.C.K.
A rearing of silkworms and reeling of silk . and that over two lakh acres
of land in Mysore State are under mulberry cultivation and mulberry
is used exclusively to feed silkworms. The raising and maintenance
of the quality of silk was, it was submitted, both in the interests of
the trade in silk pr<lducts and in public interest.
In order to carry out the purposes of the Principal Act, Sections
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3 to 9 had, even before its amendments, laid down as follows :
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"3. Regulation
of production, etc.,
of silkworm
seed .... No person shall produce, prepare, store, transport,
sell or otherwise distribute or dispose of silkworm seed,
except under and in accordance with the terms and conditions of a licence granted under this Act.
4. Regulation of rearing .... (1) No person shall rear
silkworms from silkworm seed other
than silkworm seed
obtained from a person whO holds a licence under this Act.
(2) The Goverrunent may by notification direct that
in any specified area no silkworm other than silkworm of
specified race shall be reared and that such silkworm shall
be reared from silkworm seed obtained from specified sources. On the issue of such notification, no person shall rear in
such specified area any other race of silkworm or obtain
silkworm sea'cl from any other source.
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5. Regulation of possession of silkworm seed ...• No
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person shall be in posses.~ion of silkworm seed unless-
( a) he is a rearer; or
(b) he holds a licence granted under this Act; or
( c) he is authorised in writing by the prescribed officer
to possess silkworm seed.
6. Regulation of disposal of silkworm cocoons.-No
rearer shall dispose of or agree to dispose of or in pursuance of an agreement entered into, make delivery of silkworm cocoons for reeling or for reproduction except to persons holding a licence, qnder this Act.
7. Regulation of sale or purchase of silkworm cocoons
for reeling. In any area in which a cocoon market is established under this Act, no rearer shall sell or agree to sell,
and no Jiccnced buyer shall purchase or agree to purchase
silkworm cocoons, for reeling, except in such cocoon market, and except in accordance with such conditions and in
such manner as may be prescribed.
8. Regulation of reeling.-No person shall carry on
the business of reeling silkworm cocoons unless he holds a
licence granted under this Act.
•
SYED AHMED AGA V. MYSORE (Beg, J.)
481
9. Application for licence.-Every person who desires
A
to obtain a licence under this Act shall make an application
to the Licensing Authority in such form as may be pres-
~ribed."
We· find that, as regards regula,tion of rearing, Sect10n 4(1) is
-reframcd by the Amending Act, so that now it reads as follows
B
No person shall engage in the rearing of silkworms for
the production of silkworm cocoons except under and in
accordance with the terms and conditions of a licence granted
under this Act".
On behalf of the State, it is pointed out that the amended Section
4(1) does not amplify the restrictions which had to be read with
Section 3 of the Principal Act set out above and the detailed provisions of Rules 3, 4, and 5 read with definitions given. After going
through these rules, the validity of which was not challenged, we are
satisfied that no additional restriction is imposed by the Amending
Section 4(1).
We may here indicate the already stringent regulation or restrictions
existing under the
Principal Act and the rules framed
thereunder
which were not challenged. Rule 3 ( 1) contained a prohibition against
rearing silkworms by any person from silkworm seed other than silkworm seed obtained from a seed preparer licensed under .these rules.
Rule 3(2) imposed a duty upon a person who obtains silkworm seed
from a licensed seed preparer, to preserve the bill and the egg sheets
issued by the licensed seed preparer in respct of the silkworm seed
supplied by such seed
preparer, so that, when so
required by an
officer, it could be produced before him.
Rule 4 (1) prescribed the
application form for licensing to be filled in and submitted by Rearers
and seed preparers.
Rule 5 provided for the grant of various licences
after satisfying the licensing authorities of the qualifications of the
applieant. It also enable the licensing authority to refuse licenses
to limit the number of seed preparers in an area. · The reason for
the refusal of the grant of the licence by the licensing authority had
to be communicated fo the unsuccessful applicant. Buying of cocoons
for reeling had to be licensed. Section 8 read with Rule 5 (b) lays
down that no person could carry on "the business of reeling silkworm
cocoons" without a license. Section 6, set out above, prohibited disposals and deliveries of silkworm cocoons for reeling and for reproduction except to persons holding licences under the Act.
Section
7 prohibited, in cocoon market areas, the rears of silkworm cocoons
from selling or- agreeing to sell and licensed buyers from purchasing
or agreeing to purchase silkworm cocoon for reeling except in the
cocoon market of the area. It is difficult for us to see how the mere
change of wording in Section 4(1) of the Act had really amplified
or increased the restrictions already there.
Section 4 of the Amending Act amends Section 6 of the Principal
Act by omittjn~ words : "for reeling or for reproduction."
Section
5 of the Amending Act says :
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5. "Substitution of new section for section 7.-For section 7 of the Principal Act, the following section shall be
substituted, namely :-
"7. Regulation of sale or purchase of silkworm cocoons
for reeling .. (1) In any area in which a cocoon market is
established under this Act,-
( a) no rearer shall sell or agree to sell; and
(b) no person shall
purchase or agree
to purchase,
silkworm cocoons except
in such
cocoon market
and except in accordance with such conditions and
in s,Uch manner as may be prescribed.
(2) After a cocoon market is established for any area,
no person shall except in such cocoon market, use or permit
the use or assist in the use of, any building, room, tent, enclosure, vehicle. vassel or place in such area for the sale or
purchase of silkworm cocoons or in any manner aid or abet
the sale or purchase of silkworm cocoons".
Here also we are unable ·to find any substance. in the grievance
that there has been any significant increase in' restrictions. The new
Section 7 (2) merely makes evasion of the requirement to
conduct
business in the cocoon market of an area more difficult.
E
The only amendments complained of are those in Section 12 which,
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in the Principal Act, read as follows :-
"12. Penalties.-(!) Any person who contravenes the
provisions of Section 3 or 4 shall be punishable with fine
which may extend to one hundred rupees.
(2) Any rearer who contravenes the provisions of Section 6 or 7 or any other provision of this Act or any rule,
order or notification made thereunder, shall be punishable
with fine which may extend to fifty rupees.
(3) Any licensed buyer who contravenes the provisions
of Section 7 or 8 or apy other provision of this Act or any
rule, order or notification made thereunder, shall be punishable with fine which may extend to two hundred and fift)'
rupees.
(4) Save as otherwise provided in sub-section (1), (2)
and ( 3), any person who contravenes any of the provisions
of this Act or of any rule, order or notification thereunder,
shall be punishable with
fine which may
extend to two
hundred and fifty rupees.
(5) (a) Without prejudice to any punishment under the
preceeding sub-sections, the Director of Sericulture in
Mysore may, after giving a reasonable opportunity
to tbe person concerned to be heard, suspend or
cancel the licence granted to any person for rearing
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SYED AHMED AGA V. MYSORE (Beg, J.)
silkworm seed if such person is convicted at le,a,st
twice for an offence under this Act.
(b) Any per$on aggrieved by the suspension or cancellation
of a licence under
clause (a) may
appeal to the
Government within such time as may be prescribed
and the. decision of the Government on such appeal
shall be final and shall not be called in question in
any Court of law''.
Section 7 of the Amending Act lays down :
"7. Amendment of Section 12.
In Section 12 of the
Principle Act,-
( I ) in sub-section (I), for the words "one hundred
rupees", the words "two hundred rupees" shall be substituted ;
(2) in sub-section (2), for the words and figures "secA
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tion 6 or 7 or any other provision of this Act or any rule,
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order or notification made thereunder", the words, 'figures,
brackets and Jetter. "section 6 or clause (a) of sub-section
( 1) of section 7" shall be substituted;
(3) after sub-section (2), the following
sub-section
shall be inserted, namely :-
(2A) Any person who contravenes the provisions of clause
(b) of sub-section (1) of section 7 or
sub-section
(2) of that section shall be punishable with imprisonment which may extend to three months or with fine
which may
extend to five hundred rupees or with
both" ;
( 4) for
sub-section ( 3), the following
sub-section
shall be substituted, namely :-
"(3r Any person who contravenes the provisions of section 8 shall be punishable with fine which may extend
to two hundred and fifty rupees" ;
( 5) in sub-section ( 4), for the words, brackets and
figures "sub-sections (1), (2) and (3)", the words brackets
figures and letter
"sub-sections (I), (2),
(2A) and 3
sha!1 be substituted''.
Section 8 of the Amending Act provides as :
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8. Insertion of new section 12A and 12B.--After SecH
tion 12 of the Principal Act, the following sections shall be
inserted, namely :-
_
12A. Abetment.-Whoever abets any offence punishable
under this Act shall be punished with the punish·
ment provided in this Act for such offence.
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12B. Certain offences to
under · sub-section
cognizable".
be cognizable.-The
(2A) of section 12
offences
shall be
ft was contended that the increase in the penalties would, in any
event. be additional restrictions.
Learned Counsel for· the State reB
plied that penalties are merely sanctions .provided for enforcing restrictions and are not a,dditional restrictions on freedom of trade or
commerce. It is true that, even without a change in the nature of
violations punished, those who contravene the provisions of the Act
are subjected to somewhat severer punishment. But, the increase
in the penalties is such, in view of the change in the value of money,
C as not to amount to an appreciable increase in restriction even from
the point of view of a person who wants to break the restrictive laws.
Penalties are really part of the procedure for the
enforcement of
restrictions. They do not
create new offences.
They only make
violation of whatever restrictions on trade and commerce were there
more onerous. We therefore, doubt very much whether they could
re;iUy be loakcd upon as additional restrictions upon freedom of trade
D and commerce.
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We may now refer to the cases cited by learned Counsel.
In
Atiabari Tea Co. Lid. V. the State of Assam & Ors.,(') this Court held
the Assam Taxation (on goods carried by Roads and Inland Watcrwa,ys) Act, 1954, to be void for not having secured the Presidential
sanction under the proviso to Art.
304(b) before it was introduced
in the form of a bill in the State Legislature.
In the case before us,
tl1e Principal Act had the sanction of the President and enables orders
to be passed which had the force of law enabling restrictions to be
imposed by rules covered by the
purposes of the Act.
We have
already cited Section 18 of the Principa,l Act to show the amplitude
of the rule making power which had the required Presidential sanction.
And, we have found that the amendments before us only varied
the form of restrictiveness without appreciably adding to its content.
This case has, therefore, no application to the situa,tion before us.
The Automobile Transport (Rajasthan)
Ltd. V. the State of
Rajasthan & Ors. ( 2), was relied upon by both sides for the distinction
G between mere " regulation" and a restriction contemplated by Article
304 (b) of the Constitution. It was held here that taxation of Motor
Vehicles was a compensatory measure incidental to transport by Motor
Vehicles which die! not infringe the guarantee of freedom of trade and
commerce conferred by Art.
301 of the Constitution. The effect
of such taxation was held to be too remote in its effect upon freedom
, of trade and commerce to be a restriction contemplated by it.
Subba
H Rao., J., who agreed
with the conclusions of three other learned
Judges of this Court so as to form a majority said that the nature
and extent of taxation would have
to be carefully scrutinized to
determine whether it amounted to mere regulation or restriction.
He
observed (at p. 557) :
(I) [1961] l S.C.R. 809.
(2) [1963) I S.C.R. 471.
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SYED AHMED AGA V. MYSORE (Beg, J.)
"Of all the doctrines evolved, in my view, the doctrine
of 'direct and immediate effect' on the freedom would be ,a,
reasonable solvent to the difficult situation that might arise
under our Constitution. If a law, whatever may have been
its source, directly and immediately affects the free movement of trade, it would be restriction on the sa,id freedom".
Subba Rao, .J., summarised the whole law by formulating the
following propositions (at p. 564-565) :
"(1) Art. 301 declares a right of free movement of
trade without any obstructions by way of barriers, interstate, or intra-St;i.te or other impediments operating as such
barriers.
(2) The said freedom is not impeded, but, on the
other hand, promoted, by regulations creating
conditions
for the free movement of trade, such as, police regulations,
provision for services, maiiiienance of roads, provision for
aerodromes, Wharfs, etc., with or without
compensation
(3) Parliament may by law impose
restrictions on such
freedom in the public interest ; and the said law can be made
by virtue of any entry with respect where-of Parliament has
power to m.:i,ke· a law:
( 4) The State also, in exercise of
its legislative power, may iinpose similar restrictions, subject
to the two conditions laid down in Art. 304(b) and subject
to the proviso mentioned therein.
(5) Neither Parliament
nor the State Legislature can make a law giving preference
to one State over another or making discrimination between
one State and another, by virtue of ariy entry in the Lists,
infringing the said freedom.
( 6) This ban is lifted in the
case of Parliament for the purpose of dealing with situations
arising out of scarcity of goods in any part of the territory
of India and also in the case of a State under Article 304(b),
subject to the conditions mentioned therein. And (7) ·the
State can impose a non-discriminatory trut on goods imported
from other States or the Union territory to which sintilar
goods manufactured or produced in that State are subject".
In Khyerbari Tea Co. Lid. & Anr. V. The State of Assam, (1) the
Assam Taxation (on goods carried by Road or on Inland Water
ways) Act (Assam Act X of 1961), was held to be valid. It was pointed out here by Gajendragadkar, J., that, whereas, the ratio of the majority decision in the Automobile Transport (Rajasthan) case (supra)
was that compensatory trui:ation would be outside Article 301, and, therefore, of Article 304(b) of the Constitution, in Atiabari Tea Co's case
(supra), the Court had adopted the view that the compensatory
character of a tax may be taken into account in deciding whether i.t
was a restriction under Article 304(b) which was reasonable and
in public interest. In Khyerbari Tea Co's case (supra), the Court
proceeding on the assumption that the tax was not compensatory upheld its validity, presumably because it was considered reasonable
and in public interest as a restriction.
No such question of reasonableness of any restriction imposed by the Amending Act before us
(1) [1964] 5 S.C.R .. 975.
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A has been raised by the petitioners. But, if the position of even taxation, from the point of view of "restrictions" contemplated by Article
304(b) of the Constitution could be doubtful and depended upon
its nature and extent and purpose, we think that there could be no
doubt that some additional licensing, at nominal fees cha,rged presumably to defray the expenses of carrying out the objec!l> of the Act,
B
could not be held to be anything more than"regulation" in the cases
before us.
The question of regulatory character ·or otherwise of amending
provisions ~
arisen only in the course of discussion of the question
whether any new provisions, possibly resulting in requiring some more
persons to take out licenses, who may not have been previously
c covered by provisions relating to licensing, would be a "restriction"
as contemplated by Aritcle 304 (b). The learned Additional Solicitor
General has contended that such licensing is necessary even for simply
maintaining a record of those who carry on various activities in con·
nection with
the silk
production industry and
business so that
their
purely
business
and
industrial
activities
may
be
watched
and
the
quality
and
reputation
of
this
industry
D and trade of
Mysore
may be
maintained.
Such
"regulation",
it is contended, ultimately contributes to greater flow and freedom
of trade, even if it involves some inconvenience to those who have to
take out license ,which, according to rules, were granted to all those
found qualified.
We find consider,a,ble weight in these arguments.
In any case, we are not satisfied that there has been a -real increase
E in restricticas upon commerce in silkworms and cocoons by the provisions of the Amending Act wllich mostly cover what was already laid
down by the statutory rules. If the substance of statutory rllles is
converted into statutory provisions there could hardly be said to be an
addition even in "regulation" imposed by the amending law.
F
Lea,rned Counsel for the petitioner cited Hughes and Vale Proprietary Ltd. v. State of New South Wales & Ors. ( 1), where provisions
of the State Transport (Co-ordination) Act, of the State of New South
Wales, requiring applications to be made for licences, which may be
granted or refused by an official in the exercise of an uncontrolled
discretion, and of .all provisions consequential thereto, in so far as
they were sought to be applied to public Motor Vehicles operating
G in the course of or for the purposes of inter-State trade, were held to
be invalid for a contravention of Section 92 of the Constitution of
Commonwealth of Australia.
This section, as we know, provides
that "trade,
commerce and inter-course, among States whether by
means of internal carriage or inotor navigation shall be absolutely
free".
Here, the Privy Council discussed a large number of cases
which had a bearing on the interpretation of Section 92 of the AustraH lian Constitution, including Commonwealth of Australia v. Bank of
New South Wales (2) case, where it was observed at page 311) :
"Every case must be judged on its own facts and in its
own setting of time and circumstance, and it may be that
(I) [19551 A.C. 241.
(2) [19501 A.C. 235,31 l.
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SYED AHMED AGA v. MYSORE ('Beg, J.)
ju regard to some economic activjties .and at sQllle,stage. of.
soc\3,1 · development :it might be maintained 1h~t prohibition
. with a view to State monopoly was the only.