Petitions Nos
5637 415643 45 5646 475649 51 5597 985553 675609 115516 205623 285657 5673 745702 235668 5659 675733 5740 42 5782 84 5763 64 57625747 525779 815745 5785 5737 39 5841 43 5786 5797 5861 62 and 5863 64 of 1980
Under Article 32 of the Constitution AND Civil Appeal No 2734 of 1980
Appeal by special leave from the Judgment and Order dated 12111980 of the Allahabad High Court in WPNo 311580
RA Gupta for the Petitioners in WPs5637 4180 5797573380 and CA No273480
APS Chauhan Roopendra Singh Gajraj Singh and CK Ratnaparkhi for the Petitioners in WP 576280
BS Chauhan Birj Bihari Singh Sridhar for the Petitioner in WP 574580
Rameshwar Dial and Sarwa Mitter for the Petitioners in WPs 5782 8480 RK Garg SN Kacker RK Jain and RP Singh for the Petitioners in WPs 5553 5567 5616 5620 5646 5647 5750 52 5779 815623 285646 47 5649 56515643 455702 to 5723 5673 56745659 to 56675740 42 5737 39 and 5841 4380
RP Singh for the Petitioners in WPs 5609 11  5597 9880
Soli JSorabjee Arvind Minocha and Mrs Veena Minocha for the Petitioners in WP 566170
Mohan Behari Lal for the Petitioners in WPs 578580 578680 and 565780
AK Gupta for the Petitioners in WPs 5763 6480
Lal Narain Sinha Att
 SC Maheshwari Addl
Advocate General UP OP Rana MrsShobha Dikshit for the Respondents in all the matters
The Judgment of the Court was delivered by FAZAL ALI J
Inspired by the objective of removing nation wide shortage of sugar and for the purpose of enhancing sugar production 99 in order to achieve an equitable distribution of the commodity so as to make it available to consumers at reasonable rates and thereby relieving the sugar famine the Cane Commissioner Government of Uttar Pradesh by virtue of a Notification dated 9th October 1980 acting under clause 8 of the Sugarcane Control Order 1966 hereinafter referred to as the Control Order  directed that no power crusher with certain exceptions of a khandsari unit or any agent of such owner in the reserved area of a mill could be worked until December 1 1980
The exact contents of the Notification may be extracted thus Lucknow Thursday 9th October 1980 In exercise of the powers under clause 8 of the Sugarcane Control Order 1966 read with the Central Government Ministry of Food  Agriculture Community Development and Cooperation Department of Food Government of India Order No GSR 122Ess
CommSugarcane dated July 16 1966 I Bhola Nath Tiwari Cane Commissioner Uttar Pradesh hereby direct that no owner of power Crusher other than those vertical power crushers which manufacture Gur or Rab from Sugarcane grown on their own fields or a Khandsari Unit or any agent of such owner shall in any reserved area of any Sugar Mill work the Power Crusher or the Khandsari Unit prior to December 1 1980 during the Year 1980 81
By Order Bhola Nath Tiwari Cane Commissioner Uttar Pradesh The Control Order was passed by the Central Government in exercise of the powers conferred on it by s3 of the hereinafter referred to as the Act of 1955 
In order to understand the contentions raised by the parties it may be necessary to analyse the prominent features of the above Notification with reference to the situation it was intended to meet
It is not disputed that sugar was being produced in the State of UP by the sugar mills through hydraulic process and by the power crushers through what is known as the open pan process 
Both the mills as also the crushers drew their raw material namely sugarcane from the sugarcane growers
In order to facilitate production by the sugar mills most of whom were controlled by the State a reserved area of the fields growing sugarcane was fixed throughout the State 100 The Notification applied only to the reserved areas of a mill and not to any other areas
In other words any area which fell outside the reserved area was not affected by the Notification and the power crushers situated in that area could still manufacture Khandsari by the open pan process
Thus it would be seen that the ban imposed by the notification was confined only to a particular area in the State of UP
Secondly the Notification limited the ban to work power crushers only to a short period of one month and a half ie from October 9 1980 to December 1 1980
Thirdly and it has also not been disputed the owners of power crushers of khandsari units who are the petitioners in these cases had taken out regular licences under the UP Khandsari Sugar Manufacturers Licensing Order of 1967 hereinafter referred to as the Licensing Order 
It therefore logically follows that the power crushers owned or worked by the conditions of the licences under which they were working the crushers
Fourthly what was prohibited by the Notification was only the manufacture of khandsari while the production of gur or rab from sugarcane grown in the fields belonging to the owners of the crushers was left out of the ambit of the Notification
We have mentioned these essential features of the Notification because the most important argument put forward before us by the counsel for the petitioners has been that it imposes unreasonable restrictions on the right of the petitioners under article 191g of the Constitution to carry on their trade namely production of khandsari
A subsidiary argument buttressing the main contention was that the Notification intends to create a monopoly in favour of the sugar mills at the cost of the crushers owned by the petitioners and is therefore clearly violative not only of article 191g but also of article 14 of the Constitution
We would however deal with this aspect of the matter when we examine the contentions raised by the counsel for the parties
The Attorney General appearing for the Union of India and Mr Maheshwari Additional Advocate General appearing for the State of UP contended that decision to ban the power crushers of the petitioners was taken as a part of a high powered policy to boost the production of sugar which had fallen during the year 1979 80 with the result that in the current year the country faced a great sugar famine
As the situation called for some positive action to increase the production the matter having been discussed at the 34th Annual Convention of 101 Sugar Technologists of India it was decided to ban the production of khandsari by the power crushers for a limited period
A large number of documents in the nature of affidavits counter affidavits reports and books have been filed by the counsel for both the parties in support of their respective contentions
We might also mention here that the Notification has since spent its force and in fact was not carried into effect because immediately after it was issued the present writ petitions were filed in this Court and the petitioners obtained stay of the operation of the Notification from this Court
The Attorney General however insisted that the matter should be finally decided so that if the Central Government wants to take any steps of this kind in future it may be aware of the correct constitutional or legal position
The petitioners also insisted that the constitutional and legal questions involved in these cases may be decided even though our decision may be more or less of an academic value
This brings us now to the various contentions raised by counsel for the petitioners and the respondents
As the Notification has already spent its force we propose to deal only with the important and relevant contentions that have been advanced before us
The counsel for the petitioners headed by Mr Garg Mr Mridul and others raised the following constitutional points before us  1 The Notification as also the Control Order under which it was passed are clearly violative of of article 191g and the restrictions purported to be placed on the right of the petitioners not do contain the quality of reasonableness
2 Clause 8 of the Control Order under which the impugned Notification has been issued suffers from the vice of excessive delegation of powers and is therefore violative of Article 14 of the Constitution
By the same token as the impugned Notification seeks to establish a monopoly in favour of the sugar mills at the cost of the petitioners invidious discrimination is writ large on the very face of the Notification which must be struck down as being violative of article 14
3 There is absolutely no rational nexus between the prohibition contained in the Notification preventing the crushers of the petitioners from working them and the object sought to be achieved by it
Thus the State had selected the petitioners for hostile discrimination between one segment 102 and another of persons engaged in the purchase of sugarcane its sale and production of sugar without striking a just balance between the manufacturers of gur khandsari and sugar
India lives in villages and it was not understandable why the Central Government was bent on reducing the support price of sugarcane which was adversely affecting the sugarcane growers because while the mills were not able to pay a reasonable price the crushers were able to pay a handsome price for the sugarcane supplied to them by the growers
When tested for reasonableness therefore the Notification completely fails
4 Clause 8 of the Control Order does not contemplate a complete prohibition of the production of an article but envisages only a regulation of the period or hours of working
5 The Notification violates the principles of natural justice inasmuch as it was passed without hearing the petitioners whose valuable rights were curtailed as they were put completely out of production even though for a short period
6 The impugned Notification violative of clause 11 of the Control Order itself inasmuch as the prohibition against the working of the power crushers amounts to partial revocation of the licences of the petitioners granted to them under clause 3 of the Licensing Order
Clause 11 of the Control Order clearly provides that no adverse orders could be passed against any manufacturer without hearing him
7 Even though the impugned Notification purports to have been passed under the Control Order which itself was passed under section 3 of the Act of 1955 yet if the notification is properly considered and the mischief it causes is borne in mind it goes against the very spirt and object of the Act of 1955 and in fact frustrates the equal distribution and production of sugar which apparently seems to be the objective of the impugned notification
The Attorney General and the Additional Advocate General appearing for the Union of India and the State of UP respectively countered the submissions made by the petitioners on the following grounds 1 An order passed under clause 8 of the Control Order is of a legislative character and therefore the question of the 103 application of the principles of natural justice to it does not arise
2 The Notification does not violate article 14 or 19 because it is in great public interest and is aimed at maintaining and securing proper and equitable distribution of sugar in view of the nation wide shortage of the commodity
3 The Notification is justified by the fact that recovery of sugar from sugarcane in case of khandsari units run by power crushers is between 4 to 6 per cent whereas in the case of sugar factories it ranges between 9 12 to 11 12 per cent so that utilisation of sugarcane in the case of mills is double that of the power crushers
In these circumstances khandsari units and mills belong to two different classes which cannot be said to be similarly situate so as to attract article 14 vide pp
69 70 of WP 5565 5567 of 1980 Bhagwati Sugar Industry s case
4 The khandsari produced by the crushers has got a very narrow sphere of consumption as it is used mostly by halwais or villagers whereas sugar produced by the sugar mills is consumed in far larger quantities by the public in India generally and in foreign countries after export
Therefore the sugar mills fall within a special class and the question of hostile discrimination does not arise
Similarly the action taken in order to protect national interests and distribution of sugar to the entire country on a rational basis cannot be said to be an unreasonable restriction
5 There is a marked difference between the quality of khandsari and that of sugar produced by the mills in their character specification etc which is evident from the various reports filed by the State
6 The question of natural justice does not arise because the crusher owners were fully aware of the situation and had also knowledge of the considerations which prevailed with the Government in stopping crushers for a short period in order to boost production by the sugar mills and fix support price for the sugarcane supplied to the mills
However as the Notification has expired if proper guidelines are laid down by the Court before passing a fresh order the State will certainly hear the petitioners in order to know their point of view
104 7 Clause 8 of the Control Order uses the words period  or working hours  which are wide enough to embrace within their ambit a fixed period of time covering more than a day as also hours of work on any working day
We might also mention that some of the sugarcane growers have supported the arguments advanced by the petitioners
We now proceed to scrutinise and examine the contentions of the counsel for the petitioners
On the contention according to which the impugned notification is violative of article 191g it may be necessary to dwell in some detail
It is no doubt well settled that where a citizen complains of the violation of fundamental rights contained in sub clause g of clause 1 of Art 19 or for that matter in any of sub clauses a to g thereof the onus is on the State to prove or justify that the restraint or restrictions imposed on the fundamental rights under clauses 2 to 6 of the Article are reasonable
In the instant case we are mainly concerned with sub clauses 4 5 and 6 of Art19
As far back as 1955 this Court in Saghir Ahmad vs The State of UP and Ors1 made this position very clear and observed as follows  There is undoubtedly a presumption in favour of the constitutionality of a legislation
But when the enactment on the face of it is found to violate a fundamental right guaranteed under article 191 g of the Constitution it must be held to be invalid unless those who support the legislation can bring it within the purview of the exception laid down in clause 5 of the article
If the respondents do not place any materials before the Court to establish that the legislation comes within the permissible limits of clause 6 it is surely not for the appellants to prove negatively that the legislation was not reasonable and was not conducive to the welfare of the community
 A similar view was taken in Mohammed Faruk vs State of Madhya Pradesh and Ors2 where this Court speaking through Shah J reiterated the position mentioned above in the following words When the validity of a law placing restriction upon the exercise of fundamental rights in Article 191 is challenged the onus of proving to the satisfaction of the Court that the restriction is reasonable lies upon the State 105 We therefore fully agree with the contention advanced by the petitioners that where there is a clear violation of article 191g the State has to justify by acceptable evidence inevitable consequences or sufficient materials that the restriction whether partial or complete is in public interest and contains the quality of reasonableness
This proposition has not been disputed by the counsel for the respondents who have however submitted that from the circumstances and materials produced by them the onus of proving that the restrictions are in public interest and are reasonable has been amply discharged by them
This brings us to the main question as to the circumstances under which restriction imposed by the State can be said to contain the quality of reasonableness
For this purpose almost all the decisions of this Court on the subject have been placed before us and it may be necessary to notice those of them which have a close bearing on the point at issue
It is abundantly clear that fundamental rights enshrined in Part III of the Constitution are neither absolute nor unlimited but are subject to reasonable restrictions which may be imposed by the State in public interest under clauses 2 to 6 of Art19
As to what are reasonable restrictions would naturally depend on the nature and circumstances of the case the character of the statute the object which it seeks to serve the existing circumstances the extent of the evil sought to be remedied as also the nature of restraint or restriction placed on the rights of the citizen
It is difficult to lay down any hard or fast rule of universal application but this Court has consistently held that in imposing such restrictions the State must adopt an objective standard amounting to a social control by restricting the rights of the citizens where the necessities of the situation demand
It is manifest that in adopting the social control one of the primary considerations which should weigh with the Court is that as the directive principles contained in the Constitution aim at the establishment of an egalitarian society so as to bring about a welfare state within the frame work of the Constitution these principles also should be kept in mind in judging the question as to whether or not the restrictions are reasonable
If the restrictions imposed appear to be consistent with the directive principles of State policy they would have to be upheld as the same would be in public interest and manifestly reasonable
Further restrictions may by partial complete permanent or temporary but they must bear a close nexus with the object in the 106 interest of which they are imposed
Sometimes even a complete prohibition of the fundamental right to trade may be upheld if the commodity in which the trade is carried on is essential to the life of the community and the said restriction has been imposed for a limited period in order to achieve the desired goal
Another important consideration is that the restrictions must be in public interest and are imposed by striking a just balance between the deprivation of right and the danger or evil sought to be avoided
Thus freezing of stocks of food grains in order to secure equitable distribution and availability on fair prices have been held to be a reasonable restriction in the cases of Narendra Kumar and Ors
vs The Union of India and Ors1 Ms Diwan Sugar and General Mills P Ltd and Ors vs The Union of India and The State of Rajasthan vs Nath Mal and Mitha Mal3
These are some of the general principles on the basis of which the quality of reasonableness of a particular restriction can be judged and have been lucidly adumbrated in State of Madras vs VG Row s4 case
Another important test that has been laid down by this Court is that restrictions should not be excessive or arbitrary and the Court must examine the direct and immediate impact of the restrictions on the rights of the citizens and determine if the restrictions are in larger public interest while deciding the question that they contain the quality of reasonableness
In such cases a doctrinaire approach should not be made but care should be taken to see that the real purpose which is sought to be achieved by restricting the rights of the citizens is subserved
This can be done only by examining the nature of the social control the interest of the general public which is subserved by the restrictions the existing circumstances which necessitated the imposition of the restrictions the degree and urgency of the evil sought to be mitigated by the restrictions and the period during which the restrictions are to remain in force
At the same time the possibility of an alternative scheme which might have been but has not been enforced would not expose the restrictions to challenge on the ground that they are not reasonable
107 Finally in determining the reasonableness of restrictions imposed by law in the field of industry trade or commerce the mere fact that some of the persons engaged in a particular trade may incur loss due to the imposition of restrictions will not render them unreasonable because it is manifest that trade and industry pass through periods of prosperity and adversity on account of economic social or political factors
In a free economy controls have be introduced to ensure availability of consumer goods like food stuffs cloth or the like at a fair price and the fixation of such a price cannot be said to be an unreasonable restriction in the circumstances
Thus apart from the various other factors which we have referred to above where restrictions are imposed on a citizen carrying on a trade or commerce in an essential commodity the aspect of controlled economy and fair and equitable distribution to the consumer at a reasonable price leaving an appreciable margin of profit to the producer is undoubtedly a consideration which does not make the restriction unreasonable
In fact the leading case decided by this Court which may justly be regarded as the locus classicus on the questions as to what are reasonable restrictions is VG Row s case supra where Patanjali Sastri CJ speaking for the Court observed as follows It is important in this context to bear in mind that the test of reasonableness where ever prescribed should be applied to each individual statute impugned and no abstract standard or general pattern of reasonableness can be laid down as applicable to all cases
The nature of the right alleged to have been infringed the underlying purpose of the restrictions imposed the extent and urgency of the evil sought to be remedied thereby the disproportion of the imposition the prevailing conditions at the time should all enter into the judicial verdict
In evaluating such elusive factors and forming their own conception of what is reasonable in all the circumstances of a given case it is inevitable that the social philosophy and the scale of values of the judges participating in the decision should play an important part and the limit to their interference with legislative judgment in such cases can only be dictated by their sense of responsibility and self restraint and the sobering reflection that the Constitution is meant not only for people of their way of thinking but for all and that the majority of the elected representatives of the people have in 108 authorising the imposition of the restrictions considered them to be reasonable This case was followed in a later decision of this Court in Mineral Development Ltd vs The State of Bihar and Anr1 where after quoting the observations of Patanjali Sastri CJ as extracted above Subba Rao J speaking for the Court observed as follows These observations if we may say so with great respect lay down the correct principle
It follows that it is the duty of this Court to decide having regard to the aforesaid considerations and such others whether a particular statute satisfies the objective test of reasonableness  In the case of Collector of Customs Madras vs Nathella Sampathu Chetty and Anr2 the observations of Patanjali Sastri CJ were endorsed by this Court when Ayyangar J speaking for the Court made the following observations There are several decisions of this Court in which the relevant criteria have been laid down but we consider it sufficient to refer to a passage in the judgment of Patanjali Sastri CJ in State of Madras vs VG Row In Ms Diwan Sugar and General Mills Private Ltd and Ors
vs UOI3 which was also a case arising out of the Act of 1955 and the Sugar Control Order of 1955 promulgated by the Central Government under section 3 of the said Act a Constitution Bench of this Court while examining the nature of the restrictions imposed in that case took into account the various circumstances and observed  Clause 5 of the Order lays down the factors which have to be taken into consideration in fixing prices
These factors include among other things a reasonable margin of profit for the producer andor trade and any incidential charges
This was kept in mind when prices were fixed by the impugned notification
The prices were prevalent in the free market and must certainly have taken account of a fair margin of profit for the producer though in the case of an individual factory due to factors for which the producer might 109 himself be responsible the cost of production might have been a little more
Therefore the prices fixed by the Government by the impugned notification can on no circumstances be said to have been proved to be below the cost of production   In these circumstances if price is fixed in this area price all over India is practically fixed and it is not necessary to fix prices separately so far as factories in other States which are said to be mainly deficit are concerned
There is therefore in our opinion no discrimination in effect by the fixation of prices in these three regions
 It will be noticed that even though clause 5 had fixed prices the Court upheld the restrictions because a reasonable margin of profit for the producer was left and did not insist that the producer should be allowed to have full sway in the production of sugar to the maximum capacity possible
Similarly one of the important tests laid down by this Court was that the price prevailing in the free market must be taken into account in the formula of fixation of price for essential commodities secondly while dealing with the price control imposed on factories in various States this Court held that the policy of fixation of price could not be challenged because States where they were fixed were deficit areas
We might mention here that the sheet anchor of the argument of the Attorney General is that the impugned Notification was passed in order to relieve the sugar famine by boosting the production of sugar by mills
Similarly in Nath Mal and Mitha Mal s case supra which was also a case dealing with food grains an order freezing the stocks of the commodity in order to secure its equitable distribution so as to make it available at a fair price to consumers was upheld by the Court with the following observations The clause authorises the Commissioner and various others authorities mentioned therein and such other officers as may be authorised by the Commissioner to frreeze any stock of foodgrains held by a person
Nor do we think that the power to freeze the stocks of foodgrains is arbitrary or based on no reasonable basis 
We are clear therefore that the freezing of stocks of food grains is reasonably related to the object which the Act was in 110 tended to achieve namely to secure the equitable distribution and availability at fair prices and to regulate transport distribution disposal and acquisition of an essential commodity such as foodgrains
 The most material ratio of this case is that even the freezing of stocks of foodgrains with a view to securing their equitable distribution and availability was held to be a reasonable restriction
Even if by seizing the food stocks the right of a citizen to trade in food grains was seriously impaired and hampered yet such a State action was justified on the ground of public interest
On a parity of reasoning therefore a restriction on the right of a trader dealing in essential commodities like the ban in the instant case or fixation of prices aimed at bringing about distribution of essential commodities keeping the consumers interests as the prime consideration cannot be regarded as unreasonable
We are fortified in our view by a decision of this Court in Prag Ice and Oil Mills and Anr
vs Union of India1 where Beg CJ observed as follows  All the tests of validity of the impugned price control or fixation order are therefore to be found in section 3 of the Act
Section 3 makes necessity or expediency of a control order for the purpose of maintaining or increasing supplies of an Essential Commodity or for securing its equitable distribution at fair prices the criteria of validity
It is evident that an assessment of either the expediency necessity of a measure in the light of all the facts and circumstances which have a bearings on the subjects of price fixation is essentially a subjectives matter
It is true that objective criteria may enter into determinations of particular selling prices of each kilogram of mustard oil at various time
But there is no obligation to have to fix the price in such a way as to ensure reasonable profits to the producer or manufacturer
It has also to be remembered that the objective is to secure equitable distribution and availability at fair prices so that it is the interest of the consumer and not of the producer which is the determining factor in applying any objective tests at any particular time
 The observations extracted above furnish a complete answer to the contentions raised by the petitioners on contention No 1 111 Furthermore we would like to reiterate what Chandrachud CJ observed in that case regarding the history and the manner in which the petitioners rushed to this Court  Before closing we would like to mention that the petitioners rushed to this Court too precipitately on the heels of the Price Control Order
Thereby they deprived themselves of an opportunity to show that in actual fact the Order causes them irreparable prejudice
Instead they were driven through their ill thought haste to rely on speculative hypotheses in order to buttress their grievance that their right to property and the right to do trade was gone or was substantially affected
A little more patience which could have been utilised to observe how the experiment functioned might have paid better dividends
 This is exactly what the petitioners have done in this case by rushing to this Court the moment the notification was issued and thus depriving the State as also themselves of the actual consequences of the issuing of the notification and the prejudice which it really may have caused
They did not at all show any patience in waiting for a while to find out if the experiment functioned successfully and in the long run paid good dividends
As the petitioners obtained stay orders from this Court on filing these petitions the experiment died a natural death and the notification remained ineffective
It was vehemently contended by Mr Garg that the Notification or the Control Order is in direct contravention of the Directive Principles of State policy contained in article 39 in part IV of the Constitution inasmuch as instead of developing small scale industries like the crushers the Notification has curbed the rights of their owners in order to benefit the mills
It is true that one of the important considerations which must weigh with the Court in determining the reasonableness of a restriction is that it should not contravene the Directive Principles contained in Part IV of the Constitution which undoubtedly has a direct bearing on the question as held by this Court in the cases of Saghir Ahmad vs State of UP and Ors1 and The State of Bombay and Anr
vs F N Balsara2 where this Court made the following observations  112 The new clause in Article 196 has no doubt been introduced with a view to provide that a State can create a monopoly in its own favour in respect of any trade or business but the amendment does not make the establishment of such monopoly a reasonable restriction within the meaning of the first clause of Article 196
The result of the amendment is that the State would not have to justify such action as reasonable at all in a Court of law and no objection could be taken to it on the ground that it is an infringement of the right guaranteed under Article 191 g of the Constitution Saghir Ahmed s case In judging the reasonableness of the restrictions imposed by the Act one has to bear in mind the directive principles of State policy set forth in Article 47 of the Constitution Balsara s case In the instant case however if the argument of the Attorney General is to be accepted there is no violation of the Directive Principles because the main object sought to be achieved by a temporary suspension of the business of the petitioners is to ensure large scale production of white sugar and to make it available to the consumers at reasonable rates which is an implementation rather than a contravention of the Directive Principles particularly clauses b and c of article 39
Whether the State has been able to prove this fact or not would be considered when we deal with the facts and materials placed before us by the parties
Another important aspect to which we may advert at this stage is the test which should be laid down to determine the reasonableness of a restriction involving a citizen carrying on trade or business in an essential commodity
We have already seen that this Court has held that fixation of price of sugar or freezing of stock of foodgrains does not amount to an unreasonable restriction on the fundamental right to trade enshrined under article 191g
There are other cases in which this Court has clearly held that in the case of essential commodities like sugar the question of the economic production and distribution thereof must enter the verdict of the Courts in deciding the reasonableness of the restrictions
In such cases even if the margin of profit left to the producer is slashed that would not make the restriction unreasonable
The reason for this view is that such a trade or commerce is subject to rise and fall in prices and other diverse factors which may destroy or prohibit one industry or the other so as to affect the general body of the consumers and if any measure is taken to strike a just 113 balance between the danger sought to be averted and the temporary deprivation of the right of a citizen to carry on his trade it will have to be upheld as a reasonable restriction
In Shree Meenakshi Mills vs UOI 1 Ray CJ speaking for the Court observed as follows If fair price is to be fixed leaving a reasonable margin of profit there is never any question of infringement of fundamental right to carry on business by imposing reasonable restrictions
The question of fair price to the consumer with reference to the dominant object and purpose of the legislation claiming equitable distribution and availability at fair price is completely lost sight of if profit and the producer s return are kept in the fore front
In determining the reasonableness of a restriction imposed by law in the field of industry trade or commerce it has to be remembered that the mere fact that some of those who are engaged in these are alleging loss after the imposition of law will not render the law unreasonable
By its very nature industry or trade or commerce goes through periods of prosperity and adversity on account of economic and sometimes social and political factors
In a largely free economy when control have to be introduced to ensure availability of consumer goods like foodstuff cloth and the like at a fair price it is an impracticable proposition to require the Government to go through the exercise like that of a Commission to fix the prices
 According to the Attorney General by virtue of the impugned Notification this is exactly what the Central Government wants to achieve by banning the working of power crushers for a short period
This case was followed in another decision of this Court in Saraswati Industrial Syndicate Ltd vs UOI2 which was also a case of a notification issued under clause 7 of the Control Order of 1966 where the following observations were made It is a well known fact that rationalisation of industry by the use of modern methods reduces the amount of labour needed in more mechanised modes of manufacture
Therefore we do not think that these assertions could prove any inequitable treatment meted out to the Haryana manufacturers of sugar
In any case no breach of a mandatory duty which could justify the issue of writ of mandamus was established  114 In the light of the principles enunciated and the decisions discused above we now proceed to examine the facts and circumstances placed before us by the Union of India to prove that the restrictions imposed under the impugned Notification contain the quality of reasonableness and are not violative of article 191g
The main pleas of the State of UP which have been adopted by the Union of India are to be found in paragraphs 6 to 11 of the counter affidavit filed by the respondents in writ petition Nos
5565 5567 of 1980
The respondents have taken the stand that there has been a very steep rise in the prices of sugar which is doubtless an essential commodity
It has further been alleged that one of the major factors responsible for the present rise in the prices of sugar is that there is a sharp rise in the demand for consumption of sugar whereas its production has slumped to a very low level
In order to illustrate the point it has been averred that the demand of sugar in the country has increased to over 60 lakh tonnes whereas production of the commodity in the preceding year 1979 80 was only about 395 lakh tonnes
In order to meet the demand the Central Government had to import for the first time after several years 2 lakh tonnes of sugar at a cost of about one hundred crores of rupees
One reason for the shortfall in production during 1979 80 was the poor availability of cane to the sugar factories
This in turn resulted from the worst drought conditions faced by our country particularly the State of UP which is one of the main suppliers of sugarcane
Yet another cause of the shortage was that the sugar famine led to the large scale diversion of cane to gur and khandsari manufacturers
The counter affidavit then proceeds to give a chart of the production of sugar by the crushers and the mills
It was further averred that unless the position was set right the stocks of 1979 80 would have been exhausted completely by the middle of November 1980
To meet this national crisis the Government of India took various steps to increase the production of sugar in the country during the current season 1980 81
In the first place the Government of India allowed rebate in the basic excise duty on excess sugar production in order to serve as an incentive to the sugar mills to start early cane crushing operation
This step however could not possibly have the desired effect unless the sugar factories got the raw material viz constant supply of sugarcane
Indisputably sugarcane is utilised for manufacture of sugar gur rab and khandsari and some of the quantity is also utilised for seed feed and chewing
It was further alleged that the crushers particularly those producing gur were in an advantageous position so as to be able to purchase cane at a very high rate and outcompete the sugar 115 factories
It was possible for the crushers to pay a higher price because no excise duty or compulsory levy was imposed on them on the other hand the factories suffered from certain disabilities namely sixty five per cent of the sugar production was taken by the Government of India on levy process and excise duty on free sale sugar was very high as compared to khandsari sugar
Further the Government required distribution of molasses at a fixed price of Rs6 per quintal to the mills whereas there was no such obligation on the power crushers
Finally because of the monthly release system the factories could sell only released quantity during a particular month whereas there was no such restriction on khandsari units owned by the petitioners
These steps taken by the then Government resulted in an unhealthy competition causing diversion of cane from the sugar factories with the result that sugar factories could get only 615 of the bonded cane
It was further pointed out in the counter affidavit that keeping in view the fact that the sugar stocks of 1979 80 were likely to be exhausted by the middle of November 1980 it was considered necessary to maintain an adequate supply of sugarcane to the sugar factories which would have started production earlier because of the incentives given to them by the Government of India
In an additional affidavit filed by the respondents sworn by Karan Singh Joint Cane Commissioner Government of UP it was pointed out that khandsari sugar could never be a substitute for sugar produced by sugar mills because khandsari sugar is not used for domestic purpose in preference to mill sugar as the former has higher molasses content and has unpleasant smell and taste
Further there is no gradation of khandsari sugar as its grain is not regular and bold
It was further alleged that in public distribution it is only the mill sugar which is supplied at fair price to the consumers at large and which also forms the bulk of the export
The khandsari sugar according to the respondents was generally consumed for preparation of sweets boora and batasha and was consumed mostly by the halwais
There is no reliable evidence to rebut the aforesaid facts detailed in the counter affidavit of the respondents
Thus in view of the factors detailed above it was contended by the Union of India that it was in public interest that with a view to remove shortage of sugar and achieve equal distribution of sugarcane to the mills the impugned notification was passed which seems to strike a just balance between the requirements of the country and those of the khandsari units
The Attorney General contended that since the ban was imposed only for a very short period of about 116 one month and a half there could be no appreciable loss to the khandsari units and even if there was some loss it could be recouped after the ban was lifted because the working cost of the khandsari units was much less than that of the mills
In other words by virtue of the policy adopted by the Government in passing the impugned notification a fair margin of profit was left to the khandsari units which were not completely closed
It was further stated that out of 89 sugar mills in the entire State of UP 18 sugar mills are owned by the UP State Sugar Corporation which is a Government company and controlled by the State
Sixteen sugar mills are under the cooperative sector in which the Government Investment is considerable and these mill are run by cooperative societies of which cane growers are shareholders
Thus the ultimate benefit did undoubtedly go to the sugarcane growers also through the profits made by the cooperative societies
The learned counsel Mr Garg appearing for the petitioners countered the inferences drawn by the respondents with the submission that although the above facts may not be disputed yet it was not correct to say that the khandsari units had put the mills completely out of competition
It was suggested that the khandsari units were also apart from paying a higher price to the sugarcane growers prepared to be subjected to compulsory levies or excise duty levied on the mills or to such terms as the Government may like to put on the owners of the crushers
The argument is no doubt attractive but we are not sure if and when these harsher terms are imposed on the petitioners it would be possible for them to run the crushers and make the huge profits which they are making without the aforesaid impositions
At any rate since the impugned notification has expired the Government will certainly consider the desirability of a reappraisal of the situation after taking into account this aspect of the matter
It was further pointed out by the Union of India that only 39 sugar mills are in the private sector and ensuring actual availability of sugar at reasonable rates to the sugar mills was the prime consideration which formed the basis of impugned notification in conformity with the object of the Act of 1955 and the Control Order so as to maintain a fair price for the general public
Learning a lesson from the performance of the sugar market in the preceding year the Government thought it more desirable to channelise the production of sugarcane so that the interests of neither the sugar mill owners nor of the khandsari units nor those of the cane growers suffered
It was then contended that the impugned notification far from causing any appreciable damage or loss to the petitioners serve a 117 two fold purpose which ensures equitable production and distribution of sugar
Another important argument advanced by the Attorney General which has impressed us most is one resulting from the use by the mills of the hydraulic process as distinguished from the open pan process employed by khandsari units for the production of sugar
The consequence is the recovery of sugar from sugarcane in the case of khandsari units run by power crushers is between 4 to 6 per cent whereas in the case of sugar factories it ranges between 9 12 to 11 12 per cent
Thus the overall position is that the utilisation of sugarcane by the mills is double that by the crushers and if the crushers are not able to produce more than the existing 4 to 6 per cent half of the total quantity of sugarcane supplied to them goes waste which if utilised by the factories would have served for production of more sugar
This solid distinction between the two processes of manufacture followed by the mills and the crushers is in our opinion a very rational distinction which puts the mills in a different class and which also provides a reasonable nexus between the restrictions imposed on the crushers and the object sought to be achieved
The petitioner sought to falsify the figures quoted by the Union of India regarding the percentage of recovery of sugar by reference to a book written by Mr Bepin Behari and entitled Rural Industrialization in India 
On page 100 of the book the author has observed as follows  Originally the percentage of recovery in traditional khandsari units did not go beyond 65 per cent but recent innovations have raised the recovery ratio to almost 95 per cent
Thereby the two processes have become almost commutative
In inversion loss however there is some difference
In the large scale sugar mills only ten per cent of the sugar is lost while in small khandsari plants the loss can be as much as 30 per cent and great reliance has been placed on these observations of the author
It may be noted however that the author has not cited any expert opinion as the foundation for his conclusion nor has he referred to any experiment carried out by him personally
In fact he has not even disclosed the source of his information
Apart from that the book fully supports the averments of the respondents that the percentage of recovery in traditional khandsari units did not go beyond 65 per cent
Besides there is no evidence or allegation in any of the affidavits filed by the petitioners to the effect that any new methodo 118 logy or innovation was adopted by any of the petitioners
In these circumstances the extract from the book does not appear to be of any assistance to the petitioners
On the other hand the facts detailed by the respondents in the various counter affidavits filed by them are based on the statistics maintained by the Government from year to year and reports of experts
One such report entitled studies on Specific Conductances of Indian Sugar  has been filed by the State before us and it gives the entire history and economics of sugar production
After a careful consideration of the arguments and documents produced by both the parties we are satisfied that the restriction imposed by the impugned notification in stopping the crushers for the period 10th October to 1st December 1980 is in public interest and bears a reasonable nexus to the object which is sought to be achieved namely to reduce shortage of sugar and ensure a more equitable distribution of this commodity
One of the tests that has been laid down to determine the reasonableness of a restriction is to find out if the restraint is more excessive than that warranted by the situation
In the instant case taken an overall picture of the history of sugar production it cannot be said that the stoppage of sugar crushers for a short period is more excessive than the situation demanded
In Madhya Bharat Cotton Association Ltd vs Union of India  Anr1 while considering a restriction imposed for a short time this Court observed as follows  Further cotton being a commodity essential to the life of the community it is reasonable to have restriction which may in certain circumstances extend to total prohibition for a time of all normal trading in the commodity
Accordingly we are of opinion that Clause 4 of the Cotton Control Order of 1950 does not offend article 19 1 g of the Constitution because sub clause 5 validates it Emphasis supplied In that case the restriction imposed on cotton was for a short period of one month in February 1954 and for another month in May 1954 and was held to be justified and a reasonable restraint so 119 as not to be violative of Art 19 1 g
The situation here is similar
Afterall the petitioners were working their crushers under a licence granted to them under the Licensing Order and the impugned notification merely seeks to regulate the right and not to abolish the same
For the above reasons the first contention put forward by the petitioners that the restrictions imposed by the impugned notification are unreasonable is hereby overruled and it is held that such restrictions clearly contain the quality of reasonableness and when tested on the touchstone of the principles laid down by the various authorities referred to above they fully satisfy all the requirements of a reasonable restriction
This takes us to contention No 2 raised by the petitioners
It was submitted before us that clause 8 of the Control Order under which the impugned notification has been issued suffers from the vice of excessive delegation of powers and is therefore violative of article 14 of the Constitution
It was argued that as the notification seeks to establish a monopoly in favour of the sugar mills at the cost of the petitioners it seeks to make per se an invidious discrimination which is writ large on the very face of the notification which is therefore violative of article 14
As regards first limb of the argument it may be necessary to state that the Control Order itself has been passed under the authority of s3 of the Act of 1955 which has been held by this Court to be constitutionally valid and is not in any way discriminatory so as to attract article 14
The Control Order itself having been passed under s3 contains sufficient guidelines checks and balances to prevent any misuse or abuse of the power conferred on the authorities concerned under clause 8
Clause 8 runs thus 8
Power to issue directions to producers of khandsari sugar power crushers khandsari units crushers and cooperative societies
The Central Government may from time to time by general or special order issue directions to any producer of khandsari sugar or owner of a power crusher khandsari unit or crusher or the agent of such producer or owner or a cooperative society regarding the purchase of sugar or sugarcane juice production maintenance of stocks storage price packing payment disposal delivery and distribution of sugar cane gur gul jaggery and rab or khandsari sugar or the period or hours to be worked
 120 To begin with it may be noticed that the power to issue orders or directions from time to time is conferred on the Central Government which is undoubtedly a very high authority and must be presumed to act in a just and reasonable manner
This point is well settled and concluded by several decisions of this Court as detailed below
In Chinta Lingam  Ors
vs Government of India Ors
 1 this Court made the following observations At any rate it has been pointed out in more than one decision of this Court that when the power has to exercised by one of the of the highest officers the fact that no appeal has been provided for is a matter of no moment It was said that though the power was discretionary but it was not necessarily discriminatory and abuse of power could not be easily assumed
There was moreover a presumption that public officials would discharge their duties honestly and in accordance with rules of law
 This case was followed in V C Shukla vs State Delhi Admn2 where one of us Fazal Ali J speaking for the Court observed as follows  Furthermore as the power is vested in a very high authority it cannot be assumed that it is likely to be abused
On the other hand where the power is conferred on such a high authority as the Central Government the presumption will be that the power will be exercised in a bona fide manner and according to law Moreover the power cannot be said to be arbitrary or unguided because the impugned notification derives its source from section 3 of the Act of 1955 which clearly lays down sufficient guidelines and the existence of certain conditions for proper distribution of an essential commodity
The said guidelines therefore govern the authority passing the impugned notification
Secondly clause 8 merely seeks to regulate and guide the conditions and the circumstances under which the manufacturers may exercise their rights
In other words any order passed under clause 8 is prima facie purely of a regulatory nature
It was however submitted that the Notification has been passed by the Cane Commissioner Government of UP and it does not contain any materials 121 or reasons why the ban was imposed on the crushers owned by the petitioners
As the Notification itself has been passed under clause 8 of the Control Order read with Government of India GSR No 1122 dated July 16 1966 and under the it was not necessary for the Cane Commissioner to have stated or detailed the reasons why the Notification was issued
In fact the Notification and the Control Order have to be read in the light of the main Act viz the Act of 1955 which itself provides the necessary guide lines namely that it is essential in public interest and to secure proper distribution of an essential commodity to pass orders by various authorities from time to time
This is the scheme of section 3 of the Act of 1955 which has not been challenged before us by the petitioners
It was further argued in the same token that the impugned notification seeks to establish a monopoly in favour of the sugar mills at the cost of the petitioners who have been selected for hostile discrimination as against the mills
While detailing and narrating the facts and the history of sugar production we have already shown that the State has placed cogent materials before us to show why the sugar mills had to be given a special treatment by temporarily stopping the production of sugar by the crushers
We have already dealt with the various factors while examining contention No 1 of the petitioners and it is not necessary for us to repeat the same here
There was no question of creating any monopoly to benefit the mills particularly when a very large majority of the mills were controlled by the State or cooperative societies and only a small fraction of them were working in the private sector
In view of the low working cost of the crushers they sought to outcompete the mills and deprive them of the requisite amount of sugarcane which they should have got
It was not only just but also essential to boost the production of the factories so that white sugar may be produced on a large scale and sugarcane may not be wasted which would have been the case if most of the sugar cane went to the crushers
We have pointed out that the recovery of sugarcane juice by the mills is double that by crushers and if the latter were allowed to operate the wastage of the sugarcane would have been almost 50 per cent which could have been avoided if sugar cane was allowed to be utilised by the mills
The third limb of the argument on this point was that there was was no rational nexus between the prohibition contained in the Notification preventing the petitioners from working their crushers even though for a short period and the object sought to be achieved by it
This contention also must necessarily fail as we have already shown that such nexus existed
122 It was argued by Mr Garg that as India lives in villages it was not understandable why the Central Government was bent on reducing the support price of sugarcane and thus causing loss to the sugarcane growers
It was true that the mills were not in a position to pay as high a price for sugarcane as the crushers but that was for so many reasons which we have discussed above namely the various liabilities which were imposed on the mills eg the excise duties the levy etc
Once a certain amount of stability was achieved in the sugarcane industry the ultimate benefit would undoubtedly go to the sugarcane grower even though he may have to be paid a lesser support for supply of sugarcane to the mills
It was therefore in public interest that a lesser support price for sugarcane had been fixed
Moreover it was for the Central Government who was in the know of the circumstances prevailing in the State or for that matter in the country to determine the support price of sugarcane
Even though the crushers may have paid a higher price in the long run the sufferers would be the sugarcane growers as also the consumers who would be deprived of the sugar produced by the mills which was undoubtedly superior to the khandsari sugar and has a vaster area of consumption in the country and is also meant for purposes of export
The report entitled Studies on Specific Conductances of Indian Sugar  referred to above details the distinctive features of the white sugar produced by the mills and the khandsari sugar where the various features of the nature and character of sugar are pointed out thus
This plantation sugar is crystalline white lustrous and has a purity of 998 per cent
The size of the crystal of this sugar varies from 03 to 25mm
This sugar is graded according to the Indian sugar standards Sugar corresponding to 30A is very white sugar with grain size of about 25mm
While 27 E refers to less white sugar with grain size of about 04 mm
The numeral 30 29 and 27 indicate the decreasing order of the whiteness of the sugars and the letters A E to the grade of the grain size Apart from these sugars produced in well established commercial factories the similar type of which are known in other countries another kind of sugar produced perhaps only in India and nowhere else is the khandsari sugar which is being manufactured in small scale industrial units While in the sulphitation factories the classified sugar syrups are boiled under vacuum in Khandsari units the same is carried out in the open pans
This sugar used to be palish yellow in colour 123 Nagaranjars and his co workers studied the conductivity of plantation white sugars and refined sugars and found distinctive difference in conductivity of plantation white sugar and refined sugar
 It has been clearly averred in para 15 of the counter affidavit filed by Mr Bhola Nath Tiwari Cane Commissioner Government of UP who issued the impugned notification that in year 1978 79 the production in the reserved areas was 57878 lakh tonnes out of which the percentage of cane utilised by the sugar mills was 2724 whereas it was 973 in the case of the khandsari manufactured by power crushers
It is also stated that out of the total quantity of sugarcane only 4523 per cent was utilised by gur manufacturers and the remaining 175 per cent was used for seed feed and chewing purposes etc
Similarly in the year 1979 80 there was a steep fall in the production of sugarcane from 57878 lakh tonnes in the previous year to 47111 lakh tonnes
Owing to this loss of production there was keen competition for purchase of sugarcane between the sugar mill owners and the khandsari units
As a result of this unhealthy competition sugar mills had to close down prematurely resulting in the loss of production of sugar
A very attractive argument was submitted before us by Mr Gupta appearing for some of the owners of power crushers
It was submitted that so far as the petitioners represented by him were concerned they were growing sugarcane in their own fields and had installed power crushers in their own land though the said land fell within the reserved area
It was argued that these petitioners fell in a separate category and the Government could not compel them to supply sugarcane to the mills instead of using the sugarcane grown by them in their own crushers
An apparent snag in this argument is that if in the larger public interest it becomes necessary to compel the sugarcane growers to supply sugarcane to the mills at a particular rate in order to meet a national crisis no person can be heard to say that his rights are taken away in an unjust or discriminatory fashion
Personal or individual interests must yield to the larger interests of the community
This is exactly the philosophy behind the passing of the Act of 1955
Merely because the petitioners are growing sugarcane in their own fields and own power crushers therefore they cannot be treated as a class separate from the others owners of power crushers situated within the reserved area of the the mills
124 Secondly it was argued by Mr Gupta and in our opinion rightly that the impugned notification is ex facie discriminatory inasmuch as it differentiates between vertical and horizontal power crushers without any rhyme or reason
He submitted that no rational basis has been suggested by the State for making the distinction when both types of crushers produce almost the same quantity of khandsari and apply the same mechanical process open pan process
What difference does it make says Mr Gupta if a power crusher is vertical or horizontal  In the case of a horizontal power crusher rollers are in a horizontal line situated on the surface whereas in the vertical power crusher the rollers instead of being on the surface are in a vertical position without there being any difference in the working of the two crushers
We are of the opinion that this argument of Mr Gupta is sound and must prevail
The Additional Advocate General UP sought to draw several distinctions between a vertical power crusher and a horizontal one namely 1 a vertical power crusher can crush 1500 quintals of sugarcane per month whereas a horizontal one crushes 5600 quintals of the commodity in the same period 2 vertical power crushers are non commercial and fall within the category of cottage industry whereas horizontal power crushers are included in the category of small scale industry 3 vertical power crushers are run by their owners them selves and draw supplies from sugarcane growers and 4 vertical power crusher do not require any licence
So far as the last part of the argument of the Additional Advocate General of UP that vertical power crushers do not require a licence is concerned it is factually wrong because all such crushers require a licence by virtue of the Orders passed by the Central Government under s3 of the Act of 1955
Regarding the other distinctive features the mere ipse dixit of deponent Gupta who has sworn an affidavit there is absolutely no documentary evidence to support the features pointed out or relied upon by the Additional Advocate General
In these circumstances it has not been proved to our satisfaction that there is any real distinction between a vertical and a horizontal power crusher and we regard both as falling in the same class
The notification by exempting vertical power crushers and prohibiting horizontal power crushers is clearly discriminatory and the discrimination is not justified by any rational nexus between the prohibition and the object sought to de achieved
In these circumstances therefore we hold that in so far as the word vertical  used in the impugned Notification is concerned it must be struck down as being violative of article 14
This however 125 does not render the entire notification void because the word vertical  used in the notification is clearly severable from the other portions of the notification
All that has to be done is to read the notification without the the word Vertical  as a result of which the exemptions from ban will include all owners of power crushers whether vertical or horizontal which manufacture gur or rab from sugarcane grown on their fields
Again as the notification has al ready spent its force if any order is passed in future the Government will see to it that such an invidious discrimination is not repeated
We now come to contention No4 by which it was urged that the express language of clause 8 of the Control Order does not contemplate a complete prohibition of the production of an article but envisages mere regulation of the period or hours of working
It was argued that the words period or hours  used in clause 8 are relatable only to the number of actual hours in a day for which the crushers may be permitted to work from time to time and not a complete stoppage or prohibition of the crushers for a period of a month or two
Clause 8 as extracted supra uses the words period or hours to be worked  A plain reading of this expression clearly reveals that the words period  and hours  have been used to connote two different aspects of the matter
In other words clause 8 contemplates regulation of working of the sugar by two separate methods 1 where only hours of work per day are to be regulated or fixed for instance where a crusher normally works for 10 hours a notification under this clause may provide that it should work only for 8 hours or 6 hours or 10 hours a day or for a number of days
2 The word period  however has nothing to do with the hours to be worked but it refers to another category of regulation viz whether a crusher is to run or not for a particular period of time
We are unable to agree with the contention of Mr Garg that the two words must be taken to have been used in clause 8 in the same sense
In fact this interpretation of the words will cause violence to the language of the statutory provision and instead of advancing its object it would frustrate the purpose which clause 8 seeks to subserve
In the instant case the notification has resorted to the first category viz the period of the working of the crushers that is to say about one and a half month and has not at all touched or impinged upon the working hours of the crushers
If however the notification had fixed certain hours of the day during which only the crushers could work then the notification would have resorted to the alternative mode of regulation which obviously has not been done in this case We are unable to agree with the contention put forward by Mr 126 Garg and hold that the impugned notification is wholly consistent with the provisions contained in clause 8 of the Control Order
Contention Nos 5 6 and 7 relate to the objection taken by the petitioners to the validity of the impugned notification on several grounds
In regard to contention No 5 the notification has been attacked on the ground that the Central Order violates the principles of natural justice inasmuch as it was passed without hearing the petitioners whose valuable rights were involved and their trade was stopped and they were put completely out of production even though for a short period of about one and a half month
It was contended that though clause 8 does not expressly provide for a hearing yet even if it be considered to be an administrative order the rule of audi alteram partem fully applies and the Cane Commissioner should have passed the impugned notification only after hearing the petitioners
Reliance was placed for this proposition on a large number of authorities
It is true that with the growth of law in our country this Court has consistently held for the last few years that the rules of natural justice must apply even to an administrative order unless the same are expressly excluded
Mr Garg as also other counsel for the petitioners submitted that the mere fact that there is no express provision in clause 8 for hearing the petitioners before imposing any restrictions on their business provides good reason to hold that the right to be heard was inherent in the very act of prohibition since the stoppage of the business of the petitioners would entail civil consequences
Thus they argued as no hearing was given to the petitioners the notification was void and inoperative
Reliance was placed on the observations of Krishna Iyer J in Mohinder Singh Gill  Anr
vs The Chief Election Commissioner New Delhi  Ors
  which may be extracted thus Indeed natural justice is a pervasive facet of secular law where a spiritual touch enlivens legislation administration and adjudication to make fairness a creed of life
It has many colours and shades many forms and shapes and save where valid law excludes it applies when people are affected by acts of Authority
It is the bone of healthy government recognised from earliest times and not a mystic testament of judge made law The dichotomy between administrative and quasi judicial functions vis a vis the doctrine of natural justice is presumably 127 Obsolescent after Kraipak in India and Schmidt in England 
The procedural pre condition of fair hearing however minimal even post decisional has relevance to administrative and judicial gentlemanliness
The Election Commission is an institution of central importance and enjoys far reaching powers and the greater the power to affect others  right or liabilities the more necessary the need to hear 
We consider it a valid point to insist on observance of natural justice in the area of administrative decision making so as to avoid the devaluation of this principle by administrators already alarmingly insensitive to the rationale of audi alteram partem  Strong reliance was also placed on the observations of this Court in Maneka Gandhi vs U O I  where Bhagwati J after full discussion of the entire subject observed thus The law must therefore now be taken to be well settled that even in an administrative proceeding which involves civil consequences the doctrine of natural justice must be held to be applicable
 Similarly in a very recent case section L Kapoor vs Jagmohan2 this Court had taken an opportunity to emphasis the importance of rules of natural justice and reiterated as follows The old distinction between a judicial act and an administrative act has withered away and we have been liberated from the psittacine incantation of administrative action
Now from the time of the decision of this Court in State of Orissa vs Dr Miss Binapani Dei   even an administrative order which involves civil consequences must be made consistently with the rules of natural justice
 A number of other decisions were also cited on the question of natural justice and we agree with the propositions adumbrated by 128 Mr Garg that normally where an administrative order adversely affects the valuable rights of the party affected a reasonable opportunity of hearing must be given to the person affected
The instant case however contains two prominent features which exclude the rules of natural justice
Section 3 of the Act of 1955 under which the Control Order was passed really covers an emergent situation so as to meet a national crisis involving the availability or distribution of any essential commodity which may make it necessary to restrict or control the business carried on by a citizen
It has already been pointed out by us while discussing the case of the respondent that there was an acute shortage of sugar which was not made available to consumers at reasonable rates and the situation caused serious dissatisfaction among the people
Nothing short of immediate and emergent measures taken to solve this crisis would have eased out the situation
We are fortified in this opinion by a Constitution Bench decision of this Court in Prag Ice and Oil Mills and Anr
vs U O I  where Chandrachud C J observed as follows The dominant purpose of these provisions is to ensure the availability of essential commodities to the consumers at a fair price
And though patent injustice to the producer is not to be encouraged a reasonable return on investment or a reasonable rate of profit is not the sine qua non of the validity of action taken in furtherance of the powers conferred by section 3 1 and section 3 2 c of the 
The interest of the consumer has to be kept in the forefront and the prime consideration that an essential commodity ought to be made available to the common man at a fair price must rank in priority over every other consideration
 If hearing was to be given to so many owners of power crushers it would have completely defeated and frustrated the very object not only of the Notification but also of the Act of 1955 and created complications which may have resulted in a further deterioration of an already serious situation
If the rules of natural justice were not applied in such an emergent case the petitioners cannot be heard to complain
Afterall the notification directed stoppage of operation of the petitioners  crushers only for a very short period and they would have had an opportunity of recouping their loss after they were allowed to function because the proportion of consumption of khandsari sugar was limited as indicated 129 above
The petitioners were therefore not seriously prejudiced and have rushed to this Court rather prematurely
The Attorney General had however a much more effective answer to the contention raised by Mr Garg on this point
It was submitted by the Attorney General that having regard to the circumstances the background and the situation in which the impugned notification was issued under clause 8 of the Control Order it had a statutory complexion and should be regarded as purely legislative in character
He added that no one had ever argued that before passing a legislation the persons affected by the legislation should he heard and that therefore the question of hearing or complying with the rules of natural justice would not arise
The Attorney General placed reliance on a decision of this Court in Saraswati Industrial Syndicate Ltd etc
supra and particularly on the following observations made by Beg J Price fixation is more in the nature of a legislative measure even though it may be based upon objective criteria found in a report or other material
It could not therefore give rise to a complaint that a rule of natural justice has not been followed in fixing the price
Nevertheless the criterion adopted must be reasonable
Reasonableness for purposes of judging whether there was an excess of power or an arbitrary exercise of it is really the demonstration of a reasonable nexus between the matters which are taken into account in exercising a power and the purposes of exercise of that power
Emphasis ours Having regard to the facts in the instant case a temporary ban on power crushers of a particular type was a measure governed by same if not higher considerations as an order of fixation of price
The las tmentioned case is an authority for the proposition that an order like the impugned notification is a legislative measure
That being the position the rules of natural justice stand completely excluded and no question of hearing arises
Mr Garg however submitted that in that case the petitioner did not urge that the price fixation required a quasi judicial procedure
Even so the Court clearly decided that a measure like the one we have in the instant case is purely of a legislative character and there is no question of complying with the rules of natural justice in such cases
130 In Chairman Board of Mining Examination and Anr
vs Ramjee  Krishna Iyer J speaking for the Court pointed out that there may be cases where rules of natural justice can be dispensed with
In this connection he observed as follows Natural justice is no unruly horse no lurking land mine nor a judicial cure all
If fairness is shown by the decision maker to the man proceeded against the form features and the fundamentals of such essential processual propriety being conditioned by the facts and circumstances of each situation no breach of natural justice can be complained of
Unnatural expansion of natural justice without reference to the administrative realities and other factors of a given case can be exasperating Emphasis supplied In Joseph Beauharnais vs People of the State of IIIinois2 the following observations were made which are apposite to the facts of the present case  This being so it would be out of bounds for the judiciary to deny the legislature a choice of policy provided it is not unrelated to the problem and not forbidden by some explicit limitation on the State s power
That the legislative remedy might not in practice mitigate the evil or might itself raise new problems would only manifest once more the paradox of reform
It is the price to be paid for the trial and error inherent in legislative efforts to deal with obstinate social issues
 The passing of the notification in the instant case was an act of a legislative character and was really a trial and error method adopted to deal with a very serious social problem
In Bates vs Lord Halsham of St Marlebone and Ors3 under similar circumstances a statutory committee had made an order in relation to powers to licence hackney carriages
Commenting on this provision Megarry J Observed as follows In the present case the committee in question has an entirely different function it is legislative rather than administrative or executive
The function of the committee is to make or refuse 131 to make a legislative instrument under delegated powers
The order when made will lay down the remuneration for solicitors generally and the terms of the order will have to be considered and construed and applied in number less cases in the future
Many of those affected by delegated legislation and affected very substantially are never consulted in the process of enacting that legislation and yet they have no remedy
 For the reasons aforesaid we find ourselves in complete agreement with the argument of the Attorney General that the impugned notification having been passed to effectuate the object or ideal to be achieved in order to solve a national crisis cannot but be considered a legislative measure so as to exclude rules of natural justice
The contention raised by the petitioners on this ground is therefore overruled
In contention No 6 another infirmity pointed out by the learned counsel for the petitioners was that the impugned notification is clearly violative of clause 11 of the Control Order itself because the prohibition against the working of the power crushers even for a short period amounted to a partial revocation of the licences granted to the petitioners under clause 3 of the Licensing Order
In order to appreciate this contention it is necessary to extract clause 11 2 of the Control Order which runs 2 Where all or any of the powers conferred upon the Central Government by this Order have been delegated in pursuance of sub clause I b to any officer or any authority of a State Government every Order or direction issued by such officer or authority in exercise of that power may be amended varied or rescinded by the State Government to whom the officer or authority is subordinate either suo motu or on an application made within a period of thirty days from the date of the order or direction
Provided that no order revoking a licence or permit issued to a person shall be made without giving such person an opportunity to make representation
 Reliance was particularly placed on the proviso extracted above
It was contended that even a temporary suspension of the operation of power crushers amounted to a partial revocation of the licence granted to the petitioners and that therefore it was incumbent on the authorities concerned to give the petitioners an opportunity of being 132 heard and making a representation before such revocation took effect
The Attorney General rightly pointed out that neither subclause 2 nor the proviso thereto is attracted in the instant case
It is true that the petitioners got licences under the Licensing Order which was also passed under the Act of 1955
A revocation of a licence means that the licence has not been suspended but cancelled for all times to come entailing civil consequences and complete abolition of the right for the exercise of which the licence was granted
A temporary suspension of the working of the crushers owned by the petitioners cannot amount to a revocation either complete or partial
In fact in our opinion the proviso to sub clause 2 of clause 11 of the Control Order does not at all envisage a partial or periodical revocation of a licence
The proviso would come into play only if a licence is revoked or cancelled once for all
Since a revocation or cancellation of the licence would operate to the serious prejudice of the licensee and affect him adversely it was considered necessary and expedient to give him a hearing
We are fully satisfied that the impugned notification does not attract the conditions laid down in the proviso so as to confer upon the petitioners a right of hearing
The proviso is therefore wholly inapplicable to the facts of the present case
It was further submitted by the counsel for the petitioners that even if clause 11 did not apply because the notification is of a legislative character a hearing would have removed the apprehensions of the petitioners
This argument has no substance because once it is held that the notification is impressed with a legislative character the question of hearing does not arise
It may be true that despite the fact that there is no necessity of hearing the Government could have evolved some method of giving a very short notice to the Association and taking its views
But the omission to do so would not vitiate the notification impugned
It is well settled that possibility of an alternative scheme which might have been but has not been designed would not be sufficient to make a restriction unreasonable
In State of Maharashtra vs Mumbai Upnagar Gramodyog Sangh1 this Court observed as follows The legislature has designed a scheme by which reasonable restrictions are placed upon the right of a citizen to dispose of his property possibility of an alternative scheme which might have been but has not been designed will not justifiably expose 133 the first scheme to the attack that it imposes unreasonable restrictions
 Lastly on contention No 7 it was urged that the impugned notification which purports to have been passed under the Control Order which itself was a subordinate legislation passed under s3 of the Act of 1955 if properly considered along with the serious mis chief it causes to the citizens goes against the very spirit and object of the Act of 1955 and frustrates the equitable distribution and production of sugar which apparently seems to be the main object sought to be achieved
This argument has already been considered by us when we dealt with the various facts and materials produced before us to justify the impugned notification
We have already pointed out that in view of an extraordinary situation viz the sugar famine and the increasing demand of sugar by the consumers the interests of the consumers had to rank above all considerations
The notification as stated by us earlier strikes a just balance between the needs of the consumers and the harm which may be done to the owners of the crushers
The degree and urgency of the evil sought to be remedied by a social control is the purport and the central theme of the impugned notification
Having regard to the various aspects which we have indicated above it cannot be argued with any show of force that the remedy sought by the notification is in any way arbitrary or excessive
On the other hand the report of the experts stoppage of the production of sugar by the factories the drought conditions and other factors have to enter into the decision of the Government in passing the impugned notification
The notification ex facie cannot be said to have been passed without due care and deliberation
Relevant portion of Section 3 of the Act of 1955 runs thus 3
1 If the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices
or for securing any essential commodity for the defence of India or the efficient conduct of military operations it may by order provide for regulating or prohibiting the production supply and distribution thereof and trade and commerce therein
 The impugned notification having been passed under s3 of the Act it fulfils all the conditions contained therein viz it is expedient for maintaining or increasing the supply of an essential commodity namely sugar which is included in clause e of s2 of the Act of 134 1955 and it regulates the supply and distribution of that essential commodity and the trade and commerce therein
Having regard therefore to the facts and circumstances proved in this case it cannot be said that either the Control Order or the the impugned notification is against the tenor and spirit of section 3
On the other hand it is manifestly clear from the circumstances disclosed above that it is in pursuance of the aim and object for which s3 was enshrined in the Act of 1955 that the Control Order and the notification were promulgated
The contention of the learned counsel for the petitioners on this score is accordingly overruled
Mr Rameshwar Dayal appearing for some of the petitioners raised a novel argument which was to the effect that not only the notification impugned but also the Control Order was violative of article 14 of the Constitution
It was contended that since the State had already fixed reserved areas for the factories the selection of khandsari units for banning or stopping their production amounted to a mini classification without any rational basis
We are however unable to accept this contention because in view of the various circumstances discussed above the classification if at all was based on a reasonable nexus with the object sought to be achieved by the notification
Certain other aspects were also raised by Mr Dayal which amount to almost a repetition of the main arguments placed before us by Mr Garg and the counsel following him
Thus on an overall consideration of the various aspects of the matter we are fully satisfied that applying the well established tests of reasonableness the impugned notification cannot be said to contain the quality of unreasonableness but is per se fair and reasonable and fully satisfies the conditions laid down by this Court in determining whether or not a restriction is reasonable
Before closing the judgment we would like to lay down certain guidelines for any future policy that the Government may consider fit to shape in the light of the discussion on the points raised before us in this case
In fact both counsel for the petitioners and the Attorney General had requested us to lay down certain guidelines so that the Government may benefit from the same
Although we have upheld the impugned notification but having regard to the special features of the present case we are not quite satisfied that a better policy to control sugar or increase its production could not be followed which may satisfy the parties concerned viz the crushers the mills the sugarcane growers and the consumers
135 In case the Government decides to impose a ban in future on the power crushers or other units it may consider the desirability of giving a bare minimum hearing not to all the owners of khandsari units but to only one representative of the Association representing them all and getting their views on the subject
It is possible that they might give some suggestions which the Government would like to incorporate in formulating its policy
Even if the Government thinks that an emergent situation has arisen and it may not be possible to give a hearing atleast a representation against the proposed action may be called for from such Association and considered after giving the shortest possible notice
Not that such action is a legal requirement but it will generate greater confidence of the persons who may be affected by any order to be passed against them
In the same token we may mention that when in passing an order like the impugned one the Government has adopted the trial and error method it would be in the fitness of things if the matter is carried to its logical end so that any future order passed contains the colour and quality of objectivity
Secondly could it not be possible for the Government to allow the crushers to function by regulating the working hours or to fix a quota of sugarcane to be delivered to the mills and the crushers in the ratio of 6040 or 7030 as may be advised by the experts and to insist that both the crushers and the mills should pay a uniform price to the cane growers  The counsel for the petitioners have brought to our notice a disturbing element in the entire case which is that in the past although the sugarcane growers supplied sugarcane on condition of payment to them of the support price fixed
by the Government yet the mills did not pay the price to the cane growers for a long time with the result that arrears accumulate running into lakhs of rupees
It would indeed be extremely desirable for the Government to take steps to see that payment of the price of the quantity of the cane supplied to the mills or the crushers is paid against delivery or at any rate within a reasonable time thereafter so as to provide a strong incentive to the farmers to increase their production and earn substantial profits by supplying the sugarcane to mills or crushers during the crushing season October to May
Lastly it was represented to us by the petitioners that the crushers are used for the twin purpose of production of khandsari sugar and gur rab etc but as the crushers are sealed by the officers of the Government the owners are not in a position to produce 136 even gur or rab on the production of which not only no ban has been imposed by the impugned notification but the same has been completely exempted from the purview of the notification
Thus it was asserted that the owners of crushers who want to switch over to production of gur or rab because of the ban imposed by the Government on the production of khandsari may be allowed to do so
The Attorney General however pointed out that if this course is adopted it will be difficult to detect as to how many crushers are producing khandsari sugar in the garb of gur or rab
Wherever any step for banning production is taken the Government has to evolve some procedure to detect the defaulters and with the resources at its command we cannot understand why a special staff cannot be appointed on a temporary basis for looking after the compliance of the order by the crushers and making surprise checks periodically
Another method to prevent the abuse of the privilege of production of gur or rab by producing khandsari in a clandestine fashion may be to insert a condition in the licences of the manufacturers of khandsari sugar that if they produce khandsari during the period of the ban their licences would be cancelled
The result is that all the contentions raised by the petitioners except the one raised by Mr Gupta that the introduction of the word vertical  was violative of article 14 of the Constitution are rejected
The word vertical  must be considered to have been deleted from the impugned notification
Since the impugned notification has already spent its force
no relief can be given even to the petitioners represented by Mr Gupta
But in future the Government will bear in mind the infirmity pointed out
The petitions along with the Civil Appeal are accordingly dismissed but in the circumstances without any order as to costs
NVK Petitions and Appeal dismissed


Summary:
In the State of Uttar Pradesh sugarcane was produced by the sugar mills through the hydraulic process  and by the power crushers through the open pan process 
Both the mills as also the crushers drew their raw material namely sugarcane from sugarcane growers
In order to facilitate production by the sugar mills most of which were controlled by the State reserved area of the fields growing sugarcane was fixed through out the State
With a view to removing nation wide shortage of sugar enhancing sugar production and achieving an equitable distribution of the commodity so as to make it available to consumers at reasonable rates the Cane Commissioner in exercise of the powers conferred under clause 8 of the Sugarcane Control Order 1966 issued a notification dated 9th October 1980 which directed that no power crusher other than vertical power crushers manufacturing gur or rab from sugarcane grown on their own fields or a Khandsari unit or any agent of such owner in the reserved area of a mill could be worked until December 1 1980
The petitioners who were owners of power crushers of Khandsari units and had taken out regular licences under the Uttar Pradesh Khandsari Sugar Manufacturers Licensing Order 1967 assailed the notification which limited the ban to work power crushers for a period of one month and a half ie from October 9 1980 to December 1 1980 in writ petitions to this Court
They contended 1 The notification as also the Control Order under which it was passed are violative of Article 191g and the restrictions contained therein do not contain the quality of reasonableness
2 Clause 8 of the Control Order under which the notification had been issued suffers from the vice of excessive delegation of powers and is therefore violative of Article 14 of the Constitution
The Notification seeks to establish a monopoly in favour of the sugar mills at the cost of the petitioners and must be struck down as being violative of Article 14
3 There is no rational nexus between the prohibition contained in the Notification preventing the crushers of petitioners from working them and the object sought to be achieved by it
4 Clause 8 of the Control Order does not contemplate a complete prohibition of the production of an article but envisages only a regulation of the period of hours of working
5 The Notification violates the principles of natural justice inasmuch as it was passed without hearing the petitioners whose rights were curtailed as they were put completely out of production
6 The impugned Notification by imposing a prohibition against the working of the power crushers amounts to a partial revocation of the licences granted to the petitioners under clause 3 of the 93 Licensing Order and is therefore violative of clause 11
7 The impugned Notification goes against the very spirit and object of the Act of 1955 and in fact frustrates the equal distribution and production of sugar which was the objective of the Notification
On behalf of the respondent State it was submitted that 1 An order passed under clause 8 of the Control Order is of a legislative character and therefore the question of the application of the principles of natural justice does not arise
2 The notification does not violate Article 14 or Article 19 because it is in public interest and aimed at maintaining and securing proper and equitable distribution of sugar
3 The Notification is justified by the fact that the recovery of sugar from sugarcane in case of Khandsari units run by power crushers is between 4 to 6 per cent whereas in the case of sugar factories it ranges between 9 12 to 11 12 per cent so that utilisation of sugarcane in the case of mills is double of that of the power crusher
4 The Khandsari produced by the crushers has got a very narrow sphere of consumption as it is used mostly by halwais or villagers whereas sugar produced by the sugar mills is consumed in far larger quantities by the public
The action taken in order to protect national interest and distribution of sugar to the entire country on rational basis cannot be said to be an unreasonable restriction
5 There is a marked difference between the quality of Khandsari and that of sugar produced by the mills in their character specification etc
6 The question of natural justice does not arise because the crusher owners were fully aware of the situation and had also knowledge of the considerations which prevailed with the Government in stopping crushers for a short period in order to boost production by the sugar mills and fix support price for the sugarcane supplied to the mills
7 Clause 8 of the Control Order uses the words period or working hours  which are wide enough to embrace within their ambit a fixed period of time covering more than a day as also hours of work on any working day
Dismissing the writ petitions and appeals  HELD The impugned Notification cannot be said to contain the quality of unreasonableness but is per se fair and reasonable
In so far as the word vertical  used in the Notification is concerned it must be struck down as being violative of Article 14
This however does not render the entire Notification void because the word vertical  is clearly severable from the other portions of the Notification
All that has to be done is to read the Notification void because the word vertical  as a result of which the exemptions from the ban will include all owners of power crushers whether vertical or horizontal which manufacture Gur or rab from sugarcane grown on their fields
As the Notification has already spent its force if any order is passed in future the Government will see that such an invidious discrimination is not repeated
134F 124H 125B 1i Where a citizen complains of the violation of fundamental rights contained in any of sub clauses a to g of Article 19 the onus is on the State to prove or justify that the restraint or restrictions imposed on the fundamental rights under clauses 2 to 6 of the Article are reasonable
104 C Saghir Ahmed vs The State of UP and Ors
 and Mohammed Faruk vs State of Madhya Pradesh and Ors
94 ii Fundamental rights enshrined in Part III of the Constitution are neither absolute nor unlimited but are subject to reasonable restrictions which may be imposed by the State in public interest under clauses 2 to 6 of Article 19
What are reasonable restrictions would naturally depend on the nature and circumstances of the case the character of the statute the object which it seeks to serve the existing circumstances the extent of the evil sought to be remedied as also the nature of restraint or restriction placed on the rights of the citizen
No hard or fast rule of universal application can be laid down but if the restriction imposed appear to be consistent with the Directive Principles of State Policy they would have to be upheld as the same would be in public interest and manifestly reasonable
105D E G iii Restrictions may be partial complete permanent or temporary but they must bear a close nexus with the object in the interest of which they are imposed
Sometimes even a complete prohibition of the fundamental right to trade may be upheld if the commodity in which the trade is carried on is essential to the life of the community and the said restriction has been imposed for limited period in order to achieve the goal
Freezing of stocks of food grains in order to secure equitable distribution and availability on fair prices have been held to be a reasonable restriction
105 106A C Narendra Kumar and Ors
vs The Union of India and Ors   Ms Diwan Sugar and General Mills P Ltd and Ors
vs The Union of India 1959 2 Supp SCR123 and The State of Rajsthan vs Nath Mal and Mitha Mal  referred to
iv In determining the reasonableness of restrictions imposed by law in the field of industry trade or commerce the mere fact that some of the persons engaged in a particular trade may incur loss due to the imposition of restrictions will not render them unreasonable because it is manifest that trade and industry pass through periods of prosperity and adversity on account of economic social or political factors
In a free economy controls have to be introduced to ensure availability of consumer goods like food stuffs cloth or the like at a fair price and the fixation of such a price cannot be said to be an unreasonable restriction
107 A B v Where restrictions are imposed on a citizen carrying on a trade or commerce in an essential commodity the aspect of controlled economy and fair and equitable distribution to the consumer at a reasonable price leaving an appreciable margin of profit to the producer is undoubtedly a consideration which does not make the restriction unreasonable
107 C State of Madras vs VG Row   Mineral Development Ltd vs The State of Bihar and Anr
  Collector of Customs Madras vs Nathella Sampathu Chetty and Anr
19623 SCR 786 and Ms Diwan Sugar and General Mills P Ltd and Ors
vs UOI 1959 2 Supp
SCR 123 referred to
vi A restriction on the right of a trader dealing in essential commodities or fixation of prices aimed at bringing about distribution of essential commodities keeping the consumers interests as the prime consideration cannot be regarded as unreasonable
110 C In the instant case the Petitioners by rushing to Court the moment the Notification was issued deprived the State as also themselves of the actual con 95 sequences of the notification and the prejudice which it really may have caused
They did not at all show any patience in waiting for a while to find out if the experiment functioned successfully and in the long run paid good dividends
As the petitioners obtained stay orders the experiment died a natural death and the Notification remained ineffective
111D E Prag Ice and Oil Mills and Anr
vs Union of India   referred to
vii In the case of essential commodities like sugar the question of the economic production and distribution thereof must enter the verdict of the Court in deciding the reasonableness of the restrictions
In such cases even if the margin of profit left to the procedure is slashed that would not make the restriction unreasonable
The reason is that such a trade or commerce is subject to rise and fall in prices and other diverse factors and if any measure is taken to strike a just balance between the danger sought to be averted and the temporary deprivation of the right of a citizen to carry on his trade it will have to be upheld as reasonable restriction
112 G 113A Shree Meenakshi Mills Ltd vs UOI 1974 2 SCR 398 and Saraswati Industrial Syndicate Ltd vs UOI1975 1 SCR 956 referred to
viii The restriction imposed by the Notification in stopping the crushers for the period 10th October to 1st December 1980 is in public interest and bears a reasonable nexus to the object which is sought to be achieved namely to reduce shortage of sugar and ensure a more equitable distribution of this commodity
Taking an overall picture of the history of sugar production it cannot be said that the stoppage of sugar crushers for a short period is more excessive than the situation demanded
Madhya Bharat Cotton Association Ltd vs Union of India and Anr
AIR 1954 SC 634 referred to
2i The Control Order has been passed under the authority of section 3 of the Act of 1955 which has been held to be constitutionally valid and not in any way discriminatory so as to attract Article 14
The Control Order itself contains sufficient guidelines checks and balances to prevent any misuse or abuse of the power
The Central Government under clause 8 on whom the power is conferred is undoubtedly a very high authority who must be presumed to act in a just and reasonable manner
119 E F Chinta Lingam and Ors
vs Government of India and Ors
 and VC Shukla vs State Delhi Admn  ii There was no question of creating any monopoly to benefit the mills
A very large majority of the mills were controlled by the State or co operative societies and only a small fraction of them were working in the private sector
In view of the low working cost of the crushers they sought to outcompete the mills and deprive them of the requisite amount of sugarcane which they should have got
It was not only just but also essential to boost the production of the factories so that while sugar may be produced on a large scale and sugarcane may not be wasted which would have been the case if most of the sugarcane went 96 to the crusher
The recovery of sugarcane juice by the mills is double that by the crushers and if the latter were allowed to operate the wastage would have been almost 50 per cent which could have been avoided if sugarcane was allowed to be utilised by the mills
121 E G iii If in the larger public interest it becomes necessary to compel the sugarcane growers to supply sugarcane to the mills at a particular rate in order to meet a national crisis no person can be heard to say that his rights are taken away in an unjust or discriminatory fashion
Personal or individual interests must yield to the larger interests of community
This was the philosophy behind the passing of the Act of 1955
123 F G 3
It has not been proved that there is any real distinction between a vertical and a horizontal power crusher
Both are regarded as falling in the same class
The Notification by exempting vertical power crushers and prohibiting horizontal power crushers is clearly discriminatory and the discrimination is not justified by any rational nexus between the prohibition and the object sought to be achieved
124 G 4
i Clause 8 used the words period or hours to be worked 
A plain reading of this expression reveals that the words period  and hours  have been used to connote to different aspects
Clause 8 contemplates regulation of working of the sugar by two separate methods 1 Where only hours of work per day are to be regulated or fixed and 2 the word period  which has nothing to do with the hours to be worked but it refers to another category of regulation namely whether a crusher is to run or not for a particular period of time
125 D E In the instant case the Notification has resorted to the first category viz the period  of the working of the crushers that is about one and a half month and has not at all touched or impinged upon the working hours of the crushers
If however the notification had fixed certain hours of the day during which only the crushers could work then the Notification would have resorted to the alternative mode of regulation which obviously has not been done
The impugned Notification is therefore wholly consistent with the provisions contained in clause 8 of the Control Order
125 G 126A 5
i Two prominent features exclude the rules of natural justice in the instant case
Section 3 of the Act of 1955 under which the Control Order was passed really covers an emergent situation so as to meet a national crisis involving the availability or distribution of any essential commodity which may make it necessary to restrict or control the business carried on by a citizen
There was an acute shortage of sugar which was not made available to consumers at reasonable rates and the situation caused serious dissatisfaction among the people
Nothing short of immediate and emergent measures taken to solve this crisis would have eased out the situation
If hearing was to be given to so may owners of power crushers it would have completely defeated and frustrated the very object not only of the Notification but also of the Act of 1955 and created complications which may have resulted in a further deterioration of an already serious situation
If the rules of natural justice were not applied in such an emergent case the petitioners cannot be heard to complain
Afterall the Notification directed stoppage of operation only for a very short period and the petitioners would have had an opportunity of recouping their loss after they were allowed to function because the proportion of consumption of Khandsari Sugar was limited
97 The petitioners were therefore not seriously prejudiced but have rushed to this Court rather prematurely
128 B C F 129 A Mohinder Singh Gill and Anr
vs The Chief Election Commissioner New Delhi and Ors  Maneka Gandhi vs UOI 1978 2 SCR 621 SL Kapoor vs Jagmohan  and Prag Ice and Oil Mills and Anr
vs UOI   referred to
ii The impugned Notification is a legislative measure
The rules of natural justice therefore stand completely excluded and no question of hearing arises
The passing of the notification was a trial and error method adopted to deal with a very serious problem
129 G H 130 F Chairman Board of Mining Examination and Anr
vs Ramjee   Joseph Beauhernais vs People of the State of Illinois  at 930 and Bates vs Lord Hailsham of St Marylebone and Ors  at 1378 referred to
A revocation of licence means that the licence has not been suspended but cancelled for all times to come entailing civil consequences and complete abolition of the right for the exercise of which the licence was granted
A temporary suspension of the working of the crushers owned by the petitioners cannot amount to a revocation either complete or partial
The proviso to sub clause 2 of clause 11 of the Control Order does not at all envisage a partial or periodical revocation of a licence
The proviso comes into play only if a licence is revoked or cancelled once for all
The proviso is wholly inapplicable to the facts of the instant case
132 C D State of Maharashtra vs Mumbai Upnagar Gramodyog Sangh  7
The Notification ex facie cannot be said to have been passed without due care and deliberation
The impugned Notification having been passed under section 3 of the Act it fulfils all the conditions contained therein viz it is expedient for maintaining or increasing the supply of an essential commodity namely sugar which is included in clause e of the section 3 of the Act of 1955 and it regulates the supply and distribution of the essential commodities of the trade and commerce
Neither the Control Order nor the impugned Notification is against the tenor and spirit of section 3
It is manifestly clear from the circumstances disclosed that it is in pursuance of the aim and object for which section 3 was enshrined in the Act of 1955 that the Control Order and the Notification were promulgated
133E H 134 C 8
In case Government decides to impose a ban in future on the power crushers or other units a bare minimum hearing not to all the owners of Khandsari units but to only one representative of the Association representing them and getting their views would help the Government in formulating its policy
Even if an emergent situation arises a representation against the proposed action may be called for from such Association and considered after giving the shortest possible notice
135A B 9
Whenever any steps for banning production is taken the Government has to evolve some procedure to detect the defaulters and ensure compliance of the baning order
136 C 98