Case: Punjab Traders And Ors Vs. State Of Punjab And Ors

definition of sugar factory has not undergone any change, and it reads as follows: "2. (d) sugar factory means any premises, including the land, godowns or outhouses appurtenant thereto, whereon twenty or more workers are working, or were working on any day of the preceding twelve months, and in any part of which a manufacturing process connected with the production of sugar by means of vacuum pans or in open pans is being carried on or is ordinarily so carried on, with the aid of power." The main object of the Amendment Act, 1973 is to clarify that the Principal Act applies in equal measure to a khandsari unit as it does to any other sugar factory. ( 10 ) The contention is that the provisions of the Amendment Act, 1973, though not in themselves unreasonable restrictions, nevertheless bring the appellants under greater statutory control, and are, therefore, invalid for want of previous sanction of the President in terms of the proviso to Article 304(b). This challenge, as seen above, has been rejected by the High court for the reason that the appellants business has been in equal measure controlled by the Principal Act itself. The appellants being dealers in molasses, the new definition of the term "molasses", which includes "khandsari sugar", does not subject their business to any greater control.( 11 ) The appellants counsel, Mr G.L. Sanghi contends that the provisions of the Amendment Act, 1973 impose d."ect and immediate restrictions upon the appellants trade. They are a burden on trade and they deter the appellants from trading. They directly affect the freedom of trade and commerce. They are not merely regulatory for the purpose of facilitating the free flow of trade and commerce. They are restrictions hampering trade. They may be justifiable as reasonable restrictions, but being restrictions unsupported by previous sanction of the President, they are nevertheless invalid.( 12 ) Mr C.M. Nayar, appearing for the respondents, on the other hand, contends that the impugned provisions of the Amendment Act, 1973 are regulatory measures enacted to facilitate trade and they do not come within the ban of the proviso to clause (b) of Article 304. These provisions do not require the previous sanction of the President in terms of the proviso to Article 304(b). ( 13 ) Counsel on both sides, in support of the respective contentions, refer to the principle stated by this court in Atiabari Tea Co. Ltd. v. State of Assam, Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan State of Bihar v. Harihar Prasad Debuka and other cases".( 14 ) It is not, and cannot be, disputed that if the impugned provisions are not merely regulatory with a view to facilitating trade, but are in quality and substance restrictive, though reasonable as restrictions can be, and if they in effect constitute a hindrance or impediment to the free flow or movement of trade, they are unconstitutional in the absence of previous sanction of the President. The question, however, is, the Principal Act, being an "existing law" and, therefore, beyond challenge, do the impugned provisions, introduced in 1973, being additional provisions, enlarge in substance and quality the scope and ambit of the Principal Act, thereby impeding in greater measure the free flow or movement of trade so as to fall within the ban of the proviso to clause (b) of Article 304 ? In other words, does the Amendment Act, 1973, restrict the appellants business to a greater extent or is it merely clarificatory insofar as, at any rate, the appellants are concerned ?( 15 ) The point then really is, has the amendment made the Act more stringent insofar as the appellants are concerned ? If the answer is negative, as the High court has held, the appellants are not aggrieved, and a cannot, therefore, successfully challenge the Amendment Act.( 16 ) Referring to the principle of contemporanea expositio, Mr Sanghi says that the Act, as it stood before the amendment, was not understood to apply to khandsari unit, and consequently to the business of the appellants, and it became applicable only as a result of the amendment. We do not agree that this submission is right. The High court has, on the basis of the pleadings and other evidence, and with reference to the relevant provisions, categorically held that the Act, as it originally stood, was applicable to the trade of the appellants, and the amendment in effect did not make any difference to them. The High court has found that the appellants were not aggrieved solely by reason of the amendment, and the provisions, as they stood prior to the amendment, applied to them in equal measure. This apart, the amendment, in our view, was merely clarificatory, and it was always well understood in trade that khandsari sugar was also sugar, and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khandsari. Even if it is true that persons who dealt with the statute understood its provisions in a restricted sense, such mistaken construction of the statute did not bind the court so as to prevent it from giving it its true construction. (See the observation of Lord Blackburn in Trustees of the Clyde Navigation v. Laird and Sons As quoted in National and Grindlays Bank Ltd. v. Municipal Corporation of Greater Bombay.( 17 ) We are of the view that the reasoning of the High court was correct. The Principal Act being an existing law within the meaning of Article 366(10 read with Article 305 of the Constitution, and the provisions of the Amendment Act, 1973 which are impugned in this appeal being clarificatory, the previous sanction of the President was not required. See the principle stated in Syed Ahmed Aga v. State of Mysore. We do not, however, express any view as to whether the impugned Act is regulatory or restrictive, for that question, for the present purpose, is, in our opinion, academic.

Decision (1 = appeal accepted, 0 = rejected): 0

Explanation:
0[ds]( 14 ) It is not, and cannot be, disputed that if the impugned provisions are not merely regulatory with a view to facilitating trade, but are in quality and substance restrictive, though reasonable as restrictions can be, and if they in effect constitute a hindrance or impediment to the free flow or movement of trade, they are unconstitutional in the absence of previous sanction of the President. The question, however, is, the Principal Act, being an "existing law" and, therefore, beyond challenge, do the impugned provisions, introduced in 1973, being additional provisions, enlarge in substance and quality the scope and ambit of the Principal Act, thereby impeding in greater measure the free flow or movement of trade so as to fall within the ban of the proviso to clause (b) of Article 304 ? In other words, does the Amendment Act, 1973, restrict the appellants business to a greater extent or is it merely clarificatory insofar as, at any rate, the appellants are concerned ?( 15 ) The point then really is, has the amendment made the Act more stringent insofar as the appellants are concerned ? If the answer is negative, as the High court has held, the appellants are not aggrieved, and a cannot, therefore, successfully challenge the Amendment Act.( 16 ) Referring to the principle of contemporanea expositio, Mr Sanghi says that the Act, as it stood before the amendment, was not understood to apply to khandsari unit, and consequently to the business of the appellants, and it became applicable only as a result of the amendment. We do not agree that this submission is right. The High court has, on the basis of the pleadings and other evidence, and with reference to the relevant provisions, categorically held that the Act, as it originally stood, was applicable to the trade of the appellants, and the amendment in effect did not make any difference to them. The High court has found that the appellants were not aggrieved solely by reason of the amendment, and the provisions, as they stood prior to the amendment, applied to them in equal measure. This apart, the amendment, in our view, was merely clarificatory, and it was always well understood in trade that khandsari sugar was also sugar, and that any reference to sugar, in the absence of specific exclusion or qualification, was capable of equal application to sugar of all kinds including khandsari. Even if it is true that persons who dealt with the statute understood its provisions in a restricted sense, such mistaken construction of the statute did not bind the court so as to prevent it from giving it its true construction. (See the observation of Lord Blackburn in Trustees of the Clyde Navigation v. Laird and Sons As quoted in National and Grindlays Bank Ltd. v. Municipal Corporation of Greater Bombay.( 17 ) We are of the view that the reasoning of the High court was correct. The Principal Act being an existing law within the meaning of Article 366(10 read with Article 305 of the Constitution, and the provisions of the Amendment Act, 1973 which are impugned in this appeal being clarificatory, the previous sanction of the President was not required. See the principle stated in Syed Ahmed Aga v. State of Mysore. We do not, however, express any view as to whether the impugned Act is regulatory or restrictive, for that question, for the present purpose, is, in our opinion, academic.