Case: Nagar Rice &amp; Flour Miills &amp; Ors Vs. N. Teekappa Gowda &amp; Bros. &amp; Ors

take into consideration matters which are specified in sub-section (4) of Section 5. The licensing authority must on application issue a licence to an existing rice mill or a rice mill in respect of which a permit has been granted under Section 5. For change in the location of any rice mill in respect of which a licence has been granted under Section 6, the previous permission of the Central Government is necessary under Section 8 (3) (c). 9. The Parliament has by the Rice Milling Industry (Regulation) Act, 1958, prescribed limitations that an existing rice mill shall carry on business only after obtaining a licence and if the rice mill is to be shifted from its existing location, previous permission of the Central Governmen1 shall be obtained. Permission for shifting their rice mill was obtained by the appellants from the Director of Food and Civil Supplies. The appellants had not started rice milling operations before the sanction of the Director of Food and Civil Supplies was obtained. Even if it be assumed that the previous sanction has to be obtained from the authorities before the machinery is moved from its existing site, we fail to appreciate what grievance the respondents may raise against the grant of permission by the authority permitting the installation of machinery on a new site. The right to carry on business being a fundamental right under Art. l9 (1) (g) of the Constitution, its exercise is subject only to the restrictions imposed by law in the interests of the general public under Article l9 (6) (i). 10. Section 8 (3) (c) is merely regulatory if it is not complied with, the appellants may probably be exposed to a penalty, but a competitor in the business cannot seek to prevent the appellants from exercising their right to carry on business, because of the default, nor can the rice-mill of the appellants be regarded as a new rice mill. Competition in the trade or business may be subject to such restrictions as are permissible and are imposed by the State by a law enacted in the interests of the general public under Article l9 (6), but a person cannot claim independently of such restriction that another person shall not carry on business or trade so as to affect his trade or business adversely. The appellants complied with the statutory requirements for carrying on rice milling operations in the building on the new site. Even assuming that no previous permission was obtained, the respondents would have no locus standi for challenging the grant of the permission, because no right vested in the respondents was infringed 11. But Mr. Gokhale for the respondents contended that in granting the permission under Section 8 (3) (o) the authority was bound to take into account matters which govern the issue of a permit under Section (4) of the Act. Counsel submitted that sub-section (3) (c) of Section 8 was enacted with a view to ensure adequate milling: facilities and to prevent unfair competition and on that account it is provided that when the location of an existing rice mill has to be shifted the authority had to take into consideration the number of rice mills operating in the locality; the availability of power and water supply for the rice mill in respect of which a permit is applied for whether the functioning of the rice mill in respect of which a permit is applied for would cause substantial unemployment in the locality; and such other particulars as may be prescribed. According to counsel since the Act was intended to regulate the carrying on of business of rice mills in the country, it was implicit in Sec. 8 (3) (c) that the authority sanctioning the change of location of a rice mill shall consider whether another person was by the shifting likely to be prejudiced thereby. This, counsel says, the Director did not consider, and on that account the order is liable to be set aside because the right of the respondents is infringed. This argument was not advanced before the High Court, and, in our judgment, has no substance. The considerations which are prescribed by sub-section (4) of Section 5 only apply to the grant of a permit in respect of a new rice mill or a defunct rice mill. They have no application in considering the shifting the location of an existing rice mill. In respect of a new or defunct rice mill a permit and a licence are both required: in respect of an existing rice mill only a licence is required. The conditions prescribed by sub-section (4) of Section 5 only apply to the grant of a permit and not to a licence. By Section 8 (3) (c) it is made one of the conditions of the licence that the location of the rice mill shall not be shifted without the previous permission of the Central Government. It is true that the appropriate authority clothed with the power must consider the expediency of permitting a change of location. But there is no statutory obligation imposed upon him to take into consideration the matters prescribed by sub-section (4) of Section 5 in granting the permission to change the location. 12. The appellants had been carrying on business in milling rice for more than 30 years and the mill by reason of the proposal to submerge the site in the Sharawathi Hydro-Electric Project had to be shifted from its location. The State allotted another piece of land to the appellants and did not acquire their machinery and permitted erection of their rice mill building on the new location. This was done with a view to cause minimum hardship to the appellants arising in consequence of the proposed construction of the dam resulting in submergence of their land. The State also granted permission to the appellants to change the location under the Rice Milling Industry (Regulation) Act, 1958. The permission cannot be said to be granted without consideration of the relevant circumstances.

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

Explanation:
1[ds]10. Section 8 (3) (c) is merely regulatory if it is not complied with, the appellants may probably be exposed to a penalty, but a competitor in the business cannot seek to prevent the appellants from exercising their right to carry on business, because of the default, nor can the rice-mill of the appellants be regarded as a new rice mill. Competition in the trade or business may be subject to such restrictions as are permissible and are imposed by the State by a law enacted in the interests of the general public under Article l9 (6), but a person cannot claim independently of such restriction that another person shall not carry on business or trade so as to affect his trade or business adversely. The appellants complied with the statutory requirements for carrying on rice milling operations in the building on the new site. Even assuming that no previous permission was obtained, the respondents would have no locus standi for challenging the grant of the permission, because no right vested in the respondents was infringedThis, counsel says, the Director did not consider, and on that account the order is liable to be set aside because the right of the respondents is infringed. This argument was not advanced before the High Court, and, in our judgment, has no substance. The considerations which are prescribed by sub-section (4) of Section 5 only apply to the grant of a permit in respect of a new rice mill or a defunct rice mill. They have no application in considering the shifting the location of an existing rice mill. In respect of a new or defunct rice mill a permit and a licence are both required: in respect of an existing rice mill only a licence is required. The conditions prescribed by sub-section (4) of Section 5 only apply to the grant of a permit and not to a licence. By Section 8 (3) (c) it is made one of the conditions of the licence that the location of the rice mill shall not be shifted without the previous permission of the Central Government. It is true that the appropriate authority clothed with the power must consider the expediency of permitting a change of location. But there is no statutory obligation imposed upon him to take into consideration the matters prescribed by sub-section (4) of Section 5 in granting the permission to change the location12. The appellants had been carrying on business in milling rice for more than 30 years and the mill by reason of the proposal to submerge the site in the Sharawathi Hydro-Electric Project had to be shifted from its location. The State allotted another piece of land to the appellants and did not acquire their machinery and permitted erection of their rice mill building on the new location. This was done with a view to cause minimum hardship to the appellants arising in consequence of the proposed construction of the dam resulting in submergence of their land. The State also granted permission to the appellants to change the location underthe Rice Milling Industry (Regulation) Act, 1958. The permission cannot be said to be granted without consideration of the relevant circumstances.