Case: M. A. Rasheed And Ors Vs. The State Of Kerala

3. The appellants are owners of Small Scale Industrial Units. They employ mechanised process for decortication of retted coconut husks. The main processes involved in the manufacture of coir yarn are these: First is retting of green husks. The green husks are covered with leaves and mud. The retted husks are then pounded or beaten. The fibre and pith then separate. The fibre is extracted, cleaned and dried. Next comes spinning either with the help of ratt or by hand. Ratt is a mechanical contrivance. The final stage is bundling of coir yarn for marketing. Government declared defibring of coconut husks by mechanical means as a small scale industry eligible for financial assistance under the Small Scale Industries Development Scheme. Most of the appellants availed themselves of loans under the Scheme. The appellants alleged in the petitions before the High Court that the cost involved in installing machinary in a proper building for the purpose would range from Rs. 22,000 to Rs. 35,000.4. The appellants challenged the notification on the ground that the formation of opinion by the State Government for the purpose of exercise of power under sub-rule (2) of the Rule 114 of the Rules is a justiciable issue and that the court should call for the material on which the opinion has been formed and examine the same to find out whether a reasonable man or authority could have come to the same conclusion that in its opinion for securing that in its opinion for securing the equitable distribution and availability of retted husks at fair prices, a regulation or prohibition of the manufacture of fibre from retted husks by mechanical means is necessary. The appellants allege that the reasons given in the notification as justifying the imposition of the total ban on the use of machinery for defibring huske are wholly erroneous and prima facie no reasonable person will consider them as justifying the said ban. The appellants also allege that there is no application of the mind of the authority to any genuine materials or to any relevant considerations in the exercise of the drastic power vested in the authority under Rule 114 (2) of the Rules.5. The High Court held that the appellants did not establish by material that the opinion formed by the State Government could not stand.

Court's reasoning:
6. There is no principle or authority in support of the view that whenever a public authority is invested with power to make an order which prejudicially affects the rights of an individual whatever may be the nature of the power exercised, whatever may be the procedure prescribed and whatever may be the nature of the authority conferred, the proceedings of the public authority must be regulated by the analogy of rules governing judicial determination of disputedWhere powers are conferred on public authorities to exercise the same when "they are satisfied or when "it appears to them, or when "in their opinion a certain state of affairs exists; or when powers enable public authorities to take "such action as they think fit in relation to a subject matter, the Courts will not readily defer to the conclusiveness of an executive authoritys opinion as to the existence of a matter of law or fact upon which the validity of the exercise of the power is predicated.It is in evidence that mechanisation progressed at a fairly high rate in the three districts of Trivandrum, Quilon and Alleppey. Out of 414 mechanised units in the whole of the Kerala State consisting of 11 districts 283 are in these three districts alone. There is a heavy concentration of mechanised units in the three districts. The figure given is that only 10 workers are required for de-fibring husks of 12000 coconuts a working day of 8 hours by the use of machines as against 120 workers by the process known as hand-method. The mechanical work in done quickly to consume coconut husks in very large quantities. There has been large scale unemployment of labour engaged in the traditional method and there is serious unrest in the ares.The appellants also contended that Section 3 (2) (21) of the Defence of India Act does not support Rule 114 and secondly Section 38 of the Defence of India Act confers power on the authority to make orders providing inter alia for the control of trade of industry for the purpose of regulating or increasing the supply of, or for maintaining supplies and services essential to the life of the community. Rule 114 is in complete consonance with the powers conferred under the aforesaid Section 3 (2)(21). Section 38 of the Defence of India Act states that any authority or person acting in pursuance of this Act shall interfere with the ordinary avocations of life and the enjoyment of property as may be consonant with the purpose of ensuring the public safety and interest and the defence of India and civil defence. It is a matter of policy for the State Government to decide to what extend there should be interference in relation to the enjoyment of property. The public interest is of paramount consideration. In the present case the steps taken are in the larger interests of labour engaged in the coir industry. The pre-eminent question is that it is an emergency legislation. In emergency legislation the causes for inducing the formation of the opinion are that coir is one of the most labour intensive industries in Kerala and it is estimated that more than 4 1/2 lakhs of workers are employed in the various processes of the coir industry like retting, hand-spinning, spindle spinning and manufacture of coir mats and matting and that about 10 lakhs of people depend on this industry for their sustenance. Mechanisation in coir industry has been taking place in different parts of the State. The non-mechanised sector of this industry is so labour intensive that mechanisation of fibre production is strongly opposed by workers because mechanisation results in very high consumption of coconut husks by the mechanised units and the consequent enhancement of price of husks and the non-availability of sufficient quantity of husks at fair price for use in the traditional sector viz., hand beating of husks. There have been serious tensions including law and order situations.It was also submitted that the notification offended Article 301, Article 302 states that the State can impose restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India. It was said that the Defence of India Act is not a law made by Parliament, imposing restrictions as contemplated under Article 302. The Defence of India Act has been passed by Parliament. The Rules under the Actt have legislative sanction. The restrictions are imposed in the interest of the general public. The restrictions are reasonable in the interest of the industry and public.