Case: State Of M.P. &amp; Ors Vs. M/S. Chhotabhai Jethabhai Patel &amp; Co. &amp;

2. The matter arises thus. Chhotabhai Jethabhai Patel, partnership firm of which the second respondent, Jhaverbhai Bhulabhai Patel is a partner, carried on business on a fairly large scale as manufacturers of bidis at various places in the State of Madhya Pradesh including Saugor, Being unable to secure sufficient quantities of tendu leaves grown in the forest units in the State, the firm took leases for the collection of such leaves in States of Bihar and Maharashtra. They actually imported tendu leaves under two railway consignments from Bihar to Saugor. They informed the Divisional Forest Officer about the same and asked for permission for transport of the leaves and to utilise the said leaves for manufacture of bidis in their factories. By latter dated July 27, 1965 the said Forest Officer intimated the firm that the imported leaves ware not to be moved for bidi manufacture until permission was accorded for so doing. The respondents grievance was that notwithstanding the above communication and in spite of the fact that they had not moved the imported leaves from their godowns, the Sub-Divisional Forest Officer Saugor seized two quantities of such leaves of 9007 bags imported from Garwah Road, Bihar and 256 bags of tendu leaves imported from Bindou-magani, Bihar and followed the same up by filing a complaint alleging contravention of Section 5 of the Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Adhiniyam. 1964, hereinafter referred to as the Act. THe respondents filed a petition under Article 226 of the Constitution before the High Court for the issue of a writ of certiorari quashing the complaint. The contention of the respondents (importers of the leaves) before the High Court was that the Act did not prohibit the import of tendu leaves from places outside the State nor was there any restriction on a manufacturer importing such leaves with the express object of consumption of the same in his factory for the manufacure of bidis and in any event the Act or the Rules made thereunder did not purport to regulate the transport of tendu leaves imported from places outside the State3. On behalf of the State it was contended that transport of tendu leaves whether grown in the State or outside the State was completely prohibited by Section 5 (2) of the Act and regulation and control of transport of such imported leaves was necessary for the successful working of the State monopoly in the trade of tendu leaves envisaged by the Act. Further the Act did not prohibit the import of tendu leaves and was not therefore violative of Aricles 31, 301 and 304 of the Constitution and the control of movement of tendu leaves after their import from another State was in no way repugnant to Articles 301 and 3044. The High Court rejected the contentions of the State. Hence the appeal.

Court's reasoning:
8. We find ourselves unable to accept the contentions put forward by counsel on behalf of the State. All the relevant provisions of the Act and the Rules referred to above show that the legislature intended that everybody growing leaves within the State should offer the same to it or its agents in different units for sale and the State was bound to purchase every single lot of tendu leaves unless the same could be said to be unfit for the manufacture of bids.Prima facie trade in tendu leaves as was held by this Court in Vrajlal Manilal v. State of Madh Pra, (1970) 1 SCR 400     at p. 408 = (AIR 1970 SC 129  ) would consist of dealing in those leaves i.e. their purchase and sale but "transport of the leaves once purcesed or sold would not prima facie be an organic or integral part or dealing in those leaves." It was further held in that case:"...a permit system which regulates the movement of leaves purchased by a manufacturer of bidis from the unit where they are prchased to his ware-house, then to the branches and to the sattedars cannot up to that stage be regarded as unreasonable in the light of the object of the Act, the economic condition prevailing in the State and the mischief which it seeks to cure. At the same time to expect the manufacturer to get permits issued to his sattedars for distribution by them to the innumerable mazdoors of comparatively small quantities of these leaves would not only be unreasonable but frustrating."In that case there was no question of import of any tendu leaves from outside the State or the issue of any permits in that regard. What was objected to was the insistence upon transport permits for the leaves to be distributed by the manufacturers to his innumerable sattedars and mazdoors under Section 5 of the Act. It was held that though the section "is couched in apparently wide language, the very object of the Act, as disclosed by its long title, contains inherent limitations against an absolute or as strictly regulated a ban as it would at frist reading of the section appear." Though the Court there up-held the provisions relating to the creation of the monopoly in the public interest in the matter of sale and purchase of tendu leaves, it was not disposed to uphold the restrictions on movement to the extent it was sought to be enforced by the State in that caseWithout expressing our views on the subject we hold that the entire provisions of the Act and the rules are consistent with and aim at the State monoploy in the trade of tendu leaves in case of leaves grown or produced in the State and the legislature never intended that the monopoly should be operative even to the extent of banning import of tendu leaves from outside or stalling the tendu leaves once they found their way into the State from outside. The transport of tendu leaves purchased outside but consigned to places within the State to be used for the manufacture of bidis is not integrally connected with the State monopoly as envisaged in the Act. It stands to reason that manufacturers of bidis in the State of Madhya Pradesh would not think of importing tendu leaves from distant places like Bihar and Maharashtra if they could help it and it must be the exigencies of the situation which drives a manufacturer of bidis to such course of action. In any event, the Act ought not to be construed so as to ban import of tendu, leaves from outside the State or restrict their movement once they were within the State unless clear language was used in that behalf. If and when such express embargo is imposed, a question may arise as to whether it offends the different provisions of Part XIII of the Constitution