Case: State of Tamil Nadu and Others Vs. Messrs Sanjeetha Trading Company and Others

2. The Tamil Nadu Timber (Movement Control) Order, 1982 (hereinafter referred to as Movement Control Order) was notified in exercise of the power conferred by Section 3 of the Tamil Nadu Essential Articles Control and Requisitioning Act, 1949 (hereinafter referred to as the Act). The Act aforesaid was originally entitled "Madras Essential Articles Control and Requisitioning (Temporary Powers) Act, 1949". The preamble of the Act says that it was to provide "powers to control the supply, distribution, transport and prices of essential articles and trade and commerce therein..." Section 2(a) defines "essential article" to mean any of the articles specified in the schedule to the said Act and "any other article which may be declared by the State Government by notified order to be an essential article". Under Section 3 the State Government for "maintaining, increasing or securing supplies of essential articles or for arranging for their equitable distribution and availability at fair prices may by notified order provide for regulating or prohibiting the supply, distribution and transport of essential articles and trade and commerce therein". From time to time the life of the said Act was being extended. It came to an end on January 25, 1956. In April 1956, the Tamil Nadu Act IV of 1956 was passed tothe Madras Essential Article Control and Requisitioning (Temporary Powers) Act, 1949. Ultimately by Tamil Nadu Act X of 1979, the Act was made permanent and the words "Temporary Powers" in the title of the Act were deleted. It appears that before the High Court it was an admitted position that he Act shall be deemed to be aAct in view of the enactment aforesaid. That position was not challenged even before this Court. However, it was pointed out on behalf of thethat the Act was made a permanent Act, by Tamil Nadu Act X of 1979, which had been reserved for the consideration of the President and has received hisBy a notification dated November 2, 1982 issued in exercise of powers conferred by clause (a) of Section 2 of the Act, timber was declared to be an essential article. In view of notification of the same date issued in exercise of powers under Section 3 of that very Act, the aforesaid Movement Control Order came in force. Clause 2 of the Movement Control Order defines timber saying "unless the context otherwise requires, timber includes tress when they have fallen or have been felled, and all wood, whether cut up or fashioned or hollowed out for any purpose or not". Clause 3 of the said Order prescribed the condition for transport ofof transport of timber.No person shall transport, move or otherwise carry or prepare or attempt to transport, move or carrying of timber from any place within the State of Tamil Nadu to any place outside the State except under and in accordance with the terms and conditions of a permit issued under the Tamil Nadu Timber Transit Rules, 1968."view of clause 3 aforesaid no person was entitled to transport timber from any place within the State of Tamil Nadu to any place outside the State except under and in accordance with the terms and conditions of a permit issued under the Tamil Nadu Timber TransitBy the impugned notification dated September 22, 1983, the expressions "except under and in accordance with the terms and conditions of a permit issued under the Tamil Nadu Timber Rules, 1968" were omitted. The effect of the amendment is that clause 3 of Movement Control Order now prohibits transport and movement of timber "from any place within the State of Tamil Nadu to any place outside the State." By that very notification certain types of wood (a) sandalwood sold in auctions conducted by Forest Department, (b) rosewood of export quality, (c) red sanders intended for export, (d) timber belonging to other States passing through Tamil Nadu (e) casuarina, and (f) finished produce such as doors, windows, articles of furniture and boxes, were excluded from the definition of "timber"5. After amendment of clause 3 aforesaid, now there is a complete ban on the movement of the timber from the State of Tamil Nadu to any place outside the said State. The constitutionality of the amendment aforesaid was questioned by the writ petitioners before the High Court saying that total ban on the movement of the timber from the State of Tamil Nadu to any other State was not only violative of Article 19(1)(g) of the Constitution but also of Article 301 of the Constitution, which ensures every citizen, subject to the provisions of Part XIII of the Constitution, free trade, commerce and intercourse throughout the territory ofThe reasons disclosed on behalf of the State before the High Court for imposing a complete ban on the movement of the timber outside the State, are (i) to prevent the indiscriminate felling of trees in the Hill Regions for ecological reasons; (ii) to prevent to abnormal rise in the prices of timber in the market within the State; (iii) to make available timber for local consumption, by the common man as well as industries and that (iv) if ban is imposed on the movement of timber outside the State it would help; the development ofindustries within theIt was neither disputed nor could have been disputed on behalf of thethat after deletion of the expression "except under and in accordance with the terms and conditions of a permit issued under the Tamil Nadu Timber Transit Rules, 1968" from clause 3 of the Movement Control Order by the aforesaid notification dated September 22, 1983, there has been a complete prohibition on the transport and movement of timber from any place within the State of Tamil Nadu to any place outside the State. Earlier any such transport or movement of timber was permissible under and in accordance with the terms and conditions of a permit issued under the Tamil Nadu Timber Transit Rules

Court's reasoning:
The framers of the Constitution thought such intercourse necessary, so that there should be an economic unity of India and there should not be regional or territorial barriers. At the same time, being conscious of the fact that such freedom of trade, commerce and intercourse throughout the territory of India may require to be curbed or curtailed under certain situations taking into consideration the public interest, liberty was given to the Parliament as well as to the Legislatures of the State under Articles 302, 303 and 304 of the Constitution to impose reasonable restrictions on such freedom of trade and commerce or intercourse between one State and another, by following the procedures prescribed in the aforesaidIn the facts and circumstances of the present case, as no law has been made by the Parliament imposing any restriction in respect of timber within the State of Tamil Nadu, we are not concerned with Article 302, or 303; we are concerned only with the question as to whether, the prohibition on transport of timber outside the State of Tamil Nadu is in any way hit by Article 304 of the Constitution. But before Article 304 comes into play, it has to be held that the prohibition introduced by the amendment on movement and transport of timber amounts toIt cannot be disputed that by complete prohibition on the transport of timber from the State of Tamil Nadu to any other State, the trade and commerce in timber grown in the State of Tamil Nadu has been affected and till the prohibition continues there is notrade in timber as conceived by Article 301 of the Constitution. What is the object of ensuring the free movement of trade commerce has been examined by the Court from time to time. In thecase of Atiabari Tea Co. Ltd. v. State of Assam 1961 AIR(SC) 232) it wasdrafting the relevant Articles of Part XIII the makers of the Constitution were fully conscious that economic unity was absolutely essential for the stability and progress of the federal polity which had been adopted by the Constitution for the governance of the country. Political freedom which had been won and political unity which had been accomplished by the Constitution, had to be sustained and strengthened by the bond of economic unity. It was realised that in course of time different political parties believing in different economic theories or ideologies may come in power in the several constituent units of the Union, and that may conceivably give rise to local and regional pulls and pressures in economic matters"The framers of the Constitution while saying under Article 301 of the Constitution that trade, commerce and intercourse throughout the territory of India shall be free were quite conscious of the fact that public interest may require such freedom to be curbed or curtailed and that is why under Article 302 of the Constitution, Parliament was empowered to "impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any party of the territory of India as may be required in the public interest" by law. However, the expression reasonable did not recede the word restrictions. The same thing was provided so far State Legislatures were concerned under Article 304(b), vesting them with power to impose "such reasonable restrictions" on freedom of trade, commerce or intercourse with or within that State as may be required in the public interest by law. It need not be pointed out that in Article 304(b) the expression reasonable precedes restrictions and a further check has been provided by saying in the proviso to the said article that"no Bill or amendment for the purpose of clause (b) shall be introduced or moved in the Legislature of a State without the previous sanction of the President.It has been rightly said that"there is such a mixup of exception upon exception in the series of Articles in Part XIII that a purely textual interpretation may not disclose the true intendment of the Articles."framers of the Constitution neither wanted to ensure the freedom of trade and commerce on the pattern of the freedom guaranteed by Section 92 of the Australian Constitution nor they thought it proper that the different States should have unfettered and unrestricted power while imposing prohibitions ontrade. In the larger interest of the nation, there must be free flow of trade, commerce and intercourse bothte but at the same time the regional problems account be ignored altogether. Whenever there is a clash between the national interest and the interest of the State because of which any crisis is created, the Union has power of intervention. According to us, the expression "free trade" cannot be interpreted in an unqualified manner. Any prohibition on movement of any article from one State to another has to be examined with reference to the facts and circumstances of that particularit amounts to regulation only, taking into consideration the local conditions prevailing, the necessity for such prohibition and what public interest is sought to be served by imposition thereof. The Privy Council in Hughes and Vale Proprietary Ltd. v. State of New South Wales ( 1955 AC 241 : 1954 (3) ALLER 607(PC)case must be judged on its own facts and in its own setting of time and circumstance, and it maybe that in regard to some economic activities and at some stage of social development it might be maintained that prohibition with a view to State monopoly was the only practical and reasonable manner of regulation, and thattrade, commerce and intercourse thus prohibited and thus monopolized remained absolutely free."such prohibitions are introduced in exercise of the powers, conferred by the Essential Commodities Act or any parallel or similar Act including the Act with which we are concerned in the present case, the scope of enquiry or scrutiny can only be to a limited extent because such Acts exist for maintaining, increasing or securing supplies of essential articles and for arranging equitable distribution and availability thereof at fair prices to the common man under emergent situations. The Essential Commodities Act conceives the larger welfare of the largest numbers and contemplates measures to control the essential commodities or articles which are vital to human existence in the society. With that object in view, framers of the Act vested wide powers of Control over the essential articles in the State Governments. The situations prevailing in any particular State may require complete prohibition on the movement of any essential article or commodity outside the State. That is why in the context of the provision of the Essential Commodities Act, it has been said by this Court that imposition of complete prohibition on the movement of the essential commodities from one State to another may in some circumstances amount to regulation of trade in such commodities and it need not always amount toThe matter may be different where total prohibition has been imposed on the movement of goods or articles from one State to another which have not been declared to be essential commodities or articles. In those cases the State, which has imposed such ban, has to satisfy the Court that in spite of total prohibition it amounts only to regulation of the trade in such articles or that even if it was a restriction it was reasonable within the meaning of Article 304(b) of the Constitution and has been imposed bylaw as required by Article 304(b). Sometimes it is being said that many artificial barriers on movement of produce of a particular State are being contemplated or imposed only on the consideration ofThis will only amount to the protection of regional interests for political end and not of public interest. This was not conceived by Chapter XIII of the Constitution. In Charles H. Baldwin v. G.A.F. Seelig, Inc. 294 US 511 :79 L ed 1032 (1934)) While dealing with the commerce clause in the American Constitution, Cardozo.part of the Constitution was framed under the dominion of a political philosophy less parochial in range. It was framed upon the theory that the peoples of the several States must sink or swim together and that in the long run prosperity and salvation are in union and not division."So far the present case is concerned, first the timber was declared as an essential article within the meaning of the Act. Thereafter a notified order was promulgated first restricting the transport and movement of timber outside the State except on the basis of permit to be granted in accordance with Tamil Nadu Timber Transit Rules. Later that part was deleted and complete ban on movement of timber from that State to any other State has been imposed. In thefiled before the High Court, it was stated that there was shortage of timber and the total export of timber outside the State was only 2 per cent to 4 per cent of the total timber. It was also impressed that in order to satisfy the local requirement of timber and to make timber which is an essential article available to the common man at a movement and transport of timber outside the State. The writ petitioners did not challenge the declaration of timber as an essential article. It was not suggested that the declaration of timber as an essential article has been made on extraneous considerations and not in public interest. As such it has to be assumed that for arranging the supply of timber at fair prices and for equitable distribution thereof the prohibition has been imposed. In such a situation there is no escape from the conclusion that prohibition shall be deemed to be regulatory in nature and not restrictive so as to attract Article 301 or 304 or 19(1)(g) of the Constitution