Case: K. Janardhan Pillai and Another Etc Vs. Union of India and Others Etc

The petitioners are person s engaged in the cashewnut processing industry in the State of Kerala. Since the impugned declaration and the Order seriously interfered with the right of the petitioners to purchase sufficient quantities of raw cashewnuts for processing in their factories and imposed several other restrictions on them, they have filed the above petitions.

Court's reasoning:
4. From the above definition it is clear that the State Government can declare as an essential article under the Kerala Act only an article which is not an essential commodity as defined in the Central Act. When such a declaration is made in respect of any article, the State Government acquires the power to make an order under section 3 thereof in respect of such article. The State Government is, however, precluded from declaring any article which is an essential commodity under the Central Act as an essential article and from making an order for the purpose of controlling its production, supply and distribution. This is obvious from the words in the parenthesis in section 2(a) of the Kerala Act defining the word essential article. That the object of the Kerala Act is only to provide for regulation of production, supply and distribution of an article which is not an essential commodity as defined under the Central Act is also clear from what is stated by the Kerala Government in the letter dated December 5, 1961 addressed by the Law Secretary, Government of Kerala to the Central Government seeking the assent of the President to the Bill passed by the Kerala LegislatureSince it is argued on be half of the State Government that foodstuffs only mean those articles which can be directly consumed without any kind of processing and that raw cashewnuts which are intended to be used as industrial raw material cannot, therefore, be called a s foodstuffs in the strict sense, it is necessary to examine the history of legislation relating to the trade and commerce within a State and production, supply and distribution of goods in IndiaFrom the above entries it is clear that the subject of trade and commerce within the Province and subject to entry 34 of List I, the subject of production, supply and distribution of goods were within the competence of the Provincial Government. As a result of the emergency proclaimed by thel under section 102 ofthe Government of India Act, 1935 on the outbreak of the Second World War the Federal Legislature acquired the power to make laws on all the subjects in the Provincial List. The laws made by the Federal Legislature on the provincial subjects after the Proclamation of Emergency were to cease to have effect on the expiration of a period of six months after the Proclamation of Emergency had ceased to operate except as respects things done or omitted to be done before the expiration of the said period . The Proclamation of Emergency was revoked on April 1, 1946. Consequently all laws made by the Federal Legislature on the subjects in the Provincial List were to cease to have effect after the expiry of September 30, 1946. During the period of emergency the Federal Legislature had passed a law enabling the Federal Government to issue Orders with respect to trade and commerce within the Provinces and the production, supply and distribution of several commodities which were considered to be essential and those Orders were also to cease to have effect on the expiry of September 30, 1946. Since it was felt that the Federal Legislature should continue to have power to make laws on the subject of production, supply and distribution of certain essential commodities, on March 26, 1946 the British Parliament passed the India (Central Government and Legislature) Act, 1946 (9 &10 Geo. 6, Chapter 39) amending, among others,n (4) of section 102 ofthe Government of India Act, 1935 as to the effect of laws passed by virtue of the Proclamation of EmergencyThere are at least two good reasons to reject this contention advanced on behalf of the States t, the language used in section 2(a) (v) of the Central Act and secondly the purpose of the Central Act. Section 2(a) (v) of the Central Act reads: foodstuffs. including edible oilseeds and oils. It is a well known rule of interpretation that associated words take their meaning from one another and that is the meaning of the rule of statutory construction, noscitur a sociis. When foodstuffs are associated with edible oilseeds which have to be processed before the oil in them can be consumed, it is appropriate to interpret foodstuffs in the wider sense as including all articles of food which may be consumed by human beings after processing. It is in this wider sense that the said term has been understood by Indian courts as can be seen from some of the decisions to which we shall presently refer. Secondly, having regard to the history of legislation relating to foodstuffs dealt with above and the object of the Central Act which regulates the production, supply and distribution of essential commodities amongst the poverty stricken Indian people, the expression foodstuffs should be given a wider meaning as including even raw materials which ultimately result in edible articles. Any interpretation that may be given in this case should not be governed by its consequence on the impugned Order but in the light of the importance of the Central Act in the context of the national economy. A narrow interpretation may result in the exclusion of several artic les from the purview of the Central Act although nobody has entertained any doubt so far about their being essential commodities.We shall now see what cashewnut means. Cashewnut is an edible seed or nut belonging to the family of anacardiaceae and grows mostly in tropical andl regions where humidity is great. It is generally grown in the States of Kerala, Karnataka and Tamil Nadu, in India, in East Africa and in the tropics of Central and South America. Cashewnut is shaped like a kidney or a large thick bean. It appears as though one of its ends had been forcibly sunk into the calyx end of a fleshyd fruit, called the cashew apple which is about three times as large as the nut and of reddish or yellow colour. The cashew apple is much used where the tree grows, in beverages, jams and jellies but is unimportant commercially. The nut has two walls or shells, the outer of which is smooth ande over the surface thin and somewhat elastic but stout and of olive green colour until mature when it becomes strawberry roan. The inner shell is considerably harder and must be cracked like the shells of other nuts......... The fruits are picked by hand and the nuts are first detached, then thoroughly dried in the sun.......By improved methods of roasting, the nuts pass through large revolving cylinders of sheet iron with perforated sides, which are made to revolve above wellcontrolled flames. The oil drains into containers below and is s alvaged...... Later, the inner shells are broken open by hand labour and the kernels given further heating treatment by which the skins are removed and the kernels made ready for consumption. (Vide Encyclopaedia Britannica 1962 Edn. Vol. 4, pp. 958959). It is not disputed that the raw cashewnut with which we are now concerned is used by the petitioners for processing in their factories in order to make it fit for human consumption. It is also stated that even the raw cashewnut kernel is eaten by human beings.It is well known that the food eaten by human beings consists of cereals like wheat, rice or other coerce grains, pulses, oilseeds, vegetables, sugar, fruits and nuts, animal foodstuffs and sea food like meat, beaf, mutt on and fish and dairy products like milk, butter, eggs etc. According to Websters Third New International Dictionary, the word food means fodder also. One of the meanings of the word food given in that Dictionary is material consisting of carbohydrates, fats, proteins and supplementary substances (as minerals vitamins) that is taken or absorbed into the body of an organism in order to sustain growth, repair, and all vital processes and to furnish energy for all activity of the organism. In the same Dictionary foodstuff is defined as a substance with food value and the raw material of food before or after processing. One of the usages of the said word is given as a bountiful crop of cereal foodstuffs. Therefore, foodstuff need not necessarily mean only the final food product which is consumed. It also includes raw food articles which may after processing be used as food by human beings22. InTika Ramji &Ors. etc. v. The State of Uttar Pradesh &Ors. this Court observed:"The essential commodities therein comprised inter alia foodstuffs which would include sugar as well as sugarcane and both sugar and sugarcane therefore came within the jurisdiction of the Centre."The above observation makes it manifest that even a raw material like sugarcane used in the manufacture of sugar is a foodstuffIt is also significant that raw cashewnut is included in the group of edible fruits in Chapter 8 of section II dealing with vegetable products of the First Schedule to the Customs T ariff Act, 1975It is no doubt true that cashewnut having become expensive, it is now more of a luxury. Due to export of cashewnut on a large scale, it is a commodity which is in short supply in the country and therefore the price at which it sells is beyond the reach of the common man. But nevertheless it is an article of food. It is eaten in raw form and after it is fried. It is also commonly used in various preparations of food like pulav, sweets etc. There is no basis for the assertion that it is a rare commodity outside the State where it is grown. It is eaten not only in Kerala but also in other parts of the country. When cashewnut is exported, it is exported as a foodstuff. Now it cannot be that cashewnut eaten abroad is a foodstuff, and whatever is consumed within the country is not a foodstuff. It is therefore, a foodstuff and must be classified as an essential commodity. Its importance as a foodstuff can also be seen from the statements filed in these cases in which is stated that in the State of Kerala in the year7 the total quantity of raw cashewnut procured was in the order of 60, 000 tonnes, the number of workers engaged in the cashewnut processing industry was about 1, 20, 000 and t hat there were 269 cashew factories.It was next urged that cashewnut could be treated as an essential article only for the purpose of export and not an essential commodity under the Central Act. This again is not correct. The Central Government can make an Order under the Central Act even when an essential commodity is used for industrial purpose or for purposes of export. Essential commodities do not cease to be essential commodities under the Central Act merely because they are exporte d after they are processed in India. Foodgrains (Prohibition of Use in Manufacture of Starch) Order, 1971, The Fruit Products Order, 1955, The Gur (Regulation of Use) Order, 1978, Pulses, Edible Oilseeds and Edible Oils (Storage Control) Order, 1977, Rice (Prohibition of Use in Wheat Products) Order, 1971. Vegetable Oil (Standards of Quality) Order, 1972, Vegetable Oil Product Producers (Regulation of Refined Oil Manufacture) Order, 1973 and the Essential Commodities (Regulation of Production and Distribution for purposes of Export) Order, 1966 demonstrate the diverse purposes for which an Order can be made under the Central ActIn that case this Court was concerned with the question whether there was any repugnancy between a Central law and a State law. We are not concerned here wi th such a question. If a question of application of Article 254 of the Constitution had arisen, it would have been open to consider whether there was any repugnancy at all between the two laws having regard to the scope and extent of the field occupied by the Central law and the State law. But the real question which now arises for decision in these petitions is whether the Kerala Legislature ever intended to treat any article which comes within the scope of the Central Act as an essential article . The language of section 2(a) of the Kerala Act steers clear of all essential commodities under the Central Act by excluding them from the operation of the Kerala Act. The power of the Central Government to make an order under the Central Act in respect of raw cashewnut which is a foodstuff cannot be doubted. If that is so the Kerala Act cannot apply to it. The argument that as long as the Central Government had not made an Order in respect of raw cashewnut, the Kerala Government can pass an Order is not available in the circumstances by reason of the definition of the essential article in the Kerala Act. It might have been open to consideration if the said definition had not contained the words in the parenthesis.On a careful consideration of the matter, we are satisfied that raw cashewnut is a foodstuff falling under section 2(a) (v) of the Central Act and hence cannot be declared as an essential article under section 2(a) of the Kerala Act. It follows that no Order can be made by the Government of Kerala under section 3 thereof in respect of raw cashewnut. The action of the Kerala Government is beyond the power conferred on it by the Kerala LegislatureIn theresult, we hold that the declaration made by the Government of Kerala to the effect that raw cashewnut is an essential article under the Kerala Act and the impugned Order made thereunder are liable to be quashed and they are accordingly quashedAll the other contentions including those relating to the alleged infringement of the fundamental rights of the petitioners raised in these petitions are left openIf any such serious problem arises, it can always be set right by the competent Legislature or the appropriate Government taking needful remedial action in the light of Entry 33 of List III of the Seventh Schedule to the Constitution.