The State of Tamil Nadu and Others vs Senihilvel and Others

Nainar Sundaram, J.—These writ appeals are directed against the common order, of Padmanabhan, J., in Writ Petition Nos. 1122 to 1128

of 1982, dated 20th July 1982. The Respondents in each of the writ petitions are the Appellants in these writ appeals. Equally so the Petitioner in

each of the writ petitions is the Respondent in each of the writ-appeals. The parties shall be referred to in this judgment as they stood arrayed in the

writ petitions. The prayer projected in the writ petitions is for the issue of a writ of certiorarified mandamus, calling for the records of the second

Respondent, the concerned District Revenue Officer, culminating in the order Roc. No. Rs. 112769/80, dated 14th August, 1981, and quash the

same and direct the Respondents to effect supplies of kerosene as before. The prayer has come to be projected on the following background. The

Petitioner in each of the writ petitions is a retail dealer in Kerosene and has been registered as such retail dealer by the licensing authority under the

Tamil Nadu Kerosene (Regulation of Trade) Order, 1973, hereinafter referred to as the Regulation Order, 1973. Trade in Kerosene anterior to

1969 was a free one. In 1969, certain regulation s came to be introduced with regard to the distribution of kerosene. Subsequently, in exercise of

the delegated powers conferred by Section 3 of the Essential commodities Act, Central Act X of 1955, hereinafter referred to as Act X of 1955,

the Regulation Order, 1973 came to be passed and it came into force on 14th November 1973. It has got to be noticed that it is the Government

of India which allocate the quantity of kerosene that should be distributed in each of the States and the distribution as such amongst the consumers

in the State is left to the Government of that particular State and only with the object of maintaining the supplies of kerosene and for securing its

equitable distribution and availability at fair prices and further since the necessity and expediency to provide for the licensing of kerosene were felt,

the Regulation Order 1973 had come to be passed in the State of Tamil Nadu. In July, 1979, the Commissioner of Civil Supplies, Madras made

some proposals to the Government of Tamil Nadu, taking into account certain features with reference to the scarcity of kerosene in the State of

Tamil Nadu, for ensuring a minimum uninterrupted supply at fixed price to the consumers. This proposal of the Commissioner of Civil Supplies had

the approval of the Government of Tamil Nadu and it passed G.O. Ms. No. 234, Food Department, dated 3rd September, 1979, the text of

which runs as follows:

Kerosene-Distribution of Kerosene under Public Distribution on family cards-Scheme approved.

FOOD DEPARTMENT

G.O. Ms. No. 234,

dated 3rd September, 1979

From the Commissioner of Civil Supplies-Supplies U.O. Note No. Rc. K2/41370,79 CS, dated 19th July, 1979.

ORDER

Consequent of on the reduction in allotment of kerosene to the State of Tamil Nadu by the Government of India from February, 1979 there is

scarcity of kerosene in Tamil Nadu resulting in its sale at a price higher than that fixed and a situation of non-availability for the General consumers.

With a view to ensuring a minimum uninterrupted supply of kerosene at the fixed price to the consumers, the Commissioner of Civil Supplies,

Madras has proposed (i) that kerosene may be supplied under Public Distribution system on family cards throughout the State;

(ii) that to each private retail registration certificate holders in the District who depend only on sale of kerosene for their livelihood, family cards not

exceeding 500 may be attached for supply of kerosene to the card holders and;

(iii) that in Madras City, the private kerosene retailers who are exclusively dealing in kerosene and handcart men, may be allowed ad-hoc supply of

kerosene at the rate of 100 liters per day on an ad-hoc basis for sale outside the public distribution system.

He has now requested the Government to approve the above proposals and to ratify his action in having implemented the above proposals in

anticipation of Government approval with a view to regulate the supply of kerosene.

The Government have carefully examined the proposals of the Commissioner of Civil Supplies mentioned in paragraph 1 above. They approve

the proposals of the Commissioner of Civil Supplies for distribution of kerosene through the Public Distribution System on family cards throughout

the State and for attaching 500 family cards to each of such private retailers in kerosene in the districts who solely depend on kerosene business

alone for their livelihood. The action of the Commissioner of Civil Supplies in having implemented the above two proposals in anticipation of

approval by Government is also ratified.

Orders in respect of the proposal of the Commissioner of Civil Supplies for allowing on ad-hoc supply of 100 liters of kerosene per day

excluding holidays for sale outside the Public Distribution System to each private kerosene retailers who are exclusively dealing in kerosene and

handcart men will be issued separately.

(By order of the Commissioner)

K. DIRAVIAM,

Commissioner and Secretary to Government.

Two of the retail dealers in kerosene filed Writ Petition Nos. 7029 and 7030 of 1980 challenging G.O. Ms. No. 234, Food Department, dated

3rd September, 1979 and the instructions issued pursuant there to, and Mohan, J., by order dated 23rd December, 1980, found no warrant to

entertain the writ petitions and dismissed them at the admission stage itself. The order of Mohan, J., was taken in appeal in Writ Appeal Nos. 14

and 15 of 1981, and these writ appeals along with a batch of writ petitions filed by other retail dealers in Kerosene, were heard and disposed of

by a Bench of this Court, consisting of V. Ramaswami and Sengottuvelan, JJ., on 1st December, 1981. We fine from a perusal of the judgment

that three aspects were urged before the Bench coveting interference, (i) Though, by reason only of the licensing authority registering the name of

the Petitioners as retail dealers, the Petitioners may not claim any assured supply of kerosene for distribution to the consumers, the impugned

Government order, in so far as it restricted the supply to private retail registration certificate holders in the district, who depend only on the sale of

kerosene for their livelihood is discriminatory and violative of Article 14 of the Constitution of India, (ii) The effect of the impugned Government

Order amounts to a complete deprivation of the Petitioner''s business in kerosene by executive fiat and on a ground, which is not relevant to

distribution of kerosene on equitable basis or at fan price, (iii) If really the Government wanted to introduce a new system of distribution, other than

that found in the regulation Order, 1973, they should have promulgated an order in exercise of the powers u/s 3 of Act X of 1955 and it is not

open to the Government to deprive any retail dealer who has already go registration under a licensing authority of his legitimate claim for doing

business or for supply of kerosene. If there is a scarcity or short supply, the Government should evolve a system of supply to various dealers

certain quantities on equitable basis without depriving them wholly out of the trade. The impugned Government Order is void as ultra virus the

powers under the Regulation Order, 1973. The Bench did not consider it necessary to deal with the questions, whether there is any violation of

Article 14 of the Constitution of India whether the dealers, who depend solely on sale of kerosene for their livelihood and cart men, could be

separately classified and treated separately and the learned Judges expressed an opinion that the impugned Government Order is not authorized by

law. It is true that the Bench did observe as follows:

Nobody could have any grievance if the Government wanted to introduce as a policy the public distribution system on family cards throughout the

State. That is with reference to the consumers. But, so far as dealers are concerned, the Government had not giver any rarer for choosing those

dealers who depend solely on the sale of kerosene for their livelihood and the handcart men and depriving the business to the other dealers who

also deal in other commodities in addition to kerosene.

But, we find that the above observation was not the raison d''etre for the ultimate decision reordered by the Bench which got expressed in the

following terms:

. . .If the Government wanted to introduce a new system of distribution of kerosene, a new order should have been promulgated in exercise of their

powers u/s 3 of the Essential Commodities Act and it is not open to them to make an executive orders contrary to the system provided under the

orders promulgated in exercise of the powers u/s 3 of the Essential Commodities Act. The restriction authorizing the private retail dealers who

depend only on sale of kerosene for their livelihood for the put pose of distribution is not warranted by the Regulation. Order as such. In the

circumstances, therefore, we are of the view that the impugned Government Order was unauthorized. The rights of the Petitioners also could not

be taker away by an executive order in a manner plainly contrary to the provisions of the statutory order. However, laudable the system may be,

unless it is authorized by the statutory orders, it could not be sustained.

We feel obliged to refer to yet another proceeding before this Court, the circumstances under which it arose; and the decision rendered by

another learned regale Judge of this Court. Pursuant to G.O. Ms. No. 234, Food Department, dated 3rd September, 1979. The Commissioner of

Civil Supplies, Madras seemed to have issued a communication dated 19th August, 1980, addressing all the Collectors not to supply kerosene to

private retailers beyond 1st August, 1979 and directing that supplies should be made through fair price shops. Subsequent to the Communication

from the Commissioner of Civil Supplies, dated 19th August, 1980. The District Revenue Officer, Tirunelveli passed an order Roc No.

R5.112769/80, dated 14th August, 1981 directing stoppage of supply of kerosene to 34 private retail dealers set out in the said order, which

stands extracted as follows:

PROCEEDINGS OF THE DISTRICT REVENUE OFFICER, TIRUNELVELI.

Present: Thiru V. RAMADOSS, M.A., B.L.

Roc. No. R5.112769/80

dated 14th August, 1981.

Sub.: Civil Supplies-Kerosene-Tirunelveli District-Supply of Kerosene to the Private retailers-Discontinuance-Orders issued.

Read: 1. Commissioner of Civil Supplies, Madras, letter No. K2. 43348/80/CS, dated 19th August, 1980.

Reports received from the Tahsildars.

ORDER:

In Commissioner of Civil Supplies letter read above, instructions have been issued that supply of kerosene to private retailers may be continued

only to such of those retailers who are exclusively depending upon Kerosene trade for their livelihood and to stop supply of kerosene to other

private retailers if the sale of kerosene has been commenced in the fair price shops of the T.N.C.S.C. and Co-operatives. A report on the financial

status of the private retailers in kerosene operating in Tirunevleli District was therefore called from the Tahsildars and Special Tahsildars and in turn

they have submitted their reports. A verification of the reports of the Thasildars and special Thasildars reveals that the following 34 private retailers

in kerosene are not solely depending upon kerosene trade for their livelihood and that they have other means of income. In the above

circumstances, the supply of kerosene to the following 34 private retailers is ordered to be stopped with immediate effect and that the family cards

attached to them are to be reattached to the village level fair price shops concerned.

Two of the private retail dealers filed Writ Petition Nos. 790 and 791 of 1981:

Southern Roadways (P) Ltd. ...Petr. in W.P. No. 790 of 1981.

Pandian Chemicals Limited ...Petr. in W.P. No. 791 of 1981.

v.

The Union of India represented by Secretary to the Ministry of Finance, New Delhi and Anr.-Respondent

praying for the issue of a writ of certionanified mandamus, calling for the records of the District Revenue Officer, culminating in the Order Roc. No.

R5. 112769/80 dated 14th August, 1981, quash the same in so far as it related to the Petitioners and direct the Respondents therein to effect

supplies of kerosene to the Petitioners as before. The said writ petitions were heard and disposed of by Ramanujam, J., on 8th December, 1981,

by that time, the judgment in Writ Appeal Nos. 14 and 15 of 1981

P. Manickam ...Petr. in W.A. No. 14 of 1981.

A. Kuppammal ...Appellant in W.A. No. 15 of 1981

v.

The Collector of South Arcot at Cuddalore and Anr. Respondent

has been rendered on 1st December, 1981, where by G.O. Ms. No. 234 Food Department, dated 3rd September, 1979, has been held to be

unauthorized and unsustainable. In view of the fact that the very basis of the order of the District Revenue Officer in Roc. No. R5. 112769/80,

dated 14th August, 1981 has been removed by the judgment of Bench, Ramanujam, J. was obliged to quash the order of the District Revenue

Officer and gave further appropriate directions with regard to supply of kerosene to the Petitioners before him.

The decisions of the Bench as well as of Ramanujam, J., would have definitely obliged this Court to countenance the prayers in the present writ

petition but for the fact the Government passed G.O. Ms. No. 978, Food and Co-operation Department, dated 29th December, 1981,

introducing Sub-clause (5) to Clause 3 in the Regulation Order, 1973 and the amendment as notified by the said Government Order, runs as

follows:

AMENDMENT

In the said order, in Clause 3, after sub-clause the following sub-clause shall be inserted, namely

(5) whenever kerosene is sold to consumers under Public Distribution System the Government, the Commissioner, the Collector or the licensing

authority shall have powers to direct the wholesalers to supply kerosene only to specified classes of retailers and the wholesalers shall abide by

such direction.

Public Distribution is a system whereby certain essential commodities are distributed to consumers through family cards.

By the amendment introduced, the lacuna pointed out by the Bench of this Court was sought to be got over. The matter did rot stop there.

Pursuance to the amendment, the Government issued instructions by their letter, Ms. No. 202, Food and Co-operation, dated 23rd March, 1982,

hereinafter referred to as the Government''s letter, addressed 10 the Commissioner c f Civil Supplies, Madras, whereby it was notified that

Kerosene may be supplied only to the classes of retailers set out therein for distribution to the Public, and a draft directions to be issued by the

Collectors of the Districts, to kerosene wholesalers was also enclosed for reference. The said Government''s letter and the draft director read as

follows:

Sir,

Sub: Kerosene-Tamil Nadu Kerosene (Regulation of Trade) Older, 1973-Distribution of Kerosene-Direction to Kerosene Wholesalers-Issue of

Ref.: G.O. Ms. No. 978, Food and Co-operation, dated 29th December, 1981.

In G.O. Ms. No. 978, Food and Co-operation, dated 29th December, 1981 the Government have issued amendment to Clause 3 of the Tamil

Nadu Kerosene (Regulation of Trade) Order, 1973 empowering the Government, the Commissioner of Civil Supplies, the Collector of the

Licensing Authority to direct kerosene wholesalers to supply kerosene only to specified classes or retailers and the wholesalers shall abide by such

direction.

In view of the short supply of kerosene to the State of Tamil Nadu from the Government of India, the Government have evolved the policy that

to ensure equitable distribution of kerosene to all sections of the public at fair price, kerosene may be supplied only to the following classes of

retailers for distribution to the public.:

(a) Retailers operating under the Public Distribution System, i.e., the Fair Price Shops run by the Tamil Nadu Civil Supplies Corporation and Co-

operative.

(b) Private retailers holding kerosene retail registration certificate and who are exclusively dealing with kerosene for their livelihood and were

attached with family cards not exceeding 500 for distribution of kerosene at the scales prescribed to the family cards; and

(c) Hand cart men holding retail registration certificate and are doing street vending of kerosene.

Sub-clause (5) of Clause 3 of the said Order as amended in G.O. Ms. No. 978, Food and Co-operation, dated 29th December, 1981

empowers the Collector to issue directions to the wholesalers in his jurisdiction to supply kerosene only to the above categories of retailers. The

District Collectors/Deputy Commissioner of Civil Supplies (City), Madras are therefore, requested to issue a direction to the kerosene wholesalers

operating within their jurisdiction on the above lines. A draft direction to be issued is also enclosed for reference.

A copy of the direction issued should be sent to Government within a week''s time.

This Government letter should not be cited in any directives.

Yours faithfully,

(Sd.). . .

For Commissioner and Secretary to Government.

Copy of:

Draft Direction to kerosene wholesalers to be issued Under Clause 3(5) of the Tamil Nadu Kerosene (Regulation of Trade) Order, 1973.

In exercise of the powers conferred by Section 3 of the Essential Commodities Act, 1955 (Central Act 10 of 1955) read with Sub-clause 3 of the

Tamil Nadu Kerosene (Regulation of Trade) Order, 1973, I. . .the Collector of. . .hereby direct that, with a view to ensure the equitable

distribution of kerosene at fair price to all sections of the public in the district, the kerosene wholesalers in the district shall henceforth supply

kerosene only to the following categories of retailers:

(a) Retailers operating under the public Distribution System, i.e., the fair price shops run by the Tamil Nadu Civil Supplies Corporation and Co-

operatives and the Private retailers holding kerosene retail registration certificate and who are exclusively dealing with kerosene for their livelihood

and were attached with family cards not exceeding 500 for distribution of kerosene to the cards, and

(b) handcart men holding retail registration certificate and are doing street vending in kerosene.

(2). The above directions shall come into force forthwith and failure on the part of any kerosene wholesaler to comply with the direction will be

liable for prosecution u/s 7 of the Essential Commodities Act, 1955 and the penal provisions of the Tamil Nadu kerosene (Requisition of Trade)

Order, 1973.

N. KRISHNAMURTHY

Commissioner and Secretary to Government.

It is needless to state that the amendment introduced to Regulation Order 1973 by bringing in Sub-clause (5) to Clause 3 thereof, as well as the

instructions in and the draft direction annexed to the Government''s letter have come in the way of the Petitioners in the present writ petitions for

this Court countenancing their prayers for the supplies of kerosene to them as before. Hence a necessity arose before Padmanabhan, J., and it has

arisen before us also, to examine the, attack put forth on behalf of the Petitioners of the amendment introduced to Requisition Order, 1973 by

bringing in Sub-clause (5) to Clause 3 thereof as well as the instructions and the direction given by the Governments'' letter. The amendment by

itself has not brought about any specific classification amongst the retailers as such, so that the test to find out as to whether any discrimination, has

been brought about, could be invoked and applied. It is well settled that a legislation, though it does not contain any provision which is directly

discriminatory may, yet, offend against the guarantee of equal protection if it confers upon the executive or the administrative authority an unguided

or uncontrolled discretionary power in the matter of application of the law. It is only from this angle, the amendment introduced is being challenged.

Before Padmanabhan, J., and before us, it has been contended on behalf of the Petitioners that in as much as the amendment introduced does not

contain any guidelines for the specified classes of persons to whom the wholesalers can supply kerosene and since it confers upon the executive or

the administrative authority an unguided and uncontrolled discretionary power in the matter of application of the law, and further, since, the

selection is left to the absolute and unfettered discretion of the authority without any thing to guide or control its action, the amendment cannot be

sustained. Padmanabhan, J., opined that the amendment does not lay down any principle or policy for the guidance of authority in specifying the

classes of persons to whom the wholesalers may supply kerosene and therefore, Sub-clause (5) of Clause 3 in the Regulation Order, 1973,

offended Article, 14 of the Constitution of India. Exception to this conclusion of the learned Judge is being taken on behalf of the Government and

it� authorities, who are the Appellants in these writ appeals and who were the Respondents in the writ petitions.

Learned Advocate-General, representing the Respondents (Appellants herein) addressed his submissions seeking sustenance of the amendment

introduced, by stating that both Act X of 1955 and Regulation Order, 1973 clearly indicate the policy which inspired them and the mere fact that

the amendment does not by itself make a complete and precise classification of the subject-matter, but leaves the classifications to the executives

on the administrative authority will not make the amendment violative of Article 14 of the Constitution of India, because for the purpose of selection

and classification, the executive of the administrative authority can definitely be guided by the policy indicated in Act X of 1955 and Regulation

Older, 1973. This proposition requites examination in the light of the principles educed by the highest Court in the land.

In Kathi Raning Rawat Vs. The State of Saurashtra, we find that the scope of Article 14, of the Constitution of India was, to a very great,

extent, delineated by the Supreme Court. The Supreme Court was dealing with the virus and the constitutionality of the Saurashtra State Public

Safety Measures (third amendment) Ordinance (66 of 1949), Fazil Ali, J., observed:

The clear recital of a definite objective furnishes a tangible and national basis of classification to the State Government for the purpose of applying

the provisions of the Ordinance and for choosing only such offences or cases as affecting public safety, maintenance of public safety, maintenance

of public order and preservation of peace and tranquility.

Mukherjee, J., observed:

. . .Equality prescribed by the Constitution would not be violated if the statute operates equally on all persons who are included in the group and

the classification is not arbitrary or capricious but bears a reasonable relation to the objective which the legislation has in view. The legislature is

given the utmost latitude in making the classification and it is only when there is a palpable abuse of power and the difference made have no

national relation to the objectives of the regulation, that necessity of judicial interference arise. . .

If the legislative policy is clear and definite and as an effective method of carrying out that policy a discretion is vested by the statute upon a body

of administrators or officers to make selective application of the law to certain classes or groups of persons, the statute itself cannot be condemned

as a place of discriminatory legislation. In such cases, the power given to the executive body would import a duty on it to classify the subject-

matter of legislation in accordance with the objective indicated in the statute. The discretion that is conferred on official agencies in such

circumstances is not an unguided discretion, it has to be exercised in conformity with the policy, to effectuate which the direction is given and it is in

relation to that objective that the propriety of the classification would have to be tested. If the administrative body proceeds to classify persons or

things on a basis which has no rational relation to the objective of the legislature, its action can certainly be annulled as offending against the equal

protection clause. On the other hand, if the statute itself does not disclose a definite policy or objective and it confers authority on an other (sic) to

make selection at its pleasure, the statute would be held on the face of it to be discriminatory irrespective of the way in which it is applied.

In Ram Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, the validity and vines of the Commission of Enquiry Act, 1952 (LX of

1952) and the notification issued by the Central Government pursuant to the powers u/s 3 of the said Act came up for consideration before the

Supreme Court, and while upholding the same except a set of expressions appearing in Clause 10 thereof which went beyond the Act itself, the

Supreme Court delineated the following five classes in one or the other of which a statute, which may come up for consideration on the question of

its validity Under Article 14 of the Constitution of India may be placed.

(i) A Statute may itself indicate the persons or things to whom its provisions are intended to apply and the basis of the classification of such persons

or things may appear on the face of the statute or may be gathered from the surrounding circumstances known to or brought to the notice of the

Court. In determining the validity or otherwise of such a statute the court has to examine whether such classification is or can be reasonably

regarded as based upon some differentia which distinguishes such persons or things grouped together from those left out of the group and whether

such differentia has a reasonable relation to the object sought to be achieved by the statute, no matter whether the provisions of the statute are

intended to apply only to a particular person or thing or only to a certain class of persons or things. Where the Court finds that the classification

satisfies the tests the Court will uphold the validity of the law, as it did in Chiranjitlal Chowdhri v. Union of India (1950) S.C.R. 609, State of

Bombay v. F.N. Balsara (1951) S.C.R. 602, Kedar Nath Bajoria Vs. The State of West Bengal, Budhan Choudhry and Others Vs. The State of

Bihar, and Ram Prasad Narayan Sahi and Another Vs. The State of Bihar and Others,

(ii) A statute may direct its provisions against one individual person or thing or to several individual persons or things but no reasonable basis of

classification may appear on the face of it or be deducible from the surrounding circumstances, or matters of common knowledge. In such a case

the court will strike down the law as an instance of naked discrimination, as it did in Ameerunnissa Begum and Others Vs. Mahboob Begum and

Others, .

(iii) A statute may not make any classification of the persons or things for the purpose of applying its provisions but may leave it to the discretion of

the Government to select and classify persons or things to whom its provisions are to apply. In determining the question of the validity or otherwise

of such a statute the court will not strike down the law out of hand only because no classification appears on its face or because a discretion is

given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or

policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification. After such scrutiny the court

will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of

selection or classification on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government, so as to

enable it to discriminate between persons or things similarly situate and that, therefore, the discrimination is inherent in the statute itself. In such a

case the court will strike down both the law as well as the executive action taken under such law, as it did in The State of West Bengal Vs. Anwar

Ali Sarkar, , Dwarka Prasad Laxmi Narain Vs. The State of Uttar Pradesh and Others, and Dhirendra Kumar Mandal Vs. The Superintendent

and Remembrancer of Legal Affairs to The Government of West Bengal and Another,

(v) A statue may not make a classification of the persons or things for the purpose of applying its provisions and may leave it to the discretion of

the Government to select and classify the persons or things to whom its provisions are to apply but may at the same time lay down a policy or

principle for the guidance of the exercise of discretion by the Government in the matter of such selection or classification, the court will uphold the

law as constitutional, as it did in Kathi Raning Rawat Vs. The State of Saurashtra,

(v) A statute may not make a classification of the persons or things to whom their provisions are intended to apply and leave it to the discretion of

the Government to select or classify the persons or things for applying these provisions according to the policy or the principle laid down by the

statute itself for guidance of the exercise of discretion by the Government in the matter of such selection or classification. If the Government in

marking the selection or classification does not proceed on or follow such policy or principle, it has been held by this Court, e.g., in Kathi Raning

Rawat Vs. The State of Saurashtra, that in such a case the executive action but not the statute should be condemned as unconstitutional.

In Jyoti Pershad Vs. The Administrator for The Union Territory of Delhi, the question as to whether the Slum Areas (Improvement and

Clearance) Act 1950 violates equal protection of laws guaranteed by Article 14 of the Constitution of India, came up for consideration and the

Supreme Court, while holding that there is enough guidance in the Act for exercising of discretion by competent Authority u/s 19(1) of the Act,

referred to the five proposition laid down in Ram Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, and made a summary of the

principles on a slightly different lines, more relevant to the enquiry regarding the provisions with which the Supreme Court was concerned in the

later case. In cur view the following propositions alone are relevant for a decision in this case and that is how we have culled out the same:

The enactment of the rule might not in terms enact a discriminatory rule of law but might enable an unequal or discriminatory treatment to be

accorded to persons or things similarly situated. This would happen when the legislative vests a discretion in an authority, be in the Government or

an administrative official acting either as an executive officer or even in a quasi judicial capacity by a legislation which does not lay down any policy

or disclose any tangible or intelligible purpose, thus clothing the authority with unguided and arbitrary powers enabling it to discriminate.

It is manifest that the above rule would not apply to cases where the legislature lays down the policy and indicates the rule or the line of action

which should serve as a guidance in the authority where such guidance is expressed in the statutory provisions conferring the power, no question of

violation of Article 14 could arise, unless it be that the rules themselves or the policy indicated lay down different rules to be applied to persons or

things similarly situated. Even where such is not the case, there might be limits laid down or an abuse of power, but the actual order could be set

aside in appropriate proceedings not so much on the ground of a violation of Article 14, but as really being beyond its power.

It is not however, essential for the legislation to comply with the rule as to equal protection, that the rules for the guidance of the designated

authority, which is to exercise the power or which is vested with the discretion, should be laid down in express terms in the statutory provision

itself.

So long as the policy is laid down and a standard established by a statute, no unconstitutional delegation of legislative power is involved in leaving

to selected instrumentalities the making of subordinate rules within prescribed limits and the determination of facts to which the policy as declared

by the legislature is to apply.

Such guidance may thus be obtained from or afforded by (a) the preamble read in the light of the surrounding circumstances which necessitated the

legislation, taken in Conjunction with well-known facts of which the Court might take judicial notice or of which it is appraised by evidence before

it in the form of affidavits, Kathi Raning Rawat Vs. The State of Saurashtra, being an instance where the guidance was gathered in the manner

above indicated, (b) or even from the policy and purpose of the enactment which may be gathered from other operative provisions applicable to

analogous or comparable situations or generally from the object sought to be achieved by the enactment.

In Shanti Prasad Jain Vs. The Director of Enforcement, the Supreme Court expressed that Foreign Exchange has features and problems

peculiarly its own, and it forms a class in itself and a law which prescribe a special procedure for investigation of breaches of foreign exchange

regulations will, therefore be not hit by Article 14 as it is based on a classification which has a just and reasonable relation to the object of the

legislation.

In M.M. Ipoh v. C.I.T., Madras (1908) I.S.C.J. 106 the proposition recognized is to the following effect:

Where the legislature lays down the policy and indicates the rule or line of action which should guide the authority Article 14 is not violated, unless

the rules of the policy indicated lay down different criteria to be applied to persons or similarly situate.

It is not essential for the legislature to comply with the guarantee of equal protection that the rules for the guidance should be laid down in express

terms. Such guidance may be obtained from or afforded by (a) the preamble read in the light of the surrounding circumstances, which necessitated

the legislation, taken in conjunction with well-known facts of which the court might take judicial notice or of which it is appraised by evidence

before it in the form of affidavits, (b) or even from the policy and purpose of the enactment which may be gathered from other operative provisions

applicable to analogous or comparable situations of generally the object sought to be achieved by the enactment.

The dictums in the earlier decisions in Ram Krishna Dalmia Vs. Shri Justice S.R. Tendolkar and Others, and Jyoti Pershad Vs. The Administrator

for The Union Territory of Delhi, have been followed in this case.

In Rayala Corporation v. Director of Enforcement AIR 1970 S.C. 494 while considering the virus of certain provisions of the Foreign

Exchange Regulation Act (1947) the Supreme Court found that the power concerned has not been left to the unguided and arbitrary discretion of

the authority, but is governed by the principles indicated by the provision itself. The dictum in the earlier case in Shanti Prasad Jain Vs. The

Director of Enforcement, was relied on.

In Shree Meenakshi Mills Ltd. Vs. Union of India (UOI), the Supreme Court held that where the rules or the principles for guidance are found

in the provisions of the statute and the order that came to be passed pursuant thereto, the provisions cannot be declared as unconstitutional.

We also feel obliged to notice and keep in mind the following proposition laid down by Krishna Iyer, J., in Murthy Match Works and Others

Vs. The Asstt. Collector of Central Excise, and Another,

Bare equality of treatment regardless of inequality of realities is neither justice nor homage to the constitutional principle. Another proposition which

is equally settled is that merely because there is room for classification it does not follow that legislation without classification is always

Unconstitutional. The Court cannot strike down a law because it has not made the classification which commands to the Court as proper. Nor can

the legislative power be laid to have been unconstitutionally exercised because within the class a sub-classification was reasonable but has not been

made.

In Laxmi Khandsari and Others Vs. State of U.P. and Others, the constitutional validity of a notification issued by the Cane Commissioner,

Government of Uttar Pradesh under Clause 8 of the Sugarcane (Control) Order, 1966 came up for consideration before the Supreme Court and

while upholding the same, the following principles got reiterated (at page 888):

As regards the first limb of the argument it may be necessary to state that the Control order itself has been passed under the authority of Section 3

of the Act of 1955 which has been held by this Court to be constitutionally valid and is not in any way discriminatory so as to attract Article 14.

The Control Order itself having been passed u/s 33 contains sufficient guidelines, checks and balances to prevent any misuse or abuse of the

power conferred on the authority concerned Under Clause 8.

Moreover, the power cannot be said to be arbitrary or unguided because the impugned notification derive its source from Section 3 of the Act of

1955 which clearly lays down sufficient guidelines and the existence of certain condition for proper distribution of an essential commodity. The said

guidelines therefore, govern the authority passing the impugned notification.

Once we accept the principles that a particular provision in the statute, though it does not lay down in express terms a specific rule for the

guidance of the concerned authority in the matter of exercise of a discretion, yet, there may be sufficient guidance in the statute itself and that

guidance could be gathered from the policy and the purpose behind the statute, which could be gleaned from the preamble as well as the very

scheme of the statute, we cannot straight way hold that the particular provision must be struck down as devoid of an express provision with regard

to the guidelines for the exercise of the power of classification Sub-clause (5) of Clause 3 of the Regulation Order, 1973 introduced by G.O. Ms.

No. 978, Food and Co-operation Department. dated 29th December, 1981, confers a power on the Government, the Commissioner, the

Collector or the licensing authority to direct the wholesalers to supply kerosene only to specified classes of retailers. The apprehension expressed

on behalf of the Petitioners is that since Sub-clause (5) of Clause 3 of the Regulation Order does not lay down any principle or policy for the

guidance of the authorities concerned to specify the classes of persons to whom the wholesalers may supply kerosene, the authorities concerned,

clothed with an unguided and uncontrolled discretionary powers, are likely to misuse the same by making an arbitrary selection. But, it is well

settled that the bare possibility that the discretionary power may be abused is no ground for invalidating the provision itself and if there is such

misuse of the discretionary power and such exercise of power does, in fact, offend Article 14 of the Constitution of India, this Court will definitely

strike down such resultant exercise of power as discriminatory. But, we are at the stage of testing as to whether the provision, Sub-clause (5) of

Clause 3 of the Regulation Order, 1973 in its terms has got to be struck down as violative of Article 14 of the Constitution of India In our view,

there is sufficient and ample guidance both in Act X of 1955 as well as the Regulation Order, 1973 to enable the authorities concerned vested with

the power of classification to exercise such power in accordance with such rules of guidance. As indicated by the Supreme Court in Jyoti Pershad

Vs. The Administrator for The Union Territory of Delhi, the guidance could be gathered from or afforded by the preamble read in the light of the

surrounding circumstances which necessitated the legislation, taken in conjunction with well-known facts of which the Court might take judicial

notice, or even from the policy and purpose of the enactment which may be gathered from the scheme of the operative provisions of the statute.

The preamble to Act X of 1955 states that the said Act was enacted to the interests of the general public to provide for the control of the

production, supply and distribution of and trade and commerce in certain commodities. The preamble clearly recites that this Act was being passed

in the interest of the general public. The dominant object of intendment of the Act is to secure equitable distribution and availability at fair prices of

essential commodities in the interests of the general public and the interest of the general public necessarily connotes the interest of the consuming

public and not the interest of the dealer. We do not feel called upon to dwell in extensor and in detail upon the scheme of the provisions of Act X

of 1955, and in particular Section 3 thereof which deals with the powers to control production, supply, distribution, etc. of essential commodities

and it would suffice the purpose if we point out that the provisions give sufficient guidance for the exercise of powers for maintaining or increasing

supplies of essential commodities and for securing their equitable distribution and availability at fair prices. Regulation Order, 1973 came to be

passed pursuant to the delegated powers u/s 3 of Act X of 1955. The preamble to the Regulation Order, 1973 runs as follows:

Whereas the State Government are of opinion that for maintaining supplies of Kerosene and for securing its equitable distribution and availability at

fair prices, it is necessary and expedient to provide for the licensing of kerosene.

Clause 3 of the Regulation Order, 1973 deals with licensing of wholesalers. The licensing authority is enjoined upon to have regard to certain

relevant matters while laying down the conditions from time to time with regard to distribution and sale of kerosene. This is evident from Sub-

clause (2) of Clause 3 of the Regulation Order, 1973. Both Act X of 1955, and in particular Section 3 thereof and the Regulation Order, 1973

and in particular Clause 3 thereof, do afford sufficient and enough guidelines for the authorities concerned with reference to the exercise of the

discretion in the matter of classification. The preamble, the policy, the purpose and the operative provisions of both Act X of 1955 and the

Regulation Order, 1973 provide the requisite guidance for the exercise of the power by the authorities concerned under Sub-clause (5) of Clause

3 of the Regulation Order, 1973. It is not a case of unanalyzed and unguided power, so as to amount to a carte blanche being given to the

authorities concerned to discriminate. As we pointed out earlier if there is a misuse of the power which results in discrimination that would be a

different matter for consideration. Sub-clause (5) of Clause 3 of the Regulation Order 1973 as introduced by G.O. Ms. No. 978, Food and Co-

operation Department dated 29th December 1981 carrot be stated to bring a discrimination parse so as to offend Article 14 of the Constitution of

India. Hence we are not able to agree with the conclusion of the learned single Judge that Sub-clause (5) of Clause 3 of the Regulation Order,

1973 is ultra virus Article 14 of the Constitution of India and we have to uphold the virus and the constitutionality of the said provision;

The above discussion and ruling cannot disentangle the Respondents from the controversy that has been raised over the Government''s letter

and the draft direction annexed thereto. Pursuant to the powers under Sub-clause (5) of Clause 3 of the Regulation Order, 1973, specification of

the classes of retailers to whom the wholesalers shall supply kerosene has been made in this Government''s letter and the draft direction annexed

thereto. There are three categories of retailers chosen for supply of kerosene by the wholesalers, (i) retailers operating under the Public Distribution

System, i.e., the Fair price Shops run by the Tamil Nadu Civil Supplies Corporation and Co-operatives, (ii) private retailers holding kerosene retail

registration certificate and who are exclusively dealing with kerosene for their livelihood and were attached with family cards not exceeding 500 for

distribution of kerosene to the cards, and (iii) handcart men holding retail registration certificate and are doing street vending in kerosene. While

Article 14 of the Constitution of India forbids class legislation, it does not forbid reasonable classification for the purposes of legislation. However,

in order to pass the test of permissible classification, two conditions must be fulfilled, viz. (i) that the classification must be founded on an intelligible

differentia which distinguishes persons or things that are grouped together from other self out of the group, and (ii) that the differentia must have a

rational relation to the object sought to be achieved by the Act, and what is necessary is that there must be a nexus between the basis of

classification and the object of the Act. There is no doubt that by choosing three classes, the Government''s letter and the draft direction annexed

thereto, the Petitioners and others who are similarly placed are left out of the group. Here we find that three classes have been chosen to have the

privilege of supply of kerosene through the whole sales. We are not countenancing the proposition which was advanced by the learned Counsel for

the Petitioners that by reason only of the licensing authority registering the name of any of the Petitioners as retail dealer, he has got a claim for any

assured supply of kerosene for distribution to the consumers. We must straightway point out that the learned Counsel did not make any head-way

substantiating such a proposition. But here, on account of the Government''s letter and the draft direction annexed thereto, certain classes of retail

dealers have been chosen for the privilege of getting the supply as against the other retail dealers who are left out of the group. Hence, we have to

apply the two well-known tests to find out as to whether the classification could survive without offending Article 14 of the Constitution of India.

Before we deal with this aspect, we must point out that the three classification brought about are not inter dependant, but they are distinct,

severable and each one of them can be dealt with separately.

Clause (a) of the Government''s letter has chosen for distribution of kerosene, the retailers operating under the public distribution system,

namely, the fair price shops run by the Tamil Nadu Civil Supplies Corporation and Co-operatives. Apparently it stands on a different footing. If the

Government switches over to the system of public Distribution System through the retail outlets of the Tamil Nadu Civil Supplies Corporation and

the Co-operative Societies, who can run the public distribution system throughout the State, it would not be possible for any body to take

exception to this choice. Such a canalization and distribution through fair price shops run by the Tamil Nadu Civil Supplies Corporation and the

Co-operative Societies could not offend Article 14 of the Constitution of India, In fact, at the end of the arguments, we asked Mr. I. Subramanian,

learned Counsel appearing for the Petitioners, as to whether his clients could advance and sustain a grievance over this choice, and the learned

Counsel could not give an affirmative answer, Public Distribution System like the fair price shops run by the Tamil Nadu Civil Supplies Corporation

and the Co-operative Societies forms a distinct class by itself. The differentia between the retail dealers who are commercial traders and such

public distribution system is an intelligible and a reasonable one. Hence it is possible to upheld the choice of the Government to canalize distribution

of kerosene through the retailers operating under the public distribution system as set out in Clause (a) of the Government''s letter.

Coming to Clauses (b) and (c) of the Government''s letter there is no indication in the said letter or in any other record placed before us as to

why the Respondents considered it necessary to draw a distinction between the kerosene retail dealers, who are exclusively dealing with kerosene

for their livelihood and hand-cartman on the one hand and the other kerosene retail dealers, who also trade in other commodities, on the other.

Padmanabhan, J., was obliged to countenance the attack on these Clauses (b) and (c) in the Government''s letter as unreasonable and unintelligible

classification, having no nexus between it and the objects sought to be achieved by Act X of 1955 and the Regulation Order, 1973. The learned

Judge pointed out that in the counter-affidavit filed by the Respondents before him, there is no indication as to the reason or explanation for such a

classification and no factors justifying the action of the Government was set out in the said counter-affidavit. At the request of the learned

Advocate-General appearing for the Respondents, we permitted the Respondents to file a further affidavit, clarifying the position if, in fact, a

justification and a reason for such a classification existed. Clauses (b) and (c) of the Government''s letter choose certain categories of retail dealers

in kerosene for the conferment of the privilege of distribution rights of kerosene to the consumer public and thereby others who are also retail

dealers in kerosene are left out of the group. In our view, even the affidavit filed before us has not improved the position. We shall deal with the

reasons advanced in this further affidavit filed on behalf of the Respondents in seriatim. First, it is stated that the authorities found that registered

dealers, who are exclusively dealing in kerosene, will be more effective in maintaining supplies to the public, Learned Advocate-General frankly

admitted that there had been no complaint or representation from any section of the consumer public that retailed dealer in Kerosene, who also

trade in other commodities have ever proved to be ineffective in maintaining supplies to the consumer pubic and on that account, the consumer

public was put to inconvenience and hardship. Hence, this ground of classification does not at all appear to be an intelligible and a reasonable one.

Next, it is stated that if the retailed dealers in kerosene, who are exclusively dealing in kerosene, are not allowed to vend in kerosene, they will

have no means to earn their livelihood. This is palpably and patently a reasoning which does not go with the objects sought to be achieved by Act

X of 1955 and the Regulation Order, 1973, the policy behind them being equitable distribution and availability at fair prices of the commodity in

question. They are not meant to advance the cause and livelihood of any particular trader. Thirdly, it is contended that it would be easier for the

consumers to get their regular supplies from persons who are exclusively dealing in kerosene and such retail dealers will be in a position to effect

supplies quickly and more effectively and further the registered dealers, who deal in other commodities as well as kerosene, are likely to cause

undue delay in the distribution of-kerosene. This is nothing but an expansion of the first line of justification already dealt with and we have to

eschew it for the reasons stated above. Fourthly, it is stated, that handcart men are known to deliver kerosene at the door-steps of consumers,

who are mostly house-wives and who need not stand in long queues in shops dealing in kerosene as well as other, articles. This reasoning suffers

the same infirmity as pointed out above by us. If equitable distribution at fair prices is the object to the achieved, we are not able, to understand as

to how the above reasoning adopted by the Respondents are relevant at all. Hence, we have no other alternative but to hold that Clauses (b) and

(c) of the Government''s letter have got to be struck down since they have not passed the test of permissible classification. The classification in not

founded on any intelligible or reasonable differentia and there is no national relation between the classification and the object sought to be achieved

by Act X of 1955 and the Regulation Order, 1973. There, is apparent lack of nexus between the basis of classification and the avowed object. To

this extent, we concur with the view of Padmanabhan, J.

The prayer in each of the writ petitions is two-fold. The first is to quash the order of the concerned District Revenue Officer dated 14th

August, 1981. This order of the District Revenue Officer was issued pursuant to the letter of the Commissioner of Civil Supplies, Madras, dated

19th August, 1980. Both have the basis on G.O. Ms. No. 234, Food Department, dated 3rd September, 1979, and this basis has been removed

by the judgment of the Bench of this Court in Writ Appeal Nos. 14 and 15 of 1981

P. Manickam . . .Appellant in W.A. No. 14 of 1981.

A. Kuppammal . . .Appellant in W.A. No. 15 of 1981.

v.

The Collector of South Arcot at Cuddalore and Anr.

referred to above. Following the judgment of the Bench Ramanujam, J., at the instance of two of the retail dealers in kerosene, quashed the order

of the District Revenue Officer, dated 14th August, 1981. But, circumstances have changed since the above decisions were rendered, both by the

Bench and the learned single, Judge of this Court in the sense by G.O. Ms. No. 978, Food and Co-operation Department, dated 29th December,

1981, Sub-clause (5) has been introduced in Clause 3 of the Regulation Order 1973, and in exercise of the powers conferred by that Sub-clause,

the Government issued the letter, dated 23rd March, 1982 as well as the draft direction appended thereto, Hence, the order of the District

Revenue Officer, dated 14th August,1981 has been practically superseded and it has lost its efficacy, and it is nobody''s case-that it is being

enforced and implemented. Hence, it is futile to quash the said order. As did by Padmanabhan, J., we have also proceeded to test the amendment

introducing Sub-clause (5)in Clause 3 of the Regulation Order, 1973 as well as the Government''s letter to find out as to whether they offend

Article 14 of the Constitution of India. As spelt out by our above reasoning. We have upheld the validity of Sub-clause (5) introduced in Clause 3

of the Regulation Order, 1973 and we have also sustained the choice of distribution made in the Government''s letter, in Clause (a) thereof with

reference to public distribution system. It is true we have held that the classification Under Clauses (b) and (c) of the Government''s letter cannot

be sustained. But the reasoning made and the decisions taken by us as above cannot permit countenancing the second limb of the prayer in each of

the writ, petitions, viz., that the Respondents should be directed to effect supplies of kerosene to the Petitioners as before. In the said

circumstances, these writ appeals are allowed; the order of Padmanabhan, J., in Writ Petition Nos. 1122 to 1128 of 1982 is set aside and the writ

petitions will stand dismissed. There will, however, be no order as to costs both in the Writ appeals as well as in the writ petitions.