Holding

The 1985 circular order imposing restrictions and a compulsory levy is ultra vires; the State lacked authority because it did not obtain the required prior concurrence and clause 12 of the 1982 Order does not empower such directions.

Summary

The State Government of Andhra Pradesh issued a circular on 21 June 1985 imposing restrictions on the transport and export of groundnut seeds and oil and requiring millers and traders to sell a portion of their produce to the State at a fixed price. The traders challenged the order, and the High Court struck it down on constitutional and statutory grounds. On appeal, the Supreme Court examined whether the State had authority under the Essential Commodities Act, 1955 and the central GSR‑800 notification to impose such restrictions without prior concurrence of the Central Government. The Court held that the State’s power was limited to matters covered by the 1982 Order and that clause 12 of that Order did not empower it to regulate transport, levy compulsory charges or fix prices. Because the required prior concurrence under Section 3(2)(d) and 3(2)(f) of the Act was not obtained, the circular was ultra vires and void. The appeal was dismissed, upholding the High Court’s decision.

Issues considered

Whether the State Government’s circular imposing transport restrictions and a compulsory levy on groundnut oil and seeds was within the powers delegated under the Essential Commodities Act, 1955.
Whether prior concurrence of the Central Government, as required by Section 3(2)(d) and 3(2)(f) of the Act and the GSR‑800 notification, was obtained.
Whether clause 12 of the Andhra Pradesh Scheduled Commodities Dealers (Licensing and Distribution) Order, 1982 authorises the State to issue such directions.
Whether the circular violated constitutional guarantees of free trade under Articles 19(1)(g) and 301 of the Constitution.

Legislation cited

Essential Commodities Act, 1955s. 3(1), s. 3(2)(d), s. 3(2)(f), s. 3(3), s. 3(5), s. 5

Subjects

Essential commoditiesDelegation of legislative powerPrior concurrenceUltra viresRestriction on tradeCompulsory levyClause 12Groundnut oilAdministrative lawConstitutional free trade

Judgment

DISTRICT COLLECTOR CHITI'OOR & ORS. A
v.
CHITI'OOR DISTRICT GROUNDNUT TRADERS
ASSOCIATION & ORS. ETC. ETC.

JANUARY 18, 1989
B
[K.N. SINGH AND L.M. SHARMA, JJ.]

Andhra Pradesh Scheduled Commodities Dealers (Licensing and
Distribution) Order 1982: Clauses 3 and 12-State Government Cir-
cuiar Order dated June 21, 1985-Restrictions imposed on transport of
groundnut oil seeds and oil-Compulsory levy requiring millers and C
traders to supply oil to State Government at a fixed price--"Held ultra
vires; illegal and invalid-Jn excess of power under section 3( 1) of
Essential Commodities Act 1955-No prior concurrence under section
3(2)(f) of 1955 Act obtained.

Essential Commodities Act 1955: Section 3(1) and 3(2)(f) and· D
I CentralGovernment Notification GSR 800 dated June 9, 1978-
Validity of Andhra Pradesh Scheduled Commodities Dealers ( Licens-
ing and Distribution) Order 1982-State Government not authorised to
place restrictions on movement of groundnut oil and seedS and subject·
traders to compulsory levy-Object of obtaining prior concurrence of
Central G_overnment-Exp/ained. E

Administrative Law: Delegation of power-Delegate not entitled
to exercise powers in excess or in contravention of delegated powers.

The Essential Commodities Act, 1955 is a Central Enactment pro·
viding for the control of the production, supply and distribution, trade F
and commerce in certain specified essential commodities. Section 3 ·of
the Act confers power on the Central Government to provide for
regulating or prohibiting the production, supply and distribution
thereof and trade and commerce therein, if it is of the opinion that it is
necessary or expedient so to do for maintaining or increasing supply of
any essential commodities or of securing their equal distribution and G
availability on fair price.

The Central Government issued the Notification No. CSR 800
dated June 9, 1978 delegating its powers under section 3(1) of the Act to
the State Governments to make orders iii respect of the matters
specified in the various sub-clauses of sub-seciiiin (2) iif sedion 3 in H
243
244 SUPREME COURT REPORTS [19891 1 S.C.R.

A
relation to foodstuffs subject to cerll!in conditions specified therein. By ..h.
I
clause (2) of the Notification the Central Government while delegating
its powers under section 3 to the State Government for issuing orders in
respect of matters specified therein, expressly placed restriction on the
State Government relating to any matters specified in clauses (a), (c),
(d) and (f) of sub-section (2) of section 3 to the extent that while making
B an order pertaining to any of the matters specified in the said clauses,
the State Government shall obtain prior concurrence of the Central
Government.

The State Government of Andhra Pradesh in exercise of its
powers under section 3(1) of the Act as delegated to it by the Notifica-
tion GSR 800 dated June 9, 1978 made the Andhra Pradesh Scheduled
c Commodities Dealers (Licensing and Distribution) Order, 1982 after
obtaining prior concurrence of the Central Government. This order
sought to regulate the sale and purchase of scheduled commodities as
specified in schedule I to the Order. Edible oil seeds and edible oil were
included in the said Schedule.
D
The State Government issued a circular order dated June 21,
1985, containing directions regulating the transport and export of
groundnut seeds and oil outside the State.
)<
The oil millers and traders were permitted to export oil and
E groundnut seeds only on the condition that they deliver oil to the State
Government at a fixed price in proportion of one tonne of oil for every
three tonnes to be transported outside the State. Similar conditions
were imposed in respect of groundnut seeds. The oil millers and traders
were required to execute undertaking for complying with the directions
issued by the State Government.
F
The respondents who were oil millers and traders carrying on
business in the sale and purchase of groundnut seed and groundnut oil
which is edible challenged the validity of the 1982 Order and the 1985
Circular in writ petitions to the High Court. A Single Judge quashed
the order of the State Government on the findings that the directions
G contained therein violated Articles 19(l)(g) and 301. On appeal by the
State Government a Division Bench held that the order of the govern-
ment was violative of section 3(2)(f), section 3(31-B) and section 3(5) of
the Essential Commodities Act, 1955 as the directions contained in the
order amounted to imposition of levy which could not be don'e without
obtaining the prior concurrence of the Central Government in terms of
H section 3(2)(f) of Act. It further held that the directions contained in the
DIST. COLLECTOR v. CHITTOOR DIST. ASSCN. 245

Government Order were outside the purview of the State Government
A
under clause 12 of the Andhra Pradesh Scheduled Commodities Dealers
(Licensing and Distribution) Order, 1982. No finding was however
recorded on the question whether the Order violated the constitutional
guarantee of free trade under Art. 301.

In the appeals to this Court, it was contended on behalf of the B
appellants that the directions contained in the Government Order dated
21st June, 1985 were issued by the State Government in exercise of its
powers under clause 12(2) of the Andbra Pradesh Scheduled Commodi-
ties Dealers (Licensing and Distribution) Order, 1982 which bad been
~· made by the State Government with the prior concurrence of the Cent-
ral Government in exercise of powers conferred by section 3 of the
Esssential Commodities Act, 1955 and that the directions were legal and c
valid.

Dismissing the appeals,

HELD: 1. The High Court bas rightly struck down the directions D
issued by the State Government. The directions contained in the Govern-
ment Circular Order dated June 21. 1985 are illegal and void as the
same have been issued in exercise of and in contravention of the power
delegated to the State Government under the Notification No. GSR 800
dated June 9, 1978. [256E;.253F]
E
2. The 1982 Order which was framed by the State Government in
exercise of the delegated powers does not contain any provision placing
• any restriction on the transport or movement of edible oil or oil seeds
nor it provides for imposition of compulsory levy further it does not fix
any price. [253C-D I
F
3. The directions issued by the State Government by its Circular
Order dated June 21, 1985 placing restrictions on the movement of oil
seeds and oil and imposing compulsory levy and requiring millers
and traders to sell oil seeds and oil at a price fixed by it, are out-
side the purview of 1982 Order. These directions have no sanction
of law. [253D-E] G

;c,,, 4. If the State Government was facing any problem it could
have made amendments to the 1982 Order regulating matters speci-
fied in clauses (d) and (0 of section 3(2) of the Act after obtaining
prior concurrence of the Central Government. No such course was
followed. [253E-F] H
246 SUPREME COURT REPORTS [1989] 1 S.C.R.

5. The State Government's directions requiring the millers and
A
traders to sell groundnut oil to the State Government is a matter
directly specified within the terms of section 3(2)(1) of the Act. The State
Government bad no authority to place any such restriction without the
prior concurrence of the Central Government. [254G-H]

B 6. The purpose and object for obtaining prior concurrence is to
ensure availability of essential commodity throughout the country. The
State Governments are not authorised to impose restrictions on the
movement of the essential commodities as it would have reflection in
other States both in regard to the price and in regard to the availability
of the commodity for distribution. The Central Government bas the
responsibility of maintaining a balance between the interest of the vari-
c ous States and ensuring the availability of essential commodities for
distribution at a fair price in other States also. All relevant aspects are
necessary to be scrutinised by the Central Government in giving or ·
refusing its concurrence not merely from the point of view of the State
imposing restrictions but bearing in mind the conditions of trade and
D industry and the demand and supply of the concerned commodities in
other States. Unless the Central Government is satisfied that it would be
in the interest of all concerned, it may withhold concurrence for impos-
ing restrictions on free movement of essential commodities. [254C-E]

7. A delegate is not entitled to exercise powers in excess or in
E contravention of the delegated powers. If any order is issued or framed
in excess of the powers delegated to the authorities, such order would be
illegal and void. [25IB-C]

8. The power of the authorities specified in sub-clause 1(1) of
clause 12 of the Order to issue instructions and directions is limited to
F the subject matter of the 1982 Order. Such directions and instructions
cannot pertain to regulate matters which are not covered or dealt
with by the 1982 Order. Such directions and instructions cannot
pertain to regulate matters which are not covered or dealt with by
the 1982 Order. [255F-G]

G 9. The State Government could not impose any restriction on the
export of groundnut seed or oil to outside the State and further it could
not issue directions for the compulsory levy at the specified price in view
of the limitations placed on exercise of its powers under the notification
dated Jone 9, 1978. What it could not do directly could not be permitted
to he done indirectly by virtue of clause 12 of the 1982 Order. The scope
H and ambit of clause 12(2) of the 1982 Order did not authorise the State
'
DIST. COLLECTOR v. CHITTOOR DIST. ASSCN. [SINGH, J.I 247

l Government to impose the restrictions in the Circular Order dated June A
~ 21, 1985. [256B-C]
'
CML APPELLATE JURISDICTION: Civil Appeal Nos.
2591-2597 of 1987.

From the Judgment and Order dated 11.2.1987 of the Andhra B
Pradesh High Court in Writ Appeal Nos. 1418 to 1424of 1986.

P.A. Choudhary, T.V.S.N. Chari, Ms. Sunita Rao and Badri
Nath for the Appellants.

A.K. Ganguli, C.V. Subba Rao, E. Ayyapu Reddy, G.
Narasimhulu and A. Subba Rao for the Respondents.
c
"r The Judgment of the Court was delivered by

SINGH, J. These appeals are directed against the judgment and
order of a Division Bench of the High Court of Andhra Pradesh dated D
11.2.1987 affirming the judgment of a learned single Judge of that
Court allowing the respondents' writ petitions made under Article 226
.of the constitution and quashing the State Government's Order dated
21.6.1985.

The respondents are oil millers and traders who carry on busi- E
ness in the sale and purchase of groundnut seed and groundnut seed oil
which is edible. The millers purchase groundnuts and manufacture oil
in their mills thereafter they sell the same in the State and outside the
State. Similarly the traders purchase the groundnut seed and ground-
nut oil and sell the same in the State and outside the State of Andhra
Pradesh. The State Government issued a Circular Order dated F
21.6.1985 containing directions regulating the transport and export of
groundnut seeds and oil outside the State. The oil millers and traders
were permitted to export oil and groundnut seeds only on the condi-
tion contained in the Order according to which all millers and traders
were required to deliver oil to the State Government at a fixed price in
proportion of one tonne of oil for every three tonnes to be transported G
outside the State and similarly a trader was required to supply to the
State Government one tonne of oil for every five tonnes of groundnut
seeds proposed to be transported outside the State on the price fixed
by the State Government. The oil millers and traders were required to
execute undertaking for complying with the directions issued by the
State Government. The Government Order warned the oil millers and H
248 SUPREME COURT REPORTS 11989) 1 S.C.R.

traders that action would be taken agaiust them if they failed to com-
A
ply with the directions of the Government. In substance the State
Government imposed compulsory levy on oil millers and traders on
the transport and export of groundnut oil and seeds. The respondents
challenged the validity of the Order of the State Government by means
of writ petitions before the Andhra Pradesh High Court. A learned
B single Judge quashed the Order of the State Government on the find-
ings that the directions contained therein violate Articles 19(1)(g) and
301 of the Constitution. On appeal by the State Government a Divi-
sion B~nch of the High Court held that the Government Order was
violative of Section 3(2)(f), Section 3(3)-B and Section 3(5) of the
Esssential Commodities Act 1955 (hereinafter referred to as the Act)
as the directions contained in the Order amounted to imposition of
c levy which could not be done without obtaining prior concurrence of
the Central Government in terms of Section 3(2)(f) of the Act. The
Bench further held that the directions contained in the impugned Gov-
ernment Order are outside the pO">er of the State Government under
clause 12 of the Andhra Pradesh Scheduled Commodities Dealers
D (Licencing & Distribution) Order 1982. The Division Bench did not
record any finding on the question whether the Government Order
violated the constitutional guarantee of free trade under Article 301 of
the Constitution.

Mr. Chaudhary, learned counsel for the appellants contended
E that the directions contained in the Government Memo dated
21.6.1985 were issued by the State Government in exercise of its pow-
ers under clause 12(2) of the Andhra Pradesh Scheduled Commodities
Dealers (Licencing & Distribution) Order 1982 (hereinafter referred
to as the 1982 Order) which had been made by the State Government
with the prior concurrence of the Central Government in exercise of
F the powers conferred by Sect!on 3 of the Act. The impugned directions
are legal and valid as the same are within the purview of 1982 Order.
Having given our anxious consideration to the submissions made on
behalf of the appellants we find no merit in these appeals.

The 1982 Order was framed by the State Government in exercise
G of delegated powers under Section 3(1) of the Act with the prior con-
currence of the Central Government. The Act is a central enactment
providing for the control of the production, supply and distribution,
trade and commerce in certain specified essential commodities. Sec-
tion 3 confers power on the Central Government to provide for reg-
ulating or prohibiting the production, supply and distribution thereof
H and trade and commerce therein if it is of opinion that it is necessary or
DIST. COLLECTOR v. CHITTOOR DIST. ASSCN. !SINGH, J.) 249

expedient so to do for maintaining or increasing supplies of any essen-
tial commodity or for securing their equitable distribution and availa-
A
bility at fair prices. The Central Government has the legal sanction to
issue orders under the aforesaid provisions for securing the afor~said
objectives which may include control o( price, regulation of produc-
tion and manufacture of any essential commodity, regulation, move-
ment, transport, sale and distribution of the essential commodities and B
other allied matters.- Section 5 empowers the Central Government to
delegate its powers under Section 3 for issuing orders or notifications to
such officers or authorities subordinate to the Central Government or
to State Government or such officers or authorities subordinate to
State Government as may be specified in the order in relation to such
~ matters and subject to such condition as it may specify in the order.
The Central Government is competent to delegate powers to the State c
Government or its officers and it may further specify restrictions and
conditions for the exercise of the delegated power. Any order issued
under Section 3 of the Act is legislative in nature and is required to be
notified in the official gazette under Section 3(5) of the Act. The
Central Government in the Ministry of Agriculture and Irrigation D
(Department of Food) issued the Notification No. GSR 800 dated 9th
! June 1973 delegating its powers under Section 3(1) of the Act to the

I
~ State Government to make orders in respect of the matters specified in
:various s'ub-clauses of sub-section (2) of Section 3 in relation to food-
.stuffs subject to certain conditions specified therein. The Notification
',is as under: E

"PUBLISHED IN Tiffi GAZE1TE OF INDIA (PART)
II SECTION 3 SUB-SECTION (i) DATED 17IH JUNE,
1978/27 JYAISTHA, 1900 (SAKA).

F

MINISTRY OF AGRICULTIJRE & IRRIGATION
(DEPARTMENT OF FOOD)

G
ORDER

New Delhi, the 9th June, 1978.

G.S.R. 800-In exercise of the powers conferred by Sec-
tion 5 of the Essential Commodities Act, i955 ( 10 of 1955), H
250 SUPREME COURT REPORTS [1989] 1 S.C.R.

and in supersession of the Order of the Government of
A
India in the late Ministry of Agriculture, (Department of
Food) No. GSR, 315(E) dated the 20th June 1972, the
Central Government hereby directs that the powers confer-
red on it by sub-section (1) of Section 3 of the said Act to
make orders to provide for the matters specified in clauses
B (a), (b), (c), (d), (e), (f), (h), (i) and (j) of sub-section 2
thereof shall, in relation to food-stuffs be exercisable also
by a State Government subject to the conditions:

(1) that such powers shall be exercised by a State
Government subject to such directions, if any, as may be
issued by the Central Government in this behalf;
c
(2) that before making an order relating to any mat-
ter specified in the said clauses (a), (c) or (f) or in regard to
distribution of disposal of foodstuffs to places outside the
State or in regard to regulation of transport of any food-
D stuff, under the said clause (d), the State Government shall
also obtain the prior concurrence of the Central Govern-
ment; and

(3) that in making an order relating to any of the·
matters specified in the said clause (j), the State Govern-.
E ment shall authorise only an officer of the Government.

sd/-
(K. Balakrishnan)

Deputy Secretary to the Government of India.
F
No. 3 (Genl)(l)-D & R(l)-59"
~~

By Clause (2) of the Notification the Central Government while
delegating its powers under Section 3 of the Act to the State Govem-
mcrnt for issuing orders in respect of the matters specified therein,
G expressly placed restriction on the State Government relating to any
matters specified in clauses (a) , (c), (d) and (f) of sub-section (2) of
Section 3 of the Act to the extent that while making an order pertain-
ing to any matters specified in the aforesaid clauses the State Govern-
ment shall obtain prior concurrence of the Central Government . The
Notification is manifestly clear that the Central Government did not
H delegate to the State Government its general power to pass any order
DIST. COLLECTOR v. CHITTOOR DIST. ASSCN. [SINGH, J.[ 251
~ .. '
under Section 3(1) of the Act for regulating or prohibiting the produc- A
tion, supply and distribution of the specified essential commodities
and trade and commerce therein. On the other hand the State Govern-
ment was delegated limited power to make orders in relation to food-
stuffs subject to certain conditions specified in the Notification after
obtaining prior sanction of the Central Government. Any order made
by the State Government regulating matters specified in clause (2) of B
the Notification without obtaining the prior sanction of the Central
Government would be in contravention of the delegated power. A
delegate is not entitled to exercise powers in excess or in contravention
of the delegated powers. If any order is issued or framed in excess of
. the powers delegated to the authorities, such order would be illegal
1
and void.
c
In the instant case the State Government in exercise of its powers
conferred by Section 3 of Essential ~mmodities Act as delegated to it
by Notiffoation GSR-800 dated 9th June, 1978 made the Andhra
Pradesh Scheduled Commodities Dealers (Licencing and Distribution)
Order 1982, after obtaining prior concurrence of the Central Govern- D
· ment. This Order seeks to regulate the sale and purchase of scheduled
commodities as specified in Schedule 1 to the Order. Edible oil seeds
and edible oil are included in Schedule 1 to the Order. Clause 3 of the
:order provides that no person shall carry on business as a dealer
',except under and in accordance with the terms and conditions of a
·licence issued by the licensing authority. Other provisions relate to the E
'procedure for grant, renewal, and cancellation of licence. Clause 11
· places restriction on storing of scheduled commodities, it provides for
the maximum quantity which is permitted to be stored by a licencee.
1 Clause 13 provides that the Government/Commissioner/Collector
·may direct a dealer th convert edible oil seeds into edible oils stored or
held by him.·Clause 14 provides that a licence holder transacting busi- F
ness in purchase and sale of scheduled commodities shall not purchase
,commodities at prices lower than the notified procurement price from
1 farmers. Similarly, clause 115 provides that the licencee shall not sell
the scheduled commodities at a price higher than the maximum price
fixed if any by the Central Government or by the State Government. It
is not necessary for the purpose of the present cases to refer to the G
I other clauses of the Order. There is no dispute that the provisions of
the Order do not place any restriction on the movement or transport of
groundnut oil seeds or oil outside the State nor the Order fixes any
price for the edible oil. It appears that a number of millers, traders
were exporting groundnut seeds and oil outside the State of Andhra
Pradesh. The State Government issued directions to the Collectors H
252 SUPREME COURT REPORTS [1989] 1 S.C.R.

and Licensing Authorities to ensure that groundnut seeds and oil pro-
A
duced in a District is sold within the District and in the State and the
same is not permitted to be moved out of the State. The oil millers and
traders were told io ensure that the price of edible oils are maintained
around Rs.14 per k.g. in the retail market. By a circular letter dated
6th December, 1983 the State Government directed the licensing
B authorities, Collectors and other officers of the State to ensure that
producers, millers and traders are not permitted to transport the
groundnut seeds or oil outside the State and it further directed that the
restriction imposed on movement of groundnut be removed with
immediate effect so far as bona fide farmers are concerned but so far as
the millers and traders were concerned movement of oil seeds and oil
c was subject to their agreement to supply certain quantities of ground-
nuts seeds and oil to the State Government at the price fixed by it.
Since there was problem of storage the millers and traders were
required to give undertaking in writing that they would deliver the
quantities due from them whenever demanded and on the basis of such
undertakings they were permitted to transport three times quantity of
D oil for which undertaking was furnished . The policy as set out in the
Government's Order dated 6.12.1983 was enforced for the year 1983-
84. For the year 1984-85 the Government took policy decision details
of which were communicated to the licensing authorities, Collectors
and other authorities of the State under its circular letter dated
21.6 .1985. Under the revised policy bona fide farmers were permitted
E to move and sell groundnut produced in their own field without any
restriction anywhere in the country. But the policy requiring the oil
millers and traders to deliver to the State Civil Supply Corporation, a
specified quantity of oil enabling them to transport oil and groundnut
seeds outside the State was continued. By the Government Order
dated 6.12.1985 the policy adopted for the year 1984-85 was directed
F to be continued for the year 1985-86.

The policy decision taken by the State Government and enforced
under the aforesaid circular letter placed restriction on the transport
and movement of edible oil and oil seeds and it further imposed com-
pulsory levy requiring the millers and traders to supply oil to the State
G Government at the price fixed by it. There is no dou~t that these steps
were taken bona fide to ensure availability of the edible oil and oil
seeds for public distribution at fair price but the steps taken by the
State Government were not permissible in law as the 1982 Order did
not confer power on the Government to place such restrictions. Sec-
tion 3(2)(d) provides for regulating by licence, permits or otherwise
H the storage transport, distribution, disposal, acquisition, use or con-
DIST. COLLECTOR v. CHITTOOR DIST. ASSCN. [SINGH, J.] 253

.+· sumption of any essential commodity. Clause (f) of Section 3(2) of the
Act confers power for making an order requiring any person holding in
A
stock or engaged in the production or in the business of buying or
selling of any essential commodity to sell the whole or specified part of
quantity held in or produced or received by him to the Government or
to an officer or agent of the Government. Clause (d) among other
things provides for regulating transport and movement of an essential B
commodity while clause (f) confers power to impose compulsory levy
on a person holding the essential commodity in stock by selling the
same to the Government. Section 3(3) provides that a person selling
any essential commodity to the Government in compliance with the
Order made with reference to clause (f) of sub-section (2) shall be paid
controlled price if any fixed by the Government or agreed between the
parties and in the absence of agreement the price payable would be at
c
'¥, the market rate prevailing in the locality on the date of sale. The 1982
Order which was framed by the State Government in exercise of the
delegated powers does not contain· any provision placing any restric-
lion on the transport or movement of the edible oil or oil seeds nor it
provide for imposition of compulsory levy, further it does not fix any D
price. The directions issued by the Government placing restriction on
the movement of oil seeds and oil and imposing compulsory levy and
requiring millers and traders to sell oil seeds and oil at a price fixed by
'j.._ it, are outside the purview of the 1982 Order. Those directions have no
sanction of law. If the State Government was facing any problem it
could have made amendments in the 1982 Order regulating matters E
specified in clauses (d) and (f) of Section 3(2) of the Act after obtain-
ing the prior concurrence of the Central Government. No such course
was followed. There is therefore no escape from the conclusion that

•
the directions contained in the impugned Government Order are
illegal and void as the same have been issued in exercise of and in
contravention of the power delegated to the State Government under F
the Notification dated 9.6.1978.

Learned counsel for the appellants urged that the directions
issued by the State Government placing restriction on the transport,
movement and compulsory levy on the edible oils and oil seeds were
placed with the prior concurrence of the Central Government. We find G
no merit in the submission. The State G1>vemment failed to place any
~ material before the Court to show that the prior concurrence of the
Central Government as contemplated by clause (2) of the Notification
dated 9.6.1978 !ssued by the Government of India, was obtained. The
State Government while issuing or making orders in respect of the
essential commodities under Section 3 of the Act could make provision H
254 SUPREME COURT REPORTS 11989] 1 S.C.R.

A to the extent and subject to the conditions specified in the Notifica-
tion dated 9.6.1978, it had no power to make any order in respect of
matters for which it had not been authorised to exercise powers under
Section 3 of the Act. The State Government clearly transgressed the
legislative authority in issuing the directions are contained in its circu- \
B lar letters dated 6.12.1983 and 21.6.1985. In fact an affidavit was filed
on behalf of the Central Government stating that no concurrence of
the Central Government had been obtained and the State Government
had not competence to exercise powers in respect of matters specified
in clauses (d) and (f) of Section 3(2) of the Act. The purpose and
object for obtaining prior concurrence is to ensure availability of
essential commodity throughout the country. The State Governments
c are not authorised to impose restrictions on the movement of the
essential commodities as it would have reflection in other States both
in regard to the price and in regard to the availability of the commodity
for distribution. The Central Government has the responsibility of "'
maintaining a balance between the interest of the various States and it
D has to ensure the availability of essential commodities for distribution,
at a fair price in other States also. All relevant aspects are necessary to
be scrutinised by the Central Government in giving or refusing its
concurrence not merely from the point of view of the State imposing
restrictions but bearing in mind the conditions of trade and industry
and the demand and supply of the concerned commodities-in other /'
E States. Unless the Central Government is satisfied that it would be in
the interest of all concerned, it may withhold concurrence for imposing
restrictions on free movement of essential commodities. It is in this
context that while delegating the powers to the State Government
under Section 3 of the Act for making orders in respect of the matters
specified in Section 3 of the Act the Central Government placed limi-
F tations in respect of matters specified in clause (f) of Section 3(2) of ;
the Act by providing that such power shall not be exercised by the
State Government without obtaining its prior concurrence. Before the
learned single judge the entire correspondence which passed between
the State Government and the Central Government was placed and on
perusal of the same the learned Single Judge recorded a positive find-
ing that the Central Government was opposed to restrictions on export
G
of groundnut seeds and groundnut oil. The State Government's direc-
tions requiring the millers and traders to sell groundnut oil to the State
Government is a matter directly specified within the terms of Section '/

3(2)(f) of the Act it is therefore clear that the State Government had
no authority to place any such restriction without the prior concurr-
H ence of the Central Government.
DIST. COLLECTOR v. CHJTTOOR DIST. ASSCN. [SINGH, J.] 255

Learned counsel for the appellants then urged that impugned
A
restrictions could validly be placed by the State Government in public
interest in exercise of its powers under clause 12 of the 1982 Order
which had. been framed with the prior concurrence of the Central
Government. There is no dispute that clause 12 of the 1982 Order was
framed by the State Government with the prior concurrence of the
Central Government but the question is as to whether clause 12 of the B
1982 Order confers any authority on the State Government to place
restriction on the movement and transport of edible oil and seeds or to
subject the millers and traders to compulsory levy. Clause 12 of the
Order is as under:

~' 12. Power to issue directions:
c
( 1) The Government, the Commissioner, the Collector or
the licensing authority may issue instructions or directions
on all matters covered by the provisions of this order and
all dealers shall comply with the same.
D
(2) Without prejudice to the generality of the foregoing
power such directions inay be issued to any dealer that all
or any of the commodities mentioned ir. Schedule I to this
Order may be sold to only such persons or institutions, in
such quantities and at such intervals as the Commissioner,
Collector, or the licensing authority may by general or E
special order, direct." ·

Sub-clause ( 1) of Clause 12 authorises the Government, Commissioner,
Collector or the licensing authority to issue instructions and directions
in matters covered by the provisions of the 1982 Order it further pro-
vides that such directions shall be complied by all dealers. The power F
of the authorities specified in sub-clause (1) to issue instructions and
directions is limited to the subject matter of the 1982 Order. Such
directions and instructions cannot pertain to regulate matters which
are not ·covered or dealt with by the 1982 Order. Sub-clause (2) of
Clause 12 of the Order provides that directions may be issued to any
dealer to sell an essential commodity (as mentioned in Schedule 1 to G
the Order) only to such persons or institutions in such quantities as
may be directed by the Commissioner, Collector or the licensing
authority. This clause regulates the sale of essential commodity to the
specified persons and institutions in such quantities as may be !lirncted
!>y tlt\l !l!!l!wnties- None of these two clauses cgnfer 'll1Y pgw~r i:m the
i\Ut)tqriti<l~ !9 impose levy or to fix price fqr the es§e11ti~l -CQ!!!!!\Ql\it[es J-!
256 SUPREME COURT REPORTS 11989] 1 S.C.R.

A supplied to the Government. As already noticed, restriction on trans- ·~
I
port, imposition of levy and fixation of price was not the subject mat-
ter of the 1982 Order therefore the State Government had no authority
in law to issue orders in respect of the aforesaid matters in exercise of
its powers under Clause 12 of the 1982 Order. If the submissions made
B on behalf of the State Government are accepted it would nullify the
restrictions and limitations placed by the Notification dated 9th June
1978 delegating legislative power to the State Government. The State
Government could not impose any restriction on the export of ground-
nut seed or oil to outside State and further it could not issue directions
for the compulsory levy at the specified price in view of the limitations
placed on exercise of its powers under the Notification dated 9th June
C 1978. What it could not do directly could not be permitted to be done
indirectly by virtue of clause 12 of the 1982 Order. The scope and
ambit of clause 12(2) of the 1982 Order could not and did not authorise
the State Government to impose the impugned restrictions.

We are therefore of the opinion that no exception can be taken
D to the view taken by the High Court that the impugned restrictions
placed by the State Government are ultra vires of its powers. The High
Court has rightly struck down the directions issued by the State Gov-
ernment. We find no merit in these appeals and the same are accord-
ingly dismissed with costs.
E
N.V.K. Appeals dismissed.