Holding

The reservation of certain articles for exclusive handloom production under the Handlooms (Reservation of Articles for Production) Act, 1985 is a valid, reasonable classification that does not violate Articles 14 or 19(1)(g) and is not repugnant to the Cotton Textile (Control) Order, 1948.

Summary

The Supreme Court examined the constitutional validity of the Handlooms (Reservation of Articles for Production) Act, 1985 and the 4 August 1986 order reserving certain textiles for exclusive handloom production. Petitioners argued that the reservation created a monopoly, violated Articles 14 and 19(1)(g) of the Constitution, and conflicted with the Cotton Textile (Control) Order, 1948 under the Essential Commodities Act. The Court held that the reservation is a permissible classification aimed at protecting a vulnerable cottage industry, satisfies the test of reasonableness, and advances Directive Principles under Article 39(b) and (c). It also found no repugnancy between the Handloom Act and the Cotton Textile Control Order, as they operate in different fields. Consequently, the order and the Act were upheld and the writ petition dismissed.

Issues considered

Whether the Handlooms (Reservation of Articles for Production) Act, 1985 and the 1986 reservation order violate Article 14 of the Constitution.
Whether the reservation order infringes the freedom of trade under Article 19(1)(g).
Whether the Act and the order are repugnant to the Cotton Textile (Control) Order, 1948 issued under the Essential Commodities Act.
Whether the reservation creates an unlawful monopoly in favour of the handloom sector.
Whether the classification made by the Act is reasonable and has a rational nexus with its objective.

Legislation cited

Constitution of Indias. Article 14, s. Article 19(1)(g), s. Article 39(b), s. Article 39(c), s. Article 43, s. Article 46
Essential Commodities Act, 1955s. 6
Handlooms (Reservation of Articles for Production) Act, 1985s. 3, s. 4, s. 5
Industries (Development and Regulation) Act, 1951

Subjects

Handloom reservationArticle 14Article 19(1)(g)Directive PrinciplesProtective discriminationMonopolyCotton Textile Control OrderEssential Commodities ActReasonableness testClassification

Judgment

PARVEJ AK.TAR AND ORS. A
v.
UNION OF INDIA AND ORS.

FEBRUARY 5, 1993

[LALIT MOHAN SHARMA, CT., S. MOHAN AND B
N. VENKATACHALA, JJ.]

Handlooms (Reservation of Articles for Production) Act, 1985:

Sections 3 and 4-0rder reserving certain articles for exclusive produc.: C
tion by handlooms-Constitutiona/ validity of-Whether in conflict with
clause 20 of Cotton Textile (Control) Order, 1948.

Constitution of India, 1950:

Articles 14, 19(1)(g), 39(b) & (c), 43-0rder u/s. 3(1) of the Hand- D
looms (Reservation of Articles for Production) Act, 1985-Reserving of cer-
tain aTticles for exclusive production by handlooms-Whether amounts to
protective discrimination-Whether creates unreasonable restriction 011 power-
loom industry-Wh~ther in the nature of creating monopoly-Direcfive Prin-
ciples of State Policy-<Jiving effect to. E
In the present Writ Petition and the transferred cases, the constitu·
tional validity of Handlooms (Reservation of Articles for production) Act,
1985 and the order dated 4th August, 1986 issued under S.3(1) of the Act,
directing that certain articles/class of articles to be exclusively reserved
for production by handlooms, has been challenged on the ground of F
violation of Articles 14 and 19(1)(g) of the Constitution oflndia.

On behalf-of the petitione.rs, it was contended that total reservation
of certain items of ta1lles in favour of handlooms would have the effect of
creating a monopoly; the total prohibition of manufacture of certain
clothes by the powerloom sector violated Article 19(1) (g) of the Constitu· G
tion; that the periodic review provided under Section 3(5) or the Act bas
not taken place at all; that the restrictions did not serve any public
interest; and that the Act and the Cotton Textile (Control) Order, 1948
could not operate in the same field and so the orders dated 4.8.86 issued
under the Act were ultra vires. H
803
804 SUPREME COURT REPORTS [1993} 1 S.C.R.

A On behalf of the Respondents it was contended that the Act was
entirely different from the Cotton Textiles (Control) Order 1948 issued
under the Essential Commodities
. Act, and as such there was absolutely nd
repugnance. It was also contended that an Expert Committee was con·
.
stituted to go into bandloom, powerloom and textile mUI industries, and
B based on this Committee's report, textile policy stakments were issued
and the Act therefore was a product of overall assessment to protect
handloom industry which was sinking in spite of the various co11cessions.

Dismissing the matters, this Court,

C HELD : 1. It is incorrect to state that the powerloom sector has
come to be affected. Originally, the holders of four powerlooms were
exempt. But these powerloom owners diverted their products to larger
powerloom owners. Once those te'xtiles enter the market there was no
possibility of finding out whether they bad been manufactured by the
owners of four powerlooms. Therefore, it became necessary to impose this
D prohibition. When the Act advances a directive principle contained under
Article 39(b) and (c), it cannot be called unreasonable. (8110-EJ

2. The Cotton Textile Control Order 1948 issued under the Essential
Commodities Act deals with the production while the Handlooms (Reser·
E vation of Articles for Production) Act, 1985 is an Act which dl'.als entirely
with handloom. The order issued under Section 3 of the Act is only for
protection and development of haodloom industry. There is no question
of botlt the Cotton Textile Control Order and the Order under challenge
operating in the same field. In view of the non-obstante clause in S.3(1) of
the Act, the subject of handlooms textiles was taken out of the purview of
F Industries (Development and Regulation) Act, 1951 and a separate Act
has been passed. Merely because clause 20 or the Cotton Textile Control
Order confers an enabling power that does not mean that an order issued
under the Essential Commodities Act will prevail. The objects or the Act
and the Essential Commodities Act under which the Cotton Textile (Con·
G trol) order is issued are different. Therefore, the order D!lder Section 3(1)
or the Act does not run counter to clause 20 of Cotton Textile Control
Order. [816H, 822F, 8240]

Ch. Tika Ramji v. State of Uttar Pradesh, (1956} SCR 393 and
Harishankar Bag/a v. 171e State of Madhya Pradesh, (1955) SCR 380 at 391,
H relied on.
PARvEJ AKTAR v. U.0.1. 805

3. There is no question of monopoly created in favour of bandloom A
industry. Certain kinds of textiles are reserved lo the bandloom industry.
Stlll there are number of items available for powerloom owners which they
can manufacture. The items of textiles generally manufactured in the mill
and powerloom sectors have been left out from reserved items. Only those
items which have traditloually been manufactured ou, bandlooms have B
been reserved for this sector. Recently when the powerloom started
producing the items which were traditionally being manufactured on
bandlooms, that caused a serious inroad into the baudloom Industry. The
result was an unequal competition for the bandloom sector. Handloom
Industry is the biggest cottage Industry in the country and is next only to
agricultural sector in providing rural employment. The protection bas C
been given by the Government to bandloom weavers because the Uvellhood
of bandloom weavers is threatened due to the· production of all types of
items and varieties by the powerloom Industry. It is common knowledge
that the handloom weavers are economically very poor and will have no
alternative employment in the rural areas unless protected through reser· D
vatlon of varieties for them. Therefore, the restrictions on the powerloom
industry are not only reasonable but also fully justified. Moreover, the
protection given to the bandloom industry is In furtherance of the objec-
tives laid down in the directive principles. Even if these restrictions result
in the total exclusion of the powerloom sector, such restrictions are
reasonable. [824G-H, 826E, F, G, 827A] E
Orient Weaving Mills v. Union of India, AIR 1963 SC 98 and Narendra
Kumar v. Union of India, (1960] 2 SCR 375, relied on.

Rustom Cavasjee Cooper v. Union of India, (1970] 3 SCR 530, distln·
guisbed. F
State of Rajasthan v. Mohan Lal Vyas, [1971] 3 SCC 705; Municipal
Committee v. Haji Ismai~ AIR 1967 Puojab 32; Maniram Budha Chamar v.
Pamala/ Motiram Chamar, AIR 1962 Madhya Pradesh 275; Mohd. Hanif
Quareshi v. State of Bihar, [1959] SCR 629; State of Madras v. V.G. Row, G
[1952] SCR 597; Virendra v. State of Punjab, [1958] SCR 308; Mohd. F1J1Uk
v: State of Madhya Pratksh, [1970] 1 SCR 156 and Municipal Corporation
of the City of Ahmeda/Jad v. Jan Mohammed Usman/Jha~ (1986] 2 SCR 700,
referred to.

4. Article 14 requires that all persons subject to a legislation must H
806 SUPREME COURT REPORTS (1993] 1 S.C.R.

A be treated alike. Equals must be treated alike, iu like drwmstances and
conditions. Undoubtedly, the handloom sector forms a distinguishable
class separate from powerloom sector or mills sector. The reservation of
certain articles for exclusive production In the handloom sector has the
objective of protecting the handloom sector against unequal and powerful
competition by the mechanised powerloom/mills sector. At the same time,
B it is also necessary to ensure continued production coupled with sustained
employment to the handloom weavers largely concentrated in the rural
areas. This is also in accord with the Government's declared policy of
supporting handloom sector due to its large employment potential. Thus
the classification has a rational nexus with the objective of the Act.
c [829G,H; 830A,B]

S. The handlooms are operated manually, the number of persons
employed Is many times more than powerloom for production of similar
--
quantities of cloth •. The reservation of articles for handlooms does not
D pose any serious threat to powerlooms. It has been proved by the fact that 1
even thougb the handlooms reservation orders have been on the statute
book sin<-e 1950, the powerlool"• have continued to proliferate and there
is no reason to believe that any of these looms are likely to be closed due
to the Reservation Order. The' powerlocm owners are only required to
E diversify their line of produi;tion
'
so that they do not produce cloth
reserved for bandlooms. Since .the Government policy bas always been to
'
create more employment partlcillarly in rural areas, it will be unthinkable
to Imagine the social problems' that will be created if the employment of
millions of handloom weavers is taken away by allowing powerlooms to
produce all items without any reservation. [829B·E]
F
6. Sub-section (1) of Section 3 of the Act states that the order
specifying the articles for exclusive production of handloom could be
issued for the prot.-ction and development of handloom industry from
time to time. Therefore, the reservation is not for all time to come. It could
G be revised periodically. Atleast once II year there could be a meeting of the
·Advisory Committee. [8.lOC,E]

7. The interest of the powerloom sedor has been taken into account
and powerlooms were represented albeit indirectly on the Advisory Com·
mittee. The sub..:ommittees formed by the Advisory Committee had visited
H many places in the country and discussed the matter with officers of the
PARVEJ AICTAR v. U.0.1. [MOHAN J.) 807

State Governments and met persons representing different texltte sectors. A
'r. Apart form the reports received from the sob-committees, the reptt-
sentattons received by the Government from various textile interests were
duly considered by the Advisory Committee before making their recom·
mendations. It Is, therefore, Incorrect to say that proper opportunity was
not provided to the petittoners for making representations. Moreover,
B
representatives from powerloom sector, mills sector and powerloom silk
sector have been specffically included In the Advisory Committee. It can•
not therefore be said that no opportunity was afforded to powerloom
sector and that under Section 3 of the Act regard was had only to the
handloom industry while under clause 20 of the Cotton Textile Control
Order an over all view of all the Industries could be taken. (8318-E] c
-- CIVIL EXTRAORDINARY JURISDICTION : Writ Petition
(Civil) No. 1526 of 1987.

(Under Article 32 of tbe Coostitution of India).
-y-- D
D.P. Gupta, Solicitor General, Altaf Ahmed, Additional Solicitor
General, M,N. Krisbnamaoi, V. Shekbar, Ms. A. Subhashini, K. Swamy, R.
Jagannath Goulay, Ms. Malini Poduval, R. Mohan, R.F. Nariman, P.H.
Parekh, Sahu, MA. F"iroz, Sudarsh Menon, M.K.D. Namboodri, A Sobba
Rao, Ranjit Kumar, R.N. Keshwani, Hireudra Krishna Dutt, Mrs. Nandini
Gore, Mrs. M. Karanjawala, Ms. Sushma Suri, Anil Kumar Sangal and B. E
....__.....l_._
Krishna Prasad for the Appearing Parties.

The Judgment of the Court was delivered by

MOHAN, J. The writ petition and the transferred cases challenge tbe
validity of Handlooms (Reservation of Articles for Production) Act, 1985 F
(22 of 1985) (hereinafter referred to as the Act) and tbe order bearing No.
-~. DCP/BNP/1(2) 1986 dated 4th August, 1986 issued under sub-section (1)
of Section 3 of the Act. This Act is to provide for reservation of certain
articles for exclusive production by handiooms and for matters connected
therewith. On 31st of March, 1986, the Act came into force. Section 4 of G
tbe Act provides for coostituton of an Advisory Committee to make
rccommendatioos to the Centr Government to determine the nature of
any article or class of articles that may be reserved for exclusive jiroduction
.?---
by handlooms. On 2nd June, 1986, in exercise of the powers conferred
. under Section 4 of the Act, the Central Government constituted an· Ad- H
808 SUPREME COURT REPORTS (1993) 1 S.C.R,

A visory Committee. The said Advisory Committee submitted its recomllien-
dations. After considering those recommendations the impugned order
dated 4th of August, 1986 was issued directing certain articles/class of
articles to be exclusively reserved for production by handlooms. It is this
order which is attacked on the following grounds in all these cases.
B The Act and the impugned order are violative of Articles 14 and
19(1)(g) of the Constitution.

Accordingly to Mr. M.N. Krisbnamani, learned counsel for the·
petitioners total reservation of certain items of textiles in favour of hand-
C loom would have the effect of creating a monopoly. This Court in State of
Rajasthan v. Mohan Lal Vyas, (1911) 3 SCC 705 has categorically laid down
that no monopoly can be created in favour of an individual. Similar views
have been expressed by the High Courts as seen from Municipal Committee
--
v. Haji Ismail, AIR 1%7 Punjab 32 and Maniram Budha Chamar v. Pamala/
D Motiram Chamar, AIR 1%2 Madhya Pradesh 275.
Equally, when there is a total prohibition of manufacture of these
clothes by the powerloom sector, that again, violates Article 19(1)(g) of the
Constitution. In support of his submission, the learned counsel relies on
Rustom Cavasjee Cooper v. Union of India, {1970) 3 SCR 530 and also
E Narendra Kumtir v. Union of India, (1%0] 2 SCR 375.

The next argument of the learned counsel is that though under Rule
3(5) the Advisory Committee is to meet once a year, that has not taken
place at all. The idea of such a provision is that there must be a periodic
review which review has not taken place at all.
F
The restrictions in this case if, are to be justified, it should be in public
interest. Here, no public interest is subserved. On the contrary, when the
powerloom goods are available at a lower rate to the detriment of powerloom
mantifacturers, the restrictions have come to be imposed. This submission is
G sought to be fortified by relying on Mohd. Hanif Quareshi v. State of Bihm;
(1959) SCR 629 and State ofMadras v. V.G. Row, (1952] SCR 597 at 607.

Mr. R.F. Nariman, learned counsel appearing for Textile Mills from
Gujarat in Transferred Cases Nos. 111-117of1988 would argue as under:

H The Cotton Textile (Control) Order 1948 dated 2nd August, 1948
PARVEJ AKTAR v. U.0.1. [MOHAN J.] 809

and the impugned Act cannot operate in the same field. Section 6 of the A
Essential Commodities Act, 1955 contains a non-obstante clause. Clause 20
of the Cotton Textile (Control) Order, 1948 confers power on the Com-
_missioner to reserve just as the Notification issued under the Handlooms
Act. Therefore, these orders will prevail as against the impugned. order
because Section 3 of the Act says 'notwithstanding Industrial Development B
Regulation Act'. The Cotton Textile Commissioner while issuing orders
under clause 20 is enable to augment production of handloom industry.
Therefore, this order cannot operate against the same.

Under Section 3 of the Act, the authority only looks at the handloom
industry while under clause 20 the Cotton Textile Commissioner must have C

-- regard to the over all textile industry. Hence, the Notification under Section
3 is ultra vires of clause 20.

The subjective satisfaction of this Advisory Committee constituted
under Section 4 alone is taken into consideration without regard to the
petitioner's representation. This is bad in law in view of V.G. Row's case D
(supra). The same view was reiterated in Virendra v. State of Punjab, [1958)
SCR 308.

By the impugned order there is a serious dislocation of powerloom
industry and substantive rights guaranteed under Article 19(l)(g) of the E
Constitution have been violated by Sections 3, 4, 5, and 18 of the Act. Such
restrictions amounting to prohibition have been struck down by this Court
in Mohd. Faruk v. State of Madhya Pradesh, [1970) 1 SCR 156 and
Municipal Corporation of the City of Ahmedabad v. Jan Mohammed Us-
manbhai, [1986) 2 SCR 700.
F
If the restrictions are unreasonable, certainly the Court will refuse to
uphold the same.

Mr. Altaf Ahmad, learned Additional Solicitor General appearing
for the respondent, Union of India, meeting these arguments, states as G
follows. ·

The Cotton Textile (Control) Order, 1948 is traceable to List III
Entry 33 of 7th Schedule of the Constitution. While the impugned Act is
covered by List II Entries 24 and 27 this is supplementary to the Industrial
Development and Regulation Act, 1951 which is traceable to List I EntrY H
810 SUPREME COURT REPORTS [1993) 1 S.C.R.

A 52 of the 7th Schedule. Under the Industrial Development and Regulation
Act Section 2 talks of declaration. Section 3(h) states as to what is meant
by Schedule. Secyion 3(i) states 'Schedule' means a Schedule to this Act.
Item 23 of 1st Schedule deals with textiles including those dyed, printed or
otherwise processed. Handloom industry is taken out of the purview of
B Industrial Development and Regulation Act· and a separate enactment,
namely, Handlooms (Reservation of ArtiCles for production) Act, 1985 (22
of 1985), the impugned Act, has been made. Cotton Textile (Control)
Order, 1948 deals with finished products. That is why it is traceable to
Entry 33 of List III of 7th Schedule which deals with production. Therefore,
the impugned Act is entirely different from the Cotton Textile (Control)
C Order, 1948 which is an order issued under the Essential Commodities Act.
There is absolutely no repugnance. - _,
In a similar situation dealing with Sugarcane Control Order this
Court explained the position vis-a-vis Industrial (Development and Regula-
tion) Act, 1951 in Ch. Tika Ramji v. State of Uttar Pradesh, [1956) SCR 393.
D The ratio of that judgment will apply here.
The Handloom Act only gives effect to the directive principles under
Article 39(b) and (c) of the Constitution. In such a case, this Court has
always upheld such restrictions. As to the reasonableness, of these restric-
E tions, the learned counsel would strongly rely on the counter affidavit and
particularly, the report of the Iiligh-powered Study Team under the Chair- ~- ·
manship of Mr. B. Shivaraman, which has been quoted therein. If public
interest warrants, restrictions could include prohibitions as well. The case
in point is Narendra Kumar v. Union of India, [1960) 2 SCR 375.

F Mr. Dipankar P. Gupta, learned Solicitor General supplementing the
argument submits that the Government studied the over all problem of
textile industry for a number of years. In 1%4, the powerloom inquiry was
constituted. In 1974, a high power Study Team constituted under the
Chairmanship of Mr. B. Sivaraman, the then Member, Planning Commis-
sion made the following observation in respect of effect of powerlooms and
G the employement in the handlooms sector in their report: ·

'Every new ·powerloom itself put out of action six
handlooms in the country. A handloom actually is a family
industry and not an individual's field alone. When Nation-
H al Policy is to support the expansion of the rural industry
PARVEJ AKTAR v. U.0.1. [MOHAN J.] 811

- A
of handloom in order to give more employment in the
rural sector, we shall be working at ,cross purpose in
encoura~ at the same time powerlooms to displace a
large number ofhandlooms.'

Then, a Study Group was constituted in 1981., An Expert Committee
was constituted to go into handloom, powerloom and textile mill industries. B
Based on this, from time to time, iextile policy statements were issued. In
the year 1981 and 1985, it is found that next only to agricultural sector,
handloom sector provides major rural employment. Therefore, the im-
pugned Act is a product of over all assessment. to protect a handloom
industry which was sinking in spite of the various concessions. C
It is incorrect to state that the powerloom sector has come to be
affected. Originally, the holders of four powerlooms were exempt. But
these powerloom owners diverted their products to larger powerloom

-
itn owners. Once those textiles enter the market there was not possibility of
finding out whether they· had been manUfactured by the owners of four
powerlooms.

Therefore, it became necessary to impose this prohibition. When the
D

Act advances a directive principle contained under Article 39(b) and (c),
it cannot be called unreasonable. E

We shall first examine the background leading to the passing of the
impugned enactment.

On 8.1.63, the Government of India appointed a committee, called F
'The Powerloom Enquiry Committee' under the Chairmanship of Shri
Ashok Mehta. This. Committee submitted its report to the Government of
India on 5.6.1964. Amongst others, the Committee recommended that the
production of coloured sarees should be reserved exclusively for handloom
sector. In a reference to reservation, the committee has said:-
G
"Even with the phased programmes of introduction of
powerlooms in the handloom sector, the handloom sector
would continue to play a prominent role for some decades.
It will be necessary therefore, to ensure that this Sector is
given assistance by a further Reservation of field of H
812 SUPREME COURT REPORTS (1993] 1 S,C.R.

A production.'

The said Study Team under the Chairmanship of Mr. B. Sivaraman
inter alia made the following recommendation:

'It will be noticed that three items are reserved ex-
B clusively for the handlooms and powerlooms units having
up to 4 powerlooms. Any breach of these orders is punish-
able under the Essential Commodities Act. In actual prac-
tice, however, the orders are honoured more in breach
than in compliance and there is very little of prosecution
under the Essential Commodities Act. The most glaring
c example of such breach is the production of coloured
cotton sarees by the powerlooms of Maharashtra. Litiga-
tion of various nature is entered into by the powerloom
sector to delay the proces of law. As a result, even the
little punitive action that is attempted becomes infruc-
D tuous. There is also the inherent difficulty of dealing with
the elght items which are also open to powerloom units
with four looms and less. Once the goods leave a power-
looms it becomes vecy· difficult to establish whether these
were produced iJr'a 'unit with more than four powerlooms
E or in a smaller unit. As a result, the protection suppt)sed
to have been given to the. handloom sector by reserving
certain items of production for the sector has been sub-
stantially only on paper. and the powerloom sector has
been producing the reserved items whenever it has found
it profitable to do so. The team recommends that the eight
F items .which are also open powerloom units with four
looms and less "shall be reserved exclusively for the hand-
loom sector.'

The Government of India appointed a Study Group on 'Reservation of
G Handlooms' on Uth August,_ 1980 under ihe Chairm~hip of Textile
Commissioner who has given the following recommendations in respect of
certain articles for exclusive production by handlooms:

'It may be true that owing to the dispersed nature of the
industry, the much needed orientation of production to
H market needs is very mucl;i waniing in the handloom sector.
PARVEJ AKTAR v. U.O.l. (MOHAN J.] 813

Yet more important is the inherent technological disad- A
vantage of the handloom sector and the unequal competi-
tion that it has to face from the mill and powerloom sector
on this account."

It is· a matter of common knowledge that the bulk of the bandlooms
in the country produce 'break and butter item' such as grey dboties, sarees, B
towels and plain household fabrics. It is these looms which have suffered
on account of the growing competition from the powerlooms. It is in this
context that the reservation of certain items of bandlooms acquires impor-
tance.

In order to obviate the possibility of further litigations, the Study
c
Group feels that it would be advisable to have a separate legislation for the
bandloom sector.

The Expert Committee observed in April 1985 thus:
D
"The vast growth of powerlooms has been due to certain
advantages which they have enjoyed vis-a-vis the composite
mills. These are low wages, low fiscal levies on yarn, ab-
sence of levy on grey fabrics which are the only products
of the powerlooms, wbl)1•sale evasion of protective labour
legislation, low overheads, low requirements of working E
capital and flexibility in changing the product-mix to suit
market demands, etc. As against this, it must be recognised
that there are also certain advantages with the composite
mills. For instance, the yatn costs to the powerlooms are
about 8% higher than for the composite mills. The com- F
posite mills also have the advantage of much higher level
of technological capabilities and marketing strength with

---
lf. .
reputed brand names established in the market and better
quality control. On balance, however, the advantage was
distinctly with the powerlooms so far as the production of
G
cotton fabrics is concerned. That this advantage bas put
the composite mills in some difficulty cannot be gainsaid.
In any policy calculated to restore health to the textile
industry, it would be necessary to approximately e<iualise
the advantages and disadvantages of these two sectors and
the Committee has attempted to do this through its H
814 SUPREME COURT REPORTS [1993) 1.S.C.R.

A recommendations."

It is also relevant to note that the 7th Five Year Plan strcsSes the
. ' .
necessity for reservation of articles of the handloom seaor. The relevant
extract of which is given below:

B "For the purpdse of policies, the powerlooms in the
organised mill sector and the unorganised powerloom
sector shall be treated at par and allowed to compete on
the basis of their inherent strength and capabilities. Effec-
tive measure, however, would be ·evolved to prevent·
c encroachment of the powerloom sector on items reserved
for handlooms. During the Vllth Plan emphasis would be
laid on cooperativisation and development of handlooms
through Central State level corporations, modernisation
of looms and provision of technological inputs, ensure
adequate availability of yarn and other raw materials,
D
increase the production of mixed and blended fabrics on
handloom, design support to imporve the competitiveness
of the product so as to eliminate the co.st of handicap of
handloom vis-a-vis powerlooms, improve marketing and
infrastructure support and strengthen the· data base.
E Reservation would continue under 'Handlooms (Reserva-
tion of Articles for .Production) Act,
. .
1985". The provision
of this Act would be enforced and the machinery for this
purpose suitably strengthened. New Spindleage would be
installed in cooperative sector to the extent possible. To
F improve the welfare of the/handloom weavers, a con-
tributory thrift fund scheme and worsbed-cum-housing
scheme would be taken up in the Seventh Plan".

Due to the recommendations of the various Committees under the
textile policy statements announced by the Government from time to time,
G the reservation of certain articles for production of handloom bad con-
tinued from 1.6.1950 under the Cotton Textiles (.Control) Order, 1948
issued under Section 3 of the Essential Commodities Act, 1955. However,
experience showed that these orders were challenged in course of law, from
time to time. The thrust of the argument on behalf of the powerloom was
H that they had given higher production and the powerloom cloth was
PARVEJ AKTAR v. U.0.1. [MOHAN J.) 815

cheaper than handloom fabric. Therefore, it was contended that the A
Notification issued under the Essential Commodities Act which, in effect,
seeks to prohibit production was not in consonance with the Essential
Commodities Act. It was further urged that the Notification provides for
cxcmption from compliance of. reservation order if sufficient reason was
adduced by the producer. It was claimed by the powerloom owners that B
they were not afforded such an opportunity to adduce evidence. To over-
come such difficulties, Government of India promulgated the Handlooms
(Reservation of Articles of Production) Act, 1985.

It is necessary to set out the· statement of objects and reasons of this
• Act which runs as follows: C

"STATEMENT OF OBJECTS AND REASONS

The handloom industry is characterised by sizeable \
unemployment and under-employment which are due to D
factors like lack of organisation of weavers, inadequate
availability of inputs, inluding working capital and absence
of a regular and reliable marketing system, which can
observe the entire production. Of all these the lack of
adequate marketing systell' is one single factor which
·comes in the way of proper development of handlooms. E
Although a number of de¥Clopmental measures have been
undertaken towards impl'O'ICll\ent of the industry yet due
to marketing difficulties production in the Handloiim sec-
tor continues to suffer. The inhereat technological con-
straints suffered by the handloom sector put a F
. disadvantage when the sector is forced to compete v.ith
mill and poweloom sectors in the open market. It is in this
context that reservation of certain items for exclusive
production by handloom ai;quires importance. The policy
of reservation' of certain items for exclusive production by
handloom has been adopted since 1950. Fust under the G
Cotton Textiles (Control) Order 1948 and later under the
provisions of the Essential Commodities Act, 1955. This
-,-'- policy has helped the handloom sector to a considerable
extent. However, during the last few years, these reserva-
tion orders issued under the Essential, Commodities Act H
J

816 SUPREME COURT REPORTS . (1993) 1 S.C.R.

A had been challenged in various courts of law. Though their
validity hiid been uphold it is considered desirable to have
' a separate legislation so
-
as to obviate "the possibility of
further litigation which may seriously affect the implemen-
tation of the reservation orders. A study group appointed
by the Goverment to go into this question has also sug-
B·.··
gested that it would be desirable to have a separate
legislation. It has been decided to accept this recommen-
dation, this question has also· suggested that it ·would be
desirable _to have a separate legislation. It has been
"ii~clded to accept this recommendation.
c
· The Bill apart from enabling the Central Government
to reserve by notified order certain articles or class of
articles for exclusive production by handlooms after taking
into consideration the recommendations of an Advisory
-Committee constituted under _the provisions of the Bill,
D provid:s for prohibition of manufacture of such articles
of cla5s of articles by powerloom or the other sectorism
"penalties for the contravention of the provisions of the
order and other matters necessary for implementing the
provisions of the Bill also provides for giving an exemption
E to certain articles covered ·.by. the order if the Central
Government ronsiders it;neeessary so to do for the-pur-
i)oses of the Handloom industry.

V.P. Singh -~

F New Delhi
. The 22nd August, 1984." _

With this background, we will examine the provisions of the Act in
juxtaposition to the Industrial D~elopment and Regulation Act and Cot-
ton Textile Control Order. r"
G
The Cotton Textile a;ntrol Order is an ,;rder issu~d under the
Essential Commodities Act. The object of the Essential Commodities Act
is to provide, in _the intere'st of general public, for -the. control of the
production, supply and distribution, and trad~ and. comm;r~ jn certain,
H commodities.
PARVEJ AKTAR v. U.0.1. [MOHAN J.) 817

Sub-section (1) of section 3 states as follows: A
'Notwithstanding anything contained in the Industries
(Development and Regulation) Act, 1951, the Central
Government may, if it is satisfied, after considering the
recommendations made to it by the Advisory Committee,
that it is necessary so to do for the protection and tkvelop- B
ment of the handloom industry, by order published in the
Official Gazette, direct, from time to time, that any article
or class of articles shall, on and from such date as may be
specified in the order (hereinafter referred to as the date
of reservation), be reserved for exclusive production by c
- handlooms.' (Emphasis supplied)

This Act is traceable to Entry 33 of List III of the 7th Schedule of
the Constitution. It runs as follows:
·-...,.- 'Trade and commerce in, and the production, supply and D
distribution of, -

(a) the products of any industry where the control of
such industry by the union is declared by Parliament by
law to the expedient in the public interest, and imported
goods of the same kind as such products; E
___..t..
(b) foodstuffs, including edible oilseeds and oils;

(c) cattle fodder, including oilcakes and other con-
centrates;
F
____._ (d) raw cotton, whether ginned or unginned, and cot-
ton seed; and

(e) raw jute.'

Industrial Development and Regulation Act, 1951 is an Act which G
brll1gs under centr~ COl)trol the development and regulation of number· of
__..,_ industries, ,the actiftid of which affect the country as a whole and the
developmc;nt 9f which must be governed by economic factors of all India
import. The planning of future· development on sound and balanced lines
is S'. •ht to be secured by licensing of all new undertakings by the Central H
818 SUPREME COURT REPORTS (1993) 1 S.C.R.

A Government. The Act is traceable to List I Entiy 52 which reads as under:

"lndustries, the oontrol of which by the Union is
declared by Parliament by law to be expedient in the
public interest.'

B Section 2 of the said Act reads:

'Declaration as to expediency of control by the Union.-

It is hereby declared that is expedient in ue public
interest that the Union should take under its control the
C industries specified in the First Schedule."

Section 3 is the definition section. In clause (h) it defines 'Schedule'
meaning a Schedule to this Act, while 'schedule industry' is defined under
clause (i) meaning any of the industries specified in the Fuest Schedule.

D Item 23 of First Schedule is defined as under.

'23. TEXTILES (INCLUDING THOSE DYED,
PRINTED OR OTHERWISE PROCESSED}:

1. made wholly or in part of cotton, including cotton
E yarn, hosiery and rope;

2. made wholly or in part of jute, including jute twine
and rope;

3. made wholly or in part of woo~ including wool tops,
F woollen yarn, hosiery, carpets· and druggets;

4. made wholly or in part of silk, including silk yarn
and hosiery;

5. made wholly or in part of syiithetic, artificial (man-
G made) fibres, including yarn and hosiery of such fibres."

The impugned Act is traceable to Items 24 and V of List D of tbs
7th Schedule of the Constitution which run as under:

'24. Industries subject to the provisions of (Entries 7 and
H 52} of List I."
PARVEJ AKTAR v. U.O.I. (MOHAN J.] 819

"'1:1. Production, supply and distribution of goods subject A
· to the provisions of Entry 33 of List ill.'

Therefore, handloom industry has · been taken out of Industrial
Dewlopment and Regulation Act and a separate enactment has been
)llllde.
B
In the light of the foregoing provisions, we shall examine the question
~y whether Cotton Textile Control Order and the impugned Act can operate
in the same field Section 6 of the Essential Commodities Act states:

'Effect of orders inconsistent with other enactments: c
Any order made under Section 3 shall have effect
notwithstanding anything inconsistent therewith contained
in any enactment other than this Act or any instrument
having effect by virtue of any enactment other than this
Act.' D

In view of the non-obstante clause it is argued that the Cotton Textile
Control Order will prevail over the impugned Act.

We do not think this argument is correct because the Cotton Textile E
Control Order deals with finished products which is one of the Items
mentioned in Entry 33 of List III of the 7th Schedule of the Constitution

- and the object of an order issued under Section 3 of the Essential Com-
. modities Act has already been seen,

Clause 20 of the Cotton Textile Control Order enables the Commis- F
sione~ to issue directions just as the present order.

When section sub-section (1) of Section 3 of the impugned Act says
'l'lotwithstanding anything contained in the Industries (Development and·
Regulation) Act, 1951" it means it has an overriding effect. that was the
reason why subject of handlo~m.textile was taken out of the purview of the G
Fust Schedule of Industries (De\.i:lQl!D'ent and Regulation) Act, 195l-and
-_r'- _ a separate Act had come to be passed. Merely because clause 20 of the
Cotton Textile Control Order corifers an enabling power that does not
mean that ·an order issued under the Essential Commodities Act will
prevail. H
820 SUPREME COURT REPORTS (1993] 1 S.C.R.

A In this connection, reliance is placed by .Mr. Nariman, learned coun-
sel, on Harishankar Bag/a v. The State of Madhya Pradesh, (1955] SCR 380 ~
at 391 which runs as follows:

"Sectio~ 6 of the Act cited above declares that an order
made under section 3 shall have effect notwithstanding
B anything inconsistent therewith contained in any enact-
ment other than this Act or any instrument having effect
by virtue of any enactment other than this Act. In other
words it declares that if there is any repiignancy in an
order made under section 3 with the provisions of any
c other enactment, then notwithstanding that inconsistency
the provisions of the Order will prevail in preference to
the provisions of other laws which are thus inconsistent
with the provisions of the Order."
--
In dealing with the validity of Sugarcane Control Order, .1955 this --r'
D Court observed in Ch. Tika Ramji's case (supra) as follows:

"The relevant Entries in the respective Lists of the
Seventh Schedule to the Constitution are as follows:

List I, Entry 52: Industries, the control of which by the
E Union is declared by Parliament by law to the· expedient
in the public interest.

List II, Entry 24: Industries subject to the provisions
of entry 52 of List I.
F Entry 27: Production, supply and distribution of goods
subject to the provisions of entry 33 of List III.

List III, Entry 33: As it stood prior to its amendment:-

Trade and commerce in and production, supply and
G
distribution of, the products of industries where the con-
trol of such industries by the Union is declared by Parlia-
ment by law to be expedient in the public interest.

Entry 33 as amended by the Constitution Third
H Amendment Act, 1954: Trade and commerce in, and the
PARVEJ AKTAR v. U.0.1. (MOHAN J.] 821

production, supply and distribution of, - A
(a) the products of any industry where the control of
such industry by the Union is declared by Parliament by
law to be expedient in the public interest, and imported
goods of the same kind as such products;
B
(b) foodstuffs, including edible oilseeds and oils;

(c) cattle fodder, including oilcakes and other con-
centrates;
c
- (d) raw cotton, whether ginned or unginned, and cot-
ton- seed; and

(e) raw jute.
~,.....
Production, supply and distribution of goods was no D
doubt within the exclusive sphere of the State Legislature
but it was subject to the provisions of Entry 33 of List III
which gave concurrent powers of legislation to the Union
as well as the States in the matter of trade and commerce
in, and the production, supply and distribution ef, the
,__.(_ products of industries where the control of such industries E
by the Union was declared by Parliament by law to the
expedient in the public interest. The controlled industries
were relegated to Entry 52 of List I which was the ex-
\
elusive province of Parliament leaving the other industries
within Entry 24 of List II which the exclusive province of F
the State Legislature. The products of industries which
-~_,,;,,.. ~ were comprised in Entry 24 of List II were dealt with by
the State Legislatures which had under· Entry 27 of that
List power to legislate in regard _to the production, supply
and distribution of goods, goods according to the defini-
ti on contained in article 366 ( 12) including all raw G
materials, commodities and articles. When, however it
_.,..._ came to the products of the controlled industries com-
prised in Entry 52 of List I, trade and commerce in, and
production, supply and distribution of, these goods be-
came the subject-matter of Entry 33 of List III and both H
822 SUPREME COURT REPORTS [1993) 1 S.C.R

A Parliament and the State Legislatures bad jurisdiction to
legislate in regard thereto. The amendment of Entry 33 of
List Ill by the Constitution Third Amendment Act, 1954,
only enlarged the scope of that Entry witl10ut in any
manner whatever detracting from the legislative com-
petence of Parliament and the State Legislatures to legis-
late in regard to the same.'

At page 420 it was held:

'The process of manufacture or production would be
c comprised in Entry 24 of List II except where the industry
was a controlled industry when it would fall within Entry
52 of List I and the. products of th~ industry would also
-
be comprised in Entry 27 of List II except where they were.
the products of the controlled industries when they would
fall within Entry 33 of List Ill. This being the position, it
D cannot be said that the legislation which was enacted by
the Centre in regard to sugar and sugarcane could fall
within Entry 52 of List I. Before sugar industry became a
controlled industry, both sugar and sugarcane fell within
Entry 27 of List II but, after a deciaration was made by
E Parliament in 1951 by Act LXV of 1951; Sugar industry
became a controlled industry and the product of that
industry viz., sugar was comprised in Entry 33 of List Ill
taking it out of Entry 27 of List II.'

Therefore, where the Cotton Textile Control Order deals with the
F productions while the impugned Act is an Act which deals entirely with
handloom. The order issued under Section 3 of the Act is only for protec-
tion and development of handloom industry. There is not question of both
the Cotton Textile Control Order and the impugned Order operating in
the same field. ·
G Hence, this argument is rejected.

The next argument is that clause 20 of the Cotton Textile Control .J.--

Order enables the Textile Commissioner to have. an over all view while
under Section 3 of the impugned Act t:egard is to be had only to the
H handloom industry.
823

We may now eJl!ract clau5c 20 of the Cotton Textiles (<;ontrol) A
·~··
Order, 1948 which runs as follows:

'20. (1) The Textile Commi«iouer may, from time to
time, issue directions in writing to any mmiufacturer or
class of manufacturers, or manfacturers generally regard·
ing. B

(a) the classes or specifications of cloth or yam which
each manufacturer or class of manufacturers, or manufac-
turers generally shall or shall not manufacture, or
c
.. (b) the maximum or minimum quantities thereof which
such manufacturer, or class of manufacturers generally
shall manufacture during such period as may be specified
in the order:

Provided that in issuing the direction under this sub- D
. clause the Textile Commissioner shall have regard to:

(i) the demand for cloth or yarn; and

(ii) the needs of the general public;
E
(iii) the special requirements of the industry for such
clQth or yarn;

(iv) the capacity of the manufacturer or class of
manufacturer or manufactiirers generally, to manufacture
different descriptions or specifications of cloths or yarn; F
and

(v) the necessity to make available to the general public
cloth of mass consumption.

(2) While issuing any direction under sub-clause (1) G
the Textile Commissioner may also provide that such
direction shall be with reference to the quantity of cloth
or yarn packed by the manufacturer, or class of manufac-
turers; or manufacturers generally during the period
referred to in that sub-clause. H
824 SUPREME COURT REPORTS [1993] 1 S.C.R.

A (3) Every manufacturer, or class of manufacturers
generally, to whom a direction has been ...ued shall com-
ply with the direction.

(4) Where, on an application made by any manufac-
turer or class of manufacturers or otherwise, the Textile
B Commissioner is ·~atisfied that any direction issued by him
under this clause undue hardship or difficulty to any such
manufacturer or class of manufacturers he may, by order
and for reasons to be recorded in writing, direct that the
directions shall not apply, or shall apply subject to such
c modifications as may be specified in the order, to such
manufacturer or class of manufacturers. 11

As already seen, the objects of these two orders are different. There-
-
fore, the order under Section 3(1) of the impugned Act (quoted above)
~oes not run counter to clause 20 of Cotton Textile Control Order.
D
Accordingly, this argument is rejected.

Now we will examine the question whether the Act and the order are
violative of Article 19(l)(g) of the Constitution?

E According to Mr. Krishnamani, learned counsel, if there is a total
reservation so as to create a monopoly that would be bad in law. He relies
on decision in State of Rajasthan v. Mohan Lal Vyas, [1971] 3 SCC 705 at
707. It was held thus:

"A monopoly right cannot be conferred on a citizen
F under the Constitution nor can it be justified under the
Constitution."

This argument~ in our opinion, proceeds on a misconception. There
is no question of 'llonopoly created in favour of hanct!oom industry. Certain
G kinds of textiles are reserved to the handloom industry. Still there are
number of items available for powerloum owners which they can manufac-
ture. The items of textiles generally manufactured in the mill and power-
loom sectors have been left out from reserved items. Only those items
which have traditionally been manufactured on handlooms have been A.-
reserved for this sector. As a matter of fact, the reservation orders in favour
H of handloom have been on the statute book since 1950. But this has not
PARVEJ AKTAR v. U.O.L [MOHAN J.] 825

deterred the growth of powerloom sector in the last three decades. Recent- A
ly when the powerloom started producing the items which were tradition-
ally being manufactured on handlooms, that caused a serious inroad into
the handloom industry. The result was an unequal competition for the
handloom sector. If, as rightly pointed out in the counter affidavit of iae
Union of India, handloom industry is the biggest cottage industry in the B
country and is next only to agricultural sector in providing rural employ-
ment, certainly, the accusation that the impugned order had created a
monopoly in favour of handloom industry is totally baseless. In this con-
~~ nection, the estimates of 1977-78 6th Lok Sabha in its report on powerloom
industry made the following observations and it is worthwhile to extract
them: C

- "It has, however, to be ensured that this growth of
powerloom industry should not be at the cost of handloom
industry otherwise it will lead to greater rural unemploy-
ment and problem of large scale migration of rural
D
population to the industrial areas in search of employ-
ment. The Committee, therefore, feels that the growth of
the powerloom industry should be regulated in such a way
that it does not harm the interests of the handloom in-
dustry. It would be ensured that powerloom industry does
not become a "benami·' of the mill sector but is really E
developed by the conversion of handlooms into power-
lo.om by the handloom weavers themselves. The Commit-
tee, therefore, recommend that stringent measures may be
taken to ensure that powerloom sector observe the reser-
vations made by the handloom sector and stringent action
F
should be taken for any violation of these orders. Simul-
taneously, the powerloom sector should be encouraged to
produce those varieties of cloth which are not being
produced by the handloom_ sector. The Committee have
already in Part I of their report, recommended the for-
mulation of an integreted textile policy assigning role to G
the various sectors. The Committee hope that while defin-
ing the role of the powerloom sector, the above factors
will be kept in view by the Government."

.. ,, .ih<Tbus, it will be clear that the reservation orders are for the continued H
826 SUPREME COURT REPORTS (1993) 1 S.C.R.

A employment of the handloom industry and are in the larger public interest.
Even factually, the allegation of monopoly is incorrect. The stand in
the counter affidavit is as follows:

"It is submitted that the items which are generally
B manufactured in the powerloom sector have not been
reserved for handloom sector at the cost of powerlooms
or mill sector. The total production of textile sector at the
end of Sixth Plan (1984-85) was 11,956 million mts. of
which the share of handlooms was 3514. At the end of
c Seventh Plan (1989-90) the total production in textile is
estimated al 14500 ml. mts. of which the share of hand-
looms will be only 4600. These estimated targets indicate
that there is sufficient scope for all the sectors including
-
the unorganised powerloom sector to grow during the
Seventh Five Year Plan. The differences between the
D handloom and powerlooms have been defmed in the Act
itself. The basic difference being that the handlooms are
manually operated while the powerlooms are run with the
motive force of power.'

The protection has been given by the Government to handloom
weavers because the livelihood of handloom weavers is threatened due to
the production of all types of items and varieties by the powerloom
industry. It is common knowledge that the handloom weavers are economi-
cally very poor and will have no alternative employment in the rural areas
unless protected through reservation of varieties for them. So poor is the
F weaver that he could well say in the words of Karl Marx:

'Half a century on my back and still a pauper". ~---

Therefore, the contention that there is a total prohibition, is un-
tenable and the case relied on by Mr. Krishnamani, learned. counsel,
G namely, Rustom Cavasjee Cooper v. Union of India, (1970) 3 SCR 530 has
no relevance.

No doubt, there are restrictious under the impugned order but the ,~-
question would be whether they are reasonable. The Act, as seen above,
H has come to be enacted for the protection of the interests of ,the handloom
PARVEJ AKTAR v. U.0.1. [MOHAN J.)

weavers, mostly concentrated in rural areas. They are pitted against power- A
ful sector, namely, the mills and the powerloom. As such, they face unequal
competition. The restrictions are not only r.easonable but also fully justified.
Further, the objectives sought to be achic:Ved by way of these reservatiollS
should derive support from filtjcle 43 of the Constitution which reads aS
follows: ·
B
"43: Living wage, etc., for workers. - The State shall
·endeavoui to secure, by suitable legislation or economic
organisation or in any other way; to all workers, agricul-
tural, industrial or otherwise, work, a living wage, condi-
tions of1work ensuring a decent standard of life and full c
enjoyment of leisure and social and cultural opportunities

- and, in particular, the State shall endeavour to promote
cottage industries on an individual or co-operative basis
in rural..aieas.'

The said 'article ·ordains that the State shall endeavour to promote D
cottage industries on "Jdividual or cooperative basis in rural areas. It is a
welcome measure. We /tan usefully refer to Orient Weaving Mills v. Union
of /ndja, AIR 1963 SC '9s at 103: .
"The Directive Principles of the Constitution, con- E
. tained in PartIV, lay down the policies and objectives to
be. achieved, for promoting the welfare of the people. In
the context of the present controversy, the following words
of Art. 43 are particularly apposite:

·".........and in particular, the State_shall endeavour· to F
promote cottage industires
tive basis in rural areas.'
°" an individual or co-opera-

It has rightly been pointed out in affidavit filed on
behalf of the respondents 1-4 that the exemption granted
·.by the impugned notifications is meant primarily for the G
protection of petty producers of cotton fabrics not owning
more than four power looms, from unreasonable competi-
tion by big p~oducers,. like the petitioner Company. The
State;fi;is, the~fore, made a valid classification between
goods produ~din bi!( establishments and similar goods H
828 SUPREME COURT REPORTS (1993] 1 S.C.R.

A produced by small powerloom weavers in the mofussil,
who are usually ignc.rant, illiterate and poor and suffer
from handicaps to which big establishments like the
petitioner Company are not subject.'

Equally, Article 46 inter alia requires the State to promote with
B special care the educational and economical interests of the weaker sec-
tions of the people. Therefore, these restrictions can easily be sustained as
reasonable since it is in furtherallce of the objectives laid down in the
directive principles.

C In view of what we have stated above, even if, these restrictions result
in the total exclusion of the powerloom sector that could be upheld as
reasonable. In Narendra Kumar's case (supra) at page 376 it was held thus:
---
"that the word "restriction" in Arts. 19(5) and 19(6) of
the Constitution includes cases of "prohibition' also; that
D where a restriction reaches the stage of total restraint of
rights special care has to be taken by the Court to see that
the test of reasonableness is satisfied by considering the
questiori in the background of the facts and circumstances
under which the order was made, taking into account the
nature of the evil that was .;ought to be remedied by such
E law, the ratio of the harm caused to individual citizens by
the proposed remedy, the beneficial effect reasonably
expected to result .to the general public, and whether the
restraint cau8ed by the law was more than was necessary
in theinterests of the general public."
F
On the point of violation of Article 14, a reasonable classification is
permissible under the equality clause. Of course, the classification made
should be based on intelligible differentia. Further, there should be a nexus
in such differentia with the objects sought to be achieved by the particular
G law. Article 14 requires that all persons subject to a legislation must be
treated alike. In other words, equals must be treated alike, in like cir-
cumstances and conditions. Undoubtedly, the handloom sector forms a
distinguishable class separated from powerloom sector or mills sector. The
reservation of certain articles for exclusive production in the handloom
sector has the objective of protecting the handloom sector against unequal
H and powerful competition by the mechanised powerloo~mills sector. At
PARVEJ AKTAR v. U.0.l. [MOHAN J.] 829

the same time, it is also necessary to ensure continued production coupled A
with sustained employment to the handloom weavers, largely concentrated
in the rural areas. This is also in accord with the Government's declared
policy of supporting handloom sector due to its large eoployment poten' ·
tial. The classification, hence, has a rational nexus with the objective of the.
Act.
B
The handlooms are operated manually, the number of persons
employed is many times more than powerloom for production of similar.
quantities of cloth, The reservation of articles for handlooms does not pose·
any .serious threat to powerlooms. It has been proved by the fact that even .
though the hand1ooms reservation orders have been on the sratute \iook C
since 1950, the powerlooms have continued to proliferate and there is no·
reason to believe that any of these looms are likely to be closed due to the
Reservation Order. The powerloom owners are only required to diversify
their line of production so that they do not produce cloth reserved for
handlooms. As alre&dy pointed out the reservation for handlooms has
continued since 1950 for the protection of rural hanilloom artisans and D
their continued employment in the industry. Since the Government policy
·has always been to create more employment particularly in rural areas, it
will be unthinkable to imagine the social problems that will be created if
the employment of millions of handloom weavers is taken away by allowing
powerlooms to produce all items without any reservation. Handlooms and E
handicrafts are the only traditional cottage industries which provide maxi-
mum emplayment in the rural oountry-side.

Hence, we reject this point as well.

It has already been noted from the observations of the high-powered F
Study Team.under the Chairmanship of Mr. B Sivaraman as to how.every
new powerloom will put out of action six handlooms in the country. A
handloom actually is a family industry and not an individual's field alone.

This means the families of the poor weavers are ruined by encourag-
ing powerloom. It may be that the cost of production io the powerlooms G
sector is less but if it is the object of the Goveroment to encourage
handloom for continued employment of handloom weavers io .rural areas,
-~,.;..._ certainly, nothing worthwhile can be said against the impugned reservation.
Besides, even under the Notification issued by the Textile Commissioner
on 15.4.77 many of the items stated as being produced by the petitioner H
830 SUPREME COURT REPORTS (1993) 1 S.C.R.

A were reserved for th~ handloom sector. These items are sarees with bor·
ders, lungies,. chaddars, bed sheets,. bed covers, counter panes, low read
pick cloth table clothes, napkins, duster, towels and cotton crepe fabrics.
If violating this order, the petitioner has been manufacturing these items
which are specifically reserved for handlooms, it cannot be· allowed to
continue to indulge in such violation any further. Thus, we reject the
B
argument complaining of violation of Article 14 of the Constitution.

Sub-section (1) of Section 3 of the impugned Act states that the order
specifying the articles for exclusive production of handloom could be issued
for the protection and development of handloom industry from time to
C time. Therefore, the reservation is not for all time to. come. It could be
revised periodically. It is with this object in view, Rule 3(5) of the Hand-
looms (Reservation of Articles for Production) Rule, 1986 states as follows:

'3(5): The Advisory Committee may meet at such
D places and at &uch times as may be determined by the
Chairman:

Provided that the Advisory Committee shall meet at
Ieasi once a year to review the list of reserved articles.'

E Therefore, at least once in a year there could be a meeting of the
Advisory Committee. From the counter affidavit it is· clear that in order to
have a deeper study of the problems relating to reservation of production
by handloom three sub-committees were constituted:

F (i) cotton and art silk fabrics,

('Ii) pure silk fabrics; and

(iii) woollen and tribal fabrics.

G In order to gain first-hand knowledge of the production of these
fabrics the sub-committees made field visits. While touring different
centres the sub-committees invariably involved local government repre·
sentatives.

It is averred in the counter affidavit that the sub-committee on silk
H visited powerloom weaving centres in Bangalore and Varanasi, ~e the
PARVEJ AKTAR v. U.O.l. (MOHAN J.) 831

sub-committee on wool during their visits to a number of places, including A
Panipat, Ludhiana, Kulu, Imphal and Srinagar had occasion to study the
problems of the woollen powerloom industry along with those of the
handloom industry. The Advisory .Committee on cotton met the repre-
sentatives of powerlooms, who placed their views before the sub-committee
during its sittings at Madras and Bangalore. Thus, it will be amply clear B
from what has been stated above that the interest of the powerloom sector
has been taken into account and powerlooms were represented albeit
indireCtly on the Advisory Committee.

Moreover, the sub-committees formed by the earlier Advisory Com·
mittee had visited many a places in the country and discussed the matter C
with officers of the State Governments and met persons representing
different textile sectors. Apart from the reports received from the sub-com-
mittees, the representations received by the Government from various
textile interests were duly considered by the Advisory Committee before
making their recommedations. It is, therefore, incorrect to say that proper
opportunity was not pro~ded to the petitioners for making representations. D
It is important to note that in the Advisory Committee the repre-
sentatives frnm powerloom sector, mills ·sector and powerloom silk sector
have been specifically included. Therefore, it is meaningless to state that
no opportunity was afforded to powtrloom sector and that under Section E
3 of the impugned Act regard is had only to the handloom illdustry while
under clause 20 an over all view of all the industries could be taken.

. In view of the foregoing discussion, we dismiss the writ petition and
the connected cases.

G.N. Petition dismissed.