Holding

The Supreme Court set aside the High Court’s directions that the Standing Advisory Committee must hear industry representatives and that the Government could not progressively dilute protection, holding that such observations were obiter and not supported by the provisions of the Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987.

Summary

The Supreme Court heard appeals by the Union of India challenging High Court judgments that had quashed government notifications reducing compulsory jute packaging and had directed the Standing Advisory Committee to hear workers and growers before making recommendations. The Court examined whether the Committee could make recommendations contrary to the Jute Packaging Materials Act, whether the Central Government could progressively dilute protection for eventual repeal, and whether the High Court could compel a hearing. It held that the issue of the Government’s power to dilute protection was not raised in the pleadings and the High Court’s observations were obiter and not binding. The Court found that the Act does not require the Committee to give a hearing to industry representatives, making the High Court’s directions contrary to the statute and to the earlier Dalmia Cement judgment. Accordingly, the Supreme Court set aside those directions and allowed the appeals in part, while dismissing other points as infructuous. The notifications had already lapsed, so no further relief was granted.

Issues considered

Whether the Standing Advisory Committee can make recommendations contrary to the object and purpose of the Jute Packaging Materials Act, 1987
Whether the Committee’s recommendations for progressive dilution of protection for ultimate repeal of the Act are ultra vires
Whether the Central Government’s orders based on such recommendations are in consonance with the Act
Whether, in the absence of a specific recommendation, the Central Government can determine the extent of protection
Whether the Standing Advisory Committee is required to hear workers and growers before making recommendations
Whether the High Court’s direction to the Committee to give such a hearing is valid under the Act

Legislation cited

Jute Packaging Materials (Compulsory Use in Packing Commodities) Act, 1987s. 3(1), s. 4(1), s. 4(2)

Subjects

Jute Packaging Materials ActStanding Advisory Committeeprogressive dilutionultra viresjudicial reviewindustry representationnotificationsconstitutional validityDalmia Cement case

Judgment

A UNION OF INDIA AND ORS~
v.
INDIAN JUTE MILLS ASSOCIATIONS AND ORS.

MAY 5, 2005

B [ASHOK BHAN AND A.K. MATHUR, JJ.]

Jute Packaging Materials (Compulsory use in Packing Commodities)
Act, 1987:

c · ss. 3 and 4-Progressive dilution ofprotection ofjute packing material-
High Court holding that Central Government could not resort to progressive
,...
-
dilution of protection ofjute packing material for purpose of ultimate repeal
of the Act-Directing Standing Advisory Committee to make fresh
recommendation after hearing workers engaged in jute industry and
D agriculturists producing raw jute-Held, the orders ofHigh Court have worked
out by efflux of time-However, observations made by High Court are set
aside.

In the interests of production of raw jute and jute packaging material
and of persons engaged in the production thereof, Parliament enacted the -'
E Jute Packaging Materials (Compulsory Use in Packing Commodities) Act,
1987. By order dated t.3.2002, the Central Government reduced the extent
of proteCtion in respect of sugar from 100% to 90%. Later the Standing
Advisory Committee constituted u/s 4(i) of the Ad, made the
recommendations for formation of inter-Ministerial Committee consisting
of Ministers of the Ministries concerned for the purpose of formulating a
~
F road map for the progressive dilution of compulsory packaging norms for
food grains and sugar under the Act to facilitate its repeal. Writ petitions
challenging the order of the Central Government were filed in the High
Court. Meanwhile the Central Government on the recommendation of the
Inter-Ministerial Committee, took a decision to dilute the protection in
G respect of sugar by 25% and food grains by 20% for the year July 2002
to June 2003 and by 50% and 40% for the year July 2003 to June 2004.
This led to filing of another writ petition. All the writ petitions were -1
dismissed by single Judge of the High Court. On appeal by the Indian Jute I
Mills Association etc., the Division Bench of the High .Court held that the

H 1222
U.0.1. v. INDIAN JUTE MILLS ASSOCIATIONS 1223
Central Government could not act contrary to the legislative policy and A
resort to progressive dilution of the protection of jute packaging materials
for the purpose of ultimate repeal of the Act. Aggrieved, the Union of India
filed Civil Appeals No. 6880-6883 of 2003.

In yet another writ petition the notification dated 16.4.2004 issued. B
under the Act for the period ending June 30, 2004 and the Notification
dated 1.7.2004 for a period of one month, were challenged on the ground,
inter alia, that the notifications were issued without hearing the workers ·
engaged in jute industry and the agriculturists producing raw jute. The
Single Judge dismissed the writ petitions. However, the Division Bench
quashed the Notifications and directed the Standing Advisory Committee C
to make fresh recommendation after hearing the writ petitioners.
Aggrieved, the Union of India filed Civil Appeal No. 7894 of 2004.

Pending appeals, the impugned orders passed by the High Court
have worked out with lapse of time.
D
Disposing of the appeals, the Court

HELD : Civil Appeal No. 6880-6883 of 2003 etc.:

I. The question regarding power of the Central Government to pass
any order regarding the progressive dilution or protection of the jute E
packaging material for its ultimate repeal was not under challenge. This
point did not arise from the pleadings of the parties. The observations
made are without there being any foundation of facts laid in the pleadings
and the points formulated by the Division Bench for its consideration. The
Standing Advisory Committee is constituted under the Act and not the F
Central Government. The observations made by the High Court being
contrary to the pleadings and obiter in nature are set aside. The same
would not be either binding or taken as a precedent for any future
reference. 11229-C-EJ

Dalmia Cement (Bharat) ltd and Anr. v. Union of India and Ors., G
119961 10 sec 104, referred to.

CIVIL APPEAL NO. 7894 OF 2004

2. The total duration of the two notifications was three and a half
months which has lapsed due to efflux of time. The order of the High Court H
1224 SUPREME COURT REPORTS [2005] 3 S.C.R.

A to that extent has already worked out. There is no provision in the Act
requiring the Standing Ad~isory Committee to afford a hearing to any
person associated with either the production of the raw jute or engaged
in the production uf the jute packaging mat~rial before making its
recommendations to the Central Government. The directions issued by
B the Division Bench run counter to the provisions of the Act as well as the
observations made by this Court in Dalmia Cement (Bharat) Ltd* and,
therefore, are set aside. (1231-A; 1232-D-El

*Dalmia Cement (Bharat) Ltd and Anr. v. Union of India and Ors.,
(1996110 sec 104, relied on.

BHAN, J. This order shall dispose ofC.A. No. 6880-83 of2003 arising
from the Division Bench Judgment of the High Court of Calcutta dated
27.06.2003 in G.A. No. 3567 of 2002, A.P.O.T. No. 664 of 2002, A.P.O.T.
G No. 705 of2002, G.A. No. 3758 of2002, W.P. No. 1059 of2002, G.A. ~o.
3568 of2002, A.P.O.T. No. 665 of2002, W.P. No. 1059 of2002, A.P.O.T.
No. 707 of2002, G.A. No. 3761 of2002, W.P. No. 1207 of2002 and Civil
Appeal No. 7894 of 2004 arising from another Division Bench Judgment of
-.
the same High Court dated 6.7.2004 in G.A. No. 2229 of2004, A.P.0.T. No.
314 of 2004 and W.P. No. 870 of 2004.
H
U.0.1. v. INDIAN JUTE MILLS ASSOCIATIONS [BHAN, J.] 1225
Before adverting to the facts, it may be stated that the orders passed by A
"' the High Court have worked out with the lapse of time. We shall take up the
two sets of appeals separately.

CIVIL APPEAL NO. 6880-6883 OF 2003

The Jute Packaging Materials (Compulsory Use in Packing B
Commodities) Act, 1987 (hereinafter referred to as "the Act") was enacted by
the Parliament to provide for compulsory use of jute packaging material in
supplyi~g and distribution of certain commodities in the interests of production
of raw jute and jute packing material and of persons engaged in the production
thereof and for matters connected therewith.
c
Section 3 (I) of the said Act empowers the Central Government,
notwithstanding anything contained in any other law for the time being in
"" force and being satisfied, after considering the recommendations made to it
by the Standing Advisory Committee, that it is necessary so to do in the
interests of production of raw jute packaging material and of persons engaged
D
in the prod•1ction thereof, direct from time to time, by order published in the
official Gazette that such commodity or class of commodities or such
percentage thereof, shall be packed for the purposes of its supply or distribution
in such jute packaging material as may be specified in the order.

Under Section 4(1) of the Act it is incumbent upon the Central E
Government to constitute a Standing Advisory Committee with a view to
determining the commodity or class of commodities or percentages thereof
in respect of which jute packing material shall be used in their packaging.
Under sub-Section (2) of Section 4 the Standing Advisory Committee is
required to indicate its recommendation to the Central Government after
" considering the matters as indicated in sub-clause (a) to (g) including the F
protection of interest of persons engaged in the jute industry and in the
production of raw jute.

It is not in dispute that such Standing Advisory Committee was formed
and thereafter from time to time on recommendations of the said Standing
G
Advisory Committee the Central Government passed orders for packaging
specified commodities to the extent indicated in such notification .
........
Constitutional validity of this Act was upheld by this Court in the case
" of Dalmia Cement (Bharat) ltd and Anr. v. Union of India and Ors., reported
in [1996] 10 SCC 104. It was held that the enactment of the Act was necessary H
1226 SUPREME COURT REPORTS [2005] 3 S.C.R.

A for agro-based economy of India and the agricultural crops cultivated in ..
India. That the \Act was enacted to provide economic security and justice to
producers of raw jute and the workers engaged in the manufacturing of jute
packaging material and the Central Government had taken a balanced view
in directing the use of jute packaging material for compulsory package of
certain specified commodities or percentage thereof which was subject to
B Parliamentary control. One of the challenges put to the constitutional validity
·of the Act was that the constitution of the Standing Advisory Committee
under Section 4 ( 1), consisting of only the Secretaries representing various
-•
departments without associating the jute industry was arbitrary, unjust and
therefore bad in law. This contention was rejected. However, while doing so,
c this Court observed that it would be desirable that the industry or industries
representing through recognised office-bearers may be nominated or given
notice before the Advisory Committee meets to place their views and material ~

in support thereof to evaluate the need for regulation and extent of regulation
thereof. Para 51 of this judgment reads :-

D "Yet another contention that requires consideration is that in the
Committee constituted under Section 4(1) only Secretaries representing
various departments alone are represented and no one represents the
petitioners in the Committee and that, therefore, the Act is void. This
contention also cannot be accepted as a sound principle of law.
However, as seen from the record, the Committee consists of the
E Secretaries representing various departments. It would be desirable
that the industry or industries through recognised office-bearers of
the associations may be nominated or given notice before the Advisory
Committee meets to pl~ce their views and material in support thereof
to evaluate the need for regulation and extent of regulation thereof.
F The persons representing the particular industry would assist the (
Committee to properly advise the Government before issuing
directions/orders under Section 3. The provisions of the Act contain
guidelines as is self-evident. Socio-economic justice is the public
policy. It is subject to parliamentary control. They bear reasonable
nexus to the object sought to be achieved by the Act."
G
By an order dated 01.03.2002 the Central Government issued an order
reducing the extent of protection in respect of sugar from l 00% to 90%.
J'
Subsequently, the Standing Advisory Committee in its meeting held on
12.04.2002 after hearing the Indian Jute Mills Association and others made "'
the recommendations for formation of inter-Ministerial Committee consisting
H
U.O.I. v. INDIAN JUTE MILLS ASSOCIATIONS [BHAN, J.) 1227

of Ministers of Textiles, Agriculture and Consumer Affairs, Food and Public A
Distribution for the purpose of formulating a road map for the progressive
dilution of compulsory packaging norms for food grains and sugar under the
Act to facilitate its repeal.

Writ petitions were filed against the aforesaid order. The Court passed
an interim order on 25.04.2002 directing the Union of India not to proceed B
in respect of such recommendations made by the Standing Advisory
Committee. By an order dated 15.05.2002, although the interim order was
extended, the Union .of India was given liberty to hold meeting and take
decision, but not to give effect to the same without the leave of the Court.

Pursuant to the liberty given, the Central Government ultimately took C
the decision on the recommendation of the inter-Ministerial Committee to
dilute the recommendations in respect of sugar by 25% and food grains by
20% for the year July, 2002 to June, 2003 and by 50% and 40% for the year
July, 2003 to June, 2004. Second writ petition was filed challenging the
aforesaid order of the Central Government. Both the sets of writ petitions D
were taken up together. The writ petitions came up for hearing before a
Single Judge who dismissed the same primarily on the ground that the decision
taken by the Central Government was a policy decision and therefore beyond
the judicial review. Aggrieved against the aforesaid order of the Single Judge
the Indian Jute Mills Association and another filed the appeals which have
been disposed of by the impugned order along with other connected cases. E
The Division Bench formulated the following four questions arising in
the appeals for its determination :-

"I. Whether the Standing Advisory Committee which is a creature
~ of the said Act and is statutorily obliged to act within the frame F
work of the said Act can make recommendations contrary to the
object and purpose of the Act;
2. Whether the impugned recommendations made by the Standing
Advisory Committee for creation of a road map for gradual
dilution of the protection under the Act for ultimate repeal of G
the Act and for formation of an inter-Ministerial committee for
'..
the aforesaid purpose are dehors the provision of the Act and
_...
~ without jurisdiction;
...
-'· Whether the impugned recommendations made by the Advisory
Committee and the ultimate order passed by the Central H
1228 SUPREME COURT REPORTS [2005] 3 S.C.R.

A Government as per the recommendation of the inter-Ministerial
Committee is in consonance with object and purpose· of the Act
or ultra vires the same;
4. Whether in absence of specific recommendation by the Standing
Advisory Committee the Central Government has power to make
B the impugned order as to the extent of protection for future year
for which no recommendation was made by the Standing
Advisory Committee."

Aggrieved against the judgment of the Division Bene~ the Union of
India has filed these appeals .. As the duration of the notification was for a
C period of one year which has already lapsed the order of the High Court has
worked itself out. The Division Bench in the course of its judgment observed:- -'.
I ;

·'
"The legislative policy as contained in the Act is clear and
unambiguous namely, protection of jute industry and the interest of
million of farmers and workers connected therewith and the jute
D industry itself. The Central Government therefore cannot act .contrary
to such legislative policy and resort to progressive dilution of the
protection of jute packaging materials for the purpose of ultimate
repeal of the Act."

Shri A. Sharan, learned Additional Solicitor General of India does not
E press the appeals on any point other than the setting aside of the above
quoted observations of the High Court. It is contended by him that the
observations made by the Division Bench quoted above are obiter in nature
as the same did not arise either from the pleadings of the parties or the
contentions raised before the Division Bench. The challenge in the writ petition
F was regarding the extent of power or jurisdiction of the Advisory Committee
to make its recommendation to the Central Government. There was no
ct.allenge to the power of the Central Government regarding the progressive
dilution of the protection of the jute packaging material for the purpose of
ultimate repeal of the Act.

G Shri R.F. Nariman, learned senior counsel appearing for the respondent \
submitted that since the Central Government had acted in its capacity as a
creature under the Act, the High Court was justified in holding that the L
Central Government could not act con1rary to the legislative policy spelt out
by the legislature in the Jute Packaging Materials (Compulsory Use in Packing
H commodities) Act, 1987. Shri Narinian, with reference to the objects and
U.0.1. v. INDIAN JUTE MILLS ASSOCIATIONS [BHAN, J.] 1229

-- reasons for the enactment of the aforesaid Act contended that the purpo~e of A
the Act was to provide for the compulsory use of jute packaging material in
the supply and distribution of certain commodities in the interests of production
of raw jute and jute packing material and of persons engaged in the production
thereof, and for matters connected therewith and not for the ultimate repeal
of the Act.
B
After considering the respective submissions put forth by the learned
senior counsels on behalf of the parties we are of the opinion that the contention
raised by the learned Additional Solicitor General deserves to be accepted.
On perusal of the writ petition, the prayers made therein, the contentions
raised by the respective counsels for the parties before the Division Bench
and the points formulated by the Division Beh<;h for its consideration we are
c
of the opinion that the question regarding power of the Central Government
to pass any order regarding the progressive dilution or protection of the jute
packaging material for its ultimate repeal was not under challenge. This point
did not arise from the pleadings of the parties. The observations made are
without there being any foundation of facts laid in the pleadings and the D
points formulated by the Division Bench for its consideration. We are not
even sure as to whether the learned counsels appearing for the parties before
the High Court had addressed arguments on this point. We do not agree with
the submissions made by Shri Nariman that the Central Government was
acting in its capacity as a creature under the Act. The Standing Advisory
E
Committee is constituted under the Act and not the Central Government. The
observations made by the High Court being contrary to the pleadings and
obiter in nature are set aside. The same would not be either binding or taken
as a precedent for any future reference.

The appeals filed by the Union of India are dismissed except to the F
.~ extent indicated above .

CIVIL APPEAL NO. 7894 OF 2004

In this appeal, the challenge before the High Court was to the notification
dated 16.4.2004 issued by the Central Government under The Jute Packaging G
Materials (Compulsory Use in Packing Commodities) Act, 1987 for the period
ending 30.06.2004. In spite of the interim stay granted by the High Court
another notification was issued on 01.07.2004 for a period of one month.
-~ Both these notifications have been quashed by the judgment under appeal.

One of the grounds for challenge to the notifications was that the Central H
1230 SUPREME COURT REPORTS [2005) 3 S.C.R.

A Government had issued the notifications on the recommendations made by
the Standing Advisory Committee, constituted under Section 4(1) of the Act
without associating or hearing the workers engaged in the jute industry and
the agricultural producers of the jute for whose benefit the Act had been
enacted.

B The writ petition was dismissed by the Single Judge on 19.05.2004
holding that tpere was no provision in the Act either to associate the workers
engaged in the industry and the agricultural producers of the jute or for
giving of hearing to them by the Standing Adviso.ry Committee before making
its recommendations to the Central Government.
c Aggrieved against the order passed by the Single Judge, appeals were
filed before the Division Bench. One of the grounds taken in the appeal was
that the representatives of the growers and the workers engaged in the
production of raw jute and jute packaging malerial ought to have been heard
by the Standing Advisory Committee before making its recommendation to
D the Central Government for the purpose of Section 3( I) of the Act. That in
their absence no meaningful recommendation which would serve the purpose
of the. Act could be made. The High Court relying upon the observations
made by this Court in para 51 [reproduced in the-earlier part of this order]
in Da/mia Cement (Bharat) Ltd (supra)] held that though there was no specific
provision for associating or giving a hearing to the representatives of the
E growers and the workers engaged in the production of raw jute and jute
packaging material it would be proper for the Standing Advisory Committee
to give them hearing to make a meaningful recommendation to the Central
Government for the purpose of Section 3( I) of the Act, subject however to
such modification as may be advised by the Parliament. The appeal was
F accepted, order of Single Judge was set aside, notifications dated 16.4.2004
and 01.07.2004 were quashed and a direction was issued to the Central
Government to maintain the status quo with regard to the use of jute packaging
material as was existing prior to the issuance of the notification dated 16.4.2004
till a fresh recommendation was made by the Standing Advisory Committee.
Following directions were given to the Standing Advisory Committee :-
G
"The Standing Advisory Committee shall fix a fresh date of hearing
and give notice to the appellants herein and such other persons as it
may consider necessary and after considering the submissions made
on their behalf, proceed to make fresh recommendations to the Central
Government keeping in mind the provisions of Section 4(2) and in
H
U.0.1. v. INDIAN JUTE MILLS ASSOCIATIONS [BHAN. J.] 1231

particular clause (d) thereof and the Central Government shall. A
thereafter, proceed to act in accordance with Section 3 of the Act."

The total duration of the two notifications was three and a half months
which has lapsed due to efflux of time. The order of the High Court to that
extent has already worked out. Mr. A. Sharan, learned Additional Solicitor
General of India contends that although the duration of the notification has B
already lapsed and the order of the High Court has already worked out but
the directions issued by the High Court that the Standing Advisory Committee
is required to give notice or afford a hearing to the representatives of the
growers and the workers engaged in the production of raw jute and jute
packaging material, being of far reaching consequences which would be C
operative for all times to come, being contrary to the provisions of the Act
and the observations made by this Court in Dalmia Cement (Bharat) Ltd
(supra) deserve to be set aside.

As against this the learned senior counsel for the respondents contended
that to carry out the objects and purposes for which the Act was enacted, it D
was incumbent upon the Standing Advisory Committee to associate and hear
the representatives of the growers and the workers engaged in the production
of raw jute and jute packaging material for whose benefit the Act was enacted,
before it could make any meaningful recommendation to the Central
Government.
E
Subject matter of the appeal in this Court today is not regarding the
validity of the notifications dated 16.4.2004 and 01.07 .2004 the duration of
which has already lapsed due to efflux of time. The question of law which
is being raised is as to whether the High Court contrary to the provisions of
the Act and the observations made by this Court in Dalmia Cement (Bharat) F
ltd (supra) could direct the Standing Advisory Committee to afford a hearing
to the representatives of the growers and the workers engaged in the production
of raw jute and jute packaging material. The challenge to the constitution of
Standing Advisory Committee consisting of only the Secretaries representing
various departments without associating the jute industry or its representative
being void was rejected by this Court in Dalmia Cement (Bharat) ltd (supra). G
The Court did not accept the plea of the appellant that the representatives of
the jute industries should either be nominated to the Standing Advisory
Committee or that they should be heard by the Stan<ling Advisory Committee
before making its recommendations to the Central Government for the purpose
of Section 3(1) of the Act. While rejecting the contention this Court further H
1232 SUPREME COURT REPORTS [2005] 3 S.C.R.

A did observe that, "It would be· desit"able, that_the industry or inClustries through
recognised office-bearers of the associations may be nominated or given
notice before the Advisory Committee meets to place their views and material
in support thereof to evaluate the need for regulation and extent of regulation
thereof. The persons representing the particular industry would assist the
B Committee to properly advise the Government before issuing directions/orders
under Section 3."

It would be seen that this Court was careful not to give· a positive
direction to the Central Government either to nominate a representative of
the industry on the Advisory Board or of affording an opportunity by the
C Standing Advisory Committee to hear them before making its recommendation
to the Central Government. The only desire expressed by the Court was that

-
the Standing Advisory Committee should give a notice to the jute industry to
enable it to place its point of view before the Advisory Committee for its
evaluation before making the recommendations to the Cenfral Government.
It is not disputed before us that the observations made by the Court are being
D carried out meticulously. There is no provision in the Act requiring the
Standing Advisory Committee to afford a hearing to any person associated
with either the production of the raw jute or engaged in the production of the
jute packaging material before making its recommendations to the Central
Government. The directions issued by the Division Bench run counter to the
E provisions of the Act as well as the observations made by this Court in
Dalmia Cement (Bharat) Ltd. (supra). The same deserves to be set aside and
are hereby set aside.

For the reasons stated above, Civil Appeal Nos. 6880-6883 of2003 and
Civil Appeal No. 7894 of 2004 are allowed to the extent indicated above.
F Regarding the other points as the duration of the notification is already over
and the order of the High Court has worked itself out, the appeals are dismissed
as infructuous. There shall be no order as to costs.

R.P. Appeals disposed of.