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Judgment
Harbans Singh, J.—This order will dispose of five writ petitions (Civil Writs Nos. 2240, 2242, 2287, 2368 and 2399 of 1964).
There is a quality of grass growing in Himachal and Punjab States known as bhabbar grass which is now widely used for the manufacture of paper. Shree Gopal Paper Mills, Yamunanagar, which is the only paper mill in the State of Punjab, uses this grass to a great extent besides other raw materials. For the purposes of acquiring this raw material the mill owns vast tracts of land and have taken other tracts of forests from Government or from private persons on lease. In addition, the mill also purchases bhabbar grass from private persons. Prior to 1963 there was no prohibition or restriction imposed upon the producers of grass or lessees of the grass land to export this grass outside the State to other paper mills in other States of India. However, on 23rd of August, 1963, the State Government issued a notification (copy of which is Annexure ''A'' to this petition) whereby it was provided as under:
Whereas the State Government is of opinion that it is necessary so to do for securing the equitable distribution and availability of Sabai or Bhabbar grass at fair prices. Now, therefore, in exercise of the powers conferred by sub-rules (2), (3) and (9) of rule 125 of the Defense of India Rules, 1962 the Governor of the Punjab is pleased to prohibit the movement of * * * Bhabbar grass from any place within the State of Punjab to any place outside the Punjab except upon a permit issued by District Industries Officer * * *.
This order was challenged by some of the petitioners who have filed these petitions in this Court vide inter alia Civil Writs Nos. 1839 and 2008 of 1963. During the pendency of those writ petitions the State Government found a via melia and agreed to issue export permits to the firms who had filed the writ petitions and to others on an equitable basis. The writ petitions were consequently withdrawn and the petitioners in the first three writ petition; mentioned above along with some others were issued permits for certain quantities. It has been stated on behalf of the State that in order to provide guidance to the District Industries Officers, the Divisional Forest Officers and the other officers empowered to grant permits, departmental instructions were issued according to which permits could be granted to a person only on satisfying the officer concerned about two matters:
(1) That the party concerned had contracts for supply of grass outside the State, and
(2) That they were already in trade of exporting grass.
These instructions were apparently modified by the Director of Industries vide his letter dated the 1st of October, 1964, addressed by the Director of Industries to the Assistant District Industries Officer, Hoshiarpur. The most important alteration was to the effect that only those persons were to be eligible to receive a permit "who were in the trade any time during the three years before the imposition of ban on bhabbar grass, i. e. the 23rd August, 1963", and for the purpose of fixing entitlement to the actual quantity for export the same should be fixed in proportion to "their best year''s export in any one of the three basic years (immediately preceding the ban)". The petitioners in the first three petitions had not been in trade for three years before the 23rd August, 1933, and consequently they became disentitled to get any quota of export. They consequently being aggrieved by these instructions filed the first three writs mentioned above. Inter alia they have pleaded that they had given bids at the auction of the grass land of the private persons and the Forest Department and had invested considerable amount of money in the month of June, 1964 and the change of the instructions at a time when the grass was ready for.export worked to their hardship.
This was on the last date of hearing (4th of January, 1965). When this case came up for hearing to-day, the 13th January, 1965, the learned Advocate-General intimated that, in view of the hardship that was involved because it was not made clear when the permits were granted last year that there was likely to be any change in the next year according to the modified instructions, those persons who got the permits last year will be duly considered. In view of this, these three petitions (Civil Writs Nos. 2240, 2242 and 2287 of 1964) were not pressed and are consequently dismissed with no order as to costs.
This now leaves us with the two writ petitions, Civil Writs Nos. 2368 and 2369 of 1964, which have been filed by the dealers, who used to purchase grass and after cutting it and stacking it, the same used to be sold by them to other firms who in turn exported the same. This year, according to their averment, these firms want to export this to earn greater profit. On their behalf a number of points had been taken, but it was conceded that in view of the emergency most of those points were not available to the petitioners. Consequently, the learned counsel for the petitioners urged only three points-
(1) That the impugned notification was not covered by rule 125 of the Defense of India Rules, 1932;
(2) That the instructions which arc issued by the Director of Industries are without jurisdiction and arc not in consonance with the notification, and
(3) That the restrictions placed are mala fide.
As regards the first point the same was based on misreading or wrong copying of the notification. In Annexure ''A'' filed with these petitions the opening words of the notification are-
Whereas the State Government is of opinion that it is necessary so to do for securing the equitable distribution and availability of Sabai or Bhabbar grass.
The words "at fair prices" do not find any place in the copy and it was argued on that basis that the notification was not in accordance with rule 125. On referring to the original notification in the Official Gazette, it would appear that the words '' at fair prices" are also there and consequently this contention was dropped.
Regarding the other two points a reference was made to paragraph 6 in the petitions the relevant portion of which is as follows:
* * * the management of Shree Gopal Paper Mills, who had strong links in the previous Ministry and also good influence in the present Government, because of the fact that they contribute liberally to the election and other funds of the Congress Party. In order to ruin the petitioners and others engaged in this business, the management started threatening the petitioners and others that they should leave this business of getting bhabbar grass in open market and when exporting it out of Punjab or they will get a notification issued by the Government to achieve their object. This was not acceptable to the petitioners and others who went on doing this business.
In reply to this, the State Government has stated as follows:
It is true that the notification was issued mainly to protect the interests of Messrs Shree Gopal Paper Mills in obtaining adequate supplies of raw material for their mills.
It was contended consequently that the notification cannot be justified as a measure to ensure "equitable distribution or availability of any article at fair prices", but it was meant to benefit the Gopal Paper Mills at the expense of the growers and traders in bhabbar grass.
It is obvious that the mills in other States apparently offer much higher prices for this raw material than is being offered by Shree Gopal Paper Mills. Normally speaking one sees no justification for artificially controlling the prices of raw material within India by creating such restrictions. However, under the Defense of India Rules it is for the State Government to take a decision with regard to these matters and I am afraid Courts of law cannot enter into this controversy whether a particular control or restriction is or is not for the benefit of the community. The obvious idea is that the distribution of the bhabbar grass in and outside the State should be so controlled that sufficient quantity is made available to the only Mill in the State at a fair price. The object of the notification falls within the four corners of rule 125 and consequently it cannot be said that the same is ultra vires the State Government though the restriction may not appear justified or desirable.
The second point urged by the learned counsel was that in any case the instructions that have been issued could not be issued by the Director of Industries. He, however, conceded that if the instructions issued by the Director of Industries had been incorporated in the notification itself, then the State Government was within its powers, but inasmuch as the instructions are not issued by the Government, nor do they purport to have been issued for and on behalf of the Government but by the Director of Industries, consequently the same are null and void. It was further urged that these instructions run counter to or are not in consonance with the main notification. The main notification prohibits the export of bhabbar grass except on a permit to be issued by the District Industries Officer. If the matter were left at that, the District Industries Officers of the different districts may proceed on different lines and may even act in an arbitrary manner. There is, therefore, nothing wrong in the Director of Industries issuing instructions so that all the District Industries Officers may act in the same manner. Furthermore, I do not see how the instructions run counter to the notification. It only gives details how the export permits are to be issued. As was held by the Supreme Court in Daya v. Joint Chief Controller of Imports and Exports and another A. I. R. 1062 S. C 796 restricting the trade to a limited number of persons of a particular category cannot be said to be outside the purview of the control. The relevant part of the head-note runs as follows:
If the quantum of the export in a commodity could be restricted, the control that would effectuate this must necessarily extend to the persons engaged in or desirous of engaging in the export of that commodity and this would EL fortiori be so, if the restriction takes "the form of a prohibition of exports in a commodity altogether. If, therefore, the control or restriction could legally extend to the persons who are engaged in the trade, it would appear to follow as a logical step that the restriction might take the form of classifying the persons who might participate in the trade and the conditions subject to which any particular class might be permitted to do so.
Once by the notification it was decided to control that distribution of bhabbar grass by placing restrictions on its export pt on issue of a permit, it was open to the authorities concerned further provide that export permits should be issued only to these (sic)ns who are already in trade of export and to keep out any pa(sic)tially new entrants into the trade. It is admitted by the petitioner in these two petitions that they had never before exported bhabbar grass on their own account. If the Government has considered it proper to keep out all new entrants, the Government cannot be said to have acted outside their jurisdiction or mala fide.
For the reasons given above, therefore, I feel that there is no substanre in these two petitions. They are, therefore, dismissed but there will be order as to costs.