Rajaram Atmaram Lande and others vs State of Maharashtra

M.N. Chandurkar, J.—This petition raises questions relating to the constitutional validity of sections 18 (1) and (2), 22 including the proviso, 25, 27 and 36 of the Maharashtra Raw Cotton (Procurement, Processing and Marketing) Act, 1971 (hereinafter referred to as the Procurement Act). The petitioner No. 1 claims to be an agriculturist possessing about 150 acres of land from which the principal agricultural produce which he raises is cotton. The petitioner No. 2 is a partnership firm whose business is of ginning and pressing cotton and cotton bales respectively, and according to it, the production capacity of its factory is approximately 15,700 bales of ginned cotton per year for pressing and approximately 10,000 bozas for ginning of raw cotton. The petitioner No. 3 claims to be an agricultural labourer who works on agricultural lands and receives wages in the shape of raw cotton which he used to sell in the open market and get cash amount in return. On 13-12-1971 the Procurement Act was published by the State Government after it had received the assent of the President of India. It is not disputed that the Procurement Act received the assent of the President on 4-12-1971, and though Chapters I and II thereof came into force immediately on the date of its publication, the remaining provisions came into force on 1-8-1972. u/s 1 (4) of this Act, the Act is contemplated to remain in force up to and inclusive of the 30th June 1960 and it then expires.

In order to appreciate the nature of the challenge made to the provision mentioned earlier, it is necessary to set out certain important provisions of the Procurement Act. The long title of the Act states that it is an Act to provide for the carrying on for a certain time of all trade in raw cotton by the State in Maharashtra. The preamble of the Act is in three parts. In the first part of the preamble reference is made to the fact that ginned and pressed cotton has been commanding a high level of prices at the terminal markets in recent years, but it had been brought to the notice of the Government of Maharashtra that because of too many intermediaries and also defects in the marketing system, growers of cotton in the State do not get a fair share of the price for their crop. The second part of the preamble refers to the necessity of supplying unadulterated cotton to consumers at a reasonable price, and to guarantee the purity of cotton and honest trade practices at processing centres. The last part of the preamble recites that ''''the Government of Maharashtra has decided that all trade in raw cotton should be carried on by the State for a certain time; and for that purpose to take power for acquiring kapas from the growers and other persons having stocks of cotton, getting it ginned and pressed into bales, selling it in that form to consumers and others on behalf of the tenderers and paying compensation to the tenderers; and provide for matters relating to the purposes aforesaid." "Cotton" is defined in section 2 (g) of the Procurement Act as meaning raw cotton, whether ginned or unginned. Section 2 (m) defines "kapas" as meaning unginned cotton. If necessary, we shall later refer to some other definitions. Section 3 provides far the establishment of a Board by the name of the Maharashtra State Cotton Control Advisory Board, and section 4 refers to the constitution of the Board which consists of 20 persons as designated in that section. We are not concerned with the different provisions dealing with the functioning of the Board except section 16 which sets out the duties of the Board. It appears from the duties enumerated in section 16 that the Board is advisory body and it is the duty of the Board to advise the State Government on matters specifically stated in section 16 as also on such matters connected with the administration of the Act in respect of which the Government may consider it necessary to obtain the advice of the Board, and the Board is under a statutory obligation to advice the Government on all other matters to facilitate the proper carrying out of the purposes of the Act. The substantive piece of legislation which is said to create monopoly in the trade of raw cotton is contained in sections 17, 18 and 19 which need to be fully reproduced. They are as follows :

Save as otherwise provided by or under this Act and except with the previous permission of the State Government, no person, other than the State Government or an officer or agent of such Government authorised by it in this behalf, shall purchase, sell or store for sale kapas, or carry on business in kapas.

(1) No owner or person in charge of a cotton ginning factory shall, except with the previous permission of the State Government, gin or cause to be ginned in his factory any kapas, other than kapas to be ginned on Government account.

(2) No owner or person in charge of a cotton pressing factory shall, except with the previous permission of the State Government, press or cause to be pressed ginned cotton into bales, other than such cotton to be pressed on Government account.

No person, other than the State Government or the Head of any Department authorised by the State Government in this behalf, shall, except with the previous permission of the State Government or such Head of the Department, transport kapas from any place in the State to any place outside the State. where the State Government or the Head of the Department refuses the previous permission in any case, the reasons therefor shall be recorded in writing.

These provisions create prohibitions on trade in and transport of kapas and on cotton ginning and pressing factories.

Chapter IV of the Act deals with procurement, grading and pooling kapas. u/s 20 every grower of cotton who wishes to dispose of or sell kapas produced by him is under an obligation to sell that kapas to the State Government by tendering it at a collection centre. There is a proviso added to section 20 which enables tho grower in a place where such practice prevails, to pay, the labourers engaged by him wages in kind, i. e. in kapas, and then tender the remaining quantity to the State Government as required by section 20. Section 21 creates a prohibition against the labourers selling kapas to any person other than the State Government and the labourers are required to tender kapas obtained by way of wages either personally or through an agent authorised by the State Government in this behalf, at a collection centre. The collection centres are to be designated by the Marketing Committee which is established under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, and u/s 21A which was added by Act No. 19 of 1972, it is the duty of every Market Committee to designate and maintain one or more convenient places as may be found necessary, for tendering kapas, by the growers and other persons holding stocks thereof. After the kapas is tendered at the collection centre by the growers or the persons holding stocks or on their behalf by the agents for collection authorised by the State Government, it has to be graded and marked with the grade designation marks in accordance with the provisions of the rules made and the kapas then is to be pooled according to the grades. Provision to this effect has been made in sec-22. However, under the proviso to section 22, any kapas which is tendered at the collection centres by or on behalf of labourers who are paid wages in kind is required to be graded as belonging to the lowest grade of that variety.

Chapter V of the Act deals with the mode of fixing and payment of price for kapas tendered at collection centres. The scheme of Chapter V is that the State Government fixes what is called the guaranteed price for different varieties or grades of kapas in consultation with the Central Government and notifies such price in the Official Gazette and in such other manner as it deems fit. The tenderer of kapas at a collection centre does not receive the guaranteed price but he is paid an amount equal to eighty per cent of the guaranteed price for the quantity at kapas tendered by him. This part of the price which is paid to the tenderer is referred to in section 25 as advance price. This price is to be paid to the tenderer through the Market Committee; but section 26 requires the Market Committee to make deductions from the advance price as pointed out in section 27. Section 27 provides that the Market Committee or the authorised Co-operative Society or person, as the case may be, may deduct from the advance price to be paid to a tenderer of kapas any sums due to any Co-operative Society, or any dues which the Market Committee is authorised to deduct by or under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, in respect of any notified produce) to such extent and in such manner as may be laid down in that Act, and pay the balance to the tenderer. The proviso to section 27 provides that the deductions may be made in such installments as may be deemed fit, keeping in view the quantity of kapas the person concerned is likely to tender from time to time in future. Sub-section (1) of section 28 provides that the State Government shall cause the kapas pooled u/s 22 to be ginned and pressed into bales and those bales are then caused to be sold or otherwise disposed of in the prescribed manner subject to the directions, if any, issued by the Textile Commissioner under any law for the time being in force. Sub-section (2) specifies the price at which the bales are to be disposed of. The bales are to be disposed of either at such procurement prices as may be fixed by the Central Government or by the Textile Commissioner on the advice of the Agricultural Price Commission under any law for the time being in force, for the different varieties of cotton grown in the country, and in any other case, at the prevailing market price. u/s 29 the State Government is authorised to fix the final price in consultation with the Advisory Board and having regard to certain factors specified in that section. This final price is to be determined for different varieties or grades of kapas acquired during the preceding cotton season. Under sub-section (1) of section 30 a full settlement of the account of the tenderer is then made after this final price is fixed. If the final price is less than the guaranteed price, the tenderer is paid the difference between the guaranteed price and the advance price. Where the final price is more than the guaranteed price, the tenderer is to be paid not only the difference between the advance price and the guaranteed price but he is also paid three-fourth of the difference between the final price and the guaranteed price. Section 30 also contemplates payment of bonus and the total amount of bonus is "three-fourth of the difference between the price actually realised on the sale of the bales of cotton remaining on hand on the 30th June of the preceding cotton season and the guaranteed price, if the actual price realised is more than the guaranteed price" ; and the remaining one-fourth of this difference is credited towards the Price Fluctuation Fund which is created u/s 33. u/s 32 if in any cotton season, the amount at the credit at the Price Fluctuation Fund is equal to or more than 30 per cent of the average total sales of cotton during the three preceding seasons, the entire amount realised in excess of the guaranteed price is to be distributed and paid as bonus to the persons concerned, in the same manner and subject to the deductions, if any, as laid down in sections 26 and 27.

Chapter VI of the Act deals with the Price Fluctuation Fund. Chapter VII deals with the control of cotton ginning and pressing factories. Section 36 which is one of the provisions subjected to attack is as follows:

The State Government, or any officer authorised by it in this behalf, may issue to any owner or person in charge of a cotton ginning factory or cotton pressing factory such general or special directions as it or he may think necessary or expedient, for maintaining or increasing the supply of ginned or baled cotton and the owner or such person shall be bound to follow and act upon such directions.

Section 39 which occurs in Chapter IX deals with the disposal of cotton seeds. We are not concerned with the provisions of Chapter X which provides for a special procedure for recovery of sale proceeds from purchasers of cotton bales and cotton seeds.

Chapter XI contains some miscellaneous provisions. Sub-section (1) of section 42 enables the State Government, by notification in the Official Gazette, to direct that any power or duty which by the Act is conferred or imposed upon the State Government, except the power to make rules, shall, in such circumstances and under such conditions, if any, as may be specified in the direction, be exercised or discharged also by an officer or authority subordinate to it. Under clause (a) of sub-section (2) the State Government is authorised to appoint agents for the whole State or any specified area for the purposes of purchasing, selling, storing, processing, marketing and carrying on other business in cotton on its behalf and such agents can be appointed for more than one area. Under clause (b) of sub-section (2) it is provided that any agent so appointed, if he is specially authorised by the State Government in this behalf, is entitled to pledge, mortgage or otherwise dispose of all or any of the stocks of cotton for the time being in his possession as such agent for the purpose of raising monies by way of loans or advances required by the agent for carrying on his business in cotton, and any person, in whose favour any such pledge, mortgage or disposal is effected has the same rights as he would have had if the agent were the owner of the stocks of cotton so pledged, mortgaged or disposed of, as the case may be. Under clause (c) of sub-section 2, the terms and conditions of appointment of agents are provided to be such as may be mutually agreed upon between the State Government and the agent concerned. It may be stated that in exercise of this power the State Government has already appointed the Maharashtra State Co-operative Marketing Federation Limited as its chief agent for the whole of the State. Section 43 is a penal section which makes punishable contravention of the provisions of sections 17, 18 (1) or (2), 10, 21 or 47 (1) and this contravention is made punishable with imprisonment for a term which may extend to six months, or with fine or with both. Contravention of section 36 or 37 is made punishable only with fine which may extend to five hundred rupees. Section 46 provides for the rule-making power of the State Government and is in the usual terms so as to provide that the State Government may make rules consistent with the Act generally to carry out the purposes of the Act. The rules, however, are made subject to the condition of previous publication, and under sub-section (4) the rules are also to be laid as soon as may be after they are made before each House of the State Legislature while it is in session for a total period of thirty days, which may be comprised in one session or in two successive sessions, and if, before the expiry of the session in which it is so laid or the session immediately following, both Houses agree in making any modification in the rule or both Houses agree that the rule should not be made, and notify such decision in the Official Gazette, the rule takes effect from the date of publication of such notification only in such modified form or it does not take effect, as the case may be. Section 48 expressly provides that the provisions of the Procurement Act shall be in addition to, and shall not, save as expressly provided hereinbefore, be in derogation of the Essential Commodities Act, 1955, or any other law for the time being in force.

These are the material provisions of the Procurement Act and it is proper at this stage to refer to certain other laws which are contemplated by section 48. The Essential Commodities Act, 1955, has in section 2 provided that raw cotton, whether ginned or unginned, and cotton seed are essential commodities for the purposes of that Act. So far as the trade in cotton is concerned, there is already in force in the State of Maharashtra an Act which is known as the Cotton Transport Act, 1923 (No. Ill of I923) which is a Central Act. Under this Act, "cotton" means every kind of unmanufactured cotton, that it is to say, ginned and unginned cotton, cotton waste and cotton seed. u/s 3 of this Act, the State Government has authority for the purpose of maintaining the quality or reputation of the cotton grown in any area in the State, by Notification in the Official Gazette, to prohibit the import of cotton or of any specified kind of cotton into that area, by rail, road, river or sea, or by any one or more of such routes, save under, and in accordance with the conditions of, a licence. The State Government has issued a notification dated 17-10-1966 in exercise of its powers u/s 3 of this Act, and by this notification the State Government has prohibited-

(1) the import of cotton into the protected areas by rail, road or river or by any one or more of such routes, save under, and in accordance with the conditions of, a licence granted under the said Act; and

(2) the delivery to, and the taking of delivery by, any person, at any of the railway stations situated in the protected areas and specified in Schedule II, of any cotton when such cotton has been consigned from a railway station not situated in the protected areas, unless such person holds a licence granted under the said Act for the import by rail of the cotton, into the protected areas.

It is not disputed that the protected areas have already been notified and these protected areas extend to most of the entire cotton growing region in the State. The State Government has also made rules in exercise of the powers conferred by section 7 of this Act providing for the issuing of licences. These rules are called the Maharashtra Cotton Transport Rules, 1968.

The other relevant law for the purposes of section 48 of the Procurement Act is the Cotton Ginning and Pressing Factories Act, 1925 (XII of 1925), which is also a Central Act. This Act provides for the better regulation of cotton ginning and cotton pressing factories (including the fixation of reasonable rates of charge for the ginning and pressing of cotton in certain areas, and for matters connected therewith). Section 2A (1) of this Act provides that no cotton ginning factory or cotton pressing factory shall be worked without a licence granted to the owner thereof by such authority, in such form, subject to such conditions and on payment of such fee as may be prescribed. The provisions of this Act require the factory owners to maintain certain registers and the State Government has also the power to declare by notification that in any area specified in such notification no cotton which is ginned or pressed in a cotton ginning or cotton pressing factory shall contain any admixture of cotton. Penalties are provided for making cotton wet and dry and power is also given for examination of cotton packages or bales.

The other relevant Act, to some provisions of which a detailed reference will be made later, is the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963. Another piece of legislation which is already in force in the State of Maharashtra is known as the Bombay Cotton Control Act, 1942 (No. XXX of 1942). This is an Act which provides for regulation and prohibition of the cultivation of any variety of cotton, of the mixing of the prohibited variety of cotton with other cotton and of the possession or use of, or trade in, the prohibited variety of cotton in any part of the State of Maharashtra. Section 3A (1) of this Act requires that permission of the State Government must be obtained if any standard cotton is to be mixed with any other standard cotton or any prohibited variety of cotton is to be mixed with any standard cotton in any factory in which cotton is manufactured into yarn or cloth. The only other relevant legislation to which reference will be necessary is the Maharashtra Co-operative Societies Act, 1960 (XXIV of 1961).

Having thus set out the material provisions which deal with cotton and its ginning and pressing activities in the State, we shall now take up the contentions which are raised on behalf of the petitioners, and as already pointed out, the attack made by the petitioners is against the provisions of sections 18 (1) and (2), 22 including the proviso, 25, 27 and 36 of the Procurement Act, The attack, to the details of which we shall refer a little later, is on the ground that these provisions-and especially section 18 (1) and (2)- infringe the provisions of Article 19 (1) (g) of the Constitution of India. Before we take up the attack on the individual sections, it is necessary to refer to and decide the preliminary objection to this attack raised by the learned counsel appearing on behalf of the State. It is contended on behalf of the State that a Proclamation of Emergency issued by the President of India under Article 352 of the Constitution is still in force. This Proclamation, it is not disputed, was issued on 3-12-1971. It is contended, relying on the provisions of Article 358 of the Constitution, that since this legislation, namely, the Procurement Act, has come into force after the date of the Proclamation issued by the President, and in any case, since the assent of the President to the Bill passed by the Legislature of the State of Maharashtra was given on 4-12-1971 i. e. after the date on which the Proclamation was issued, none of the provisions of the Procurement Act is vulnerable to an attack on the ground that a fundamental right of any of the petitioners under Article 19 is violated. According to the learned counsel for the petitioners, Article 358 of the Constitution does not in the instant case bar an attack against the provisions of the Procurement Act as violating the provisions of Article 19 of the Constitution, because, according to him, the date on which either the assent of the President was given or the assent of the President was first published i, e. 13-12-1971, is immaterial. According to the learned counsel, the "law" referred to in Article 358 of the Constitution must be read for the purposes of that Article as including a Bill as passed by the Legislature, and it is not necessary for the purposes of Article 358 that the Bill so passed by the Legislature must either receive the assent of the Governor or the assent of the President. The contention, in short, is that the word "law" must be so construed as to cover even a Bill which has gone through the Houses of the Legislature, and thus the function of the Legislature having been completed in so far as the Bill in question was concerned, the Bill must be deemed to be a ''law'' for the purposes of Article 358 of the Constitution. This submission is made on the basis of a decision of the Madras High Court reported in Subbachariar v. State of Madras (1967) I Mad. L. J. 206. In order to decide this contention, it is necessary to refer to Article 358 of the Constitution which reads as follows:

While a Proclamation of Emergency is in operation, nothing in Article 19 shall restrict the power of the State as defined in Part III to make any law or to take arty executive action which the State would but for the provisions contained in that Part be competent to make or to take, but any law so made shall, to the extent of the incompetency, cease to have effect as soon as the Proclamation ceases to operate, except as respects things done or omitted to be done before the law no ceases to have effect.

It is necessary to find out what meaning is to be attached to the words "restrict the power of the State to make any law" used in Article 358. Do these words contemplate an operative law which affects the fundamental rights of a citizen or is it enough that the Legislature has passed a Bill which has not gone through the entire legislative process contemplated by the Constitution but is likely to become a law after the proclamation under Article 352 of the Constitution is made by the President? The obvious purpose of making the submission which the learned counsel for the petitioners is making is to point out that the Procurement Act, when it was in the form of a Bill, in any case prior to 3-12-1971, must be construed as a law, so that the protection against an attack on the ground that the provisions of Article 19 of the Constitution are violated is not available to it. The object of Article 358 is to enable the State during the Emergency to make a law which would not otherwise have been possible to be made having regard to the provisions of Article 19 of the Constitution. In other words, during the subsistence of a Proclamation of Emergency there is, so to say a suspension of the rights under Article 19 and legislation is permitted to be made so as to affect those rights during the continuance of the Emergency. The latter part of Article 358 clearly indicates that the protection which is given against the attack on the ground of violation of Article 19 is taken away as soon as the Proclamation ceases to operate, and it also provides that whatever might have been done or omitted to be done before the law ceases to have effect, those actions are protected. If the latter part of Article 358 contemplates that the law is to cease to have effect immediately as soon as the Proclamation ceases to operate and it is the same law which is referred to in the earlier part of Article 358, then the law cannot cease to have effect unless the law had already become effective. There was no necessity to grant protection against an attack on the ground of violation of Article 19 unless the law was an operative law or unless it affected any of the fundamental rights of a citizen under Article 19. A law would affect a fundamental right of a citizen as contemplated by Article 358 only if it is a law which is in force or to which the State is giving effect, with the result that some of the rights of a citizen are being infringed. There is a known distinction between a "Bill" and a "law" as contemplated in the Constitution. The legislative procedure which is provided for under Article 196 to 201 of the Constitution clearly brings out this distinction. Under Article 168 of the Constitution, the Legislature does not consist merely of the House of Legislature where there is one or the Houses of Legislature where there are two, but the Legislature consists of the Governor and the two Houses where there are two and in other States, one House. Thus, the Legislature which is contemplated by the Constitution does not consist merely of the Houses of Legislature but the Governor is made a part of the Legislature by the provisions of Article 168. As a matter of fact, the provisions of Article 168 are themselves sufficient to negative the contention of the learned counsel for the petitioners that the entire legislative procedure contemplated by the Constitution must be deemed to have been gone through because the Bill had already been passed by the Legislature. It is not disputed in the instant case that after the Bill was passed by the two Houses of the State Legislature of Maharashtra, the Governor had not given his assent to it but he had reserved it for the consideration of the President and it was, therefore, that the President gave his assent on 4-12-1971. This was a course which obviously the Governor must have adopted in view of the provisions of Article 200 which provides that when a Bill has been passed by the Legislative Assembly of a State or, in the case of a State having a Legislative Council, has been passed by both Houses of the Legislature of the State, it shall be presented to the Governor and the Governor shall declare either that he assents to the Bill or that he withholds assent therefrom or that he reserves the Bill for the consideration of the President. Article 201 provides :

When a Bill is reserved by a Governor for the consideration of the President, the President shall declare either that he assents to the Bill or that he withholds assent therefrom".

Now, if this was a Bill which was reserved for the consideration of the President, we fail to see how it could be said to have become a law when it was pending with the President for his assent. Article 201 itself refers to the Bill being reserved for the assent of the President. It cannot be disputed that it is only after either the Governor gives his assent or in a case where the Bill is reserved for the consideration of the President, the President gives his assent to the Bill, that the Bill becomes a law, in the sense that so far as the constitutional requirement is concerned, the procedure has then been completely gone through. Even this, in our view, is no sufficient so far as the provisions of Article 358 are concerned. A Bill which has received the assent of the President may indicate the completion of the legislative procedure; but so far as a citizen is concerned, in our view, it does not become a law as contemplated by Article 358 because it would be only after promulgation of such a law that a citizen''s right will get affected and it is only then that there will be a cause of action for complaining that a fundamental right of a citizen has been affected. u/s 5 of the Bombay General Clauses Act, 1904, where any Bombay Act or Maharashtra Act is not expressed to come into operation on a particular day, then, in the case of a Maharashtra Act made after the commencement of the Constitution, the Act comes into operation on the day on which the assent thereto of the Governor or the President, as the case may require, is first published in the Official Gazette. So far as Chapters I and II of the Procurement Act are concerned, the date of commencement of that Act must be 13-12-1971, and so far as the remaining provisions are concerned, the date of coming into force of the Act must be 1-8-1972. So far as, therefore, the contention that the provisions, particularly of section 18, of the Procurement Act have invaded the fundamental right of the petitioners is concerned, the material date would be 1-8-1972. The Procurement Act must, therefore, be said to have been made by the State either with effect from 13-12-1971 or with effect from 1-8-1972 depending upon the provisions which are sought to be challenged.

The decision on which reliance is placed by the learned counsel for the petitioners is really not of much assistance to him. In that case (namely Subbachariar''s case cited supra) there are, no doubt, observations which lend support to the proposition that the term "law" used in the Constitution is used in a compendious way and that in a given case it might mean a Bill passed by the Legislature of a State. The Division Bench there was dealing with the validity of the Madras Inam Estates (Abolition and Conversion into Ryotwari) Act, 1963, and of other similar legislative enactments. The contention there was that the word "taw" used in Article 31-A of the Constitution meant a valid law, that is to say, a law which was not void, and it was in that context that it was contended that when Article 31-A referred to "law", it need not be understood in the strict sense but that it meant a Bill passed by the Legislature of a State. The Division Bench there held :

A reading of Articles 31 and 31-A shows that in the context, the word ''law'' in the first proviso to Article 31-A cannot be understood in its strict sense. Article 31-A assumes that the legislation in question is open to attack under Articles 14, 19 or 31. The very language ''no law shall be deemed to be avoid on the ground that it is inconsistent with or takes away or abridges any of the rights conferred by Article 14, Article 19 or Article 31''assumes that the law may be void but for the non-obstante provision. In our view, the word law appears to have been used in a compendious way describing also a legislation that has been passed through the Legislature of a State and not yet received the assent of the President. In Part VI of the Constitution where the legislative procedure is given, there is no provision for reservation of a law for the President''s consideration. Articles 200 and 201 speak only of a Bill. In our view the word ''law'' used in Article 31-A means just a Bill passed by the Legislature of a State.

It is not necessary for our purposes to go into the question whether the word "law" used in Article 31-A meant a Bill passed by the Legislature of a State. Assuming that the word "law" is used in a compendious way as observed by the Madras High Court, in this petition we are really concerned with what meaning should be given to the words "make any law" in Article 358 of the Constitution. As we have already pointed out, Article 358 of the Constitution contemplates an effective law which affects the fundamental rights of a citizen under Article 19 of the Constitution. We are not, therefore, inclined to accept the submission that the Bill as passed by the Legislature to which the Governor had not given his assent but which the Governor had reserved for the consideration of the President must be treated as a law for the purposes of Article 358 of the Constitution. That Bill did not in any way affect any of the rights of any citizen and in such a case it could not have been contemplated that a Bill was to be protected against an attack on the ground of violation of Article 19 because no such protection was necessary as the Bill itself did not violate any fundamental right. We, therefore, uphold the contention advanced on behalf of the State that the provisions of the Procurement Act are, during the subsistence of the Proclamation of Emergency made on 3-12-1971, immune to any attack on the ground of violation of Article 19 of the Constitution.

It is, however, urged that the protection which is given by Article 358 would be available to only such laws as have any nexus with the Emergency and that no nexus between the Procurement Act and the Emergency has been established, so that the State could claim a protection under Article 358 of the Constitution. The learned counsel relied on certain observations in M/s. Appakutti v. State of Kerala 1969 Lab. I. C. 30 In that case, the petitioners had challenged the notices given to them cancelling their appointments as dealers in foodgrains in which capacity they were carrying on the business of wholesale distributors of rationed articles, namely, rice and wheat, under clause 51 of the Kerala Rationing Order made by the State Government u/s 3 of the Essential Commodities Act. The State Government amended the order by adding clause 51-A by which they took the power to cancel the appointment of any or ail or any class of authorised wholesale distributors after giving an opportunity to such distributor or distributors of being heard if the Government was of opinion that in the interest of the general public it was necessary or expedient to do so. Clause 51-A itself was challenged and in that context the Division Bench observed :

After the emergency has come into being, the State, as defined in Part III of the Constitution, has to consider whether in all the circumstances, it is expedient and necessary to make such a law, and, it is only if it is satisfied that it will proceed to make such a law. Under Article 358 it is only while a proclamation of emergency is in operation that it permits the State to make a law or take executive action heedless of Article 19".

It is not possible for us to read these observations as laying down a proposition that there are any limitations on the powers of the State to make a law during the subsistence of the Proclamation of Emergency. In any case the words of Article 358 do not contain any limitation on the power of the State as to the nature of the law, nor can it be spelt out from the provisions of Article 358 that when a legislation is challenged and a defence of protection of the provisions of Article 358 is raised, the State is bound to satisfy the Court that the legislation has some nexus with the Emergency or that the legislation challenged had become necessary in view of the situation which arose directly out of the Emergency. The protection given by Article 358 to a legislation made during the subsistence of the Emergency against an attack on the ground of violation of Article 19 of the Constitution appears to us to be a blanket protection if the legislation is otherwise legal and constitutionally valid. The Procurement Act is, in our view, protected from an attack on the ground that it infringes Article 19 of the Constitution of India by Article 358 of the Constitution.

We shall now refer to the challenge made to the constitutional validity of the provisions of section 18 (1) and (2) of the Procurement Act. It is necessary to point out that it has not been disputed before us that section 17 as enacted creates a monopoly of the State Government in the business of kapas. u/s 17, there is an absolute prohibition created to the effect that no person other than the State Government or an officer or agent of the State Government authorised in that behalf shall purchase, sell, or store for sale kapas, or carry on business in kapas. The provisions of sections 20, 21, 21-A, 22 and 23 are provisions which are made with a view to carry out one of the objects of the Act, namely, that the State wanted to take the power for acquiring kapas from the growers and other persons having stocks of cotton with a view that all trade in raw cotton shall be carried on by the State up to 30-6-1980. The provisions of section 17 have not been challenged by the petitioner No. 1 who claims to be a grower of cotton nor is the Procurement Act or any provision thereof challenged on the ground of legislative competence in the sense that the legislation was not within the competence of the Legislature. It was not contended that the Legislature was legislating beyond its powers to legislate in respect of items which are enumerated in Lists II and III in the Seventh Schedule to the Constitution. The attack which is directed at the provisions of section 18 (1) and (2), however, is that the provisions creating an absolute ban or prohibition against cotton ginning and pressing factory owners ginning and pressing any cotton other than that on Government account cannot be said to be basic and essential provisions for the purposes of carrying out the scheme of monopoly business in kapas. These provisions, according to the learned counsel, therefore, are not protected by the provisions of Article 19 (6){ii) of the Constitution and they must, therefore, be tested on the touchstone of reasonable restrictions contemplated by Article 19 (6). We may point out that though we have found that the impugned legislation is protected by the provisions of Article 358 of the Constitution, we are going into the contention whether the provisions of section 18 have or have not the protection of Article 19 (6)(ii) as we have been expressly requested by the parties concerned to decide this question. The argument is really two fold: The first limb of the argument is that sections 18 (1) and (2) of the Procurement Act are not provisions which relate to carrying on of business of trade in raw cotton and are, therefore, not protected under Article 19 (6)(ii) of the Constitution. Another limb of the argument is that the legislation in essence is a legislation which must be read as providing for a monopoly business only in kapas and that the provisions with regard to the ginning and pressing of raw cotton are provisions which are really ancillary or incidental to the main purpose of the Act, namely, the monopoly in cotton, and they must, therefore, satisfy the test of reasonableness under Article 19 (6), first part. We may state at this stage that the argument that an incidental or ancillary provision in a legislation is not protected by Article 19 (6) (ii) is advanced by the learned counsel for the petitioners on the basis of three authorities of the Supreme Court. The first one is the leading case on the scope of Article 19 (6)(ii) in Akadasi v. State of Orissa AIR 1963 S C 1047. To this we shall refer a little later. We would mention two other cases, first one being Rashbihari Panda etc. Vs. State of Orissa, . and the other being Virajlal Manilal and Co. and Others Vs. State of Madhya Pradesh and Others, In Rasbihari''s case the Supreme Court was not dealing with any particular provisions of the Orissa Tendu Leaves (Control of Trade) Act, 1961. What was challenged in that case was the action of the State Government inviting offers for advance purchase only from purchasers during the previous year who had carried out their obligations to the satisfaction of the Government in preference to open competition. This action was struck down and it was held that the classification based on the circumstance that certain existing contractors had carried out their obligations in the previous year regularly and to the satisfaction of the Government was not based on any real and substantial distinction bearing a just and reasonable relation to the object sought to be achieved i. e. effective execution of the monopoly in the public interest. The Supreme Court held that the exclusion of all persons interested in the trade, who were not in the previous year licensees was ex facie arbitrary; it had no direct relation to the object of presenting exploitation of pluckers and growers of Tendu leaves, nor had it any just or reasonable relation to the securing of the full benefit from the trade to the State. In paragraph 19 the Supreme Court observed :

The scheme of selling Tendu leaves to selected purchasers or of accepting tenders only from a specified class of purchasers was not ''integrally and essentially'' connected with the creation of the monopoly and was not on the view taken by this Court in Akadasi Padhan''s case protected by Article 19 (6)(ii): it had therefore to satisfy the requirement of reasonableness under the first part of Article 19 (6),

The argument in the instant case was that just as a scheme for the selection of purchasers restricting the purchasers only to a class of persons who had satisfactorily discharged their obligations to the Government was not a matter which was integrally and essentially connected with the creation of monopoly, so also in the instant case the provisions creating a ban on owners of ginning and pressing factories not to gin or press any cotton except on Government account cannot be said to be an integral and essential part of the monopoly business in kapas. In Vrajlal Manilal and Co. v. State of Madhya Pradesh (cit. supra). the Supreme Court, which was dealing with a legislation creating a monopoly of trade in Tendu Pattas or bidi leaves, was examining certain restrictions which were contained in section 5 of the Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Adhiniyam, 1964, with regard to transport of bidi leaves. There the Supreme Court observed in paragraph 10 :

The long title of the Act recites that the Act was enacted for regulating ''the trade in tendu leaves'' by creating a State monopoly in such trade. Trade in tendu leaves would consist of dealing in those leaves i.e. their purchase and sale. Transport of the leaves once purchased or sold would not prima facie be an organic or integral part of dealing in those leaves. It is something extraneous to dealing in those leaves, something which takes place after the purchase or sale thereof is completed and property in them has passed from the dealer to the purchaser and therefore does not form part of the trade in that commodity. That being so the restrictions on their transport contained in section 5 cannot be held to be the integral part of the trade monopoly but as ancillary or incidental thereto, made for its effective enforcement.

On the basis of this authority also it was contended that just as the provisions relating to the transport of tendu leaves in that case was considered as not an essential or integral part of the monopoly business in tendu leaves and, therefore, had to be justified with reference to the reasonableness of the restrictions contemplated by Article 19 (6) of the Constitution, similarly in the instant case also the prohibition against ginning and pressing of cotton created by the provisions of section 18 (1) and (2) of the Procurement Act should be construed as not being essentially or integrally connected with the scheme of the monopoly business in kapas and must, therefore, satisfy the test of reasonableness of restrictions in Article 19 (6) of the Constitution.

The question whether the provisions of section 18 (1) and (2) of the Procurement Act satisfy the test of reasonableness of restrictions under Article 19 (6) of the Constitution, will be required to be decided only after we go into the question whether these provisions substantively create a monopoly of any business in ginning and pressing cotton as contended on behalf of the State, or whether they must be treated as mere ancillary provisions for the purposes of monopoly trade in kapas. It is necessary to refer to Article 19 (6) of the Constitution which provides as follows:

Nothing in sub-clause (g) of the said clause shall affect the operation of any existing law in so far as it imposes, or prevents the State from making any law imposing, in the interests of the general public, reasonable restrictions on the exercise of the right conferred by the said sub-clause, and, in particular, nothing in the said sub-clause shall affect the operation of any existing law in so far as it relates to, or prevents the State from making any law relating to,-

(i) the professional or technical qualifications necessary for practising any profession or carrying on any occupation, trade or business, or

(ii) the carrying on by the State, or by a corporation owned or controlled by the State, of any trade, business, industry or service, whether to the exclusion, complete or partial, of citizens or otherwise.

It is contended on behalf of the State that section 18 (1) and (2) of the Procurement Act, though it violates the right of ginning and pressing factory owners under Article 19 (1)(g) of the Constitution, is not affected by the provisions of Article 19 (1)(g) because it has the protection of Article 19 (6)(ii) as it is a law relating to carrying on by the State or controlled by the State, of a trade or business, whether to the exclusion, complete or partial, of citizens or otherwise, It cannot be disputed in the instant case that the virtual effect of the provisions of section 18 (1) and (2) is that a statutory bar is created against ginning and pressing factory owners to gin and press cotton or cotton bales as the case may be, except on Government account. There is no doubt a provision in section 18 (1) and (2) that if cotton other than on Government account is either to be ginned or pressed, previous permission of the State Government is necessary. This permission is in the nature of an exemption from the operation of the provisions of section 18 (1) and (2) granted by the State but which no ginning or pressing factory owner can claim as a matter of right. The provision with regard to the permission, however, does not prevent the provisions of section 18 (1) and (2) from operating as a complete bar to carrying on the business of ginning and pressing cotton and cotton bales. One of the essential requirements of Article 19 (6) (ii) is no doubt satisfied because there is exclusion not only partial but indeed complete, of the citizens from this business. The question will still remain : what is the effect of these provisions and what is the object and purpose of the legislation in introducing these provisions in the Procurement Act ? Are these provisions intended to be merely ancillary or incidental provisions for effectively carrying on the monopoly business in kapas or do these provisions by their own force enable the State Government to carry on the business of ginning and pressing cotton and cotton bales to the exclusion of all other citizens in the States Does the law enacted in section 18 (1) and (2) relate to the business of ginning and pressing cotton and cotton bales which is to be carried on to the exclusion of the other citizens ? If it is so then only the protection under Article 19 (6)(ii) would be available to the State. The words "a law relating to" found in Article 19(6) (ii) have been construed by the Supreme Court in Akadasi v. State of Orissa. In paragraph 17 of the judgment, the Supreme Court observed :

A law relating to'' a State monopoly cannot in the context, include all the provisions contained in the said law whether they have direct relation with the creation of the monopoly or not. In our opinion, the said expression should be construed to mean the law relating to the monopoly in its absolutely essential features. If a law is passed creating a State monopoly, the Court should enquire what are the provisions of the said law which are basically and essentially necessary for creating the State monopoly. It is only those essential and basic provision which are protected by the latter part of Article 19(6). If there are other provisions mad; by the Act which are subsidiary, incidental or helpful to the operation of the monopoly, they do not fail under the said part and their validity must be judged under the first part of Article 19(6).

Since the State is now making a claim that section 18 of the Procurement Act is also a monopoly legislation it is necessary for us to consider in the light of the provisions of the Act including the preamble whether section 18 (1 ) can really be said to be a legislation which creates a monopoly of the State Government in any business or trade. While explaining how a statute which is said to impinge on the fundamental rights is to be construed, the Supreme Court observed in Vrajlal ManilaVs case (cit. supra) :

''''A mere literary or mechanical construction would not be appropriate where important questions such as the impact of an exercise of a legislative power on constitutional provisions and safeguards there under are. concerned In cases of such a kind, two rules of construction have to be kept in mind: (1) that Courts generally lean towards the constitutionality of a legislative measure impugned before them upon the presumption that a legislature would not deliberately flout a constitutional safeguard or right, and (2) that while construing such an enactment the Court must examine the object and the purpose of the impugned Act, the mischief it seeks to prevent and ascertain from such factors its true scope and meaning.

It is necessary, therefore, to examine the object and the purpose of this legislation as set out in the long title and the preamble. The long title of the Act says that this is "an Act to provide for the carrying on for a certain time of all trade in raw cotton by the State in Maharashtra." The title, therefore, indicates that the intention of the Legislature clearly was to make provisions for permitting the State to carry on all trade in raw cotton. We would emphasise the words "all trade" because that, in our view, is significant. Is the scope of the words "all trade in raw cotton" to be restricted only to the trade in kapas; or was it the intention of the Legislature to go beyond creating a monopoly in the business of Kapas? "Cotton" is defined in section 2 (g) of the Procurement Act as meaning raw cotton, whether ginned or unginned. "Kapas" is defined in section 2 (m) as unginned cotton. "Raw cotton", therefore, includes, according to the statute, ginned raw cotton and kapas. The trade with regard to which provision was, therefore, being made as indicated according to the long title is trade not only in kapas but trade in ginned cotton and kapas. The preamble of the Act to which we have already referred shows the different activities which were sought to be covered by the legislation. The Legislature had felt that the growers of cotton were not getting their due share by way of fair price for their crop because there were many intermediaries and there were defects in the marketing system. The second part of the preamble is significant. The second part says that it is also necessary to supply unadulterated cotton to consumers at a reasonable price and to guarantee the purity of cotton and honest trade practices at processing centers. When the preamble refers to consumers, the reference obviously is to consumers of cotton which is in a usable form. Kapas as such is not a usable commodity except for the limited purpose of ginning and pressing into bales. The Legislature obviously felt that the present system prevailing at processing centres was not a healthy system because it did not result in pure cotton being made available to consumers and at a reasonable price and that there were not honest trade practices at these centres. The object of the Legislature was, therefore, obviously to make a provision which would not only guarantee a fair return to the growers of cotton but it had also the consumers in view and the obvious object was to make available to the consumers unadulterated cotton at a reasonable price. The power which was intended to be given to the Government by the Legislature by the impugned legislation was for these two purposes and it has been expressly clarified in the third part of the preamble where the preamble observes, obviously with reference to the earlier parts of the preamble, that all trade in raw cotton should be carried on by the State for a certain time. The provisions which follow in the enactment were obviously intended to achieve the object of creating a monopoly in all trade of raw cotton because it is for that purpose that the Legislature has thought it fit to give power to the State Government not only for acquiring kapas from growers and other persons having stocks of cotton but also for getting it ginned and pressed into bales, selling it in that form to consumers and others on behalf of the tenderers, and for providing for matters relating to the purposes aforesaid. There is no manner of doubt in our mind that when the Legislature was enacting the provisions of Chapter III of the Procurement Act, the Legislature had a clear intention of taking within the sweep of the legislation the entire trade in raw cotton starting from the procurement of kapas to the selling of ginned cotton in the form of bales to the consumers. This is the nature of monopoly which was sought to be created by the Legislature. It is this purpose of the Act which is sought to be achieved by the enactment of sections 17 and 18 (1) and (2). To have unginned cotton ginned and ginned cotton pressed into bales is a very essential and intrinsic part of trade in raw cotton. This could only be achieved, having regard to the object of providing pure cotton to consumers by creating an absolute prohibition against ginning and pressing factory owners from carrying on their business as ginning and pressing factory owners except in respect of cotton given to them on Government account.

It is no doubt true that the Government is utilizing the services of the existing cotton ginning and pressing factory owners for its own purposes and it was this fact on which reliance was placed by Shri Manohar to contend that the State never intended to bring about a monopoly of the business of ginning and pressing raw cotton. In this connection Shri Manohar invited our attention to the pro-forma of an agreement which is to be entered into between an individual ginning or pressing factory owner and the Maharashtra State Co-operative Marketing Federation Limited which was acting as the chief agent of the State Government. It is urged that the State Government itself is not carrying on the business of ginning and pressing but is permitting it to be carried on by an individual ginning and pressing factory owner and, therefore, it could not be said to be a monopoly business carried on by the State Government Particular reference was made to the clause relating to damages, and in clause 13 of the agreement it was provided-

The Processing Agent hereby agrees and undertakes to indemnify the Federation of the loss and damage that the Federation may suffer as well as of costs, charges and expenses that the Federation may be required to incur on account of any breach, commission or omiasion of any of the terms and conditions of this agreement.

It was urged that there was no privity between an individual ginning and pressing factory owner and the State Government but that in effect the monopoly which was being created was that of the Federation itself. It is not disputed that u/s 42(2}(a) of the Procurement Act the State Government has constituted the Marketing Federation as its chief agent far the purpose of purchases and sale and distribution of and trade in cotton, on certain terms and conditions mentioned in that agreement. By the very nature of the business it may not be possible for the State Government in the very first year of the promulgation of the legislation to carry on the business of ginning and pressing in its own ginning and pressing factories. That, however, it is not the requirement of the law at all. Even in a monopoly business, it is legitimately permissible for the State to appoint an agent to perform such functions as are necessary for the purposes of the business, and the test which must be applied in a case like this must be to see whether the agent is carrying on the business on his own account or whether he is carrying on the business on Government account. That such a course is permissible is clear from the decision in Akadasi''s case (cit. supra) in which the Supreme Court observed in paragraph 33:

Agency which can be legitimately allowed under Article 19 (6)(ii) is agency in the strict and narrow sense of the term; it includes only agents who can be said to carry on the monopoly at every Stage on behalf of the State for its benefit and not for their own bene It at all. All that such agents would be entitled to would be remuneration for their work as agents. That being so, the extended meaning of the word ''agent'' in a commercial sense wholly inapplicable in the context of Article 19 (6) (ii) .

There is no material before us to come to the conclusion that the Marketing Federation is in any way carrying on the business of ginning and pressing on its own account and not on Government account. The fact that kapas is got ginned in the ginning factory of an individual ginning owner or that certain bales of cotton are pressed in the pressing factory of an individual factory owner cannot be construed to mean that the ginning and pressing factory owners are carrying on the business on their own account. The agreement to which our attention has been drawn clearly shows that the services of ginning and pressing factory owners are merely being hired out by the Marketing Federation acting as agent of the State Government for the purposes of ginning and pressing raw cotton. What is being paid to them is only by way of remuneration for the services rendered and such a transaction cannot, even in a commercial sense, be treated as amounting to business carried on by an individual ginning or pressing factory owner on his own account. The fact that the agent, namely, the Marketing Federation supplies cotton and that the bales of cotton, after they are ginned and pressed, are to be handed over back to the Marketing Federation which alone is entitled to dispose them off in accordance with the duties entrusted to it by the State Government clearly indicates that the Marketing Federation is working as the agent and was only trying to hire the services of individual ginning or pressing factory owners for getting a certain amount of work done in lieu of the remuneration paid to them. Merely from the fact that the Marketing Federation in its capacity as agent of the State Government is getting the work of ginning and pressing cotton done from the individual factory owners it cannot be inferred that the monopoly of trade in raw cotton which has been created in favour of the State Government by the Legislature had really become the monopoly either of the Marketing Federation or of any individual ginning or pressing factory owner. The enactment of section 18, was, in our view, very essential if a monopoly business in ginning and pressing of cotton had to be created in favour of the Government because that could be the only way in which persons carrying on business of ginning and pressing of cotton could be excluded from business. There could not have been any exclusion of ginning and pressing factory owners from the business of ginning and pressing except by a provision of a prohibitory nature like the one contained in section 18(1) and (2). Having given our anxious consideration, therefore, to the question whether the law is one relating only to monopoly in the trade of kapas or whether it extend the scope of the monopoly beyond trading in kapas; we are satisfied that the legislation intended, and indeed does create monopoly in the entire trade of raw cotton for which provisions in section 18 (1) and (2) were absolutely essential. We are not, therefore, inclined to accept the contention that section 18 (1) and (2) must be treated as provisions merely incidental and ancillary to the provisions relating to business in kapas. Consequently, the provisions of section 18 (1)and (2) of the Procurement Act must stand protected under Article 19 (6) (ii) of the Constitution and they are immune to any attack on the ground that they violate the fundamental right of the petitioner No. 2 under Article 19 (1) (g) of the Constitution. In view of this finding, the alternative contention that the State Government must justify the restrictions which in the instant case amount to prohibition as reasonable does not arise at all for consideration and we do not propose to go into that question.

The view taken by us, however, does not prevent the petitioner No. 2 from raising a challenge to the provisions of section 18 (1) and (2) of the Procurement Act on the ground of violation of Article 14 of the Constitution. One of the contentions raised on behalf of the petitioners is with regard to the permissive provision to be found in section 18 (1) and (2). As already pointed out by us, section 18 (1) and (2) creates a prohibition against ginning Kapas except on Government account and pressing cotton into bales other than cotton to be pressed on Government account. Section 18 (1) and (2) has, however, provided that cotton other than cotton on Government account could be ginned or pressed into bales if previous permission of the Government is obtained. The argument is that section 18 (1) and (2) does not in any way provide for any guidance or policy for the grant of permission contemplated thereby and on the face of the provision discrimination is writ large. It is also urged that there is no remedy provided in the Act to agitate the question of arbitrary or discriminatory refusal in case the Government rejects permission in a given case. In other words, it is contended that in the absence of any guidance or policy anywhere in the Act, the Government is at liberty to pick and choose ginning and pressing factory owners of its own choice to whom permission will be granted and those to whom permission is declined are likely to be discriminated against. It is contended that even till today the Government has not framed any rules indicating under what circumstances a person will be entitled to permission or on what considerations permission will be granted or rejected by the Government. It is also urged that the power to exempt an individual ginning or pressing factory owner from the provisions of section 18 could be delegated u/s 42 (1), and there is no guidance at all to any subordinate authority as to how and in what circumstances such exemption or permission to gin and press cotton other than cotton on Government account should be granted. Another limb of the same argument is that by failing to indicate in the law itself the circumstances under which such permission should be granted, the Legislature has failed to lay down the necessary legislative policy and must, therefore, be taken to have abdicated its essential legislative functions in favour of the Government. Essentially the attack is one based on Article 14 of the Constitution and some decisions of the Supreme Court were relied upon in support of his contention by the learned counsel for the petitioners. These were : State of West Bengal v. Anwar Ali AI R l952 SC 75. Kathi Raning Rawat Vs. The State of Saurashtra, . Dwarka Prasad Laxmi Narain Vs. The State of Uttar Pradesh and Others, . S.G. Jaisinghani Vs. Union of India (UOI) and Others, . Devi Das Gopal Krishnan and Others Vs. State of Punjab and Others, . and Municipal Corporation of Delhi Vs. Birla Cotton, Spinning and Weaving Mills, Delhi and Another, . These are all authorities, no doubt, dealing with cases under Article 14 of the Constitution. It is, however, now well-settled that unequal protection clause in Article 14 is available to a citizen not only when discrimination appears on the terms of the statute but also when it is the result of an improper or prejudicial execution of the law. We are not concerned in this case with any instances where any action of the State Government is challenged as resulting in unequal treatment. The petitioner No. 2 who alone is the ginning and pressing factory owner and could alone make a grievance with regard to validity of section 18 (1) of the Procurement Act has not invoked the provisions for exemption and has not made any application for exemption and, therefore, we are not called upon to decide whether any action in the implementation or execution of the law has resulted in any infringement of Article 14 of the Constitution. What is contended is that the law on the face of it must be struck down because of the absence of any policy or guidance in the law itself. When such is the attack, the decision must turn on the construction of the relevant provisions of the Act itself. In Kedar Nath Bajoria Vs. The State of West Bengal, , while dealing with the challenge to the West Bengal Criminal Law Amendment (Special Courts) Act, 1949, the Supreme Court observed :

''''Whether an enactment providing for special procedure for the trial of certain offences is or is not discriminatory, and violative of Article 14 must be determined in each case as it arises, for no general rule applicable to all cases can safely be laid down.

As observed by the Supreme Court, when any particular enactment is challenged as violative of Article 14, the question will only have to be decided on the terms of the statute and such other circumstances as are relevant. It is not correct to say that in enacting section 18 of the Procurement Act the Legislature has abdicated any of its legislative functions. The essential legislative function consists in determining the legislative policy and its formulation as a rule of conduct. The Legislative policy so far as the present enactment is concerned is the creation of State monopoly in the trade in raw cotton, which includes the business of ginning and pressing raw cotton. This has been achieved, as we have already pointed out, by the enactment of section 18. The permissive provision in section 18 (1) and (2) against which the grievance has been made is, in our view, really in the nature of a proviso creating an exemption and enabling the State Government to permit ginning and pressing factory owners to gin and press cotton other than cotton on Government account. The working of the substantive provision creating the prohibition is not dependent at all on the provision made for the purposes of exercising the power to exempt and permit a ginning and pressing factory owner to carry on the ginning and pressing of cotton other than on Government account.

The question is : is this provision liable to be struck down because the section itself does not provide for circumstances under which this power can be exercised? The learned counsel appearing on behalf of the State contends that the power is given by the legislation itself to the State Government and where the power is given to the State Government, it must be presumed that the power will be exercised only for the purposes of furthering the objects of the Act and not for defeating the purposes of the Act. It is urged that the guidance must be found even in the preamble and the preamble clearly states the purposes for which the Act has been made and, therefore, wherever necessary the Government must be trusted to exercise the power bona fide, and if in any given case the power has been exercised mala fide or not in accordance with law, then it is that individual act of the exercise of power which could be struck down and not section 18 itself. It now seems to be settled law that where an Act is challenged on the ground that certain provisions thereof do not lay down any guidance, guidance could be found out in the several provisions of the Act and also in the preamble. We may refer to the decision of the Supreme Court in Jyoti Pershad Vs. The Administrator for The Union Territory of Delhi, . In that case the provisions of section 19 of the Slum Areas (Improvement and Clearance) Act, 1956, were challenged as being obnoxious to the equal protection of laws guaranteed by Article 14 of the Constitution. The Supreme Court in that case observed:

So long as the Legislature indicates, in the operative provisions of the statute with certainty, the policy and purpose of the enactment, the mere fact that the legislation is skeletal, or the fact that a discretion is left to those entrusted with administering the law, affords no basis either for the contention that there has been an excessive delegation of legislative power as to amount to an abdication of its functions, or that the discretion vested is uncanalised and unguided as to amount to a carte blanche to discriminate. If the power or discretion has been conferred in a manner which is legal and constitutional, the fact that Parliament could possibly have made more detailed provisions, could obviously not be a ground for invalidating the law.

We may also refer to another decision of the Supreme Court in P.J. Irani Vs. The State of Madras, The provisions challenged there were in section 13 of the Madras Buildings (Lease and Rent Control) Act, 1949, in which power was given to the State Government to exempt a particular building or buildings from the operation of law, and the question was whether such a provision violated the provisions of Article 14 of the Constitution. Section 13 was worded in the following terms:

''''Notwithstanding anything contained in this Act the State Government may by a notification in the Fort St. George Gazette exempt any building or class of buildings from all or any of the provisions of this Act.

While negativing this contention, the Supreme Court referred to the decision in Sardar Inder Singh Vs. The State of Rajasthan, . In that decision section 15 of the Rajas-than (Protection of Tenants) Ordinance, 1949, was challenged and upheld. The Supreme Court had observed in that case :

''''It is argued that that section does not lay down the principles on which exemption could be granted, and that the decision of the matter is left to the unfettered and uncanalised discretion of the Government and is therefore repugnant to Article 14. It is true that that section does not itself indicate the grounds on which exemption could be granted, but the preamble to the Ordinance sets out with sufficient clearness the policy of the Legislature; and as that governs section 15 of the Ordinance, the decision of the Government thereunder cannot be said to be unguided: vide Earishankar Bagla v. State of Madhya Pradesh(l6).

After referring to these observations the Supreme Court upheld the decision of the High Court that section 13 of the Madras Act was constitutionally valid but pointed out that individual orders of Government passed under that section could be subject to judicial review in the manner already indicated.

We may also usefully refer to the case of Harishankar Bagla v. State of Madhya Pradesh. There the Supreme Court was concerned with the question whether the power delegated to the Textile Commissioner under sections 3 and 4 of the Essential Supplies (Temporary Powers) Act, 1946, was valid.

This power was given under clause 3 of the Cotton Textiles (Control of Movement) Order, 1918. Clause 3 which was challenged provided:

No person shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth, yarn or apparel except under and in accordance with-

(i) a general permit notified in the Gazette of India by the Textile Commissioner, or

(ii) a special transport permit issued by the Textile Commissioner.

The contention was that the Textile Commissioner had been given unregulated and arbitrary discretion to refuse or grant a permit, and on behalf of the dealers reliance was placed on the case in Messrs Dwarka Prasad v. State of U. P. A I R 1954 SC 465. which has also been relied upon by the learned counsel for the petitioners before us. Repelling the argument the Supreme Court has observed in paragraph 8:

''''The policy underlying the order is to regulate the transport of cotton textile in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion cannot be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief.

In this connection, we may refer to a very recent decision of the Supreme Court reported in Manhar Lal Bhogilal Shah Vs. State of Maharashtra, . The question there was whether a person could be prosecuted both under item (8) and item (81) of section 167 of the Sea Customs Act, 1878. There were no guidelines to decide as to under what item a person should be prosecuted. The argument was that there were no guidelines in section 187-A of the Act in the matter of filing a complaint for the offence under item (81) of section 167, and if there is an option to the officers mentioned therein to file a complaint or not to file a complaint, there will be clear infringement of Article 14 of the Constitution. This argument was negatived, and the Supreme Court observed in paragraph 10:

While deciding whether a complaint should be instituted for an offence which is covered both by items 6 and 81 of section 167, a customs officer must take into account the enormity and magnitude of the contravention and the evidence which is available. It is possible that in certain cases the evidence may not be sufficient for taking the matter to a criminal Court and in view of the entire facts a complaint may not be lodged for contravention of offence under item 81 but in all cases the customs officers have to act in a reasonable and bona fide manner and they cannot just discriminate between similar cases according to their whim and fancy. The object and purpose of the Act has already been noticed as also its scheme and the relevant provisions. The power conferred by section 187-A has to be exercised for effectuating the object and purpose of the Act keeping in view the entire scheme. It cannot, therefore, be said that any unguided discretion or power has been conferred of the nature which would come within the inhibition of Article 14.

These decisions thus clearly show that on the mere fact that a provision of law does not disclose guidance with regard to the conditions for the exercise of a power, the provision cannot be struck down as violative of Article 14 of the Constitution. It is permissible to look into the other provisions of the Act and the policy of the Act to ascertain whether the relevant provision can be struck down as infringing Article 14. The policy of the Procurement Act is to vest the trade in raw cotton as a monopoly in the State Government. In the execution of the Act it is this policy which must be implemented. It is also legislative policy that purity of cotton should be guaranteed. If purity of cotton is to be guaranteed, the possibility of a mixture or adulteration of cotton must be ruled out. At the same time, cotton on Government account must have priority so far as ginning and pressing is concerned. Whether permitting any individual ginning or pressing factory owner to gin or press any cotton other than cotton on Government account is likely to affect the main purpose of the Act, namely, the purity of cotton so far as ginning and pressing is concerned is a good guideline, found in the policy of the Act for deciding whether any individual person should be permitted to gin and press cotton other than that on Government account. In a given case, while the ginning and pressing of cotton on Government account is in progress; it would indeed be almost impossible to permit any individual ginning and pressing factory owner to deal with any other cotton, so as to create a possibility of adulteration or mixture of cotton. Really speaking, during the time when ginning and pressing factory owners are ginning and pressing cotton on Government account, it may not even be possible for the State Government to grant such permission. We have already pointed out above that this Act is to be read along with the other relevant Acts, and while deciding whether any particular ginning and pressing factory owner is to be permitted to gin and press cotton other than on Government account, Government would also have to find out that there will not be a violation of the other relevant provisions of law. We cannot forget that the power to exempt or the power to permit is given not to any minor official by the Legislature but is bestowed on the Government as such. In Re: The Kerala Education Bill, 1957. Reference Under Article 143(1) of The Constitution of India, . the Supreme Court attached particular importance to the fact that certain discretion was vested in the Government. It was observed that where any particular clause leaves any discretion to the Government to take any action, it must be understood that such discretion is to be exercised for the purpose of advancing and in aid of implementing and not impeding the policy of law. Abuse of a power by the Government is not to be easily assumed. As pointed out by the Supreme Court in Matajog Dobey Vs. H.C. Bhari, . it has to be borne in mind that a discretionary power is not necessarily a discriminatory power and that abuse of power is not to be easily assumed where the discretion is vested in the Government and not in a minor official. In Ms Pannalal Binraj v. Union of India20 in which the question was whether a power given to the Commissioner of income tax and the Central Board of Revenue to transfer the case of an assessee from the area within which he resides or carries on business to any other income tax Officer if the exigencies of tax collection warrant the case was an arbitrary power, the Supreme Court pointed out that the power was vested not in minor officials but in top ranking authorities like the Commissioner of income tax and the Central Board of Revenue who act on the information supplied to them by the income tax Officer concerned. It was further pointed out:

This power is discretionary and not necessarily discriminatory and abuse of power cannot be easily assumed where the discretion is vested in such high officials. There is moreover a presumption that public officials will discharge their duties honestly and in accordance with the rules of law.

It was further pointed out that the possibility of a discriminatory treatment cannot necessarily invalidate a legislation and where there is an abuse of power the parties aggrieved are not without remedies under the law and what will be struck down in such cases will not be the provision which invests the authorities with such power but the abuse of the power itself. There is no reason why we should assume that having regard to the policy and the object underlying the provisions of the Procurement Act the Government will not act in a bona fide manner or will discriminate deliberately without any basis against any particular ginning or pressing factory owner. In such a case it is always open to the citizen to challenge the action as discriminatory and it will be that action which must be struck down and not the provision enacted by the Legislature giving the power to the Government to grant permission to gin and press cotton other than on Government account in a given case. We may also point out that the Government has advice available to it of the Board which is to be constituted u/s 4 of the Procurement Act. One of the duties of the Board is to advise the State Government on all other matters to facilitate the proper carrying out of the purposes of the Act. It is also open to the Government to seek the advice of the Board on such matters that it considers necessary to have that advice. It cannot, therefore, be said that the matter relating to the laying down of a positive policy with regard to the circumstances in which or the conditions on which the permission contemplated by section 18 (1) and (2) could be granted, could not be a matter on which advice could be taken from the Board. Having regard to the view which we have taken we are not inclined to strike down the provisions of section 18 (1) and (2) of the Procurement Act with regard to the permission to gin or press cotton other than on Government account as violative of Article 14 of the Constitution on the ground that there is an unguided and arbitrary power given by the Legislature to the Government, or that there was an abdication of essential legislative function in favour of the Government.

Another attack which was made was that this power was capable of being delegated u/s 42 of the Act and there was no guidance as to how the delegate should exercise the power of exemption. This question, in our view, is at the present moment purely academic. It is stated before us that the Government has not delegated its powers u/s 18 to any other authority. Even otherwise, section 42 (1) itself provides that the delegation should, if necessary, also be accompanied by laying down the circumstances and the conditions under which the delegated power is to be exercised. Any grievance that the delegate does not have any guidance or that the delegate has been vested with an unguided and arbitrary power could arise only if and when such power is delegated.

It was also contended that just as section 18 (1) and (2) did not lay down any guidelines for the exercise of the power of exemption, there are no rules nor regulations to decide through which ginning and pressing factory owners the Government would get the work done. We fail to see how the petitioners can make any such grievance. It is not disputed that the petitioner No. 2 himself is one of the 539 ginning and pressing factory owners who have been entrusted with the work of ginning and pressing cotton on Government account. He has also executed an agreement in favour of the Chief Agent, one of the terms of which is that the agreement of agency between the Chief Agent and the State Government will be deemed to be a part of the agreement between the petitioner No. 2 and the Chief Agent. The petitioner No. 2 is, therefore, not entitled to make the grievance which he is making. Apart from that, we may point out that the Government has now made rules called the Maharashtra Raw Cotton (Procurement, Processing and Marketing) (Prohibition on Cotton Ginning and Processing Factories) Rules, 1972, which have been gazetted on 2-12-1972. These rules are not very happy worded. The rules purport to lay down the principles which have to be considered while deciding whose services the State Government or the Chief Agent shall employ for having cotton ginned and pressed on Government account, Rule 3 however is headed "Principles to be followed in granting permission for ginning kapas or pressing ginned cotton into bales on Government account in factories." It has not been seriously disputed before us that there is no provision in section 18 (1) or (2) for any permission either being asked for or being granted by the Government as contemplated by the heading given to rule 3. The misleading heading, however, does not affect the main provision in the rule in which nine circumstances have been laid down, all or some out of which will have to be considered before a person in charge of cotton ginning or pressing factory is allowed to gin or press cotton on Government account. We are not in this case concerned with the validity of these rules as they are not challenged. In the view which we have taken, we must, therefore, hold that the provisions of section 18 (1) and (2) cannot be held to be bad on the ground that they are hit by Article 14 of the Constitution.

One of the contentions which was raised was in respect of section 22 of the Procurement Act, and the argument was that section 22 is an unreasonable restriction of the right of the petitioners to carry on their business. It was contended that the grading of cotton which is required to be made u/s 22 is likely to be arbitrary and that there is no forum where the question of grading could be further agitated by the grower and there was no opportunity to the grower to challenge the determination of the grade of cotton which the grower or any person tenders. It is contended on behalf of the State that under rule 7 of the Maharashtra Raw Cotton (Grading and Marking) Rules, 1972, the Agricultural Produce Market Committee is entrusted with the duty of supervising grading operations, and, therefore, if there is any dispute with regard to grading, the dispute will be resolved under the provisions of section 10 of the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963 (here-inafter referred to as the Marketing Regulation Act). In an affidavit which was filed on behalf of the State it is stated that the provisions of section 10 of the Marketing Regulation Act fully apply to the transactions of sale and purchase of cotton in the collection centres under the supervision of the market committees and thus any decision made by the grader appointed by the Government is not final and an aggrieved person, i.e. a seller or a purchaser, has a right to move the Board u/s 10, which will deal with the dispute as provided by that section and the rules made thereunder. In our view, a dispute which is raised with regard to grading can be taken by the disputing party u/s 10 of the Marketing Regulation Act to the Board. For the purposes of the Marketing Regulation Act, cotton has been declared as a notified produce and the Market Committee has to arrange for its collection in the market area and the Market Committee has been duly authorised by the State Government to open collection centres for kapas. The collection centres which are opened are under the direct supervision of the Market Committee and rule 7 of the Maharashtra Raw Cotton (Grading and Marking) Rules also requires that the Market Committee concerned shall exercise such supervision on the grading operations as may be required under the rules made by the State Government under the Marketing Regulation Act, or any byelaws made by it under the Act. Having regard to kapas now having become a notified produce for the purposes of section 29 (2) (a) (g) (i) and section 30A of the Marketing Regulation Act, in our view, so far as the matter relating to grading is concerned, any disputes raised either by a buyer or a seller with regard to grading must be said to arise out of the transactions carried out under the supervision of the Market Committee under the Marketing Regulation Act. Consequently section 10 of that Act will clearly govern such disputes. Section 10 provides as follows :

(1) For the purpose of settling disputes between buyers and sellers, or their agents including any disputes regarding the quality or weight or payment of any agricultural produce, or any matter in relation to the regulation of marketing of agricultural produce in the market area, the Market Committee of that area shall constitute from amongst its members a Board.

(2) The Board shall consist of such number of members, and shall be constituted in such manner, and conduct its business in such manner, as may be prescribed. The rules may provide for appointment of arbitrators, payment of fees by the parties for the settlement of disputes, and appeal to the Board from their decision.

Under the Maharashtra Agricultural Produce Marketing (Regulation) Rules, 1967, provision is made in rule 98 with regard to settlement of disputes. Rule 97 provides for the constitution of the Board. Under sub-rule (1) of rule 98 it is provided that where any dispute referred to in section 10 arises between any parties operating in the market area, the Secretary of the Market Committee or any person authorised by the Market Committee in that behalf may, if the parties agree to settle such dispute by arbitration, refer the dispute to arbitration and in the absence of such agreement, to the Board constituted under rule 97. Sub-rule (4.) states that every dispute shall be decided as far as possible at the spot and on the same day and under sub-rule (5) any party to the dispute aggrieved by the decision of the arbitrator may within seven days of such decision appeal to the Board and the decision of the arbitrator subject to the decision of the Board in appeal, in binding on the parties. It is clear, therefore, that the contention that there is no forum for agitating the question of grading is not borne out by the provisions referred to above. Since there is an adequate provision for determining any dispute with regard to grading, though no direct provision is made in section 22 itself, we are satisfied that the provisions of section 22 cannot be held to be invalid as constituting an unreasonable restriction on any fundamental right of any of the petitioners.

Challenge is then made to the provisions in the proviso to section 22 of the Procurement Act. This is a rather unusual provision and we must say at the outset that discrimination is writ large on the face of the proviso. We have referred to section 20 which permits the grower to pay the labourers engaged by him wages in kind i. e. in kapas. Section 21 provides that the labourers who have got kapas by way of wages may tender the kapas so obtained either personally or through an agent authorised by the State Government in this behalf, at a collection centre. It is stated on behalf of the State Government that no such agent has yet been appointed. The fact is that it is the labourer who must go to the collection centre and tender kapas. When kapas is tendered by the grower or parson holding stocks or on their behalf by agents for collection authorised by the State Government, kapis is graded in accordance with the rules made in that behalf, namely, the Maharashtra Raw Cotton (Grading and Marking) Rules. The rules made by the Government are fairly exhaustive, and they provide for five grades, being I-Grade, II-Grade, Ill-Grade, X-Grade and X-2 Grade. Thus, any person who is holding stock of kapas, if he tenders it at the collection centre, will be paid price according to the grading. If the proviso to section 22 was not there, the labourer would be a person holding stock of kapas and he would also be entitled to be paid in accordance with the grade which the kapas which he is tendering is found to have. The proviso, however, reads:

Provided that, kapas of any variety tendered at the collection centres by or on behalf of labourers who are paid wages in kind shall notwithstanding anything contained in any law for the time being in force, be graded as belonging to the lowest grade of that variety.

The effect of this proviso is that even if the kapas is not of the lowest grade, merely because the hand that tenders the kapas is of the labourer his kapas is directed to be treated by the Legislature as of the lowest grade. If the same kapas is tendered by the grower, it will be graded according to its quality; but if it is tendered by the labourer, it will be graded not according to the quality but it will be statutorily graded as of the lowest grade. We fail to see any justification for this classification depending on the hand of the tenderors of kapas. It is no doubt true as contended on behalf of the Government that the proviso distinctly provides for a different group of persons, namely, the labourers and, therefore, there is a basis for the classification. This, however, is not sufficient for the purposes of Article 14 of the Constitution. The classification must have reference to the object of the Act and it must have a nexus with the object of the Act. We are dealing with a legislation which deals with a commodity which is to be paid for, and when a commodity is graded not on the basis of its quality but on the basis of the hand which tenders it, we fall to see how such a provision could be said to be one not violating Article 14 of the Constitution of India. The policy of the Act is to acquire kapas, be it from the grower or be it tendered by the labourer. But the kapas must be graded according to its quality depending not on the hand of the tenderer but upon the quality inherent in the kapas itself. We, therefore, see no basis for the labourer being treated in a different way while he tenders cotton and his cotton being treated as of the lowest variety through it might be of the highest variety.

It was faintly suggested that the Government did not wish to encourage the policy of payment in kind to agricultural labourers. The Act, however, does not purport to regulate the relationship between the grower of cotton and his labourer. On the other hand, whereever such a practice prevails, namely, of payment of wages in terms of kapas, that practice has been recognised by the Legislature. The recognition of such a practice in the proviso to section 20 militates against the justification which is now sought to be advanced that the Legislature did not wish to permit or encourage the practice of paying labourers in terms of kapas by way of wages. We must, therefore, declare the proviso to section 22 of the Procurement Act as void as being hit by the provisions of Article 14 of the Constitution. The provision which we are striking down is clearly in the nature of a proviso and but for this proviso the labourer would have also fallen within section 22 itself. The proviso is, therefore, clearly severable and the substantive provisions in section 22 will not, therefore, be affected by our declaration of the proviso to section 22 as void and inoperative.

It was then contended that section 27 of the Procurement Act is also a discriminatory provision because that section provides that where payment is to be made to the tenderer of cotton, deduction has been directed to be made in respect of any dues to any co-operative society in respect of any notified produce, and the argument is that while there are no deductions made in respect of amounts which are borrowed by persons who may be called as non-growers of cotton, deductions are required to be made only in case of growers of cotton who are compulsorily required to sell kapas under the provisions of this Act. Section 27 provides as follows :

The market committee or the authorised co-operative society or person, as the case may be, may deduct from the advance price to be paid to a tenderer of kapaa any sums due to any co-operative society, or any dues which the market committee is authorised to deduct by or under the Maharashtra Agricultural Produce Marketing (Regulation) Act, 1963, in respect of any notified produce, to snob extent and in such manner as may be laid down in that Act, and pay the balance to the tenderer:

Provided that, the deductions may be made in such installments as may be deemed fit, keeping in view the quantity of kapas the person concerned is likely to tender from time to time in future.

The learned counsel appearing on behalf of the State disputes the factual position and it is urged that such deductions are made by the co-operative societies in respect of all crop loans. The contention of the petitioners is that in a given case where the dues of any co-operative society including the Land Development Bank exceed the price of the cotton tendered by an agriculturist, the consequence of the operation of section 27 will be that no amount by way of price of the cotton tendered by him will be received by him because the entire amount will stand deducted. It is also the petitioners'' case that the substantial object of the provisions in section 27 is to facilitate the recovery of dues outstanding against an agriculturist and payable to co-operative society, namely, the Land Development Bank. Another contention which is raised is that the provisions of section 27 are made applicable only in the case of tenderers of cotton and this class of persons is being discriminated against because there is no such provision with respect to growers of other crops. In our view, the learned counsel for the petitioners is not right when he contends that the deduction which is contemplated by section 27 would also cover dues of the Land Development Bank. It is necessary to refer to the provisions of section 48-A of the Maharashtra Co-operative Societies Act, 1960. Under that section it is provided that where any agricultural produce, for the growing of which a loan has been advanced by any co-operative society u/s 48 is tendered by any person for sale at a collection centre u/s 30-A of the Marketing Regulation Act on any day, then the price agreed to be paid therefore shall be paid by the purchaser to the tenderer after deducting the dues of the co-operative Society mentioned aforesaid and to the extent there stated and the amount so deducted shall be paid to Market Committee constituted under that Act as provided in that section. It also provides that the amount of the deduction on account of the loan advanced by the co-operative society shall not in the aggregate exceed forty percent, of the total amount to be paid by the purchaser. The provisions of section 48-A make it abundantly clear that the Market Committee does not have the power to make a deduction out of the price which is to be paid by the purchaser to the tenderer except in respect of a loan which has been advanced for the growing of the agricultural produce which is tendered for sale to the purchaser through the medium of the Market Committee. Section 48-A does not refer to the loan taken by an agriculturist from a Land Development Bank for the purpose of development of agriculture. Reference is also necessary to the provisions of section 30A of the Marketing Regulation Act. The material part of that provision reads as follows:

30A. (1) A. Market Committee duly authorised by the State Government for the purpose may by an order in writing, open collect ion centres for collecting thereat the notified produce specified in such order. The Market Committee shall publish such order for the information of the public in such manner as it deems fit.

(2) Where any person wishes to sell any notified produce in a market area, he shall tender all such produce only at the collection centre established for the purpose under sub-section (1): Provided that, agricultural produce notified under sub clause (ii) of clause (g) of sub-section (2) of section 29 may be tendered through a commission agent.

Sub-section (3) requires the Market Committee to have the produce tendered to it weighed, measured or as the case may be, counted, forthwith, and arrange for issuing a receipt therefor to the person who has tendered the produce at a collection centre for sale, or, as the case may be, through the commission agent or any agency fixed by the State Government where tender through an agent is allowed and also to arrange to give a copy of the receipt to the purchaser, the co-operative society, if any, and where a receipt is given through such agent or agency, if any, also to the Market Committee. Sub-section (4) details the particulars which are to be incorporated in the receipt. Under sub-section (6) there is an obligation created on the purchaser to pay forthwith, on receiving a copy of the receipt, the total amount to be paid by him as recorded in the receipt by drawing two cheques, one in favour of the Market Committee and another in favour of the tenderer. The Cheque which is to be drawn in favour of the tenderer will be in respect of the amount which is found due after deducting the amounts consisting of the amount of dues of the Market Committee to be paid by the purchaser, the amount of dues to be paid by the tenderer to the commission agent by way of his commission, if any, and such other market charges, as are duly authorised by the Market Committee, the amount of dues to be paid by the tenderer to a co-operative society, u/s 48A of the Maharashtra Co-operative Societies Act, and the amount of advance price received by the tenderer, if any, in respect of the agricultural produce notified under sub-clause (i) of clause (gl) of sub section (2) of section 29. For the purposes of the present petition, it must be stated that in exercise of the powers u/s 30-A the State Government has issued a notification authorising the Agricultural Produce Marketing Committees specified in column 2 of the schedule attached to the notification open collection centres for collecting kapas which has been described as a notified produce. This notification is published on 4-7-1972. Prior to that by a notification published on 23-6 1972 the State Government, in exercise of the powers under sub-clause (i) of clause (a) (gl) of sub-section (2) of section 29, has notified kapas being an agricultural produce in which all trade therein is to be carried on exclusively by the State Government under the Procurement Act for the purposes of sub-clause (i) of clause (gl). The combined effect of these provisions is that kapas which is grown by the agriculturist is to be tendered at the collection centres which are opened by the Market Committees notified in the Gazette dated 4-7-1972. Under the Procurement Act, collection centre is a place designated by the Market Committee for tendering kapas by any grower or any other person holding stocks thereof. Kapas thus becomes an agricultural produce with regard to which the Market Committee has been authorised to open collection centres at which the purchaser, namely, the State Government, in the exercise of the right to carry on the monopoly business, purchases kapas. Prior to cotton being dealt with by the Procurement Act it was already one of the items which was listed as an agricultural produce u/s 2 (1)(a) of the Marketing Regulation Act. In the Schedule to that Act in the category of "fibres", item 1 was shown as cotton, ginned and unginned. It is true that ginned and unginned cotton is now being separately dealt with for the purposes of marketing by the Procurement Act and that Market Committees are now dealing with cotton with reference to the Procurement Act. But the provisions of section 48A of the Co-operative Societies Act read with the provisions of section 30-A of the Marketing Regulation Act clearly show that the mode of recovery which is now provided by section 27 of the Procurement Act is not something which is special to growers of cotton alone. u/s 48-A the deduction on account of dues due to a co-operative society by way of loan taken as a crop loan is permissible to be made in respect of any agricultural produce. The petitioners are, therefore, not right when they contend that the growers of cotton are being singled out for being the subject of a legislation with regard to the recovery of crop loans. Even otherwise, it is difficult for us to appreciate how any discrimination could arise. The liability of a grower of an agricultural produce to repay the crop loans cannot be disputed. If the Legislature has made provisions only for the recovery of crop loans in respect of certain agricultural produce as contended by the petitioners, we fail to see how any question of discriminatory treatment can arise in such a case. The Legislature is competent to legislate in the matter of co-operative societies and it is, therefore, entitled to make a provision for recovery of crop loans advanced by the Co-opertive Society. We see no vice in section 27 of the Procurement Act which can render it as invalid as contended on behalf of the petitioners.

The apprehension expressed on behalf of the petitioners that in a given case the entire amount would stand set off by dues to the co-operative societies on account of crop loans is also misplaced. The learned counsel has obviously overlooked the provisions of section 48-A of the co-operative Societies Act which place a restriction on the extent of the deduction to be made on account of recovery of crop loans. It expressly provides that the amount of the deduction on account of the loan advanced by the co-operative society shall not in the aggregate exceed forty per cent of the total amount to be paid by the purchaser. This restriction will clearly operate in a case where deductions are being made by virtue of the powers u/s 27 of the Procurement Act. There is also a sufficient safeguard in section 27 itself which provides that the total amount of loans to be deducted could be deducted in installments which could be decided upon having regard to the probable quantity of kapas which the person concerned is likely to tender from time to time. We are not, therefore, satisfied that the petitioners have been able to make out any case of a discriminatory treatment u/s 27 of the Procurement Act.

The next provision which is attacked on behalf of the petitioners is the provision in section 25 of the Procurement Act. That section provides :

Every tenderer of kapas at a collection centre shall in the first instance be entitled to receive eighty percent of the guaranteed price for the quantity of kapas tendered by him, which shall be the advance price payable to a tenderer.

What is contended is that in any case the Procurement Act provides for the payment of guaranteed price to the tenderer. We have earlier pointed out that whatever may be the final price which is fixed at the end of this season, when guaranteed price is fixed by the State Government in consultation with the Central Government u/s 24, the grower is entitled to the guaranteed price. In case the final price fixed is more than the guaranteed price, the grower may get more than the guaranteed price. But what is argued is that if the grower is at all times entitled to nothing less than the guaranteed price, the provision requiring only 80 per cent of the price to be paid is an unreasonable restriction on his right to dispose of his property because, according to the petitioners, in the open market they will get the entire price immediately. It is not possible to assume that in all cases when an agricultural produce is sold in the market, the grower will get the entire price immediately, for, even in transactions relating to agricultural produce credit transactions do many times take place and we can take judicial notice of the fact that often such transactions of sale of agricultural produce take place through the medium of the commission agent who many times is called an Aditya or who is a middleman who arranges for the sale of agricultural produce from the grower to the purchaser. But so far as the Procurement Act is concerned, we cannot overlook the fact that this is not a case where the deduction of 20 per cent. which is made at the initial stage is not paid at all. At best it is a case of deferred payment. The State Government has in its affidavit pointed out why this deduction is necessary. It is stated in the affidavit that the State Government has contributed an amount of Rs. 3 1/2crores as share capital to the share capital of the Chief Agent, namely, the Maharashtra State Co-operative Marketing Federation, and this amount is to be used by the Federation as its initial working capital. The trade which the Government is taking over is the entire trade in raw cotton, and we have already pointed out that for the purposes of carrying on all trade in raw cotton, ginning and pressing will have to be done by the State Government. In the affidavit it has been stated that the expenses of ginning kapas purchased at various collection centres are also initially met out of this working capital of Rs. 3 1/2 crores. It is further stated that on the basis of the Government contribution to the capital, the Federation raises an amount of Rs. 35 Crore from the Reserve Bank of India through the Maharashtra State Co operative Bank and that the credit given to the Federation is guaranteed by the State Government. The Federation has to hypothecate the cotton, which has been purchased by it for the Government, to the Reserve Bank of India and the Reserve Bank will then advance 90 per cent of the guaranteed price of the cotton pledged to it. This 90 per cent amount which is to be received from the Reserve Bank is to be utilised by the Federation for purchase of cotton at various collection centres and the amount has to be made available for the continuous process of purchase of kapas It is averred that at every hypothecation the Federation receives from the Reserve Bank 90 per cent of the guaranteed price and from out of this 90 per cent expenses have to be met for ginning and pressing of cotton, and that is why an additional amount of 10 per cent is deducted from the guaranteed price. The averments in the affidavit show that the deduction of 20 per cent from the guaranteed price is being made in order to make funds available for the working out of the monopoly scheme. The object of the enactment is to safeguard the interests of both the grower and the consumer. When a scheme on such a large scale covering the entire State is to be carried out and the benefit of which is ultimately to go to the grower and the consumer, we do not see anything wrong in the State Government making a provision thai the payment of the price for the kapas which will be purchased from the grower will be made in two installments. What is withheld for the time being is only 20 per cent of the guaranteed price which cannot be said to be such an unusually large percentage of the guaranteed price so as to make the provisions of section 25 unreasonable. The entire scheme is ultimately intended to achieve the payment of fair price to the grower and guarantee pure cotton to the consumer. It cannot be disputed that the entire scheme is in public interest, and because of mere deferment of a small portion of the price when such deferment clearly appears necessary having regard to the vestness of the scheme, we are not inclined to hold that section 25 providing for deferment of 20 per cent of the price can be said to be an unreasonable restriction on the right of a citizen or a grower to carry on his business or the right to dispose of his property. Having regard to the scheme and the object of the Act, we are satisfied that the provision in section 25 providing for an immediate payment of 80 per cent of the guaranteed price by way of advance price cannot be struck down as an unreasonable restriction on the right under Article 19 (1)(f) or (g) of the Constitution.

The last provision which is challenged is in section 36 of the Procurement Act. Section 36 reads as follows :

The State Government or any officer authorised by it in this behalf, may issue to any owner or person in charge of a cotton ginning factory or cotton pressing factory such general or special directions as it or he may think necessary or expedient, for maintaining or increasing the supply of ginned or baled cotton and the owner or such person shall he bound to follow and act upon such directions.

It is contended that here again the State Government has been given uncontrolled power to issue any directions which it might think necessary or expedient. According to the learned counsel, this power could be delegated to a subordinate authority, and there is no provision in the Act which can be said to regulate the exercise of this power, nor have any rules been made, nor is any appeal provided against any direction if it is issued by a subordinate authority. It is urged that in a given case directions which might not be capable of being complied with are likely to be given, and it is contended that the directions may be onerous ones for disobeying which a prosecution could be launched. We have already referred to section 43 (2) which provides that whoever contravenes the provisions of section 36 or 37 shall, on conviction, be punished with fine which may extend to five hundred rupees. We have already pointed out that when power is given to the Government, we cannot presume that that power will be abused. The apprehension, therefore, that directions which are not capable of being complied with may be given need not enter into the decision of the question whether section 36 could be said to be invalid on the ground of giving an unguided or arbitrary power to the State Government or any other officer. We cannot overlook the fact that there is guidance in section 36 itself as to the purpose for which such directions could be given by the State Government or by any officer who is authorised by it in that behalf. The purpose of the direction must be relevant to the object of maintaining or increasing the supply of ginned or baled cotton. The validity or propriety of any direction which is given either by the State Government or by any other officer authorised by it in that behalf will have to be tested on the touchstone of ''he necessity of maintaining or increasing the supply of ginned or baled cotton. The power u/s 36 cannot be exercised for a purpose extraneous to that stated in the section itself; and if a direction either travels beyond the purpose set out in section 36 or is unreasonable so that it is not possible for the person for whom it is made to comply with it, it is that direction which will have to be struck down and not the provisions of section 36. A citizen has ample remedies against the arbitrary or unreasonable exercise of power given to an authority under the statute, but merely because there is a possibility of an unreasonable exercise or arbitrary exercise of power which is to be exercised for achieving the object which is set out in the very same provision which gives the power, it cannot be a ground for striking down the power itself though the exercise of the power may be struck down. Even with regard to the alleged apprehension of a prosecution, it is necessary to point out that the prosecution under the Act has to be launched with the previous sanction of the State Government, or any officer authorised by it in that behalf. It is no doubt true that the sanction behind the exercise of the power u/s 36 is the power to launch a Prosecution; but even there the Legislature has provided a safeguard and no prosecution even for a breach of a direction u/s 36 can be started except with the previous sanction of the State Government. It will be unreasonable to assume that even in a case of a direction which it was impossible to comply with, a prosecution would be sanctioned by the State Government. We are, therefore, satisfied that the attack on section 36 of the Procurement Act on the ground that it also gives an unguided power to the State Government must fail.

The result is that the challenge made by the petitioners to the constitutional validity of sections 18 (1) and (2), 22, 25, 27 and 36 of the Procurement Act stands negatived. The petition, however, must be allowed in so far as it challenges the proviso to section 22, and as pointed out earlier, that proviso to section 22 has been declared to be void and unenforceable as violative of Article 14 of the Constitution. The petition is thus partly allowed, but in the circumstances of the case we make no order as to costs.