Rice Millers Association vs Union of India and Others

A.B. Chaudhari, J.—Rule. Rule is made returnable forthwith. Learned Advocate Smt. Pranita Chaubey waives service on behalf of respondent No. 1, learned Advs. Mr. Mehmood Pracha with Mr. R.V. Malviya, for respondent No. 2, and learned Govt. Pleader Mrs. Dangre, for respondent Nos. 3 to 5. With the consent of rival parties, this Writ Petition is taken up for final hearing. By the present Writ Petition, the petitioner, Rice Millers Association, Gondia, has put to challenge Clause (b) of Regulation 4 of the Food Safety & Standards (Licensing & Registration of Food Businesses) Regulations, 2011, as ultra vires the powers conferred on Respondent No. 2, i.e., Food Authority, under Section 31(2) and Section 91 of the Food Safety and Standards Act, 2006, and has consequently prayed for quashing the consequential communications stated in Prayer Clause (1).

In support of the Writ Petition, Mr. Khapre, learned counsel for the petitioner, submitted that the provision of the Regulations, 2011, and in particular Clause (b) of Regulation 4 is ultra vires the provisions of Sections 31 and 92 of the Food Safety & Standards Act, 2006 [hereinafter referred to as the Act of 2006 for brevity] According to Mr. Khapre, the power to frame a Regulation given to the authority is by way of supporting the legislation and in no case, a Regulation or any Clause thereof can override or supplant the substantive provision of the Act. He further argued that there cannot be any Regulation in derogation of what is contemplated by the Act of 2006; otherwise the same would attract the vice of not only arbitrariness, but want of authority. Mr. Khapre then argued that prescription of Rs. 12 lakhs annual turnover as the limit to treat food businesses as small scale or cottage as per Clause (b) of Regulation 4 is clearly in usurpation of authority by the Food Safety & Standards Authority of India and without any power to do so. He further contended that the said authority does not have any power to define what is the small scale industry and it must be left to the licensing or Registering Authority to decide upon the facts and circumstances in each case, rather than generalizing the same, since there are an number of food items and no general prescription of Rs. 12 lakhs as annual turnover could have been made. Mr. Khapre invited our attention to Sections 31 and 92 of the Act of 2006 and argued that the said Regulation clearly is in contravention or derogation of these provisions and, therefore, are ultra vires the said provisions and liable to be declared accordingly. He, therefore, prayed for the reliefs stated in the prayers to the petition.

Per contra, learned counsel for respondent No. 2 and other respondents supported the Regulation in question. The counsel for the respondents argued that the meaning of the words small scale, as contended by the counsel for the petitioner, cannot be understood in the way petitioner wants to. According to him, the Act of 2006 relating to the food businesses must be distinguished from the other items with which small scale industries are concerned. According to the learned counsel for the respondent No. 2, the Act of 2006 is so framed with a view to have food safety standards in the country in view of serious cases of adulteration of food items being found out in the country. Learned counsel for the respondents then invited our attention to Sections 31 and 92 and argued that the Regulation, in question, is framed as per the due authority given by the Act itself and there is no usurpation as contended by the petitioner. The Counsel for the respondents then continued their arguments and submitted that the Regulation, in question, is supplemental to what the Act has provided, and is not in derogation of the substantive provisions of the Act. According to them, small scale industries in food business have been brought in the Regulations with annual turnover of less than Rs. 12 lakhs after long, conscious and studious exercise was undertaken by the Govt. of India and the Authority. Objections were invited from the public at large and were considered and it is only thereafter the Regulations were framed in the public interest and with a view to supplement the provisions of the Act of 2006. The counsel for the respondents, therefore, submitted that the clause challenged in the petition is neither ultra vires, nor bad for any reason. They, therefore, prayed for dismissal of the Writ Petition.

We have heard the learned counsel for the rival parties. Regulation 4(b) of the Food Safety & Standards (Licensing & Registration of Food Businesses) Regulations, 2011, reads thus:

Petty Food Manufacturer means any food manufacturer, who:

(a) .....

(b) such other food businesses including small scale or cottage or such other industries relating to food businesses or tiny food businesses with an annual turnover not exceeding Rs. 12 lakhs and/or whose:

(i) production capacity of food (other than milk and milk products and meat and meat products) does not exceed 100 kg/ltr. per day; or

(ii) procurement or handling and collection of milk is up to 500 litres of milk per day; or

(iii) slaughtering capacity is 2 large animals or 10 small animals or 50 poultry birds per day; or less.

Section 31(1) and (2) of the Food Safety & Standards Act, 2006 reads thus:

Licensing and registration of food business--(1) No person shall commence or canyon any food business except under a license.

(2) Nothing contained in sub-section (1) shall apply to a petty manufacturer who himself manufactures or sells any article of food or a petty retailer, hawker, itinerant vendor or a temporary stall holder or small scale or cottage or such other industries relating to food business or tiny food business operator; but they shall register themselves with such authority and in such manner as may be specified by regulations, without prejudice to the availability of safe and wholesome food for human consumption or affecting the interests of the consumers.

Section 92 of the Act provides for an enabling power to the Food Authority to make Regulations. From the reading of the above provisions, it is clear that by virtue of Section 92, Food Authority has been empowered by the Parliament to make Regulations in respect of the subjects mentioned in Section 92 itself. There is no dispute that the subject, in question, falls in the said provision of Section 92 and, therefore, the Food Authority is vested with the power to make Regulations, including the Regulation in question.

The next question is about framing of Regulation in relation to Clause 4 providing for annual turnover of Rs. 12 lakhs. Perusal of sub-section (1) of Section 31 clearly shows that no person can carry on any food business except under a license. Thus, there is a blanket prohibition on carrying on food business and one will have to obtain a license. Sub-section (2) then is in the nature of exemption for persons carrying on food businesses as petty retailers, hawkers, temporary stall holders, small scale or cottage food business. The Parliament did not, however, define what the small scale or cottage industry would be. The Regulations were, thus, required to be framed in accordance with the enabling power under Section 92. The Regulating Authority for that purpose invited objections from the public and thereafter considered the same and found that annual turnover of Rs. 12 lakhs should be the appropriate figure for the purpose of exemption under Sub-section (2) for small scale industries. Had there been no Regulation provided by the Regulating Authority, it would have meant that the small scale industry doing the business of above fifty crore or hundred crore of rupees would also fall within the category of exemption in the absence of Regulation. The Regulation was obviously framed with a view to give relief to the petty vendors or petty retailers or temporary stall holders. Even then annual turnover of Rs. 12 lakhs was imposed as a limit which is quite reasonable and proper, and we do not think that this aspect would be justicable in the present Writ Petition. That apart, by no stretch of imagination, it could be said that the Regulatory Authority has overreached the provision of the Act or defined what is small scale industry. On the contrary, by supplementing the provision of the Act in the form of Regulations, as aforesaid, the limit of annual turnover of Rs. 12 lakhs has been indicated for giving effect to the provisions of the Act. The submission made by learned counsel for the petitioner that each case should be allowed to be decided by the Registering or licensing Authority to find out what is the small scale or cottage industry does not at all appeal to us. Such a discretion cannot be left to a particular officer and, therefore, in our opinion, the Regulatory Authority has rightly put the annual turnover of Rs. 12 lakhs in the aforesaid Regulation 4(b).

In the result, we do not find that Clause 4(b) challenged before us is ultra vires Section 31 or Section 92 of the Act. We, therefore, uphold the said Regulation. The Regulation does not overreach any of the provisions of the Act. In the result, we make the following order:

ORDER

[a] Writ Petition No. 531 of 2014 is dismissed.

[b] No costs.