MANNALAL JAIN versus THE STATE OF ASSAM AND OTHERS

Citation: [1962] 3 S.C.R. 936 · Decided: 29-09-1961 · Supreme Court of India · Bench: BHUVNESHWAR PRASAD SINHA · Disposal: Case Allowed

Cited by 2 judgment(s) · see the full citation network in Lexace

Judgment (excerpt)

1961 
JI rs. Dossibai 
X. B. Juj11blw.J 
v. 
Khl1TKl&and GorU111Ql 
Das Gupta J. 
1961 
Septnnbtr 29. 
• 
936 
SUPREME COURT REPORTS 
[1962) 
under s. 6 (1) of tho Rent Act the provision of 
part II of the Act, apply. 
The Trial Court nnd the High Court wer• 
therefore right in holding that the City Civil Court, 
Bombay, had 'no jurisdiction to try the suitll. 
Tho a ppeale arc accordin~ly dismil!&'cl with 
costs. 
Thero will be one 1et of hearing fee for th• 
four appeals. 
Ap~nl di.<miased. 
MANNALAL JAIN 
t'. 
TIIF. RTATF. OF ASSAM A?-.J) OTHERS. 
(R. T'. 81NRA, c. J., R. K. DAS, A. TC SARIU.R, 
N. RA.JAGOPALA AYYANGAR nnd 
.T. R. MUDl!OLKAR, .T.T.) 
Foo,/ Cnntro/-T.ire•r• '°' U"ho/,.alt dealing in rir• anii 
padd.:1-l.icm'1°flfl Orda pre10-ibing co"'1itinna Jnr g,ant of 
licP111:R--Stal1, r'r0t"rnml'nt 
ia~uing inatructionR 
lo 
lictnaing 
auf.1,oritif'8 to qranf licenceJ to co·oP'rative ~ocielit1 01ily-Pro-
priety of---Grant of licl'nttt to ro-operative .!Dcittit11 and rtfttaal (() 
othm-1.egalilf/ ~f-E,.ential Commodili'6 .A<I, 1955, (IO of 
195.5), "· 3 mul 6-·-A•ROm FoodgraiM (Lir.<n•;ng and Co11trol) 
nrd<r, IP61, cl. 5. 
In exercise of the powers ronf<rred by s. 3 of the Ew.n-
tial O>mmodities Ar.t, 1955, the Assam Government made the 
A"am Foo<lizrains (Licensing anrl Control) Order, 1961. 
This 
Order providt"d that no person could do bu~ine~s in foodgrains 
including ric.- and parlrly, in \\•holcsal~ quantities except under 
a licenc' i"ued thereunder. 
Clause 5 of the Order laid down 
in suh-ds. (a) to (e) matters which the licensin<r authority 
!l}•all, among otht'r 
matters, have rejrard to in granting 
or 
refusing 
a 
license; 
sub-cl. (e) bring "whether the 
applicant is a co-operative society". 
In 1959, directions had 
he.n issued to aU liccnsing authoritieo by the Government that 
the rights of monopoly procurement had been given to Apex 
Co-operative Society. The petitioner applied for a licence but 
was ref115'd in view of the provisions of sub-cl. (e) of cl. 5 of 
the Order. The petitioner challenged the order refusing the 
licence on the grounds: (1) that sub-clause :el wu u/trg viua 
• 
r 
"
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) 
+ 
:l S.C.R. SUPRElllE COURT REPORTS 
937 
as it was beyond the powers granted to the S~ate Goyernment 
under s. 3 read with s. 5 of the Act, and (n) !hat sub;cl· (e) 
had been applied in a discriminatory manner with .a v1~~ to 
create a monopoly in favour of the Apex Co-operative Society. 
He'd, (per C.J., Das and Ayyangar, JJ.), that sub-cl. (e) 
of cl. 5 of the Order was not ultra vires s. 3 read wit~ s._ 5 of 
the Act, but the impugned order rejecting the apphca'.'?n of 
the petitioner was bad as it infringed the rights of the petuwner 
guaranteed under Arts. Hand 19 of the Constitution. 
Section 3 of the Act authorised the making of an order 
to achieve two objects, for maintaining or increa~ing supplies 
of essential commodities and for securing their equitable di~tri­
bution and availability at fair prices. Sub-clause (e) of cl. 5 of 
the Control Order, 1961, which enabled the licensing authority 
to prefer a co-operative society in certain circumstances in th~ 
matter of granting a licence, was not unrelated to the objects 
mentioned in s. 3 of the Act. 
A co-operative society may, by 
reason of the place which it occupies in the village economy of 
a particular area, be in a better position for maintaining or 
increasing- supplies of rice and paddy and even for securing 
their eq~itable 'distribution and availability at fair prices. 
Ramanlal Nagardas v. JJ[. 8. Palnitkar, A.LR. 
1961, 
Guj. 38, distinguished, 
Sub·clause (e) permitted the licensing authority to give 
-._.._ 
preference to co-operative societjes in certain cases but it did 
not have the effect of creating a monopoly in favour of 
co-operatiVe societ:es. In the present case the licensing authority 
refused lir.f'nce to the petitioner for the onJy reason and 
purpose of granting a monopoly to co-operative societies; it 
r 
had administered •1e Jaw in a discriminatory manner and for 
the purpose of achieving the ulterior object of creating a mono-
poly in favour of co-operative1_; which object was not within 
sub-cl. (e). The licensini>: authoritv was influenced, not by 
considerations mentioned in cl. 5 of the Order, but by the 
instructions issued by the State Government to grant Iicencci 
to co-operatives only. 
It \vas not proper for the Government 
to issue instructions to the licensing authorities when they were 

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