VRAJLAL MANILAL & CO. & ORS. versus STATE OF MADHYA PRADESH & ORS.

Citation: [1970] 1 S.C.R. 400 · Decided: 25-04-1969 · Supreme Court of India · Bench: M. HIDAYATULLAH · Disposal: Dismissed

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

Judgment (excerpt)

VRAJLAL MANILAL & CO. & ORS. 
v. 
STATE OF MADHYA PRADESH & ORS. 
April 25, 1969 
[M, HIDAYATULLAH, C.J., J. M. SHl!LAT, 
V. BHAllOAVAr 
K. S. Hl!GDB AND A. N. GROVBI., 11.) 
Madhya Pradesh 
Ttndu, Pattu 
(Vyapar Vinlyaman) 
Adh/nJyam 
(29 of 1964), s. 5(2) and r. 9 of Ruin made thereunder-State monopoly 
In tradf--Rtstrktlon on transport-Whether integral part of monopO/'J'-
Ruaonab/eness of-I/ violate of Art.r. 19(1) cl (g) and 304. 
The Madhya Pradesh Tendu Patta (Vyapar Viniyaman) Adhiniyam, 
1964 waa puoed for rcgulatins trade in tendu leaves in the public intereot 
by crutins a State monopoly in that trade, that is, in the purcbue and 
oale of tendu leaves. 
Under 1. 5 (1) when the Act is brought into force 
In an ana, no person, except the Government, ii. authorised oftlcer or 
&jl!Dt in respect of the unit where the leaves arc gtown can purchase or 
tramport them. Explanation I permits purchases from Government, it! 
authorised officers and agents and s. 5(2) permits two categories of per-
IOOI to tramport the leaves, namely : (a) a grower, from one place to 
another within the unit where they are grown; and (b) the purcbuer, 
under Explanation I. either for manufacturing bidis within the State or 
for their export outside the Slate. under a permit in accordance with ltt 
terms and conditions. 
Rule 9 of the I 965 Rules made under the Act 
provides far the application to be made for a transport permit. 
The appellants had several branches in different areas of the State. 
Whenever they purchase the leaves they have to be moved to their ware-
bouoes outside and from there to their branches and then, to the sattedars, 
that is, independent contractors, who undertake to have bidis rolled through 
matdoors to whom the satttdars distribute tobaceo and the tendu leaves 
supplied by the appellants. 
There were 6 to 7 thousand such sauedara 
and the number of mazdoors employed by the sattedars was very Iarsc. 
The appellants applied for and ob\ained permits authorising them to 
transport the leaves purchased by them to their godowns situate oullide 
the units. On June 4, 1965, tbe Divisional Forest Officer issued an order 
which forbade altoaether movement of old leaves, that is, those which were 
In atoct when the Rules came into force. 
The order also provided that 
permits illuea by the Foreat Department would be necessary for lrlDIPOrt 
of the lea- from warehoules to branches, and from 
these 
to 
the 
'1lltld4rs, aod when the •tl.edars distributed leaves 
to the 
ma1.doori 
employed by him. 
On a reprnentation by the appellanta, pointina out 
the di11leultiea involved in obtaining such permits the branch manaaen of 
tho bldi manufaeturina firms were authorised to iuue tran9\>0rt permits to 
the sattedan; but findina that the branch manascrs were 1asuing permits 
for bulk tnnoport, the District Forest Ofllcer rcacinded the relaxation. 
The appellants thereupon challenged the validity of •· 5 and r. 9 in the 
ffiah Coutt as violating Art. 19(1 )(f) and (g) and Arts. 301 and 304 
of the Constitution. The High Court dismissed the petition. 
In appeal to this Court, 
HELD: Whats. 5(2) and r. 9 are intended to require i• that a manu-
facturer must have a permit to move the leaves purch•sed by him from tho 
A 
B 
c 
D 
F 
G 
H 
A 
B 
c 
D 
E 
F 
G 
H 
VllA.JLAL MANILAL V, M. P. STATE (She/at, J,) 
401 
Unit where he has purchased them to his warehouse outside, from there 
to his branches and also when he transports then to his aattedars. But no 
such permit is inteded to be necessary when the leaves are distributed for 
the manufacture of bidis• by those sattedars to the mazdoors. 
Such a 
construction would make the restriction imposed !easonable within the 
meaning or Arts. 19(1) (5) and (6) and Art. 304(b). [412A-C] 
The Legislature thought that it was in the public interest to entrust 
the entire trade to the State which would fix reasonable prices in consulta-
tion with an advisory committee and make it, at the same time, compul-
sory for the State to purchase the entire stock which would be offered for 
sale at those pri..,s. Considering the object of the Act, it cannot be said 
that such a monopoly was unreasonable. But transport of the leaves once 
purchased or sold would not prime facie be an integral part of monopoly 
m the trade and restrictions on such transport should be reasonable. It 
may be that free movement of leaves even after they are sold would create 
difliculty in effectively implementing the inte

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