w w w . L a w y e r S e r v i c e s . i n



WEST COAST FIBRE INDUSTRIES v/s STATE OF KERALA


Company & Directors' Information:- S S S FIBRE LIMITED [Active] CIN = U17110PB2005PLC027818

Company & Directors' Information:- WEST COAST INDUSTRIES LIMITED [Strike Off] CIN = U15520DL1992PLC051440

Company & Directors' Information:- WEST COAST INDIA LIMITED [Active] CIN = U01514KA1992PLC013749

Company & Directors' Information:- G L FIBRE PRIVATE LIMITED [Strike Off] CIN = U17112PB2010PTC033873

Company & Directors' Information:- INDIA FIBRE PVT LTD [Active] CIN = U17232WB1968PTC027401

    O.P. No. 1500, 1505, 1509 of 1981

    Decided On, 11 December 1985

    At, High Court of Kerala

    By, THE HONOURABLE MR. JUSTICE V. SIVARAMAN NAIR

    K.P. Kesava Menon; K.P. Dandapani ; Sumathi Dandapani; For Petitioners Government Pleader; For Respondents



Judgment Text

1. The three petitioners are conducting coconut husk decortication industries which were licensed earlier than the promulgation of the Kerala Coconut Husks Control Order. AH three are members of the Decorticated Fibre Producers Association, Unnikkulam amsom, Kozhikode. Their complaint is against the attempt of the State and its subordinate officers in mobilising procurement of green husks for retting for use in the traditional coir industry, which is organised mainly on co-operative basis, and the allotment of only dry coconut husks to the mechanised sector of the industry. This is sought to be done by issue of permits enabling the mechanised industrial sector to purchase only dry (brown) coconut husks. Petitioners submit that their industries were started at a time when there was no restriction at all in the procurement of husks, and therefore the machineries in the industrial units were so devised and fabricated as to consume green husks for manufacture of fibre. The restriction imposed in the procurement of green husks by the mechanised units operates as an unreasonable fetter on their freedom of trade, according to the petitioners. Preference to the Co-operative Sector, which, according to them, is not justified on the facts, amounts to hostile discrimination against the mechanised sector, and therefore, violates Art.14 of the Constitution of India. It is also their case, that if the respondents were earnest and serious, far more of green husks than is required by the Co-operative sector for manufacture of coir in traditional methods mainly by manual process, could have been procured, without in any manner restricting the intake of such husks by the mechanised sector. Restriction on the right of freedom of trade is, therefore, said to be unreasonable and violative of Art.19(1)(g) of the Constitution of India. They further contend that the Kerala Husks Control Order is unconstitutional, since husk does not fall under clause (a) of Entry.3 since it is not a product of an industry, the control of which is vested in the Union Government as declared by Parliament. In the alternative, it is submitted that the power under the Kerala Essential Articles Control (Temporary) Powers Act cannot be availed of by the State since such power is limited to such articles that are not essential commodities under the Essential Commodities Act. Petitioners therefore seek invalidation of the Kerala Coconut Husks Control Order and the restrictions imposed in the permits issued in their favour, that they shall procure only dry (brown) husks.


2. Respondents 1 to 3 submit that it is a matter of policy for the State to decide whether mechanised industry engaged in manufacture of coir fibre shall be permitted to procure green husks or dry husks. It is again a matter of policy as to whether the State shall reserve any industry or portion thereof for operation by the traditional and manual sector or the Co-operative sector or mechanised private industries sector. In such matters of policy involving expediency, the jurisdiction of the court is ordinarily not attracted, except of course, in cases where arbitrariness in dealing with rights of citizens is alleged and satisfactorily proved. It is again a matter of policy for the State to decide as to whether a commodity which is essential for the conduct of a particular industry shall be best utilised in the larger interests of the largest number of people or should be permitted to be cornered by the affluent industries. In such matters also, according to the respondents, the court cannot ordinarily exercise its powers of judicial review, since preference of a larger number of persons engaged in traditional and manual processes of manufacture of coir, against a few industrialists, cannot, in any case, be considered as arbitrary or discriminatory.


3. The controversy which has to be resolved is, therefore, basically one of policy. The scope of judicial review in such regions is severely limited. It is not open for this court ordinarily to reframe the policy on its own or annul a policy adopted by the State on consideration of expediency or for the only reason that an alternative policy would have been possible, or for the reason that it may be equally expedient to adopt an alternative course. Unless it be that there is manifest arbitrariness in the exclusion of some out of the many from the benefits which they would have normally been entitled to enjoy, this court is not ordinarily entitled to interfere. The merits of mechanisation in an over-populated country where the number of unemployed increases year after year is a matter better left to be decided by the executive administrative instrumentalities of the State, subject of course to an effective over-sight to ensure that such policy does not transgress the limits of reasonableness and amount to arbitrariness in State action. The only course open to the courts in matters of executive policy depending on expediency is to confine themselves to this eagle-eyed over-sight. The courts do not ordinarily travel beyond that and shall not be directly involved in matters of executive policy or administrative expediency. I have, therefore, to approach the problem thrown up in these Original Petitions with this caution as the governing factor.


4. The validity of the Kerala Coconut Husks Control Order was upheld by a Division Bench of this Court in the decision reported in AIR 1977 Kerala 88. I am in entire agreement with the reasoning contained in that judgment. I need only adopt such reasoning to repel the grounds sought to be raised by the petitioner in C.M.P. No. 7276 of 1981 seeking amendment of the petition.


5. The next contention which I have to consider is whether the restriction, that mechanised industrial units engaged in decortication of fibre shall be issued permits for procurement only of dry husks and earmarking green husks for retting to be used in the traditional-manual sector is violative of the rights of the petitioners under Art.14 and 19(1)(g) of the Constitution of India. The attack on the basis of Art.14 of the Constitution of India is based on the submission that the preference given to Co-operative Societies for almost exclusive procurement of green husks for purposes of retting amounts to hostile discrimination against mechanised industrial units like those established by the petitioners prior to the promulgation of the Husks Control Order with machineries for decorticating green husks. Preference in favour of Co-operative Societies, cannot, ordinarily, be treated as violative of Art.14 of the Constitution of India. Such preference is in favour of a well-defined class. It is not in controversy that the Co-operative Societies consist mostly of labour, who were ordinarily employed in the traditional manual sector of manufacture of coir. A preference in favour of such co-operative societies so as to enable the traditional sector of the industry engaging the largest number of indigent labour from unequal competition from the more affluent mechanised units in the same industry cannot be considered as violative of the guarantee of equality contained in Art.14 of the Constitution of India. It has been held repeatedly that the spirit of Art.14 is that unequals should not be treated as equals. The thrust of the case of the respondents is that the manual labour engaged in the traditional sector of coir industry had to be organised in the Co-operative sector, since they were incapable of competing with the larger private industrial units, including mechanised sector. These Co-operative Societies of manual workmen engaged in the traditional process of manufacture of coir, therefore, form a class by themselves. Preference granted to them and the anxiety with which they have been brought under the protective umbrella of the State cannot be considered as violative of the petitioners' right to equality under Art.14 of the Constitution of India. Such preference and patronage is fully justified in terms of Art.38, 41 and 43 of the Constitution of India requiring the State to strive to promote the welfare of the people by securing and protecting, as effectively as it may, a social order in which justice, social, economic and political, shall inform all the institutions of national life, the State shall strive to minimise the inequalities in income, and endeavour to eliminate inequalities in status, facilities and opportunities; make effective provision for securing the right to work, to education and public assistance in cases of unemployment; and to secure to all workers a living wage, conditions of work ensuring a decent standard of life etc. I am, therefore, not inclined to accept the submission that the preference given to the Co-operative sector in the matter of procurement of green husks for purposes of retting so as to enable manufacture of coir from retted husks in the traditional sector of the industry is in any manner discriminatory or violative of Art.14 of the Constitution of India. The averment of the petitioners that the Coir Corporation, Beypore, was granted movement permits for 20 lakhs green husks is sought to be explained in the counter affidavit of the first respondent. It is stated that from November, 1978 onwards, movement permits were issued to Coir Corporation only for dry husks for manufacture of decorticated fibre as in the case of the petitioners. The fact that once upon a time, the Coir Corporation was granted movement permits to procure green husks for purposes of retting cannot sustain the petitioners' submission that there was hostile discrimination even among the decorticating units.


6. The question whether preference granted to a Co-operative Society is violative of Art.14 of the Constitution of India had come up for consideration before the Supreme Court early, viz., in AIR 1956 SC 676. It was held that such preference in the matter of procurement of sugar cane by a Co-operative Society consisting of cultivators "is a reasonable provision made for the benefit of the large number of persons forming the members of the Cane Growers' Co-operative Society and cannot be impugned as in any manner violative of any fundamental right of the petitioners." That observation applies on all fours to the facts of the present case.


7. It seems to me that there is no substance in the submission that regulation of procurement of husks by issue of permits is violative of the freedom of the petitioners to carry on trade or business in decorticated fibre. It is beyond dispute that coconut husks which are being procured are not sufficient to meet the requirements of the industry. A more effective mobilisation of efforts for procurement may be absolutely essential. The shortage in procurement results in the necessary requirement of imposing some restrictions on the utilisation of this essential raw-material for the manufacture of fibre and other products. It is beyond dispute that the traditional manual sector of the industry cannot use dry husks. It also beyond dispute that mechanised units like those owned by the petitioners can process both dry husks and green husks in the process of decortication. May be, green husks can be processed easier and better. It may also be that the fibre may have better colour, better consistency and better length. It is in evidence that the decorticated fibre, which is usually brown in colour, it used mostly for purposes of cushioning whereas white fibre made out of retted husks is used for manufacture of yarn ropes and other coir products. In a situation where dry husks cannot be used for purposes of retting and the green and dry husks can both be used for decortication and in a situation where there is scarcity of this essential raw material for easy procurement, a restriction that the mechanised industrial sector shall purchase only dry husks cannot be treated as an ureasonable restriction on the freedom of the petitioners to carry on the trade or business in manufacture of coir fibre and other products. The restriction is a reasonable one; it is definitely in larger public interest. Even though 67 per cent of the total coconut crop is produced in Kerala, it is beyond doubt that only a negligible portion of husks is available for procurement. If all the requirements of the mechanised industrial sector of green husks is enabled to be met by such procurement, it may as well be that the State aided Co-operative sector may be eased out of the industry resulting in unemployment to a large number of people living in the coastal areas of the State. A provision which enables the additional fourth respondent Co-operative Coir Marketing Federation to procure green husks for purposes of retting, cannot, in these circumstances, be considered as anything other than reasonable restriction in public interests. I am, therefore, not in a position to accept the submission that the restriction contained in the permits issued in favour of the petitioners that they should procure only dry husks is in any manner an unreasonable restriction on the petitioners' freedom of trade under Art.19(1)(g) of the Constitution of India.


8. It also seems to me necessary to deal with some of the factual aspects of the matter. The case of the petitioners is that they started their industrial units much prior to the promulgation of the Kerala Coconut Husks Control Order and the machineries are adapted for manufacture of fibre only from green husks. It is stated in the counter affidavit filed in OP No. 1500 of 1981 that, "the petitioners in this Original Petition and OP No. 1505/1981 and 1509/1981 were granted the movement permits for transportation or dry or brown husks from 1-6-1976 The petitioners have net at any time demanded for the issue of movement permit for transportation of green husk before filing of this Original Petition". This assertion is ret seen controverted in any of the series of affidavits filed by the petitioners. As a matter of fact, it is positively admitted in the rejoinder affidavit filed on behalf of the petitioner in OP No. 1500 of 1981, that:


"the petitioner as well as others situated like him had no other go in the circumstances of the case, than to accept the permits for dry husk alone, as otherwise their factories will have to be laid off for want of any sort of raw material to provide labour for their workmen. Therefore, to avoid labour problems and also breach of peace in the locality, the petitioner and others similarly situated like him bad been cornered by the 3rd respondent to accept his movement permits under circumstances amounting to duress and coercion."


Curiously, however, the petitioner insists that be had been purchasing green husks for manufacture of fibre. Exts. P10 to P12 bear out of this submission. Obviously, therefore, the petitioners did not feel inhibited by any restriction in the movement permits in the matter of procurement of green husks. I do not think that such persons are entitled to invoke the extraordinary jurisdiction of this court and seek reliefs against the conditions which were imposed over five years prior to the filing of the Original Petitions and which they had been merrily contravening. It may be true that because of the severe restrictions imposed on the procurement of green husks by the mechanised units the coir industry has moved out to other States, where it is easier for them to conduct the

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trade and effectively compete with the Kerala units. This, of course should be a matter for grave concern for the State. It is also essential that there should be some co-ordination between the States in the matter of clamping down regulations on industrial activities in larger public interest. It should not be as if the imposition of the Regulation in the interest of the public in one State and its absence in the neighbouring State shall result in undue advantage to the industrialists of the neighbouring State to the detriment of the livelihood of the workmen depending on one of the most important traditional industries in the former State. This aspect of the matter has to be considered by the State and Central Governments so as to devise regional and zonal strategies to regulate the conduct of the trade industry in the neighbouring States in the larger public interest. 9. I am not satisfied that the restriction, that the petitioners shall procure only dry coconut husks, which admittedly can be processed in their mechanised industrial units, is in any manner discriminatory of their freedom to conduct trade or business in coir products. The restriction imposed in reasonable. The preference in favour of the traditional sector of coir industry organised on co-operative basis so at to effectively protect larger number of workmen from unhealthy competition from more affluent industrialists in the larger public interest cannot be struck down as discriminatory. Such preference in favour of a deserving and well defined class cannot be treated as arbitrary, or unconstitutional. The Original Petitions, therefore, fail and are hereby dismissed. There will be no order as to costs.
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