Mannalal Jain vs The State Of Assam And Others

Rewritten Version Notice: This is a rewritten version of the original judgment.

Court: supreme-court

Case Number: Petition No. 303 of 1960

Decision Date: 29 September 1961

Coram: S.K. Das, Bhuvneshwar P. Sinha, A.K. Sarkar, N. Rajagopala Ayyangar, J.R. Mudholkar

In this matter the Supreme Court of India delivered its judgment on 29 September 1961. The case was styled Mannalal Jain versus the State of Assam and others. The judgment was authored by Justice S K Das, who was joined by Justices Bhuvneshwar P Sinha, A K Sarkar, N Rajagopala Ayyangar and J R Mudholkar. The parties were identified as the petitioner, Mannalal Jain, and the respondents, the State of Assam together with additional respondents. The decision was reported in the 1962 volume of the All India Reporter at page 386 and in the 1962 Supreme Court Reporter (Third Series) at page 936. Subsequent citation references include the 1974 Supreme Court Reports (volume 366) and the 1981 Supreme Court Reports (volumes 2001 and 2030). The central statutory provision considered was the Essential Commodities Act of 1955, specifically sections 3 and 6, and the operative regulation was the Assam Foodgrains (Licensing and Control) Order, 1961, particularly clause 5 of that order.

The Court’s headnote explained that, exercising the authority conferred by section 3 of the Essential Commodities Act, the Government of Assam issued the Assam Foodgrains (Licensing and Control) Order, 1961. That Order stipulated that no person could engage in the wholesale trade of essential food grains, including rice and paddy, unless he possessed a licence issued under the Order. Clause 5 of the Order enumerated several sub‑clauses, labelled (a) through (e), which set out the factors that a licensing authority must consider when deciding whether to grant or refuse a licence; sub‑clause (e) specifically required the authority to consider whether the applicant was a co‑operative society. In 1959 the State Government issued directions to all licensing authorities stating that the rights of monopoly procurement for rice and paddy had been assigned to the Apex Co‑operative Society. The petitioner subsequently applied for a wholesale licence but his application was rejected on the ground that sub‑clause (e) of clause 5 applied, meaning that only co‑operative societies were eligible for such licences. The petitioner challenged the refusal on two principal grounds. First, he argued that sub‑clause (e) was ultra vires because it exceeded the powers conferred on the State Government by section 3 read together with section 5 of the Essential Commodities Act. Second, he contended that the application of sub‑clause (e) was discriminatory and intended to create a monopoly in favour of the Apex Co‑operative Society. The Court, speaking through the Chief Justice and Justices Das and Ayyangar, held that sub‑clause (c) of clause 5 was within the scope of section 3 read with section 5 and therefore not ultra vires. However, the Court found that the order rejecting the petitioner’s licence was invalid because it violated the petitioner’s constitutional rights under Articles 14 and 19. Section 3 of the Act authorises the issuance of orders to achieve two objectives: to maintain or increase the supply of essential commodities and to ensure their equitable distribution and availability at fair prices. The Court observed that sub‑clause (e) of clause 5, which permitted a licensing authority to give preference to a co‑operative society under certain circumstances, was not unrelated to those statutory objectives. Consequently, while the provision itself was constitutionally permissible, its application in this case was tainted by discriminatory intent and thus unconstitutional.

It was observed that the purpose of section 3 of the Act was to maintain or increase the supplies of essential commodities and to secure their equitable distribution at fair prices. The Court noted that a cooperative society, because of its position in the village economy of a particular area, could be in a better position than other traders to maintain or increase supplies of rice and paddy and to ensure that those supplies were distributed equitably and made available at reasonable prices. The decision in Ramanlal Nagardas v. M. S. Palnitkar, A.I.R. 1961 Guj. 38, was distinguished because the facts there were not the same as in the present case.

The Court explained that sub‑clause (e) of clause 5 of the Control Order permitted the licensing authority to give preference to cooperative societies in certain circumstances, but that provision did not create a monopoly in favour of cooperative societies. In the case before the Court, however, the licensing authority had refused a licence to the petitioner solely for the purpose of granting a monopoly to cooperative societies. The Court held that the authority had administered the law in a discriminatory way and had pursued an ulterior objective of creating such a monopoly, an objective that was not within sub‑clause (a) of the Order.

The judgment further observed that the licensing authority was not acting on considerations mentioned in clause 5 of the Order; instead, it was influenced by an instruction issued by the State Government that licences should be granted only to cooperative societies. The Court said that it was improper for the Government to issue such instructions because the licensing authorities were required to act according to the provisions of law.

Per the opinions of Justices Sarkar and Mudholkar, sub‑clause (e) of clause 5 of the Order served the object of section 3 of the Act, namely the maintenance or increase of supplies of essential commodities and the securing of their equitable distribution at fair prices, and therefore was not ultra vires. Even if the Order allowed only one class—cooperative societies—to carry on the business and prohibited other classes, the Court held that this would still advance the objects of the Act. The prohibition of other classes from the business would amount, in the Court’s view, to a reasonable restriction under Article 19(6) of the Constitution.

The Court relied on the decisions in Narendra Kumar v. the Union of India (I.S.M. 2 S.C.R. 375) and Glass Chatons Imports and Users’ Association v. the Union of India (W.P. 65 of 1959, unreported). It concluded that the licensing authority had not exercised its power under sub‑clause (e) in a discriminatory manner in the present case. The authority was entitled to give preference to a cooperative society, and it had done so. Although that preference resulted in the petitioner being unable to carry on his business, the Court found that the restriction was reasonable, given the necessity of securing food grains at reasonable prices and in adequate quantities.

Furthermore, the Court noted that no directions had been given by the State Government in 1961 ordering licensing authorities to grant licences only to cooperative societies. Consequently, it could not be said that the licensing authority merely followed governmental directions and had not acted independently. In fact, the Order itself contained a direction in sub‑clause (e) to give preference to cooperative societies. The Court observed that cooperative societies formed a distinct class, and a provision giving preference to such a class better served the objects of the Act and possessed a clear nexus with those objects without offending Article 14.

In this case the Court observed that the statutory requirement to give preference to a cooperative society bore a clear connection with the purpose of the Act and therefore did not violate Article 14. The matter was heard under original jurisdiction as Petition No. 303 of 1960 filed pursuant to Article 32 of the Constitution for the enforcement of fundamental rights. The Solicitor‑General of India appeared for the petitioner, while the Attorney‑General of India and counsel for the respondents were also present. The judgment dated 29 September 1961 was delivered on behalf of the bench comprising the Chief Justice and two puisne judges. The petitioner, Mannalal Jain, originally filed the writ petition on 17 October 1960 challenging an order dated 13 September 1960 issued by the Deputy Commissioner of Kamrup, Gauhati. That order had rejected the petitioner’s application for a licence to trade in rice and paddy for the year 1960 under the Assam Foodgrains (Licensing and Control) Order, 1960. The petition was listed for hearing on 2 February 1961, but the hearing was postponed indefinitely because it was pointed out that the licence period for 1960 had already elapsed, requiring the petitioner to submit a fresh application for the year 1961. Accordingly, the petitioner filed a new application on 4 February 1961. However, before that date the Governor of Assam promulgated a revised Assam Foodgrains (Licensing and Control) Order, 1961, and the new application had to be considered under the terms of that Order. Since the Deputy Commissioner had not yet ruled on the fresh application, the petitioner approached the Supreme Court through Civil‑Miscellaneous Petition No. 850 of 1961 seeking various reliefs, including a direction that the licensing authorities consider his application and grant the licence. On 11 April 1961 the Deputy Commissioner issued an order rejecting the petitioner’s application. The order, which is the subject of the present challenge, stated: “Having regard to the existing licences in these areas (Mangaldai and Gauhati) and the quantity of foodgrains available therein, any further licence would be superfluous.” When the petition was again listed on 1 May 1961, the petitioner requested time to amend his original petition, which pertained to the refusal of the 1960 licence. The amendment became necessary because of the later order of 11 April 1961 that denied the licence for 1961. The Court allowed the amendment, and the matter proceeded on the basis of the amended petition filed on 5 May 1961 (Civil‑Miscellaneous Petition No. 1140 of 1961). The Court then set out the factual background: the petitioner is an Indian citizen engaged in the business of trading rice and paddy in the district of Kamrup, Assam.

In this matter the petitioner explained that the Essential Commodities Act of 1955, enacted as Act 10 of 1955, empowered the Central Government to regulate certain essential goods. Under section 3 of that Act, and pursuant to a notification that delegated those powers to the Government of Assam, the State government issued the Assam Foodgrains (Licensing and Control) Order of 1958. That Order mandated that any wholesale dealing in rice and paddy could be undertaken only after the trader obtained a license from the appropriate licensing authority. The petitioner asserted that he had obtained such a license for the year 1958, but that the licence had expired on 31 December 1958. He further contended that he continued his rice‑paddy business in 1959, although there existed a dispute as to whether he had secured a licence for that year. On 26 November 1959 the petitioner received a letter from the office of the Deputy Director of Supply in Guwahati informing him that his licence would not be renewed after 31 December 1959. According to the petitioner, that communication resulted from a decision of the Government of Assam, taken on the advice of the Food Advisory Council, to grant a monopoly right of paddy procurement to a cooperative society in Kamrup district known as the Assam Co‑operative Apex Marketing Society Ltd., which was respondent No. 6 in the case. In a separate letter dated 13 November 1959, the Director of Supply, Assam, outlined the policy to be implemented, stating that the monopoly right for Kamrup district and several adjoining subdivisions had been awarded to the Apex Marketing Society. The Society was to purchase paddy from growers through various service co‑operative societies, collect all surplus paddy, and deliver the quantity required for buffer stock to the Supply Department; any paddy not needed by the Department could be sent to mills. That letter was circulated to all licensing authorities. Subsequently, on 5 January 1960, the Assam Foodgrains (Licensing and Control) Order 1960 came into force, replacing the 1958 Order. Clause 5 of the 1960 Order specified the factors that the licensing authority must consider when granting or refusing a licence, namely: (a) the amount of foodgrains available locally; (b) the number of persons who have applied for or been granted licences in the area; (c) the ordinary business carried on by the applicant; and (d) the applicant’s past activities as a licence‑holder or businessman, subject to the provision that the State may modify licence‑granting conditions from time to time.

The governing authority retained the power to alter the conditions attached to the grant of a licence from time to time. On 28 January 1960 the petitioner submitted an application seeking a licence for the year 1960. The licensing authority rejected the application by an order dated 17 February 1960. The order explained the rejection in the following terms: “You are hereby informed that as the Co‑operative Apex Marketing Society has been given the right of monopoly purchase in the Kamrup district this year, your case cannot be considered for issue of the licence.” The rejection was evidently based on the Government of Assam’s decision to permit monopoly procurement. The petitioner challenged the order by filing a writ petition under Article 226 of the Constitution in the High Court of Assam. The High Court allowed the petition principally on the ground that the petitioner’s application for a licence for 1960 had not been examined on its merits in accordance with clause 5 of the Assam Foodgrains (Licensing and Control) Order, 1960. While the Court did not address the broader question of whether the State could create a monopoly in paddy procurement through executive instructions to licensing authorities, it nonetheless set aside the order dated 17 February 1960 and issued a writ of mandamus directing the licensing authority to consider the petitioner’s application on its merits and in compliance with the provisions of the aforesaid Control Order.

Despite the mandamus, the licensing authority failed to issue any order until 7 June 1960. On that date the petitioner filed two separate applications before the High Court: one sought a directive ordering the licensing authority to grant him a licence for 1960, and the other sought contempt proceedings against the authority for non‑compliance. Notices of these applications were served on the respondents. The following day, 8 June 1960, the licensing authority issued another refusal order, stating that “as the Assam Co‑operative Apex Marketing Society Ltd. had already been granted a licence to deal in rice and paddy, with its branches spread all over the district, it was considered unnecessary to grant further dealing licences to individual dealers for the same area.” On 9 June 1960 the petitioner withdrew the two applications filed on 7 June and instead filed a fresh application on 15 June 1960 challenging the 8 June refusal. The High Court, on 10 August 1960, again set aside the 8 June order and directed the licensing authority to act independently of any instructions from the Government, to give due consideration to the merits of the petition, and to decide the matter according to the relevant provisions of the Assam Foodgrains (Licensing and Control) Order, 1960. Nonetheless, the licensing authority did not make any order in compliance with the Court’s directions until after 8 September 1960.

The High Court and the petitioner filed two applications on the same day: one seeking enforcement of the High Court’s direction and the other seeking to commence contempt proceedings. Both applications were admitted and notices were served on all respondents, including the licensing authority, on that very day. Subsequently, on 13 September 1960 the licensing authority issued another order rejecting the petitioner’s application. In that order the authority observed, inter alia, that the Assam Co‑operative Apex Marketing Society Ltd. had previously applied for and obtained a licence for the same areas, and that this fact was a relevant consideration under Clause 5(b) of the Assam Foodgrains (Licensing and Control) Order, 1960. The authority further stated that the stock of foodgrains available in the locality could be readily procured by the already‑licensed party, which, being a co‑operative, possessed better facilities for such procurement. Accordingly, the authority found no necessity to grant a licence to the petitioner and therefore rejected the petition.

Instead of returning to the High Court of Assam, the petitioner instituted a writ petition before this Court on 17 October 1960, identified as Writ Petition No. 303 of 1960. After that filing, certain proceedings took place in this Court, as referenced in the introductory paragraph of this judgment. The petition has since been amended and now challenges the licensing authority’s order dated 11 April 1961, which rejected the petitioner’s application for a licence for the year 1961. The provisions of the Assam Foodgrains (Licensing and Control) Order, 1960 are no longer applicable because the Governor of Assam issued a fresh order, the Assam Foodgrains (Licensing and Control) Order, 1961. For convenience, this later instrument is referred to as the Control Order, 1961.

Clause 5 of the Control Order, 1961 prescribes the matters that the licensing authority must consider when granting or refusing a licence. Specifically, the clause requires the authority to have regard to the following: (a) the quantity of foodgrains available in the locality for which the licence is sought; (b) the number of persons who have applied for and those who have been granted licences for foodgrains in that locality; (c) the nature of the business ordinarily carried on by the applicant; (d) the applicant’s past activities as a licence‑holder or as a business firm; and (e) whether the applicant is a cooperative society. It is noteworthy that the proviso to the earlier Clause 5 was omitted and a new sub‑clause (e) was inserted, thereby enabling the licensing authority to factor in the applicant’s status as a cooperative society when deciding on a licence.

To complete the factual record, it may be observed that on 10 November 1960 the High Court dismissed the petitioner’s application to proceed against the opposite parties for contempt, primarily on the ground that the order dated 13 September 1960 had not been before the Court.

In this matter the order dated 11 April 1961 was contested by the petitioner on two principal grounds. First, the petitioner contended that the High Court had held that the order of 13 September 1960 had not been before it, and therefore the subsequent order of 11 April 1961 was challenged. The petitioner argued that sub‑clause (e) of clause 5 of the Control Order 1961 was ultra vires because it exceeded the powers conferred on the State Government by section 3 read with section 5 of the Essential Commodities Act 1955. The second ground advanced by the petitioner was that, even if sub‑clause (e) of clause 5 were intra vires, the provision merely permitted the licensing authority to consider, among other relevant matters, whether the applicant for a licence was a cooperative society. It did not empower the authority to grant a monopoly right of procurement in favour of a cooperative society by excluding all others. Consequently, the petitioner maintained that the licensing authority was not authorised to act as though the sub‑clause created a monopoly right for cooperatives. The petitioner further alleged that, in the present case, the licensing authority disregarded the actual provisions of clause 5 of the Control Order 1961 and instead followed instructions issued by the State Government to grant a monopoly to cooperative societies, basing its order on those instructions despite contrary directions previously issued by the High Court in earlier applications of the petitioner. In other words, the petitioner characterised the impugned order as a colourable exercise of power, asserting that the authority acted according to State Government instructions rather than in accordance with the statutory provisions that were meant to guide it, thereby conferring a monopoly on cooperative societies not contemplated by clause 5. As a result, the petitioner claimed that the order lacked any legal authority or jurisdiction, deprived the petitioner of the right to carry on his trade, and discriminated against him by granting a monopoly to respondent No 6 in a manner not provided by law. The petitioner argued that these actions violated his constitutional rights under Articles 14 and 19, and therefore he was entitled to approach this Court under Article 32 of the Constitution to have the order set aside. The petitioner also sought the quashing of the licence granted to respondent No 6 on the same grounds. On the side of the respondents – the State of Assam, its officials, and the Assam Co‑operative Apex Marketing Society Ltd. (respondent No 6) – it was argued that neither of the two grounds of attack was tenable. The respondents asserted that sub‑clause (e) of clause 5 of the Control Order 1961 fell within the authority and powers granted to the State Government by sections 3 and 5 of the Essential Commodities Act 1955.

The respondents submitted that, read with clause five of the Essential Commodities Act of 1955, no monopoly has been granted to the Assam Co‑operative Apex Marketing Society Ltd. They further asserted that the order issued by the licensing authority on 11 April 1961 was based on the considerations mentioned in sub‑clauses (a) and (b) of clause five of the Control Order of 1961, and that such an order could not be attacked by a petition under article 32 of the Constitution. The Court therefore proceeded to examine the alleged grounds of attack and the corresponding replies. Regarding the first ground of attack, it was necessary to clarify at the outset that the validity, or vires, of the Essential Commodities Act of 1955 itself had not been challenged before this Court. What was contested was the contention that section three of the Act confers certain powers on the Central Government, which it has, in turn, delegated to the State Government of Assam. The respondents argued that these delegated powers do not authorize the inclusion of sub‑clause (e) of clause five of the Control Order of 1961; in other words, they claimed that whether an applicant for a licence is a co‑operative society or not is irrelevant to the objects for which section three empowers the Central Government or its delegate to make orders.

Section three, subsection (1), was quoted to illustrate the argument. It reads: “If the Central Government is of the opinion that it is necessary or expedient to maintain or increase supplies of an essential commodity, or to secure its equitable distribution and availability at fair prices, it may by order provide for regulating or prohibiting the production, supply, distribution, trade and commerce thereof.” Subsection (2) of the same section, which the Court did not need to read in detail, enumerates the various categories of orders that may be made under the powers conferred by subsection (1), without limiting the generality of those powers. The respondents maintained that the powers under section three may be exercised only when the Central Government or its delegate is of the opinion that such exercise is necessary or expedient to achieve two specific objectives: (a) maintaining or increasing supplies of any essential commodity, and (b) securing its equitable distribution and availability at fair prices. They further argued that the fact that an applicant is a co‑operative society bears no connection with either of those two objectives; consequently, sub‑clause (e) of clause five of the Control Order of 1961 could not be said to fall within the powers granted by section three of the Act. The Court could not accept that argument in the broad terms presented. It was satisfied that clause five of the Control Order of 1961 does not create a monopoly in favour of co‑operative societies. The clause sets out five matters and provides that the licensing authority shall have regard to those matters when granting or refusing a licence. The five matters …

The clause lists five matters but explicitly states that these are “among other matters” that the licensing authority may consider, therefore the enumeration is not exhaustive. Consequently, the licensing authority is free to examine any factor it deems relevant to the decision to grant or refuse a licence, with the five listed items merely illustrating some of the considerations. Sub‑clause (e) therefore permits the authority to give preference to a co‑operative society in particular circumstances when granting a licence; in other words, there may be situations or localities where the factors set out in sub‑clause (e) outweigh other considerations. The effect of sub‑clause (e) is not far‑reaching. Indeed, the counsel for the respondents acknowledged that sub‑clause (e) of clause 45 does not create a monopoly in favour of co‑operative societies. Proceeding on the premise that sub‑clause (e) does not establish a monopoly, the question is whether it falls outside the powers conferred on the State Government by section 3 of the Essential Commodities Act, 1955. It is undisputed that sub‑clauses (a) to (d) clearly lie within the powers of section 3. Matters such as the stock of foodgrains available locally for which the licence is sought, the number of persons who have applied for and been granted licences in the locality, the usual business carried on by the applicant, and the applicant’s past activities as a licencee or businessman are undoubtedly connected with the two objects mentioned in section 3. The question, then, is whether the fifth matter mentioned in sub‑clause (e)—whether the applicant is a co‑operative society—is wholly unrelated to those two objects. It cannot be said to be unrelated. The respondents’ counter‑affidavit states that co‑operative societies possess better facilities for procuring foodgrains and are positioned to assure scheduled prices to the farmers who grow paddy. It further explains that among co‑operative societies there are primary societies comprising the growers themselves, as well as supply co‑operatives that can eliminate middle‑man profits. Paragraph 4 of the affidavit notes that the National Development Council resolved that the State should assume wholesale trade in foodgrains to maintain fair price levels for both producer and consumer and to minimise the disparity between the price received by the farmer and the price paid by the consumer throughout the year. The Council also decided that an adequate number of primary marketing societies should be established and linked with village co‑operatives to serve as agencies for the collection and sale of foodgrains at assured prices at the village level.

The affidavit explained that, following the decision of the National Development Council, the Government of Assam, after consulting its State Food Advisory Council, had resolved that whenever rice and paddy are procured in the State, preference should be given to cooperative societies that possess the necessary resources and facilities. The Court observed that because cooperative societies may occupy a distinctive position in the village economy of a particular locality, it cannot be asserted as a universal rule that sub‑clause (e) of clause 5 of the Control Order, 1961, bears no relationship to the objectives enumerated in section 3 of the Essential Commodities Act, 1955. The Court noted that in certain villages or regions cooperative societies are better placed to maintain or increase the supply of rice and paddy, and to ensure that such supplies are distributed equitably and made available at fair prices. Consequently, the Court rejected the broad contention advanced by counsel for the petitioner that sub‑clause (e) of clause 5 of the Control Order, 1961, could have no connection whatsoever with the two objectives set out in section 3 of the Essential Commodities Act, 1955. The petitioner had relied upon the decision in Ramanlal Nagardas v. M. S. Palnitkar, a case in which the validity of a State action that entrusted the wholesale distribution of sugar—an essential commodity under the Essential Commodities Act, 1955—to cooperative societies alone, thereby excluding other similarly licensed dealers, was challenged. That precedent held that a State may make a classification for the purpose of achieving a specific legislative aim, but such a classification must satisfy two requirements: first, it must be founded on an intelligible differentia; second, the differentia must have a rational relation to the objectives sought to be achieved. The issue was examined in the light of Article 14 of the Constitution, and the earlier court had held that the State’s action of assigning wholesale distribution of sugar exclusively to cooperative societies amounted to discrimination that violated the equality guarantee of Article 14. The principles underlying Article 14 are now well settled and have been explained in numerous decisions of this Court, rendering a detailed recitation unnecessary. In the present case, the Court observed that no discrimination between one class of licence‑holders and another, as occurred in Ramanlal Nagardas v. M. S. Palnitkar, has been established. Instead, the factual situation is that licences have been issued solely to cooperative societies while the petitioner’s application for a licence has been denied, the licensing authority justifying its refusal on the ground that a monopoly should be created in favour of cooperative societies. This circumstance, the Court noted, amounts to discrimination.

The Court observed that a discrimination had indeed been made against the petitioner and that such discrimination could not be justified under clause five of the Control Order of 1961. In examining the petitioner’s application, the licensing authority had applied a discriminatory approach that was not supported by the provisions of clause five. This observation led the Court to consider the second argument raised by the petitioner’s counsel, while noting that the first argument, which relied on the decision in Ramanlal Nagardas v. M. S. Palnitkar, did not provide any assistance in the present case. The Court explained that sub‑clause (e) of clause five permitted the licensing authority to give preference to a cooperative society in certain circumstances, but that sub‑clause did not create a monopoly in favour of cooperatives. The preference allowed by sub‑clause (e) was found to have a reasonable relationship to the objects of the legislation set out in section three of the Act; consequently, sub‑clause (e) could not be declared invalid on the ground that it amounted to class legislation. However, the Court warned that if an order were passed under that sub‑clause for a purpose that the legislature had not contemplated, such an order would constitute discrimination and would deny the guarantee of equal protection of the law. Turning to the petitioner’s second argument, the Court held that the licensing authority could lawfully give preference to cooperative societies if it was of the opinion that issuing a licence to a cooperative in a particular locality would further the objectives of section three of the Act. In the present case, the authority had not acted on such a view. Instead, the authority repeatedly refused to grant a licence to the petitioner solely for the purpose of creating a monopoly for cooperative societies. The Court described this as discrimination in the administration of the law, noting that the law had been applied in a discriminatory manner in order to achieve an ulterior objective – namely, the creation of a monopoly favouring cooperatives – an objective that clearly lay outside the scope of sub‑clause (e) of clause five. The Court referred to the various orders previously quoted, which demonstrated that the licensing authority had denied the petitioner’s licence not on the grounds enumerated in sub‑clauses (a) and (b) of clause five, but on the ground that the State Government had decided to introduce a monopoly for the procurement of paddy in favour of cooperative societies and therefore no licences should be granted to individual dealers other than cooperatives. Considering the facts previously outlined in the judgment, the Court concluded that the impugned order dated 11 April 1961 was based on the same rationale – the creation of a monopoly in favour of cooperatives – even though the order referred to existing licences and the quantity of foodgrains available in the locality.

During the hearing before the Court, the matter was adjourned so that the parties could file affidavits demonstrating whether private dealers, other than co‑operatives, had been entirely excluded from dealing in paddy throughout the State. The affidavits submitted thereafter established that private dealers had indeed been completely excluded. In the affidavit presented on behalf of respondent No 1, paragraph 4 states that “it is not denied that in the year 1961 licences for the procurement of paddy were issued to the co‑operatives in all the paddy‑producing districts in Assam.” To argue that no monopoly had been created in favour of a particular co‑operative such as respondent No 6, the same affidavit points out that a number of co‑operatives had been, or were being, granted licences for paddy procurement. The Court considered these statements to demonstrate a single purpose: the creation of a monopoly favouring co‑operatives. To achieve that purpose, the State Government employed an indirect approach; rather than issuing a direct order authorising such a monopoly—whether the State possessed competence under the Essential Commodities Act, 1955, a question on which the Court expressed no opinion—it instructed the licensing authorities in all districts to grant licences solely to co‑operatives. The flaw in the challenged order lies in the licensing authority’s acceptance of those instructions and the consequent issuance of an order in accordance with them. The licensing authority’s duty was to issue orders in conformity with element 5 of the Control Order, 1961. Instead, it acted on the State’s directives, which the Court found inconsistent with sub‑clause (e) of element 5, because that sub‑clause permits preference for co‑operatives only in certain circumstances, not the creation of an exclusive monopoly. Accordingly, the Court held that the impugned order violated the petitioner’s constitutional rights under Articles 14 and 19 and therefore must be set aside. The order dated 11 April 1961 issued by the licensing authority was quashed, as was the order granting a licence to respondent No 6. The licensing authority is directed to consider the petitioner’s application for a licence for the year 1961 on its merits, together with the application of respondent No 6 and any other pending applications, while observing the provisions of clause 5 of the Control Order, 1961 and any other applicable legal provisions, in light of the observations made in this judgment. The licensing authority must disregard any instructions that are not in harmony with the governing law.

All instructions that are not consistent with the legal provisions guiding the licensing authority must be disregarded. Because the year 1961 will end in a few months, the pending licence applications should be processed as quickly as possible so that the petitioner’s right is not lost due to delay. Before concluding the matter, the Court expressed deep concern about the manner in which the State Government or its officers have issued instructions concerning the grant of licences. Those instructions are plainly inconsistent with the statutes that regulate the issuance of such licences. The Court doubted the wisdom of issuing executive directions in matters that are governed by law; even if it were deemed necessary to give directions, such directions may not be framed or used in a way that overrides statutory provisions. To allow that would destroy the foundation of the rule of law and undermine orderly administration. The Court therefore felt it necessary to refer to this issue because the instructions issued by the State Government or its officers for granting licences for the procurement of paddy do not comply with clause 5 of the Control Order 1961. Consequently, the petition was allowed with costs and the orders previously directed should now be issued.

SARKAR J. noted that the petitioner is an Indian citizen who conducts business as a dealer in rice and paddy in the State of Assam. Since 1958, the trade in rice and paddy in that State has been regulated by Orders issued by the State Government under the Essential Commodities Act, 1955, based on powers delegated by the Central Government under section 5 of that Act. Those Orders, hereinafter called Licensing Orders, stipulated that no person could purchase, sell or store for sale any food grain, including rice and paddy, in wholesale quantities unless the person held a licence issued in accordance with the terms and conditions of the Order. Wholesale purchase or sale was defined as any transaction involving quantities exceeding ten maunds. The petitioner had obtained a licence to deal in paddy for the year 1958; it was unclear whether a licence had been obtained for 1959, but that year was not relevant to the present case. On 28 January 1960, the petitioner applied, under the then‑in‑force Licensing Order, for a licence to deal in paddy in Kamrup district of Assam for the year 1960. The application was refused by an order dated 17 February 1960 on the ground that the Co‑operative Apex Marketing Society had been granted a monopoly of purchase in Kamrup district.

In this case the petitioner invoked Article 226 of the Constitution to obtain the quashing of an order issued by the licensing authority that refused to grant a licence for dealing in paddy in Kamrup district. The High Court of Assam delivered its judgment on 27 April 1960, holding that the licensing authority was legally bound to consider the petitioner’s application and had failed to fulfil that duty. Consequently, the Court set aside the refusal order and issued a writ of mandamus directing the authority to examine the petitioner’s application on its merits. The licensing authority, however, did not act on the writ until 7 June 1960, prompting the petitioner to file a fresh application before the High Court on that date, seeking enforcement of the mandamus. Upon receiving notice of this motion, the authority issued another order on 8 June 1960, again refusing the licence. In that order the authority explained that the Assam Co‑operative Marketing Society already held a licence to deal in rice and paddy throughout the district, and therefore it deemed it unnecessary to grant an additional licence to an individual dealer for the same area. The petitioner subsequently withdrew the 7 June motion and instituted a new petition under Article 226, challenging the 8 June order. On 8 August 1960 the High Court annulled the 8 June refusal, observing that the licensing authority must act in a quasi‑judicial capacity and cannot simply follow instructions from the State Government without independently assessing the merits of each application as required by the Licensing Order. The Court directed the authority once more to decide the petitioner's case in a quasi‑judicial manner. Despite this direction, the authority failed to make a decision, and the petitioner returned to the High Court on 8 September 1960, requesting appropriate relief. After receiving notice of this filing, the authority issued another refusal on 13 September 1960, this time denying licences not only to the petitioner but also to several other private dealers. The order stated that the Assam Co‑operative Apex Marketing Society had previously applied for and been granted a licence for the relevant areas, a circumstance that fell under clause 5(b) of the Assam Foodgrains (Licensing and Control) Order, 1960. The authority argued that the cooperative could readily procure the required stock of foodgrains in the area, possessed better facilities as a co‑operative, and therefore it was unnecessary to issue additional licences to the applicants. The High Court, on 10 November 1960, issued an order on the petitioner’s 8 September motion, discharging the rule because the relief sought had already been granted. The Court noted that the 13 September order was not before it at the time of its earlier directions and that it was competent to assess whether that order conformed with the earlier August order. The Court also observed that it found no sufficient reason to initiate contempt or any other action against the licensing authority for the delay in disposing of the licence application.

In its analysis, the Court noted that the order issued on August 8, 1960, did not provide any justification for taking action against the licensing authority for the delay in deciding the licence application. The Court further observed that the Assam Foodgrains (Licensing and Control) Order, 1960, which governed the petitioner’s 1960 licence request, contained no provision that allowed a co‑operative society to be given preference in the grant of a licence. The present petition was then presented before the Court under Article 32 of the Constitution, challenging the validity of the licensing authority’s order dated September 13, 1960, and seeking a declaration that the licence granted to the Assam Co‑operative Apex Marketing Society was illegal. The petitioner also requested that the licensing authority be directed to consider all licence applications in accordance with the provisions of the 1960 Licensing Order. The petition was scheduled for hearing on February 2, 1961. By that date, the year for which the petitioner had applied for a licence had already elapsed, and the 1960 Licensing Order had been superseded by a new Order issued in 1961. Consequently, the Court held that the petition had become substantially infructuous. The petitioner then proposed to file a fresh application for a licence for the year 1961 and asked that the pending petition be adjourned. The Court consequently adjourned the petition sine die. On February 4, 1961, the petitioner submitted a new application for a licence to deal in paddy for the year 1961. The licensing authority responded on April 11, 1961, stating: “Having regard to the existing licences in these areas (Mangaldai and Gauhati), and the quantity of food grains available therein, a further licence would be superfluous.” As a result, the petitioner’s request for a 1961 licence was declined. The petitioner subsequently amended the original petition, with the permission of the Court, to now challenge the April 11, 1961 order. The respondents in this amended petition were the State of Assam and several of its officers, including the licensing authority, as well as the Assam Co‑operative Apex Marketing Society, hereafter referred to as the Apex Society. The Court reiterated that the 1961 licence application was governed by the Licensing Order, 1961, and that the central issue in the dispute concerned clause (e) of paragraph 5 of that Order. That paragraph reads: “In granting or refusing a licence under this Order, the licensing authority shall, among other matters, have regard to the following, namely: – (a) the stock of foodgrains available in the locality for which the licence is required; (b) the number of persons who have applied for and those who have been granted licences in respect of the foodgrains under this Order in the locality; (c) the business ordinarily.”

In this case the licensing authority was required, under clause (e) of paragraph 5 of the Licensing Order 1961, to consider whether an applicant was a cooperative society when a licence for dealing in paddy was sought. The record showed that, in every locality where the Order was applied, licences for paddy were granted only to various cooperative societies that were subsidiaries of the Apex Society, and no private dealer received a licence. The respondents explained that these grants had been made legitimately under clause (e) of paragraph 5 of the Order. The petitioner’s grievance therefore centred on this practice. He advanced two separate arguments. First, he contended that clause (e) of paragraph 5 was ultra vires because it bore no relationship to the purpose of the Essential Commodities Act, the statute under which the Order was framed. Second, he asserted that, even assuming the clause was valid, its implementation was discriminatory and designed to create a monopoly in favour of the Apex Society, thereby infringing his fundamental rights under Article 19(1)(g) and Article 14 of the Constitution. The Court found that neither of these contentions was properly founded and proceeded to examine the first argument concerning the alleged ultra vires nature of the clause.

The Court first noted that the Essential Commodities Act itself was not challenged; consequently, any order made under the authority of that Act would be presumed valid unless shown otherwise. Section 3 of the Act empowers the Central Government to issue orders whenever it deems necessary or expedient for maintaining or increasing the supplies of essential commodities, or for securing their equitable distribution and availability at fair prices. The purpose of the Act, therefore, is to ensure that essential commodities, including food grains such as paddy, are supplied in sufficient quantities and at reasonable prices to the public. Clause (e) of paragraph 5 of the Licensing Order 1961 explicitly permits a cooperative society to be preferred when a licence is granted. The Court then asked whether the object of the Act would be achieved if the trade in paddy were entrusted to cooperative societies. It concluded affirmatively. A cooperative society, by definition under Section 4 of the Co‑operative Societies Act 1912, is an organisation whose primary goal is the promotion of the economic interests of its members in accordance with cooperative principles. When a society conducts business according to those principles, it trades with its own members and does not pursue profit as the dominant motive. Accordingly, when a licence to purchase paddy is issued to a cooperative society of growers, the transaction occurs directly between the seller and a body of which the seller is a member, effectively eliminating the middleman and reducing the price of the commodity for consumers. This arrangement, the Court observed, aligns with the statutory objective of securing equitable distribution and fair pricing of essential commodities.

In this case, the Court explained that when a co‑operative society of growers is granted a licence to purchase paddy, the seller actually sells to a body of which he himself is a member. This arrangement effectively removes the middleman and consequently lowers the price of the commodity. The Court referred to an observation from its earlier judgment in Narendra Kumar v. Union of India, where it was noted that “the middleman’s profits increase the price of goods which the consumer has to pay is axiomatic” (page 389). The Court further quoted that judgment stating that, in modern times, those responsible for social control have endeavoured to minimise the activities of middlemen and to replace them largely by co‑operative sale societies of producers and of consumers (page 390). The Court therefore expressed no doubt that if the purchase of paddy is left to growers’ co‑operatives – which is precisely the purpose of clause (e) of paragraph 5 – the resulting product, rice (husked paddy), can reasonably be expected to reach consumers at a fair price. Such an outcome would further the objective of the Essential Commodities Act, and consequently the clause could not be said to be ultra vires the Act.

The Court then addressed the contention that clause (e) of paragraph 5 would create a monopoly in favour of co‑operative societies, which would be illegal and contrary to the purpose of the Act. The Court found this argument to be unfounded. It observed that if paragraph 5 contained only clause (e), directing preference to co‑operative societies in the grant of licences, the provision would not be inherently bad. The question of a monopoly would not arise because the provision merely preferred one class – the co‑operative societies – to conduct the business, which, as previously stated, advances the Act’s objective. While this preference would effectively bar other persons from the business, the Court noted that the remaining issue was whether such a prohibition was reasonable under article 19(6) of the Constitution.

To illustrate how such a restriction might be assessed, the Court referred to the earlier case of Narendra Kumar v. Union of India. In that case, the “Non‑ferrous Metal Control Order, 1958” was issued under section 3 of the Essential Commodities Act, and clause (4) of that order provided that no person could acquire any non‑ferrous metal except under a permit issued by the Controller according to principles specified by the Central Government. The Government later communicated principles that permitted permits only to certain manufacturers and expressly excluded dealers. Consequently, dealers were completely prohibited from trading, and only designated manufacturers could obtain permits to deal in rolled non‑ferrous metals. Dealers challenged this restriction under article 32, claiming that clause (4) read with the Government’s principles violated article 19(1)(f) and (g). The Court held that the Constitution’s use of the word “restriction” was intended to be sufficiently broad to include laws that are inconsistent with article 19(1), provided such inconsistency or deprivation of rights is reasonable in the interests of the matters mentioned in the article. The Court further stated that the word “restriction” also encompassed outright prohibitions, and therefore a law that prohibits the exercise of a fundamental right can be saved if the prohibition is reasonable. After considering the facts, the Court concluded that the restriction in that case was permissible. This reasoning was offered to demonstrate how the present question concerning clause (e) of paragraph 5 might be examined in light of constitutional provisions on reasonable restriction.

In the earlier case, certain dealers challenged a licensing scheme that permitted only selected manufacturers to obtain permits for dealing in rolled non‑ferrous metals. The dealers sought a declaration under Article 32 that clause 4 of the order, together with the principles issued by the Government, violated Article 19(1)(f) and (g). The Court observed that the Constitution’s use of the term “restriction” was intended to be broad enough to include laws that were inconsistent with the rights in Article 19(1), provided that such inconsistency was reasonable in the interest of the matters specified in the clause. The Court therefore rejected the argument that any law prohibiting the exercise of a fundamental right could never be saved. After examining the facts, the Court held that both clause 3 and clause 4 of the order were valid. It explained that although clause 3 effectively excluded dealers from the trade, the exclusion was a reasonable restriction in the public interest. Likewise, clause 4, read together with the governmental principles, was also a reasonable restriction. However, the Court noted that the principles announced by the Government had not been issued in accordance with sub‑sections (5) and (6) of section 3 of the Essential Commodities Act. Because of this procedural defect, the petition was allowed and a writ was issued restraining the Union from giving effect to clause 4 until the principles were properly specified. This procedural finding did not diminish the earlier observations on the validity of the restrictions, which the Court considered applicable to the present matter.

The Court then turned to the licensing order of 1961 that was the subject of the present case. It noted that the order, together with its policy statement, completely prohibited dealers from trading and effectively created a monopoly favoring certain manufacturers. The Court held that, despite this total prohibition, the order constituted a reasonable restriction on the dealers’ right to trade under Article 19(6), because the restriction served a legitimate public purpose. The writ that had been issued earlier was limited to the deficiency in the procedure for specifying the policy statement, not to the substantive reasonableness of the restriction itself. Consequently, the Court found no defect in the issuance of the Licensing Order 1961. The remaining issue, therefore, was whether the prohibition imposed on dealers like the petitioner, if any, by the Licensing Order 1961 was reasonable in the circumstances of the present case.

In the present matter, the Court referred to the decision in Glass Chatons Importers & User’s Association v. The Union of India, reported as (1) and decided on 10 April 1961. That case originated from a petition filed under Article 32 by several importers of glass chatons. The Central Government had issued, under the Import and Export (Control) Act, 1947, the Imports (Control) Order of 1955 which prohibited the import of glass chatons except through a licence. Paragraph 6 of that Order enumerated the grounds upon which the Central Government or the Chief Controller of Imports and Exports could refuse to grant a licence or direct a licensing authority not to grant one. One of those grounds, listed as element (h), stated that a licence could be refused if the licensing authority decided to channel imports and their distribution through special or specialised agencies or channels. The Court observed that, since 1958, licences had been granted only to the State Trading Corporation and that no applications for licences had been filed by the petitioners or any other trader after 1957. Nevertheless, the petitioners argued that the existence of paragraph 6(h) made it futile for private traders to apply for licences. They contended that paragraph 6(h) was void because it violated Articles 19(1)(f) and 19(1)(g). The Court examined this contention and quoted the earlier judgment in W. P. 65 of 1959 (unreported), noting that if a decision had been taken that imports shall be handled by particular agencies or channels, granting a licence to an applicant outside those agencies would defeat the purpose of that decision. Consequently, if the canalisation of imports served the general public interest, refusing licences to outsiders would also be in the public interest. The central question, therefore, was whether canalising imports through special agencies or channels was in the general public’s interest.

The Court concluded that it could not accept the argument that a decision to canalise imports was per se an unreasonable restriction on the right to trade. Considering the facts of the earlier case, the Court held that the decision to canalise the import of glass chatons was indeed in the interest of the general public. Although it was alleged that the Government was creating a monopoly favouring the State Trading Corporation, the Court noted that the period of permits granted to that corporation had already expired, rendering the monopoly claim moot. Nonetheless, the Court reiterated that its earlier analysis on paragraph 6(h) of the Order remained applicable. This judgment, therefore, reinforces the principle that a preference directed by clause (e) of paragraph 5 of the Licensing Order, which favours co‑operative societies, does not automatically render the provision invalid. The Court’s reasoning in the glass chatons case provides strong support for the view that such preferential treatment, even if it results in private dealers being excluded from trading, can constitute a reasonable restriction on the right to trade when it serves the larger public interest.

In the matter before the Court, the order that related to the co‑operative societies was not automatically deemed invalid. The Court was convinced, based on the facts of this case, that granting a preference to co‑operative societies, even if that preference resulted in dealers being completely barred from dealing in paddy, constituted a reasonable restriction on the dealers’ right to trade. The Court noted that the State of Assam suffered a deficit in foodgrains and that the State Government bore the responsibility of ensuring that the population residing within its borders received adequate foodgrains at a reasonable price. When paddy was procured for the benefit of consumers in the State through a co‑operative society, there was a strong basis, as previously explained, to believe that rice would become available to the people of Assam at a reasonable price. The Court indicated that it would later examine in detail the structure and the activities of the co‑operative societies that had been issued licences, and that such an examination would clearly show that assigning the trade exclusively to the co‑operative societies was a reasonable step under the circumstances.

The Court then turned to the petitioner’s second contention, which alleged that clause (e) of paragraph 5 had been applied in a discriminatory fashion so as to create a monopoly favouring the Apex Society. The Court first observed that licences for the year 1961 had not been granted to the Apex Society; instead, licences had been issued to a large number of primary co‑operative societies composed of growers. Consequently, the Court found it difficult to accept the argument that such a distribution of licences created a monopoly. While acknowledging that the effect might amount to a prohibition of trade for certain persons, the Court stated that this issue had already been addressed. The Court added that licences had indeed been issued to the Apex Society in 1960, but that the present proceedings did not concern the licences of that earlier year, and therefore the legality of the 1960 licences was no longer a relevant question. Before proceeding further, the Court deemed it appropriate to describe the co‑operative societies involved. The Court noted that around 1957 the Government of Assam had sponsored the formation of the Apex Society, reminding that the Constitution’s directive principles encourage the promotion of co‑operative societies. The Apex Society was described as having a pyramidal structure with three tiers: at the top stood the Apex Society itself, beneath it were various primary marketing co‑operative societies, and at the base were numerous primary co‑operative service societies. Membership of the marketing societies primarily consisted of cultivators, and the service societies were likewise dominated by cultivators. The Court observed that the Apex Society’s function appeared to be the coordination of the subsidiary societies’ operations and the receipt of funds from them.

In this scheme, the Apex Co‑operative Bank advanced funds to cultivators through the subsidiary societies in order to assist them with their agricultural operations. The service societies purchased from the growers the paddy that the growers were able to set aside, and they used the proceeds from the sale of that paddy to repay the advances received from the Apex Bank. The money obtained from the sale of paddy was then transferred to the Apex Society. The service societies, having collected the paddy, sold it to the marketing societies. The marketing societies, in turn, delivered a portion of the paddy to the Government for the creation of a buffer stock and supplied the remaining quantity to rice mills for milling, both actions being carried out in accordance with Government directions. The overall benefits of this arrangement were considerable. By eliminating middlemen, the growers, who were members of the societies, received a share of the profits generated by the societies. This profit‑sharing mechanism helped keep the price of paddy low because the service societies charged only a minimal profit margin when transferring paddy to the marketing societies, and that modest profit was distributed among the grower‑members. Consequently, growers were able to sell their produce at comparatively lower prices. In addition, the growers enjoyed the advantage of obtaining loans from the Apex Society on liberal terms to finance their cultivation. These loans were easy to obtain and repay because the repayment was secured by the systematic purchase of their produce through the service societies. It was reasonable to conclude that such a system would encourage greater cultivation and lead to larger quantities of food grains being produced, thereby furthering the objective of the relevant Act.

Each of the societies involved was a corporate body under Section 18 of the Co‑operative Societies Act, 1912, and together they formed a network covering the entire surplus‑grain‑producing region of Assam, each society operating within its own jurisdiction. A vast number of food‑grain growers were members of the primary marketing and service societies, and it was to these societies that the licences in question had been issued, which formed the basis of the petitioner’s grievance. After the formation of the Apex and subsidiary societies, the State Government, with the concurrence of the Central Government, adopted a policy of procuring paddy in specified areas exclusively through these societies. Accordingly, at the end of 1959 the State Government issued instructions to certain officials that the procurement of paddy for the Kharif year 1959‑60 should be conducted through the co‑operative societies. This policy may have been the reason why the licensing authority, in its order dated 17 February 1930, stated that the petitioner’s application for a licence could not be considered. It is noteworthy that the Licensing Order of 1960 did not contain any provision granting preference to a co‑operative society in the issuance of licences. The present case, however, does not concern any licence for the year 1960 or the validity of any order of the licensing authority refusing to grant the petitioner a licence for that year.

In this case, the Court considered whether the licensing authority had lawfully refused to grant the petitioner a licence for the year 1960, and whether any order of the licensing authority refusing such a licence was valid. Turning to the allegation that the power under paragraph 5(e) of the Licensing Order had been exercised in a discriminatory way, the Court first noted that the Order, which it had previously held to be valid, expressly permitted the authority that granted licences to give preference to a co‑operative society, and that the authority had indeed exercised that discretion. Although this preference resulted in the petitioner being excluded from the trade of purchasing and selling paddy, the Court observed that, in the circumstances of the case, the restriction on the petitioner’s trading right was reasonable because it was intended to secure an adequate and reasonably priced supply of foodgrains for the people of Assam. The Court expressed serious doubts that the licensing authority was meant to act in a quasi‑judicial capacity when granting licences; rather, the question before the authority concerned the advancement of the object of the Act as expressed in the Licensing Order, not a contest between competing private rights. Accordingly, the authority’s primary consideration had to be that the licences it issued would help make foodgrains available at a fair price to the public, a purpose for which the Act conferred powers. Because that purpose was legitimate, the resulting prohibition on private dealers’ trading was also deemed legitimate. The Court recalled two earlier cases that had proceeded on the premise that the licensing authority was not a quasi‑judicial officer, and it stated that it need not finally decide that issue here. The respondent had contended that the authority, when granting a licence to the co‑operative society, merely implemented government directions and had not acted independently. The Court found no support for that contention beyond the petitioner’s bare allegation, which the respondent denied. The Court noted that directions issued by the Assam Government for the year 1961 had been produced, but the earlier instructions requiring licences to be given to co‑operative societies applied only to the year 1959‑60 and did not extend to 1961. Consequently, those earlier instructions could not be regarded as having perpetual effect, for otherwise every future licence granted to a co‑operative society would have to be considered made under those obsolete instructions, a view the Court could not accept. Finally, the Court observed that the High Court, by its order dated 10 August 1960, had required the licensing authority to act in a quasi‑judicial manner, and there was no reason to think the authority had failed to comply with that directive.

In his reasoning, the judge observed that the licensing authority had failed to comply with the direction issued by the High Court. He further considered it reasonable to infer that the Government of Assam introduced clause (e) within paragraph five of the Licensing Order, 1961, as a response to the judgments of the Assam High Court that he had mentioned earlier. The judge concluded that the Government’s intention was that, because of clause (e), the licensing authority should give preference to co‑operative societies when granting licences. He then referred to section four of the Act, which provides that an order made under section three, which confers powers on any officer or authority, may contain directions as to how those powers are to be exercised. On the basis of the reasons he had already set out, the judge held that a direction contained in the Licensing Order directing the authority to prefer co‑operative societies was not improper. He expressed the view that clause (e) of paragraph five of the Licensing Order, 1961, effectively amounted to such a direction. Consequently, after the issuance of the Licensing Order, 1961, the Government of Assam did not need to issue any further directions to the licensing authority. The judge further stated that no serious question of a violation of Article fourteen of the Constitution could be raised against this arrangement.

The judge noted that if the duty of the licensing authority was of a quasi‑judicial nature, it would be difficult to argue that its decision to follow the direction would offend Article fourteen. He added that it was clear that co‑operative societies constituted a distinct class, and that a statutory provision granting preference to such a class was beneficial because it would better serve the object of the Act, as previously explained. He observed that the provision had a clear connection with the purpose of the legislation and therefore satisfied the constitutional test of equality under Article fourteen. From every perspective, the judge concluded that the order of the licensing authority, which gave preference to co‑operative societies, could not be reasonably objected to and was a fair order in the circumstances of the case. For these reasons, he dismissed the petition. Justice Mudholkar then expressed agreement with the judgment delivered by Justice Sarkar. In accordance with the majority opinion, the writ petition was allowed with costs, and the petition was formally affirmed.