Bombay High Court
Indian Small Scale Paint ... vs State Of Maharashtra And Ors on 15 December, 2015
Bench: A.S. Oka
ASWP4029-14.DOC
AGK
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 4029 OF 2014
INDIAN SMALL SCALE PAINT
ASSOCIATION SOCIETY, having Office at
registered Gujarat Colour & Coating P. Ltd.,
137 Bhiwandi Wada Road, Village Ghonsai,
Taluka Wada, District Thane. ...Petitioner
Versus
1. STATE OF MAHARASHTRA
2. SECRETARY,
Department of Food & Civil Supplies,
Consumer Protection Department,
Mantralaya, Mumbai - 400 032
3. CONTROLLER OF RATIONING,
Mumbai
4. COLLECTOR OF DISTRICTS ...Respondents.
Mr. Sheroo P. Kanuga, for the Petitioner.
Mr. V.S. Gokhale, AGP, for Respondent Nos. 1 to 4.
CORAM: A.S. OKA &
G.S. PATEL, JJ.
RESERVED ON : 7th December 2015
PRONOUNCED ON: 15th December 2015
JUDGMENT: (Per G.S. Patel, J.)
1. On 14th October 2014, notice was issued to the Respondents
for final disposal of this Petition at the admission stage returnable
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on 24th November 2015. Hence: Rule. Respondents waive service.
By consent, Rule is made returnable forthwith and Petition called
out and taken up for hearing and final disposal.
2. The challenge in this Petition is to the legality and validity of
the Maharashtra Solvent Raffinate and Slop (Licensing) Order 2007
("the impugned Order"; "the State Order").
3. The Petitioner is an association and a society of
manufacturers of paints of various kinds and descriptions. The
Petitioner Association's members are all small scale units. They
manufacture paint formulations by combining various raw materials
in different proportions to get the desired quality of paint. The
relevant raw materials fall into several groups, such as film forming
materials, pigments and extenders, solvents and additives. Many of
these are petroleum byproducts.
4. Petroleum products are covered by Entry 53 of List-I of the
Constitution of India. The items in this list are covered by the
Petroleum Act, 1934, and the Central Government has framed
Rules in 1976 under that Act. Chapter 1 of the Petroleum Act, 1934
deals with control over petroleum. The relevant rules specify that
no license is required for the transport or storage of petroleum of
certain classes. The Petroleum Rules, 1976 deal with the
importation, transportation and storage of petroleum, licensing,
refining and so on. This is stated in the Petition principally to
establish that it is the Central Government that has legislative
authority over many of the items used by the Petitioner's members.
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5. The Essential Commodities Act, 1955 ("the EC Act"; the)
is enacted in order to provide, in the general public interest, control
over the production, supply and distribution of trade and commerce
in certain commodities specified in the Schedule to that Act to be
"essential commodities". Petroleum is one of these. The purpose
of the EC Act is to ensure that the prices and distribution of these
essential commodities are maintained in a manner optimally
beneficial to the public interest.
6. The Central Government's Ministry of Petroleum and
Natural Gas issued the Solvents, Raffinates & Slop (Acquisition,
Sale, Storate & Prevention of Automobile) Order, 2000 ("the
Central Order").
7. It is the case of the Petitioner that the impugned order is that
there is an impermissible repugnancy between the State Order and
the Central Order, and that the former unlawfully contains
restrictions not to be found in the latter.
8. We have heard Mr. Kanuga for the Petitioner and Mr.
Gokhale for Respondent Nos. 1 to 4 at some length. With their
assistance, we have carefully considered the material on record.
9. It is first necessary to make reference to the Central Order. 1
That order is clearly issued in exercise of the powers conferred by
Section 3 of the EC ACt. Section 3 imposes certain restrictions on
the sale and use of solvents, raffinates slops with other products. It
reads:
Petition, Ex. D-1, pp. 40-42
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"3. Restriction on sale and use of
solvents, raffinates, slops and other
product.-- (1) No person shall either
acquire, store or sell solvents included
in the schedule without a licence issued
by the State Government or the District
Magistrate or any other officer authorised
by the Central or the State Government.
PROVIDED THAT no such licence shall
be required for consumption of 50 kilo
litres per month or less and stock at a
given time of 20 Kilo litres or less of
solvents listed in the Schedule combined.
(2) No person shall either use or help in
any manner the use of solvents,
raffinates, slops or their equivalent or
other product except motor spirit and high
speed diesel, in any automobile:
PROVIDED THAT nothing in this Order
shall preclude the use of such products
for research purposes on automobiles.
(3) Any person whosoever is engaged in
the sale or trading of solvents,
raffinates, slops or their equivalent and
other product, either imported or
indigenous, for any purpose, whatsoever,
shall file end-use certificates from
consumers to whom he sells and furnish
customer-wise sales to the District
Magistrate or to the State Civil Supplies
Authorities, on a quarterly basis.
(4) Any person whosoever is engaged in
use of solvents, raffinates, slops or
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their equivalent and other product, either
imported or indigenous for manufacture of
any petrochemicals or any other purpose
shall file end-use certificates to the
District Magistrate or the State Civil
Supplies Authorities, on a quarterly
basis.
(5) The Central Government may, by order,
notify the form required for making
application and the format in which
licence, shall be issued under sub-clause
(1), and issue guidelines as may be
necessary for giving
ig effect to the
provisions of this Order."
(Emphasis added)
10. Mr. Kanuga's submission is directed specifically to the
proviso to Clause 3(1) and to Clauses 3(3) and 3(5). These, in his
submission, govern the field and it is not possible for the State to
have issued its impugned Prder in a manner repugnant to any of
these provisions.
11. Mr. Kanuga first attempted a submission that the issuance of
the impugned Order was itself a case of impermissible delegation.
We asked Mr. Gokhale to take instructions and in response he
placed on record a copy of an order dated 30th November 1974
issued by the Ministry of Industry & Civil Supplies under Section 5
of the EC Act by which the Central Government specifically
delegated all its powers, including those in Section 3(1) of that Act,
and conferred a delegated authority to make orders in respect of the
matters specifically in Clauses (d), (e), (f ), (g), (h), (i), (ii) and (j)
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of sub-section (2). There is, therefore, clearly a valid delegation by
the Central Government to the State Government of all the
necessary powers. The delegating order is unchallenged. Mr.
Kanuga submits that the delegation notification is issued by the
Civil Supplies Department and not by the Petroleum Ministry. This
is surely irrelevant. The question is of delegation under the
Essential Commodities Act, and even the Central Order (which
according to Mr. Kanuga, governs the field) was issued under
Section 3 of that Act.
12. In order to appreciate Mr. Kanuga's submission on the issue
of repugnancy, we must consider the provisions of the impugned
order dated 25th January 2007.2 This Order is also clearly issued
under Section 3(i) of the EC Act, evidently in pursuance of the
delegated power referred to earlier. The relevant portions read:
"3. Prohibition against acquisition,
Storage, Sale, Storage for sale or
consumption without license:- (a) No
person shall either acquired, store, sell
or consumer Solvent, Raffinate and Slop
included in the Schedule I except under
and in accordance with the terms and
conditions of a license issued in this
behalf by he Licensing Authority.
Provided that no such license shall
be required for consumption of 50 Kls per
month or less and storage for consumption
of 20 Kls or less of Solvent Raffinate and
Slop and for which such person shall first
register himself as a consumer with the
Exhibit "E", Pp. 51-85
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Licensing Authority under the provision of
this order.
(b) No person shall import in the State
of Maharashtra, Solvent Raffinate and Slop
included in the schedule I either from
other state or country unless he has
obtained a license for its acquisition,
storage, sale, storage for sale or
consumption under this order.
(c) No person shall either acquire
Solvent, Raffinate and Slop except from an
oil company or a license or sell Solvent,
Raffinate and Slop to any person except a
licensee or a registered consumer.
(d) No person shall either use or help in
any manner, the use of Solvent, Raffinate
and Slop in any automobile.
(e) No person shall either use or help in
any manner adulterating of Motor Spriti or
High Speed Diesel with Solvent, Raffinate
and Slop;
(f) No person a licensee an Oil Company
or otherwise shall sell Solvent Raffinate
and Slop included in the Schedule I to any
person other than a licensee or a
registered consumer."
(Emphasis added)
13. Since Mr. Kanuga seeks to contrast the provisions of the
Central Order with the State Order, it may be convenient to
tabulate both of these provisions side by side.
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Central Order State Order
"3. Restriction on sale "3. Prohibition against
and use of solvents, acquisition, Storage, Sale,
raffinates, slops and other Storage for sale or
product.-- (1) No person consumption without
shall either acquire, store license:- (a) No person
or sell solvents included shall either acquired,
in the schedule without a store, sell or consumer
licence issued by the State Solvent, Raffinate and Slop
Government or the District included in the Schedule I
Magistrate or any other except under and in
officer authorised by the accordance with the terms
Central or the State and conditions of a license
Government. issued in this behalf by he
Licensing Authority.
PROVIDED THAT no such
ig PROVIDED THAT no such
licence shall be required license shall be required
for consumption of 50 kilo for consumption of 50 Kls
litres per month or less per month or less and
and stock at a given time storage for consumption of
of 20 Kilo litres or less 20 Kls or less of Solvent
of solvents listed in the Raffinate and Slop and for
Schedule combined. which such person shall
first register himself as a
consumer with the Licensing
Authority under the
provision of this order.
(2) No person shall either (b) No person shall
use or help in any manner import in the State of
the use of solvents, Maharashtra, Solvent
raffinates, slops or their Raffinate and Slop included
equivalent or other product in the schedule I either
except motor spirit and from other state or country
high speed diesel, in any unless he has obtained a
automobile: license for its
acquisition, storage, sale,
storage for sale or
consumption under this
order.
PROVIDED THAT nothing
in this Order shall
preclude the use of such
products for research
purposes on automobiles.
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(3) Any person whosoever (c) No person shall
is engaged in the sale or either acquire Solvent,
trading of solvents, Raffinate and Slop except
raffinates, slops or their from an oil company or a
equivalent and other license or sell Solvent,
product, either imported or Raffinate and Slop to any
indigenous, for any person except a licensee or
purpose, whatsoever, shall a registered consumer.
file end-use certificates
from consumers to whom he
sells and furnish customer-
wise sales to the District
Magistrate or to the State
Civil Supplies Authorities,
on a quarterly basis.
(4) Any person whosoever (d) No person shall
is engaged in use of
solvents, raffinates, slops
or their equivalent and
either use or help in any
manner, the use of Solvent,
Raffinate and Slop in any
other product, either automobile.
imported or indigenous for
manufacture of any
petrochemicals or any other
purpose shall file end-use
certificates to the
District Magistrate or the
State Civil Supplies
Authorities, on a quarterly
basis.
(5) The Central Government (e) No person shall
may, by order, notify the either use or help in any
form required for making manner adulterating of
application and the format Motor Spriti or High Speed
in which licence, shall be Diesel with Solvent,
issued under sub-clause Raffinate and Slop;
(1), and issue guidelines
as may be necessary for
giving effect to the
provisions of this Order."
(f) No person a licensee
an Oil Company or otherwise
shall sell Solvent
Raffinate and Slop included
in the Schedule I to any
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person other than a
licensee or a registered
consumer."
14. Mr. Kanuga directs his attention firstly to the proviso to
Clause 3(a) of the State Order and specifically to the portion
emphasized above. It is his submission that the requirement for a
person to register himself as a consumer with the Licensing
Authority under the impugned order is unlawful and is repugnant
to the Central Order since no such registration is contemplated by
the proviso to Clause 3(i) of the Central Order.
15.
In our view, this submission is misconceived. A provision for
registration cannot be equated with a requirement of licensing.
Conceptually and in their intended purpose, the two are entirely
distinct. Registration, even compulsory registration, is merely
record keeping and, on its own, nothing more: municipal registers
of births, marriages and deaths, for instance, are only repositories
of certain information. Licensing, on the other hand, involves the
grant of a permission; that but for which the activity involved would
be unauthorised or even illegal. The proviso to Clause 3(a) of the
State Order is of the former variety, a mere register. It is in no sense
a requirement of licensing or the grant of permission. It does not
mandate any additional license for consumption or storage of
specified quantities (consumption of 50 Kls per month or less and
storage for consumption of 20 Kls or less of Solvent Raffinate or
Slop). The maximum quantities are the same in both the Central
Order and in the impugned order. It is true that the Central Order
does not have any requirement for registration. But it is equally true
that the proviso to Clause 3(a) of the impugned order specifically
states, in complete conformity with the Central Order, that no such
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license is required for the consumption or storage of these
quantities. All that the State Order says is that for storage or
consumption of these quantities, a person must be registered. It
must be noted that there is no provision in the State Order to refuse
registration. Consequently, the registration requirement in the State
Order cannot be said to be repugnant to the Central Order. It is
perhaps an efficient method of record keeping, but nothing further.
16. Mr. Kanuga may, however, be correct in his submission that
Clause 3(b) of the impugned order is on the face of it contrary to
and repugnant to the Central Order. That Clause specifically states
that any importation into the State requires a license for the
acquisition, storage, sale, storage for sale or consumption. There is
no such licensing permissible under the Central Order in the matter
of importation. The restriction in Clause 3 of the Central Order is
the requirement of obtaining a license for acquisition, storage or
sale of solvents. There is no additional or separate license for
importation. In fact, sub-clauses (3) and (4) of Clause 3 of the
Central Order only require filing of certain end-use certificates and
furnishing customer-wise sales. Now the very notification of
delegation produced by Mr. Gokhale in term says in sub-clauses (3)
that the State Government may not issue any order in pursuance of
the delegated powers if they are inconsistent with any order issued
by the Central Government under the EC Act. We are unable to
agree with Mr. Gokhale that clause 3(b) of the State Order is not
inconsistent. It appears to us clearly an additional licensing
imposition not to be found in any part of the Central Order. To that
extent, sub-clause 3(b) of the impugned order will have to be held to
be repugnant.
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17. Mr. Kanuga's final submission need not detain us. He
submits that the very existence of the impugned order is a
repugnancy in and of itself. The field, he submits, is fully occupied
by the Central Order and the State Government has no authority in
law to make the impugned order. This appears to us to be
inaccurate. Clause 3(a) of the Central Order specifically permits
licensing by the State or by a District Magistrate, the latter being an
officer and functionary of the State. Read with the delegation
notification, this means that the State Government may have its
own licensing regime provided it is not inconsistent with the
Central Order.
18. In any case, the question of repugnancy between a Central
legislation and a State legislation is no longer res integra. Principally
the same arguments were canvassed and considered in the
judgment dated 23rd December 2013 in Petrol Dealers Association &
Anr. v State of Maharashtra & Ors.,3 to which one of us (A.S. Oka J)
was a party. In paragraphs 8 and 10, this Court held thus:
"8. The Supreme Court in the case of Deep
Chand (supra) considered the repugnancy
between two statutes, one being a Central
Act -- Motor Vehicles (Amendment) Act, 1956
and the other being a State Act -- U.P.
Transport Service (Development) Act, 1955.
The Supreme Court considered three tests
of inconsistency of repugnancy formulated
by Nicholas in his Australian
Constitution, Second Edition, page 303.
They are as follows:
Writ Petition No. 3018 of 1998, decided on 23rd December 2013;
MANU/MH/2247/2013
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'(1) There may be inconsistency in
the actual terms of the competing
statutes;
(2) Though there may be no direct
conflict, a State law may be
inoperative because the Commonwealth
law, or the award of the Commonwealth
Court, is intended to be a complete
exhaustive code; and
(3) Even in the absence of
intention, a conflict may arise when
both State and Commonwealth seek to
exercise their powers over the same
subject matter.'
The Court noted with approval the
aforesaid three tests and laid down the
following principles for ascertaining
repugnancy between two statutes.
'Repugnancy between two statutes may
thus be ascertained on the basis of
the following three principles:
(1) Whether there is direct conflict
between the two provisions;
(2) Whether Parliament intended to
lay down an exhaustive code in
respect of the subject matter
replacing the Act of the State
Legislature; and
(3) Whether the law made by
Parliament and the law made by the
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State Legislature occupy the same
field.'"
10. The Supreme Court in the case of
Tulloch and co. (supra) considered this
repugnance from the two standpoints. These
are explained by the Court in paragraph 15
of the judgment as follows:
'15. Repugnancy arises when two
enactments, both within the
competence of the two Legislatures,
collide and when the Constitution
expressly or by necessary implication
provides that the enactmento f one
Legislature had superiority over the
other than to the extent of the
repugnancy the one supersedes the
other. But two enactments may be
repugnant to each other even though
obedience to each of them is possible
without disobeying the order. The
test of two legislations containing
contradictory provisions is not,
however, the only criterion of
repugnancy, for, if a competent
legislature with a superior efficacy
expressly or impliedly evinces by its
legislation an intention to cover the
whole field, the enactments of the
other legislature whether passed
before or after would be overborne on
the ground of repugnance. Where such
is the position, the inconsistency is
demonstrated not by a detailed
comparison of provisions of the two
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statutes but by the mere existence of
the two pieces of legislation.'
Thus, repugnancy would arise where there
is a direct collision between the two
enactments so that the two cannot stand
together or even where one enactment
occupied the whole field so that the mere
existence of the other enactment amounts
to repugnancy. In either case the statute
of the legislature having superiority over
the other, i.e., the one expressly
colliding in the first case and that which
occupies the whole field in the second,
will prevail."
19. In this view of the matter, we are unable to accept Mr.
Kanuga's submissions in their entirety. He is correct to the limited
extent indicated above.
20. The Petition therefore succeeds in part. Sub-clause (b) of
Clause 3 of the State (impugned) Order dated 25th January 2007 is
null and void and is hereby quashed and set aside. The remaining
provisions of the impugned order are held not to be repugnant to
the Central Order or for want of delegation.
21. Rule is partly made absolute in the above terms. The Petition
is disposed of with no order as to costs.
(G. S. PATEL, J.) (A.S. OKA, J.)
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