The Hindustan Times Ltd vs Union Of India And Ors.
1971 Latest Caselaw 54 Del

JUDGMENT

Jagjit Singh, J.

(1) The Hindustan Times Limited, which is a public limited company, and three others have challenged the legality of subclause (3A) of clause 3 of the Newsprint Control Order, 1962, hereinafter referred to for facility of reference as "the Newsprint Control Order".

(2) In exercise of the powers conferred by section 3 of the Essential Commodities Act, 1955 (hereafter called "the Act"), the Central Government made the Newsprint Control Order. The Newsprint Control Order came into force on January 17, 1962. With effect from December 29, 1962 the following new sub-clause (3A) was inserted in clause 3 thereof by the Newsprint Control (Third Amendment) Order, 1962 - "(3A). No consumer of newsprint, other than a publisher of text book or books of general interest, shall use any kind of paper other than newsprint except with the permission, in writing of the Controller."

(3) Section 3 of the Act gives power to the Central Government to control production, supply and distribution etc., of essential commodities. Sub-section (1) of that section provides that if the Central Government is of opinion that it is necessary or expedient so to do for maintaining or increasing supplies of any essential commodity or for securing their equitable distribution and availability at fair prices, or for securing any essential commodity for the defense of India or the efficient conduct of military operations, it may, by order, provide for regulating or prohibiting the production, supply and distribution there of and trade and commerce therein.

(4) Paper, including newsprint, paper board and straw board, is one of the essential commodities as defined in section 2. Further according to section 4 of the Act an order made under section 3 may confer powers and impose duties upon the Central Government or the Stale Government or officers and authorities of the Central Government or State Government, and may contain directions to any State Government or to officers and authorities thereof as to the exe.rcise of any such powers or the discharge of any such duties.

(5) Newsprint is defined in clause 2(e) of the Newsprint Control Order to mean "paper of any of the descriptions specified in Schedule I, used for printing." Schedule I specifies the below mentioned descriptions of paper:- "1-.White printing paper (.excluding laid marked paper) with fibre content of not less than 70 per cent mechanical wood pulp. 2. Glazed newsprint. 3. Indigenous newsprint manufactured by Nepa Mills."

(6) SUB-CLAUSE (1) of clause 3 of the Newsprint Control Order is to the effect that no person other than an importer shall acquire newsprint except under and in accordance with the terms and conditions of an authorisation issued by the Controller. Sub-clause (2) and (3) restrict the sale and consumption of newsprint. Sub-clause (.4) requires authorisation under the clause to be in writing and to be in the form set out in Schedule II. Sub-clause (5) enjoins that in issuing an authorisation issued by the Controller. Sub-clauses (2) and (3) restory down in the Import Control Policy with respect to newsprint announced by the Central Government from time to time. Sub-clause (3A), inserted in December 1962 has already been reproduced above.

(7) The Hindustan Times Limited is carrying on the business of printing and publishing daily English newspaper known as Hindustan Times and daily Hindi newspaper called Hindustan. For the Hindustan Times and daily circulation of 1,27,644 was claimed during the period April 1968 to March 1969 and it was further stated to have increased to an average of 1,37,485 per day during April 1969 to January 1970. It is not disputed that Hindustan Times is one of the leading daily English newspapers in the country.

(8) Besides Hindustan Times Limited the other petitioners are Sarvshri J. L. Gupta, Prem Prakash Sharma and R. N. Sinha. Shri Gupta was mentioned to be a shareholder of the Hindustan Times Limited and to have a vital interest in the affairs and business of that Company. Shri Prem Prakash Sharma was stated to be a reader of the newspapers while Shri Sinha was described as the printer and publisher of Hindustan Times and Hindustan.

(9) It was stated in the petition that consequent upon the insertion of sub-clause (3A) in clause 3 of the Newsprint Control Order the Press Registrar had informed the Secretary of the Indian & Eastern Newspaper Society that newspapers were not permitted to use white printing paper other than the newsprint without permission in writing of the controller. Reference was also made to the Import Policy with respect to newsprint announced by the Central Government turn the years 1964-65 and 1965-66. It was averred that according to the Import Control Policy with respect to newsprint for the year 1965-66 "white printing paper was made a part of the quota and its use was made obligatory though excise duty on it was waived". It was stated that the periodicals were. however, allowed "free use of the duty paid paper".

(10) The grievance of the petitioners was that in violation of their fundamental rights, guaranteed under articles 14, 19(1)(a) and 19(1)(g) of the Constitution newspapers have been prohibited from using paper other than newsprint and that will necessarily bring down circulation and will also affect the economy and business of the Hindustan Times Limited. It was urged that the present position regarding the availability of white printing paper other than newsprint in the country was such that the requirements of every class of consumer could be met. The power conferred on the Controller under subclause (3A) was alleged to be arbitrary and discriminatory in so far as newspapers were concerned and to have imposed unreasonable restrictions on them. The petitioners, therefore, desired sub-clause (3A) of clause 3 of the Newsprint Control Order to be declared ultra vires, illegal and unconstitutional. The impugned sub-clause was stated to be violative of articles 14, 19(1)(a) and 19(1)(g) of the Constitution and to be ultra vires of the provisions of the Act besides suffering from the vice of excessive delegation of powers. A prayer was as well made in the petition that the Union of India and its officers, agents and subordinates including the Controller and the Registrar of Newspapers for India be restrained and prohibited from enforcing or in any manner giving effect to the provisions of sub-clause (3A) or taking penal or other action for contravention of the provisions of the Newsprint Control Order.

(11) On behalf of the respondent, the Union of India, an affidavit in opposition to the petition was filed by Shri K. N. Bamzai, Registrar of Newspaper. The averments of the petitioners about sub-clause (3A) of clause 3 of the Newsprint Control Order being unconstitutional, ultra vires, illegal of suffering from the vice of excessive delegation were controverter. It was also affirmed that the indigenous production of white printing paper is limited and this type of paper is intended to meet the requirements of the offices of the Government, other business offices and publishers of school and university text books and books of general interest, "who are not allowed any quota of newsprint". Sub-clause (3A) was stated to have been inserted for the purpose of maintaining the supplies of the white printing paper other than newsprint to consumers of the categories described above. It was admitted that from April 1965 white printing other than newsprint was made a part of the newsprint allocation policy and that white printing paper was being made available to newspapers according to their respective entitlement free of excise duty.

(12) It was as well stated in the affidavit of Shri Bamzai that the position regarding availability of white printing paper other than newsprint in India was such that the requirements of every class of consumer could not be met from the total production thereof. The total production of white printing paper by all the mills was stated to be to the extent of 1.60.000 tons per year, out of which 70,000 tons were mentioned to be consumed by Government offices and thus only 90.000 tons were left for general consumers. Another fact stated by him was that the availability of indigenous printing and writing paper other than newsprint is reviewed every year and additional quantities of indigenous printing and writing paper are allocated to newspapers in addition to newsprint as part of their entitlement. For the year 1963-64 an additional quantity of 5.000 tons was allocated, which was raised the 25.000 tons in the year 1965-66. Under the Import Control Policy for newsprint for the years 1966-67. 1967-68 and 1968-69 a quantity of 20.000 tons of white printing paper other than newsprint for each year was allocated to newspapers. For the year 1969-70 a quantity of 25,000 tons of white printing paper other than newsprint was allocated but it was added, that the supplies to that extent could not be made by the mills in the country.

(13) Elaborate arguments were addressed to us by Shri V. M. Tarkunde for the petitioners and Shri O. P. Malhotra for the respondent.

(14) The first contention raised by Shri Tarkunde was that the impugned sub-clause (3A) was violative of article 14 of the Constitution as equal protection of the law was denied to consumers of newsprint other than publishers of textbooks or books of general interest. The requirement of the sub-clause that only the consumers of newsprint other than publishers of textbooks or books of general interest should not use any kind of paper other than newsprint except with the permission in writing of the Controller was alleged to be discriminatory and not based on any rational and intelligible classification. It was urged that newspapers, and more particularly leading newspapers like the Hindustan Times, were serving more useful purpose by dissemination of news and views and were thus instrumental in moulding the public opinion on right lines. To prevent newspapers from using white printing paper other than newsprint over and the quantity allocated as part of their entitlement under the Import Control Policy with respect to newsprint was contended to be discriminatory. It was stated that when publishers of books of even ordinary fiction could use unlimited quantities of white printing paper denying the same right to newspapers could not be justified. Another submission made was that there was also irrational discrimination between daily newspapers and periodicals as periodicals had been permitted to use unlimited quantities of white printing paper in addition to their allocation of newsprint.

(15) It will be seen that sub-clause (3A) of clause 3 of the Newsprint Control Order does not make any distinction between daily newspapers and periodicals. Any permission given to periodicals for using white printing paper other than newsprint will not by itself be indicative of any discrimination. No order permitting any periodical or periodicals use of white printing paper other than newsprint having been challenged obviously full data in that connection could not and was not required to be made available by the respondent. The contention about the impugned sub-clause being violative of article 14 of the Constitution wiU, therefore, depend on the fact whether the classification of publishers of textbooks or books of general interest and other consumers of newsprint is irrational and unintelligible or whether its object is to maintain the supplies of paper or to secure equitable distribution thereof.

(16) Though the definition of "consumer of newsprint", as given in clause of the Newsprint Control Order, covers a printer or publisher of textbooks or books of general interest who uses newsprint, but it is evident from the return filed on behalf of the respondent that in actual practice publishers of school and University textbooks and books of general interest are not being allowed any quota of newsprint. Allocations of available quantity of newsprint have been made to printers and publishers of newspapers in accordance with the Import Control Policy with regard to newsprint as announced by the Central apply. In determining the question of the validity or otherwise of such a statute the court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification. After such scrutiny the court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situate and that. therefore, the discrimination is inherent in the statute itself. In such a case the court will strike down both the law as well as the executive action taken under such law." The case of Messrs Dwarka Prasad Laxmi Narain v. Slate of Uttar Pradesh and others was one of the cases referred to in the case of Shri Ram Krishna Dalmia. The Supreme Court was. in that case, considering the provisions of the Uttar Pradesh Coal Control Order. 1953. Clause 4(3) of that Order empowered the licensing authority to grant or to refuse to grant. renew or refuse to renew, suspend, revoke, cancel or modify any terms thereof granted by him under the Order for reasons to be recorded. The power conferred was held to be arbitrary and uncontrolled and, therefore, to be unreasonable. In Harishankar Bagla and another v. The State of Madhya Pradesh while dealing with a case relating to validity of clause (3) of the Cotton Textiles (Control of Movement) Order, 1948 made under the powers conferred by Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, the Supreme Court distinguished the case of Messrs Dwarka Prashad Laxmi Narain. Clause (3) of the said Cotton Textiles (Control of Movement) Order was as follows :- "3.No person shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth yarn or apparel except under and in accordance with- (i) a general permit notified in the Gazette of India by the Textile Commissioner, or (ii) a special transport permit issued by the Textile Commissioner."

(17) Chief Justice Mahajan (as his Lordship then was), speaking for the Court, observed as under:- "IT may also be pointed out that reference to the decision of this Court in-'Dwarka Prasad's case (A) is not very apposite and has not bearing on the present case. Section 4(3) of the U.P. Coal Control Order was declared void on the ground that it committed to the unrestrained will of a single individual to grant, withhold or cancel licenses in any way he chose and there was nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper apply, lii determining the question of the validity or otherwise of such a statute the court will not strike down the law out of hand only because no classification appears on its face or because a discretion is given to the Government to make the selection or classification but will go on to examine and ascertain if the statute has laid down any principle or policy for the guidance of the exercise of discretion by the Government in the matter of the selection or classification. After such scrutiny the court will strike down the statute if it does not lay down any principle or policy for guiding the exercise of discretion by the Government in the matter of selection or classification, on the ground that the statute provides for the delegation of arbitrary and uncontrolled power to the Government so as to enable it to discriminate between persons or things similarly situate and that. therefore, the discrimination is inherent in the statute itself. In such a case the court will strike down both the law as well as the executive action taken under such law."

(18) The case of Messrs Dwarka Prasad Laxmi Narain v. State of Uttar Pradesh and others was one of the cases referred to in the case of Shri Ram Krishna Dalmia. The Supreme Court was. in that case, considering the provisions of the Uttar Pradesh Coal Control Order. 1953. Clause 4(3) of that Order empowered the licensing authority to grant or to refuse to grant. renew or refuse to renew, suspend, revoke, cancel or modify any terms thereof granted by him under the Order for reasons to be recorded. The power conferred was held to be arbitrary and uncontrolled and, therefore, to be unreasonable. In Harishankar Bagla and another v. The State of Madhya Pradesh while dealing with a case relating to validity of clause (3) of the Cotton Textiles (Control of Movement) Order, 1948 made under the powers conferred by Section 3 of the Essential Supplies (Temporary Powers) Act, 1946, the Supreme Court distinguished the case of Messrs Dwarka Prashad Laxmi Narain. Clause (3) of the said Cotton Textiles (Control of Movement) Order was as follows :- "3. No person shall transport or cause to be transported by rail, road, air, sea or inland navigation any cloth yarn or apparel except under and in accordance with- (i) a general permit notified in the Gazette of India by the Textile Commissioner, or (ii) a special transport permit issued by the Textile Commissioner."

(19) Chief Justice Mahajan (as his Lordship then was), speaking for the Court, observed as under :- "IT may also be pointed out that reference to the decision of this Court in-'Dwarka Pra.sad's case (A)' is not very apposite and has not bearing on the present case. Section 4(3) of the U.P. Coal Control Order was declared void on the ground that it committed to the unrestrained will of a single individual to grant, withhold or cancel licenses in any way he chose and there was nothing in the Order which could ensure a proper execution of the power or operate as a check upon injustice that might result from improper execution of the same. . . . In the present Control Order there is no such provision as existed in the U.P. Coal Control Order. Provisions of that Control Order bear no analogy to the provisions of the present Control Order. The policy underlying the Order is to regulate the transport of cotton textile in a manner that will ensure an even distribution of the commodity in the country and make it available at a fair price to all. The grant or refusal of a permit is thus to be governed by this policy and the discretion given to the Textile Commissioner is to be exercised in such a way as to effectuate this policy. The conferment of such a discretion cannot be called invalid and if there is an abuse of the power there is ample power in the Courts to undo the mischief."

(20) It was also remarked that if the permit had been applied for and refused arbitrarily then that may have given a right to attack the law on the ground that it vested arbitrary and unregulated power in the Textile Commissioner.

(21) Shri Tarkunde submitted that the Controller having arbitrarily refused to grant any permit to daily newspapers, sub-clause (3A) itself is open to attack in the light of what was remarked in the case of Harishankar Bagla referred to above, here is. however, no material to support that contention. In the counter-affidavit by the Registrar of Newspapers it was mentioned that some of the newspapers had requested the Government for permission to purchase