Daily Foods vs Union Of India And Ors.
1993 Latest Caselaw 180 Del

ORDER 1992 - Clause 20(i)-Order restricting production of Skimmed Milk passed for a period of ninety days-fresh order imposing ban for another ninety days passed machenically without considering fresh material-illegal. (Para 19)

Clause 20(2)(e)-"any other factor" does not mean that sub Clause (a) to (d) can be given go by and ban can be imposed even when milk is available in abundance.

(Para 16)

WORDS & PHRASES - " any other factor" occurring in Sub clause (e) of Sub clause (2) of Clause 20 of The Milk and Milk Product Order 1992-does not mean any factor totally different from those occurring in preceding sub clause; (ejusdem genris?) (Para 16)

JUDGMENT

Y.K. Sabharwal, J.

(1) Milk is an essential commodity within the meaning of Essential Commodities Act, 1955 (for short 'the Act'). The Central Government has the power to regulate production, supply, distribution etc of milk and milk products as provided in Section 3 of the Act The Central Government as provided in Section 5 can also delegate its power to make orders under Section 3 of the Act and direct the powers to be exercised by such officer or authority subordinate to the Central Government or to such State Government or such officer or authority subordinate to a State Government as may be specified in the direction. Section 2(d) provides that 'State Government' in relation to a Union Territory means the Administrator thereof. .In the case of Union Territory of Delhi the Central Government by notification dated 9th June, 1978 delegated its powers under Section 3 of the Act to the State Government. By virtue of that delegation the Administrator of Delhi over a period of time has been issuing various orders for maintaining and increasing the supply of milk for securing its equitable distribution in Union Territory of Delhi.

(2) On 9th June 1992 the Central Government, in exercise of powers conferred on it by Section 3 of the Act, for maintaining and increasing the supply of liquid milk of the desired quality in the interest of general public and for regulating the production, supply and distribution of milk and milk product brought into force "The Milk and Milk Product Order 1992" (for short 1992 Milk Order'). Paragraph 2(g) of the said Order defines milk products as follows:- SEC.2(G):"Milk product" means cream, malai, curd, yoghurt skimmed milk curd, shrikhand, paneer or channa, skimmed milk paneer or skimmed milk channa, cheese, processed cheese and cheese spread, ice cream, milk ice cream; condensed milk (sweetened and unsweetened), condensed skimmed milk (sweetened and unswetened), whole milk powder, skimmed milk powder, partly skimmed milk powder, khoya, rabri, kulfi, kulfa, casein, sweets made from khoya, paneer and channa, infant milk food, table butter, deshi butter, ghee or butter oil and includes any other substance containing- on a dry weight basis not less than fifty per cent of milk solids (excluding added sugars), or any other substance declared by the Central Government, by notification as a milk product."

(3) Paragraph 3 of 1992 Milk Order envisages the constitution of Milk and Milk Product Advisory Board. It provides that the Board shall be constituted soon after the commencement of the order but not later than 180 days from the date of the commencement of the order. The Advisory Board is required to assist, aid and advise the Central Government on any matter concerning the production, manufacture, sale, purchase and distribution of milk and milk product and on matters incidental thereto. Although more than 180 days have expired the said Board has still not been constituted. Paragraph 12 of the 1992 Milk Order provides that the Central Government may, by Notification in the official gazette, appoint or designate any officer of the Government not below the rank of a Joint Secretary to Government of India, to exercise the powers and functions of the Controller under the Order. The Controller shall, subject to the control of the Central Government, be responsible for the general implementation and control of the provisions of the order. Paragraph 12 also states that the Controller shall, without prejudice to any other powers conferred upon him under the Order and the powers of the Central Government under paragraph 13, be responsible for implementing the provisions of the Order and shall take such steps as may be necessary for furtherance of the purposes of the Order. Paragraph 20 of the 1992 Milk Order confers power on the Controller to impose temporary restrictions on production of milk product. Paragraph 20 reads as under: "CLAUSE20. Temporary restriction on production of milk product:-(1) The Controller may, if he is satisfied that it is necessary so to do to maintain or increase the supply of liquid milk in any region, direct, by Order published in-the Official Gazette, that for the period mentioned in the said Order, the distribution of liquid milk or the production of any milk product by any class or category of producers or manufacturers thereof shall be restricted in such manner as maybe specified in the Order, provided that no such Order shall remain in force for a period of more than ninety days at a time. (2): In making the restriction referred to in sub-paragraph (1), the Controller shall have regard to the following factors, namely:- a) the availability of liquid milk in the region. b) the demand for liquid milk by the general public in the region; c) the availability of skimmed milk powder and white butter for reconstitution into liquid milk by dairy plants, d) the inter-se importance of liquid milk and the concerned milk product proposed to be restricted, and e) any other factor relevant for maintaining the liquid milk supply."

(4) The Controller, in exercise of the powers conferred by sub paragraph (i) of Paragraph 20 read with Paragraph 27 of the 1992 Milk Order and having regard to the factors specified in sub paragraph (2) of Paragraph 20 of the 1992 Milk Order, in order to maintain and increase the supply of liquid milk in the Union Territory of Delhi, made on 9th June 1992 an order called "The Delhi (Milk and Milk Product) Control Order 1992" to came into force on the date of its publication in the official gazette. The said order provided that it shall cease to operate on 16th July, 1992. This order defines "Milk product" as follows:- "MILK Product" means:- (i) Whole Milk Powder; (ii) Skimmed Milk Powder; (iii) Condensed Milk (Sweetened and unsweetened); (iv) Paneer and channa (v) Processed Cheese; (vi) Khoya; (vii) Sweets made from Khoya, Paneer and Channa. (viii) Desighee or butter oil(by whatever name called). (ix) Casein;"

 (5) On 23rd July 1992 the Controller in exercise of powers conferred by sub paragraph (1) of Paragraph 20 read with Paragraph 27 made another order for Union Territory of Delhi on the similar lines as the earlier order dated 9th June, 1992 except that in this Order the definition of "Milk product" was changed. It provided that the Order shall cease to operate on 7th August, 1992. The "Milk product" was defined as follows:-    "MILK Product" means:- (i) Whole Milk Powder. (ii) Skimmed Milk Powder; (iii) Condensed Milk (Sweetened and unsweetened)."   

 (6) By an order dated 6th August 1992 the operation of the order dated 23rd July 1992 was extended up to 6th September 1992.   

 (7) The effect of the change of definition of the "Milk Product" in the order dated 23rd July 1992 was that the prohibition from 23rd July 1992 continued only for manufacture of whole milk powder, skimmed milk powder and condensed milk (sweetened and unsweetened) and not in respect of khoya, Desi ghee, Paneer etc.   

 (8) The petitioner who claims to be involved in the business of milk and milk products is aggrieved by continuation of prohibition on manufacture of skimmed milk powder. According to petitioner the prohibition is absolutely irrational and arbitrary particularity because the skimmed milk is a by product which comes into existence on manufacture of Desi ghee, Khoya, Paneer etc and in respect of these products there is no prohibition on manufacture.   

(9) The undisputed fact is that the milk contains 85% water, 6.5% fat/cream and 8.5%solidnonfats.Accordingtopetitioner for manufacturing Desi ghee, khoya etc it is necessary to extract from the milk the fat/cream contents of 6.5%. After the extraction of the fat/cream from the milk the residue is known as skimmed milk. By drying skimmed milk and processing it the skimmed milk powder is manufactured. The skimmed milk powder-can-be re-converted into milk by adding fats and homogenising it but Desi ghee, khoya, paneer etc can never be reconverted into milk. According to the petitioner the effect of not prohibiting-manufacture of Desi ghee, khoya, Paneer etc is that the skimmed- milk is permitted to be generated which shows there is no shortage of milk in Delhi otherwise prohibition would also have been imposed on manufacture of Desi ghee, Khoya, Paneer etc. The petitioner says that it is arbitrary and irrational to impose prohibition on manufacture of skimmed milk powder when the skimmed milk is permitted to be generated. The petitioner further says that there is no nexus between the prohibition on conversion of skimmed milk into slammed milk powder and the object of maintaining milk supply in Delhi. According to petitioner, there is no reasonable basis to prohibit the conversion of slammed milk into skimmed milk powder when manufacture of Desi ghee, Khoya, Paneer etc has not been prohibited. Petitioner submits that the skimmed milk is highly perishable and has minimum shelf life and thus the skimmed milk has to go as a total waste because of the restriction on its conversion into skimmed milk powder. Petitioner has also pointed out that in view of abundance of the milk there are no customers for purchase of the skimmed milk.

(10) The petitioner had filed on 18th August, 1992 C.W. 2874 of 1992 challenging 1992 Milk Order dated 9th June, 1992 as also the Orders dated 23rd July 1992 and 6th August, 1992. The Ministry of Food Processing and the Ministry of Agriculture have taken contradictory stand. The Ministry of Food Processing agrees with the petitioner that the ban is not required to be imposed. The petitioner has alleged that on 4th September 1992 arguments in C.W. 2874/92 were heard by the Division Bench and the Bench on prima facie being convinced with the case of the petitioner that the restriction on conversion of skimmed milk into skimmed milk powder is arbitrary and irrational, asked the Counsel for Ministry of Agriculture whether it is going to extend the prohibition which was expiring on 6th September 1992 and as counsel for the said Ministry was not in a position to make a categorical statement in that regard, the Division Bench issued Rule and observed that the petitioner can approach the Court again if the Government issues any further order prohibiting conversion of slammed milk into skimmed milk powder. On 6th September 1992 the prohibition was not continued and the order lapsed. The petitioner contends that he had hardly worked for one month when again prohibition was imposed on converting skimmed milk into skimmed milk powder by issue of an order dated 3rd October 1992. The said order was published in Newspapers on 10th October 1992. The order dated 3rd October 1992 would cease to operate on 1st January 1993. This writ petition was filed on 14th October 1992 seeking quashing of the order dated 3rd October 1992. During the pendency of the writ petition another order dated 1st January 1993 was issued further extending the period of prohibition. The order dated 1st January, 1993 states that it shall cease to operate on 31st January 1993. With the leave of the court the petitioner, on the grounds already taken in the writ petition, has also challenged the validity of the order dated 1st January 1993. The period mentioned in the order dated 1st January 1993 has expired but the petitioner has still pressed his claim in the writ petition contending that if the matter is not adjudicated by the court the respondents would again issue a similar order of prohibition for further period thus forcing the petitioner to file yet another petition. In the facts and circumstances of the case it is necessary to decide the controversy although the order has lapsed on 31st January, 1993.

(11) Mr. Jaitley, learned counsel for the petitioner contends that in C.W. 2874/92, the petitioner has taken various grounds and reserving the right of the petitioner to press those grounds in that petition or to urge those grounds in any other proceedings, for the present purposes, the challenge to the impugned orders is limited to three grounds, namely, (1) restriction on manufacture of skimmed milk powder cannot be imposed when there is no shortage of milk and it is available in abundance; (2) restriction on manufacture of skimmed milk powder cannot be imposed during the period when there is no restriction on manufacture of Khoya, Desi ghee, Paneer etc and (3) Temporary restriction under Paragraph 20 of 1992 Milk Order cannot be continued for more than 90 days by issue of successive orders.

(12) Mr. Arun Jaitley relied upon various documents on record to show that during the period in which restriction was imposed on manufacture of skimmed milk powder the milk was available in abundance. Reliance has also been placed on a statement placed on record showing the milk consumed by about 23 Dairies in Northern grid for making pure ghee, skimmed milk powder, whole milk powder and Dairy whitner. According to that statement about 8 lakhs kilograms per day is consumed by the said dairies who are situate in close vicinity of Delhi. The grievance made by the petitioner is that the respondents have not imposed any restriction on those dairies which was necessary to be imposed if the purpose was to maintain and increase supply of liquid milk to Delhi. The letters sent by Cooperatives in Punjab to Minister of Agriculture for helping Punjab Milk Federation to supply one lakh litres of milk per day to Delhi Milk Scheme and the letters sent by Gwalior Cooperative to Delhi Milk Scheme for supply of milk have also been relied upon. Further reliance has been placed on letters sent by Secretary, Ministry of Food Processing Industries to the Secretary of Department of Animal Husbandary and Dairying, Ministry of Agriculture, slating that there was no shortage of milk in Delhi. Certain newspaper reports have also been relied upon to show that because of surplus availability of milk the Mother Dairy reduced the price of the milk by per litre.

(13) The contention is that making of the impugned orders imposing restriction on conversion of the skimmed milk into skimmed milk powder during the period when milk is available in abundance is highly arbitrary, perverse and unsustainable as the consequence of the restriction is that skimmed milk goes a total waste and has to be thrown instead of its being dried up and converted into skimmed milk powder for being used during the period of scarcity of the milk. It was contended that even Paragraph 20(2) recognises the fact that the skimmed milk powder can be reconverted into liquid milk and the restriction on manufacture of skimmed milk powder even during the flush season results in making the milk a scare commodity during the lean period and thus the impugned orders deserves to be quashed.

(14) Admittedly during the months of November, December, January and February the milk is available in abundance. It is known as Flush season for milk. Between May and August there is a shortage of milk and it is known as Lean period. During the months of March, April, September and October there is neither abundance nor shortage of milk. The average quantity of milk is available in these four months and this period is known as Transitory. The challenge in the present writ petition is to orders imposing restrictions on manufacture of skimmed milk powder during months of October, November, December and January, i.e. during the Flush season.

(15) It is not necessary to make a detailed reference to the documents relied upon by the petitioner to show availability of milk in abundance as Mr.Madan Lokur, learned counsel appearing for Ministry of Agriculture, very fairly conceded that during the period in question the milk available in Delhi was in abundance. Learned counsel, however, contended that restriction under Paragraph 20 on production of milk product can be imposed by the Controller even when the milk in abundance is available. Mr.Lokur has argued that the availability and demand of liquid milk are some of the factors envisaged by Paragraph 20(2) to which the Controller shall have regard to besides other factors relevant for maintaining the liquid milk supply as provided in clause (e) of Paragraph 20(2). The submission is that even if the factors mentioned in clause (a) to (d) may not call for the restriction being imposed the Controller would still be entitled to impose restriction on consideration of "other relevant factors".

(16) In Karam Singh Sobti and another Vs. Sri Pratap Chand and another, meaning of the words "shall have regard to the provisions of the Act" as appearing in Section 57(2) of Delhi p73 Rent Control Act, 1958 came up for consideration. The Delhi Rent Control Act, 1958 has repealed the Delhi and Ajmer Rent Control Act. 1952. Section 57(2) provides that notwithstanding such repeal, all suits and other proceedings under the said Act (1952 Act) pending, at the commencement of 1958 Act, before any court or other authority shall be continued and disposed of in accordance with the provisions of the said Act as if the said Act had continued in force and 1958 Act had not been passed. The first proviso to Section 57(2) provides that any suit or proceeding for the fixation of standard rent or for eviction of tenant from any premises to which Section 54 does not apply the court or other authority shall have regard to the provisions of 1958 Act. The second proviso provides that the provisions of appeal under 1952 Act shall continue in force in respect of suits and proceedings disposed of therein. The Supreme Court by majority decision held that the first proviso must be read harmoniously with the substantive provision contained in sub section (2) and the only way of harmonising the two is to accept the view which the Punjab High Court has accepted, namely, the words "shall have regard to the provisions of this Act" merely mean that "where the new Act has slightly modified or clarified the previous provisions, these modifications and clarifications should be applied". The Supreme Court held that the first proviso does not take away what is given by sub section (2) of Section 57 of 1958 Act. The question here would be whether clause (e) takes away what is given by clause (a) to (d) and has it the effect of almost nullifying factors (a) to (d). The answer, in my opinion, has to be in negative. While considering 'any other relevant factor' under clause (e) the factors enumerated in clause (a) to (d) cannot be given a complete go by, and the factors (a) to (d) cannot be made entirely redundant. The question is not as to how much weightage is required to be given to each or any one of the factors set out in Paragraph 20(2). It is of course, for the Controller to decide but the Controller cannot give a complete go by to the factors (a) to (d) while relying upon clause (e) which is a general clause. The regard to other relevant factor as permissible in clause (e) can be made for considering maintenance of the liquid milk supply and not for any extraneous matter. Mr.Lokur contends that to support and strengthen the dairy cooperatives in the country to enable the said Cooperatives to increase their production and promote their financial viability, the restriction can be imposed even during flush season. In my view reliance on these factors by altogether ignoring factors (a) to (d) would be irrational, extraneous and arbitrary, it is also not clear how imposition of the impugned ban would support the milk cooperatives. The effect of imposition would be the wastage of residual skimmed milk because of its limited shelf life. Further the milk is not being lifted in large quantity from Cooperatives as is evident from the letters written by the said Cooperatives. Moreover, the skimmed milk powder which can be re-converted into milk would not be generated for being available during the scarcity period. The consequence of ban during flush season would be (i) further scarcity during lean period: and (ii) wastage of milk & skimmed milk during flush season and thus it would adversely affect not only the milk Cooperatives but also p73 public at large. Assuming the support and strength to the milk cooperatives can be a relevant consideration under the Act, the aforesaid facts and consequences show how, in fact, the impugned ban is adversely affecting the Cooperative Dairies. It may also be noticed that Ministry of Food Processing has always been opposing imposition of ban on the ground of plenty of milk.

(17) MR.MADAN Lokur relying upon the decision of Supreme Court in M/s.Prag Ice & Oil Mills and another Vs.Union of India, 1978 Vol.3 S.C.C. Page 459 contends that the method of trial and error is inherent in Legislative efforts to deal with obstinate social issues. The contention is that the respondents are entitled to experiment their views of imposing prohibition during flush season which ultimately may not be found to be workable but may be found to be erroneous but ail the same such trial and error method is legally permissible and is not liable to be quashed though the method adopted earlier may be more appealing to the court. As a principle there is no difficulty in accepting it. Even if two views are possible the respondents are entitled to adopt any of the said view though ultimately that view may be found to be erroneous. This principle, however, would have no applicability when the impugned action is per se arbitrary, perverse and demonstrably irrelevant to the object of the Act. As noticed earlier, the impugned orders are per se arbitrary, perverse and are based on irrelevant and extraneous considerations which have no nexus with the object of the Act which is to maintain and increase the supply of the essential commodities. The impugned orders instead of strengthening the milk Cooperatives have. in fact, resulted in jeopardising their interest and is working to their prejudice. It may further be noticed that the alleged ground of strengthening the milk Cooperatives was taken, for the first time. in the counter affidavit filed by the respondents and was not considered while imposing the restriction. The decision to continue restriction during flush season has been taken without having regard to relevant considerations like availability of milk. availability of skimmed milk powder and demand of milk and thus amounts to colourable exercise of power. In view of aforesaid conclusions it is not necessary to decide whether availability of milk and other factors relevant to Delhi alone are to be considered or the presence of those factors in the northern region are. to be considered. The impugned orders imposing restriction on conversion of skimmed milk into skimmed milk powder during flush season cannot be upheld.

(18) The impugned orders do not prohibit conversion of milk into Ghee, Khoya, paneer etc. The plea of the petitioner is that so long as the manufacture of Ghee, Khoya, Paneer etc is permissible skimmed milk would continue to be generated. The contention is that prohibition on conversion of skimmed milk into skimmed milk powder would be wholly illogical and perverse particularly when there is no prohibition on conversion of milk into Ghee, Khoya, Paneer etc. I find considerable force in this contention as well. The respondents have tried to meet the contention by urging that Ghee and Khoya can be manufactured by extracting 3% fat instead of extracting the entire fat content of 6.5%. In theory it may be possible. The respondents have, however, not pleaded that the manufacturers of Ghee and Khoya are manufacturing the said products by extracting 3% fat contents and not the entire fat contents. It cannot be disputed that if 3% fat content is extracted double the quantity of milk would be required. Going by the same analogy in theory it may be possible to manufacture those products by extracting even One percent of the fat contents but in that eventuality the milk required would be about six times. In the flush season when there is abundance of milk nobody is likely to buy the skimmed milk and thus no reasonable person would manufacture these products by extracting less percentage of fat and use more quantity of milk. That seems to be the reason that in past during the scarcity period the prohibition on manufacture of skimmed milk powder was being imposed while imposing ban on manufacture of Ghee, Khoya, Paneer etc. The decision to ban manufacture of skimmed milk powder without imposing a ban on manufacture of Ghee, Khoya, Paneer is, on the fact of it, wholly illogical, irrational and arbitrary. Further, as already noticed earlier, the milk products like Ghee, Khoya, Paneer etc cannot be reconverted into milk whereas skimmed milk powder can be so reconverted. The ban on manufacture of skimmed milk powder in absence of any ban on manufacture of Ghee, Khoya, Paneer cannot be sustained. The ban on manufacture of skimmed milk powder during the scarcity period can exist only when there is ban on manufacture of milk products like Ghee, Khoya, Paneer and not otherwise.

(19) Paragraph 20 of 1992 Milk Order empowers the Controller to impose a temporary ban. It provides that no order imposing temporary restriction on production of milk product shall remain in force for a period of more than 90 days at a time. The use of the words "at a time" shows that the Controller has to examine the matter afresh after 90 days, if he considers to impose a further ban after the expiry of 90 days. The 3rd October 1992 Order was made to operate till 31.12.1992 and on 1st January 1993 another order was issued extending the ban up to 31st January 1993. The Controller is not empowered to do something indirectly which under 1992 Milk Order cannot be done directly. After expiry of 90 days another ban order cannot be issued without examining the matter afresh and further material, if any, more so when admittedly the milk was available in abundance. The temporary prohibition cannot be for a period beyond 90 days. The words 'at a time' does not mean that the Controller can give artificial breaks and issue successive orders imposing restrictions on the manufacture of the milk product and thus convert temporary restriction into almost permanent restriction. The Controller in exercise of power under Paragraph 20 can only impose temporary restriction and has no power to impose permanent restriction either directly or indirectly. As the order dated 1st January. 1993 was issued by the Controller without any fresh material and when admittedly there was abundance of milk it deserves to be quashed.

(20) For the foregoing reasons, I allow the writ petition and quash the impugned orders dated 3rd October 1992 and 1st January 1993. The petitioner would also be entitled to costs quantified at Rs.2500.00.