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PETITIONER: PARVEJ AKTAR AND ORS.

       Vs.

RESPONDENT: UNION OF INDIA AND ORS.

DATE OF JUDGMENT05/02/1993

BENCH: MOHAN, S. (J) BENCH: MOHAN, S. (J) SHARMA, L.M. (CJ) VENKATACHALA N. (J)

CITATION:  1993 SCR  (1) 803        1993 SCC  (2) 221  JT 1993 (1)   453        1993 SCALE  (1)456

ACT: Handlooms  (Reservation  of Articles  for  Production)  Act, 1985: Sections  3  and  4-Order  reserving  certain  articles  for exclusive  production by  handlooms-Constitutional  validity of-Whether  in  conflict with clause 20  of  Cotton  Textile (Control) Order, 1948. Constitution of India, 1950: Articles  14, 19(1)(g), 39(b) & (c), 43-Order u/s.  3(1)  of the Handlooms (Reservation of Articles for Production)  Act, 1985-Reserving of certain articles for exclusive  production by  handlooms-Whether amounts to protective  discrimination- Whether  creates  unreasonable  restriction  on   power-loom industry-Whether   in  the  nature  of  creating   monopoly- Directive Principles of State Policy-Giving effect to.

HEADNOTE: In the present Writ Petition and the transferred cases,  the constitutional   validity  of  Handlooms   (Reservation   of Articles  for production) Act, 1985 and the order dated  4th August,  1986 issued under S3(1) of the Act, directing  that certain   articles/class  of  articles  to  be   exclusively reserved for production by handlooms, has been challenged on the  ground of violation of Articles 14 and 19(1)(g) of  the Constitution of India. On  behalf of the petitioners, it was contended  that  total reservation  of  certain  items of  textiles  in  favour  of handlooms would have the effect of creating a monopoly,  the total  prohibition of manufacture of certain clothes by  the powerloom sector violated Article 19(1)(g) of the  Constitu- tion;  that the periodic review provided under Section  3(5) of the Act has not taken place at all; that the restrictions did not serve any public Interest; and that the Act and  the Cotton  Textile (Control) Order, 1948 could not  operate  in the  same field and so the orders dated 4.8.86 issued  under the Act were ultra vires. 804 On  behalf of the Respondents it was contended that the  Act was  entirely different from the Cotton  Textiles  (Control) Order  1948 Issued under the Essential Commodities Act,  and as  such  there was absolutely no repugnance.  It  was  also

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contended  that  an Expert Committee was constituted  to  go into  handloom, powerloom and textile mill  industries,  and based on this Committee’s report, textile policy  statements were  Issued and the Act therefore was a product of  overall assessment to protect handloom industry which was sinking In spite of the various concessions. Dismissing the matters, this Court, HELD : 1. It is incorrect to state that the powerloom sector has  come to be affected.  Originally, the holders  of  four powerlooms were exempt.  But these powerloom owners diverted their  products  to  larger powerloom  owners.   Once  those textiles  enter  the  market there  was  no  possibility  of finding out whether they had been manufactured by the owners of  four  powerlooms.   Therefore, it  became  necessary  to impose this prohibition.  When the Act advances a  directive principle  contained under Article 39(b) and (c), it  cannot be called unreasonable. [811D-E] 2.   The Cotton Textile Control Order 1948 issued under  the Essential  Commodities Act deals with the  production  while the Handlooms (Reservation of Articles for Production)  Act, 1985  Is  an Act which deals entirely  with  handloom.   The order  issued  under  Section  3 of  the  Act  is  only  for protection  and development of handloom industry.  There  is no question of both the Cotton Textile Control Order and the Order under challenge operating in the same field.  In  view of the non-obstante clause in S.3(1) of the Act, the subject of  handlooms  textiles  was taken out  of  the  purview  of Industries  (Development  and Regulation) Act,  1951  and  a separate  Act has been passed.  Merely because clause 20  of the  Cotton Textile Control Order confers an enabling  power that does not mean that an order issued under the  Essential Commodities  Act will prevail.  The objects of the  Act  and the Essential Commodities Act under which the Cotton Textile (Control)  order  is issued are different.   Therefore,  the order under Section 3(1) of the Act does not run counter  to clause  20  of Cotton Textile Control  Order.  [816H,  822F, 824D] Ch.   Tika Ramji v. State of Uttar Pradesh, [1956]  SCR  393 and Harishankar Bagla v. 7he State of Madhya Pradesh, [1955] SCR 380 at 391, relied on. 805 3.   There  is no question of monopoly created in favour  of handloom  industry.  Certain kinds of textiles are  reserved to  the handloom industry.  Still there are number of  Items available  for powerloom owners which they can  manufacture. The items of textiles generally manufactured In the mill and powerloom  sectors have been left out from  reserved  items. Only those items which have traditionally been  manufactured on  handlooms have been reserved for this sector.   Recently when  the powerloom started producing the items  which  were traditionally being manufactured on handlooms, that caused a serious  inroad into the handloom industry.  The result  was an  unequal competition for the handloom  sector.   Handloom industry is the biggest cottage industry in the country  and is  next  only  to agricultural sector  in  providing  rural employment.  The protection has been given by the Government to  handloom  weavers  because the  livelihood  of  handloom weavers is threatened due to the production of all types  of Items and varieties by the powerloom industry.  It is common knowledge  that the handloom weavers are  economically  very poor  and will have no alternative employment in  the  rural areas unless protected through reservation of varieties  for them.  Therefore, the restrictions on the powerloom industry are not only reasonable but also fully justified.  Moreover, the  protection  given  to  the  handloom  industry  is   in

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furtherance  of  the objectives laid down in  the  directive principles.  Even if these restrictions result in the  total exclusion  of  the powerloom sector, such  restrictions  are reasonable. [824G-H, 826E, F, G, 827A] Orient  Weaving Mills v. Union of India, AIR 1963 SC 98  and Narendra  Kumar v. Union of India, [1960] 2 SCR 375,  relied on. Rustom Cavasjee Cooper v. Union of India, [1970] 3 SCR  530, distinguished. State  of  Rajasthan v. Mohan Lal Vyas, [1971]  3  SCC  705; Municipal  Committee  v. Haji Ismail, AIR  1967  Punjab  32; Maniram  Budha  Chamar v. Pamalal Motiram Chamar,  AIR  1962 Madhya Pradesh 275; Mohd.  Hanif Quareshi v. State of Bihar, [1959] SCR 629; State of Madras v. V.G. Row, [1952] SCR 597; Virendra v. State of Punjab, [1958] SCR 308; Mohd.  Faruk v. State of  Madhya Pradesh, [1970] 1 SCR 156  and  Municipal Corporation  of  the  City  of  ahmedabad  v.  Jan  Mohammed Usmanbhai [1986] 2 SCR 700, referred to. 4.   Article  14  requires  that all persons  subject  to  a legislation must 806 be  treated  &like.  Equals must be treated alike,  in  like circumstances  and  conditions.  Undoubtedly,  the  handloom sector forms a distinguishable class separate from powerloom sector or mills sector.  The reservation of certain articles for  exclusive  production in the handloom  sector  has  the objective of protecting the handloom sector against  unequal and  powerful competition by the mechanised  powerloom/mills sector.   At the same time, it is also necessary  to  ensure continued  production coupled with sustained  employment  to the  handloom  weavers  largely concentrated  in  the  rural areas.   This  is  also  in  accord  with  the  Government’s declared  policy  of supporting handloom sector due  to  its large  employment potential.  Thus the classification has  a rational nexus with the objective of the Act.                                         [829G,H; 830AB] 5.   The  handlooms  are operated manually,  the  number  of persons  employed  Is  many times more  than  powerloom  for production of similar quantities of cloth.  The  reservation of  articles for handlooms does not pose any serious  threat to  powerlooms.   It has been proved by the fact  that  even though  the  handlooms reservation orders have been  on  the statute  book since 1950, the powerlooms have  continued  to proliferate  and there is no reason to believe that  any  of these  looms are likely to be closed due to the  Reservation Order.  The powerloom owners are only required to  diversify their  line of production so that they do not produce  cloth reserved  for  handlooms.  Since the Government  policy  has always been to create more employment particularly In  rural areas, it will be unthinkable to Imagine the social problems that  will  be  created if the  employment  of  millions  of handloom  weavers  Is taken away by allowing  powerlooms  to produce all items without any reservation. [829B-E] 6.   Sub-section (1) of Section 3 of the Act states that the order  specifying the articles for exclusive  production  of handloom could be issued for the protection and  development of  handloom  industry from time to  time.   Therefore,  the reservation  is  not  for all time to  come.   It  could  be revised periodically.  Atleast once a year there could be  a meeting of the Advisory Committee. [830CE] 7.   The  interest  of the powerloom sector has  been  taken into   account  and  powerlooms  were   represented   albeit indirectly  on the Advisory Committee.   The  sub-committees formed by the Advisory Committee had visited many places  in the country and discussed the matter with officers of the

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807 State  Governments  and met persons  representing  different textile  sectors.  Apart form the reports removed  from  the sub-committees,   the   representations  received   by   the Government   from  various  textile  Interests   were   duly considered  by  the Advisory Committee before  making  their recommendations.   It is, therefore, Incorrect to  say  that proper  opportunity was not provided to the petitioners  for making  representations.   Moreover,  representatives   from powerloom  sector,  mills sector and powerloom  silk  sector have  been specifically included in the Advisory  Committee. It cannot therefore be said that no opportunity was afforded to  powerloom  sector and that under Section 3  of  the  Act regard  was  bad only to the handloom industry  while  under clause  20 of the Cotton Textile Control Order an  over  all view of all the industries could be taken. [831B-E]

JUDGMENT: CIVIL EXTRAORDINARY JURISDICTION : Writ Petition (Civil) No. 1526 of 1987.       (Under Article 32 of the Constitution of India). D.P.  Gupta,  Solicitor  General  Altaf  Ahmed,   Additional Solicitor  General,  M.N.  krishnamani,V.  Shekhar,  Ms.  A. Subhashini K. Swamy, R. Jagannath Goulay,Ms. Malini  Poduval R.  Mohan,  R.F.  Nariman, P.H.  Parekh,  Sahu,  MA.  Firoz, Sudarsh   Menon,  M.K.D.  Namboodri  A  Subba  Rao,   Ranjit Kumar,R.N.  Keshwani  Hirendra Krishna  Dutt,  Mrs.  Nandini gore,  Mrs.  M.  Karanjawala, Ms. Sushma  Suri,  Anil  Kumar Sangal and B. Krishna Prasad for the Appearing  Parties.          The Judgment of the Court was delivered by MOHAN,  J.  The  writ petition  and  the  transferred  cases challenge the validity of Handlooms (Reservation of Articles for Production) Act, 1985 (22 of 1985) (hereinafter referred to as the Act) and the order bearing No. DCP/BNP/1(2)  1986 dated  4th  August,  1986 issued under  sub-section  (1)  of Section  3  of  the  Act.   This  Act  is  to  provide   for reservation of certain articles for exclusive production  by handlooms  and for matters connected therewith.  On 31st  of March, 1986, the Act came into force.  Section 4 of the  Act provides  for constitution of an Advisory Committee to  make recommendations  to the Central Government to determine  the of any article or class of articles that may be reserved for exclusive  production by handlooms.  On 2nd June,  1986,  in exercise of the powers conferred under Section 4 of the Act, the Central Government constituted an Ad- 808 visory Committee.  The said Advisory Committee submitted its recommendations.   After considering  those  recommendations the  impugned  order dated 4th of August,  1986  was  issued directing,   certain  articles/class  of  articles   to   be exclusively  reserved  for production by handlooms.   It  is this order which is attacked on the following grounds in all these cases. The Act and the impugned order are violative of Articles  14 and 19(1)(g) of the Constitution. Accordingly to Mr. M.N. Krishnamani, learned counsel for the petitioners  total reservation of certain items of  textiles in  favour of handloom would have the effect of  creating  a monopoly.   This  Court in State of Rajasthan v.  Mohan  Lal Vyas,  [1971] 3 SCC 705 has categorically laid down that  no monopoly can be created in favour of an individual.  Similar views  have been expressed by the High Courts as  seen  from Municipal  Committee v. Haji Ismail, AIR 1967 Punjab 32  and

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Maniram  Budha  Chamar v. Pamalal Motiram Chamar,  AIR  1962 Madhya Pradesh 275. Equally, when there is a total prohibition of manufacture of these clothes by the powerloom sector, that again,  violates Article  19(1)(g)  of the Constitution.  In support  of  his submission,  the learned counsel relies on  Rustom  Cavasjee Cooper v. Union of India [1970] 3 SCR 530 and also  Narendra Kumar v. Union of India, [1960] 2 SCR 375. The  next  argument of the learned counsel  is  that  though under  Rule  3(5) the Advisory Committee is to meet  once  a year,  that has not taken place at all.  The idea of such  a provision  is  that there must be a  periodic  review  which review has not taken place at all. The  restrictions in this case if, are to be  justified,  it should  be in public interest.  Here, no public interest  is subserved.   On the contrary, when the powerloom  goods  are available  at  a lower rate to the  detriment  of  powerloom manufacturers,  the  restrictions have come to  be  imposed. This  submission  is sought to be fortified  by  relying  on Mohd.  Hanif Quareshi v. State of Bihar, [1959] SCR 629  and State of Madras v. V. G. Row, [1952] SCR 597 at 607. Mr.  R.F.  Nariman, learned counsel  appearing  for  Textile Mills from Gujarat in Transferred Cases Nos. 111-117 of 1988 would argue as under: The  Cotton Textile (Control) Order 1948 dated  2nd  August, 1948 809 and  the  impugned  Act cannot operate in  the  same  field. Section 6 of the Essential Commodities Act, 1955 contains  a non-obstante  clause.   Clause  20  of  the  Cotton  Textile (Control)  Order, 1948 confers power on the Commissioner  to reserve just as the Notification issued under the  Handlooms Act.   Therefore, these orders will prevail as  against  the impugned,order   because   Section  3  of   the   Act   says ’notwithstanding  Industrial  Development  Regulation  Act’. The  Cotton Textile Commissioner while issuing orders  under clause  20  is  enable to  augment  production  of  handloom industry.  Therefore, this order cannot operate against  the same. Under Section 3 of the Act, the authority only looks at  the handloom  industry while under clause 20 the Cotton  Textile Commissioner  must  have  regard to  the  over  all  textile industry.  Hence, the Notification under Section 3 is  ultra vires of clause 20. The  subjective  satisfaction  of  this  Advisory  Committee constituted   under   Section   4  alone   is   taken   into consideration    without   regard   to   the    petitioner’s representation.   This is bad in law in view of  V.G.  Row’s case  (supra).  The same view was reiterated in Virendra  v. State of Punjab, [1958] SCR 308. By  the  impugned order there is a  serious  dislocation  of powerloom  industry and substantive rights guaranteed  under Article  19(1)(g) of the Constitution have been violated  by Sections  3,  4, 5, and 18 of the  Act.   Such  restrictions amounting  to  prohibition have been struck  down,  by  this Court in Mohd Faruk v. State of Madhya Pradesh, [1970] 1 SCR 156  and Municipal Corporation of the City of  Ahmedabad  v. fan Mohammed Usmanbhai [1986] 2 SCR 700. If  the restrictions are unreasonable, certainly  the  Court will refuse to uphold the same. Mr.  Altaf  Ahmad,  learned  Additional  Solicitor   General appearing for the respondent, Union of India, meeting  these arguments, states as follows. The  Cotton  Textile (Control) Order, 1948 is  traceable  to List  III  Entry  33 of 7th Schedule  of  the  Constitution.

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While the impugned Act is covered by List II Entries 24 and 27  this is supplementary to the Industrial Development  and Regulation Act, 1951 which is traceable to List I Entry 810 52  of the 7th Schedule.  Under the  Industrial  Development and Regulation Act Section 2 talks of declaration.   Section 3(h)  states as to what is meant by Schedule.  Section  3(i) states ’Schedule’ means a Schedule to this Act.  Item 23  of 1st  Schedule  deals  with textiles  including  those  dyed, printed or otherwise processed.  Handloom industry is  taken out of the purview of Industrial Development and  Regulation Act and a separate enactment, namely, Handlooms (Reservation of  Articles  for production) Act, 1985 (22  of  1985),  the impugned  Act,  has  been made.   Cotton  Textile  (Control) Order, 1948 deals with finished products.  That is why it is traceable  to  Entry 33 of List III of  7th  Schedule  which deals  with  production.   Therefore, the  impugned  Act  is entirely different from the Cotton Textile (Control)  Order, 1948   which  is  an  order  issued  under   the   Essential Commodities Act.  There is absolutely no repugnance. In a similar situation dealing with Sugarcane Control  Order this  Court  explained  the  position  vis-a-vis  Industrial (Development and Regulation) Act, 1951 in Ch.  Tika Ramji v. State  of Uttar Pradesh, [1956] SCR 393.  The ratio of  that judgment will apply here. The  Handloom  Act  only  gives  effect  to  the   directive principles under Article 39(b) and (c) of the  Constitution. In   such  a  case,  this  Court  has  always  upheld   such restrictions.   As to the reasonableness, of these  restric- tions,  the  learned  counsel would  strongly  rely  on  the counter affidavit and particularly, the report of the  High- powered  Study  Team  under  the  Chairmanship  of  Mr.   B. Shivaraman,  which  has  been  quoted  therein.   If  public interest  warrants, restrictions could include  prohibitions as  well.  The case in point is Narendra Kumar v.  Union  of India, [1960] 2 SCR 375. Mr.   Dipankar   P.   Gupta,   learned   Solicitor   General supplementing  the  argument  submits  that  the  Government studied  the  over  all problem of textile  industry  for  a number  of  years.   In  1964,  the  powerloom  inquiry  was constituted.   In 1974, a high power Study Team  constituted under the Chairmanship of Mr. B. Sivaraman, the then Member, Planning  Commission  made  the  following  observation   in respect  of effect of powerlooms and the employment  in  the handlooms sector in their report:               "Every new powerloom itself put out of  action               six  handlooms  in the  country.   A  handloom               actually  is  a  family industry  and  not  an               individual’s   field  alone.   When   National               Policy  is  to support the  expansion  of  the               rural industry               811               of  handloom in order to give more  employment               in  the rural sector, we shall be  working  at               cross purpose in encouraging at the same  time               powerlooms  to  displace  a  large  number  of               handlooms.’ Then,  a  Study  Group was constituted in  1981.  An  Expert Committee was constituted to go into handloom, powerloom and textile  mill  industries.   Based on  this,  from  time  to time,textile  policy  statements were issued.  In  the  year 1981  and 1985, it is found that next only  to  agricultural sector,  handloom  sector provides major  rural  employment. Therefore,  the  impugned  Act  is a  product  of  over  all assessment to protect a handloom industry which was  sinking

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in spite of the various concessions. It is incorrect to state that the powerloom sector has  come to be affected.  Originally, the holders of four  powerlooms were  exempt.   But these powerloom  owners  diverted  their products  to larger powerloom owners.  Once  those  textiles enter  the market there was not possibility of  finding  out whether  they  had been manufactured by the owners  of  four powerlooms. Therefore,  it became necessary to impose this  prohibition. When the Act advances a directive principle contained  under Article 39(b) and (c), it cannot be called unreasonable. We shall first examine the background leading to the passing of the impugned enactment. On  8.1.63, the Government of India appointed  a  committee, called   "The   Powerloom  Enquiry  Committee’   under   the Chairmanship of Shri Ashok Mehta.  This Committee  submitted its  report to the Government of India on 5.6.1964.  Amongst others,  the  Committee recommended that the  production  of coloured sarees should be reserved exclusively for  handloom sector.   In a reference to reservation, the  committee  has said:-               "Even   with   the   phased   programmes    of               introduction  of  powerlooms in  the  handloom               sector, the handloom sector would continue  to               play  a prominent role for some  decades.   It               will  be necessary therefore, to  ensure  that               this  Sector is given assistance by a  further               Reservation of field of 812 production." The  said Study Team under the Chairmanship of Mr. B.  Sivar an inter alia made the following recommendation:               "It  will  be  noticed that  three  items  are               reserved  exclusively  for the  handlooms  and               powerlooms  units having up to  4  powerlooms.               Any breach of these orders is punishable under               the  Essential  Commodities  Act.   In  actual               practice,  however,  the orders  are  honoured               more in breach than in compliance and there is               very little of prosecution under the Essential               Commodities Act.  The most glaring example  of               such  breach  is the  production  of  coloured               cotton    sarees   by   the   powerlooms    of               Maharashtra.  Litigation of various nature  is               entered into by the powerloom sector to  delay               the  process  of law.  As a result,  even  the               little  punitive  action  that  is   attempted               becomes   infructuous.   There  is  also   the               inherent  difficulty  of dean with  the  eight               items  which are also open to powerloom  units               with  four  looms and less.   Once  the  goods               leave  a powerlooms it becomes very  difficult               to  establish whether the were produced  in  a                             unit  with more than four powerlooms or  in  a               smaller  unit.   As a result,  the  protection               supposed  to have been given to  the  handloom               sector   by   reserving   certain   items   of               production  for  the  sector  has  been   sub-               stantially  only  on paper and  the  powerloom               sector  has been producing the reserved  items               whenever it has found it profitable to do  so.               The team recommends that the eight items which               are also open powerloom units with four  looms               and less shall be reserved exclusively for the               handloom sector.’

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The   Government  of  India  appointed  a  Study  Group   on ’Reservation  of  Handlooms’ on 12th August 1980  under  the Chairmanship  of  Textile  Commissioner who  has  given  the following recommendations in respect of certain articles for exclusive production by handlooms:               "It  may be true that owing to  the  dispersed               nature  of  the  industry,  the  much   needed               orientation  of production to market needs  is               very much wanting in the handloom sector.               813               Yet    more   important   is   the    inherent               technological  disadvantage  of  the  handloom               sector and the unequal competition that it has               to face from the mill and powerloom sector  on               this account.’ It  is  a matter of common knowledge that the  bulk  of  the handlooms  in  the country produce ’break and  butter  item’ such  as  gray dhoties, sarees, towels and  plain  household fabrics.   It is these looms which have suffered on  account of  the growing competition from the powerlooms.  It  is  in this  context  that  the reservation  of  certain  items  of handlooms acquires importance. In order to obviate the possibility of further  litigations, the  Study Group feels that it would be advisable to have  a separate legislation for the handloom sector. The Expert Committee observed in April 1985 thus:               "The vast growth of powerlooms has been due to               certain  advantages  which they  have  enjoyed               vis-a-vis the composite mills.  These are  low               wages,  low fiscal levies on yarn, absence  of               levy  on  gray  fabrics  which  are  the  only               products of the powerlooms, whole-sale evasion               of   protective   labour   legislation,    low               overheads, low requirements of working capital               and flexibility in changing the product-mix to               suit market demands, etc.  As against this, it               must be recognised that there are also certain               advantages  with  the  composite  mills.   For               instance, the yarn costs to the powerlooms are                             about  8% higher than for the composite  miffs .               The composite mills also have the advantage of               much    higher    level    of    technological               capabilities   and  marketing  strength   with               reputed brand names established in the  market               and  better  quality  control.   On   balance,               however, the advantage was distinctly with the               powerlooms so far as the production of  cotton               fabrics is concerned.  That this advantage has               put  the  composite mills in  some  difficulty               cannot be gainsaid.  In any policy  calculated               to restore health to the textile industry,  it               would  be necessary to approximately  equalise               the advantages and disadvantages of these  two               sectors and the Committee has attempted to  do               this through its 814 recommendations." It  is  also relevant to note that the 7th  Five  Year  Plan stresses  the necessity for reservation of articles  of  the handloom  sector.   The relevant extract of which  is  given below:               "For  the purpose of policies, the  powerlooms               in   the   organised  mill  sector   and   the               unorganised powerloom sector shall be  treated

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             at par and allowed to compete on the basis  of               their  inherent  strength  and   capabilities.               Effective  measure, however, would be  evolved               to  prevent  encroachment  of  the   powerloom               sector   on  items  reserved  for   handlooms.               During  the VIIth Plan emphasis would be  laid               on   cooperativisation  and   development   of               handlooms   through   Central   State    level               corporations,   modernisation  of  looms   and               provision  of  technological  inputs,   ensure               adequate  availability of yarn and  other  raw               materials,  increase the production  of  mixed               and   blended  fabrics  on  handloom,   design               support to improve the competitiveness of  the               product  so  as  to  eliminate  the  cost   of               handicap  of  handloom  vis-a-vis  powerlooms,               improve  marketing and infrastructure  support               and  strengthen the’ data  base.   Reservation               would  continue under "Handlooms  (Reservation               of  Articles for Production) Act, 1985".   The               provision  of this Act would be  enforced  and               the   machinery  for  this  purpose   suitably               strengthened.    New  Spindle  age  would   be               installed in cooperative sector to the  extent               possible.   To  improve  the  welfare  of  the               handloom  weavers, a contributory thrift  fund               scheme and worshed-cum-housing scheme would be               taken up in the Seventh Plan". Due  to the recommendations of the various Committees  under the  textile policy statements announced by  the  Government from  time to time, the reservation of certain articles  for production of handloom had continued from 1.6.1950 under the Cotton Textiles (Control) Order, 1948 issued under Section 3 of the Essential Commodities Act, 1955.  However, experience showed  that these orders were challenged in course of  law, from time to time.  The thrust of the argument on behalf  of the powerloom was that they had given higher production  and the powerloom cloth was 815 cheaper  than handloom fabric.  Therefore, it was  contended that the Notification issued under the Essential Commodities Act  which, in effect, seeks to prohibit production was  not in  consonance with the Essential Commodities Act.   It  was further  urged that the Notification provides for  exemption from  compliance of reservation order if  sufficient  reason was  adduced  by  the  producer.   It  was  claimed  by  the powerloom  owners  that  they  were  not  afforded  such  an opportunity   to   adduce  evidence.    To   overcome   such difficulties, Government of India promulgated the  Handlooms (Reservation of Articles of Production) Act, 1985. It  is  necessary to set out the statement  of  objects  and reasons of this Act which runs as follows:             "STATEMENT OF OBJECTS AND REASONS               The  handloom  industry  is  characterised  by               sizeable   unemployment  and   underemployment               which   are  due  to  factors  like  lack   of               organisation     of    weavers,     inadequate               availability  of  inputs,  including   working               capital and absence of a regular and  reliable               marketing system, which can observe the entire               production.  Of all these the lack of adequate               marketing  system is one single  factor  which               comes  in  the way of  proper  development  of               handlooms.  Although a number of developmental               measures   have   been   undertaken    towards

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             improvement   of  the  industry  yet  due   to               marketing   difficulties  production  in   the               Handloom  sector  continues  to  suffer.   The               inherent technological constraints suffered by               the  handloom sector put a  disadvantage  when               the sector is forced to compete with mill  and               powerloom  sectors in the open market.  It  is               in  this context that reservation  of  certain               items  for  exclusive production  by  handloom               acquires    importance.    The    policy    of               reservation  of  certain items  for  exclusive               production by handloom has been adopted  since               1950.    First  under  the   Cotton   Textiles               (Control)  Order  1948  and  later  under  the               provisions  of the Essential Commodities  Act,               1955.   This  policy has helped  the  handloom               sector  to  a considerable  extent.   However,               during  the last few years, these  reservation               orders issued under the Essential  Commodities               Act               816               had been challenged in various courts of  law.               Though  their validity had been uphold  it  is               considered   desirable  to  have  a   separate               legislation  so as to obviate the  possibility               of  further  litigation  which  may  seriously               affect  the implementation of the  reservation               orders.   A  study  group  appointed  by   the               Government  to go into this question has  also               suggested that it would be desirable to have a               separate legislation.  It has been decided  to               accept this recommendation, this question  has               also  suggested that it would be desirable  to               have  a  separate legislation.   It  has  been               decided to accept this recommendation.               The  Bill  apart  from  enabling  the  Central               Government   to  reserve  by  notified   order               certain  articles  or class  of  articles  for               exclusive production by handlooms after taking               into  consideration the recommendations of  an               Advisory   Committee  constituted  under   the               provisions   of   the   Bill,   provides   for               prohibition of manufacture of such articles of               class  of articles by powerloom or  the  other               sectorism  penalties for the contravention  of               the provisions of the order and other  matters               necessary  for implementing the provisions  of               the Bill also provides for giving an exemption               to  certain articles covered by the  order  if               the Central Government considers it  necessary               so  to  do for the purposes  of  the  Handloom               industry.                                      V.P. Singh                New Delhi                The 22nd August, 1984." With this background, we will examine the provisions of  the Act  in  juxtaposition  to the  Industrial  Development  and Regulation Act and Cotton Textile Control Order. The  Cotton Textile Control Order is an order  issued  under the Essential Commodities Act.  The object of the  Essential Commodities  Act is to provide, in the interest  of  general public,  for  the  control of  the  production,  supply  and distribution, and trade and commerce in certain commodities. 817 Sub-section (1) of section 3 states as follows:

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             "Notwithstanding  anything  contained  in  the               Industries  (Development and Regulation)  Act,               1951,  the  Central Government may, if  it  is               satisfied,      after     considering      the               recommendations  made  to it by  the  Advisory               Committee,  that it is necessary so to do  for               the protection and development of the handloom               industry,  by order published in the  Official               Gazette,  direct, from time to time, that  any               article  or  class of articles shall,  on  and               from  such  date as may be  specified  in  the               order (hereinafter referred to as the date  of               reservation),   be  reserved   for   exclusive               production by handlooms.’ (Emphasis supplied) This  Act  is traceable to Entry 33 of List III of  the  7th Schedule of the Constitution.  It runs as follows: "Trade  and  commerce  in, and the  production,  supply  and distribution of,               (a)   the  products of any industry where  the               control  of  such  industry by  the  union  is               declared by Parliament by law to the expedient               in the public interest, and imported goods  of               the same kind as such products;               (b)   foodstuffs,  including  edible  oilseeds               and oils;               (c)   cattle  fodder, including  oilcakes  and               other concentrates;               (d)   raw cotton, whether ginned or  unginned,               and cotton seed; and               (e) raw jute." Industrial  Development and Regulation Act, 1951 is  an  Act which  brings  under  central control  the  development  and regulation of number of industries, the activities of  which affect  the country as a whole and the development of  which must  be governed by economic factors of all  India  import. The  planning  of future development on sound  and  balanced lines  is  sought  to be secured by  licensing  of  all  new undertakings by the Central 818 Government.   The Act is traceable to List I Entry 52  which reads as under:               "Industries, the control of which by the Union               is  declared  by  Parliament  by  law  to   be               expedient in the public interest."               Section 2 of the said Act reads:               ’Declaration as to expediency of control by the Union.-               It  is  hereby declared that is  expedient  in the  public interest that the  Union  should               take   under   its  control   the   industries               specified in the First Schedule.’ Section  3  is  the definition section.  In  clause  (h)  it defines  "Schedule"  meaning a Schedule to this  Act,  while "schedule industry’ is defined under clause (i) meaning  any of the industries specified in the First Schedule. Item 23 of First Schedule is defined as under- "23.  TEXTILES (INCLUDING THOSE DYED, PRINTED OR OTHERWISE PROCESSED):               1.    made  wholly  or  in  part  of   cotton,               including cotton yarn, hosiery and rope;               2.    made   wholly  or  in  part   of   jute,               including jute twine and rope;               3.    made   wholly  or  in  part   of   wool,               including  wool tops, woollen  yarn,  hosiery,               carpets and druggets;               4.    made wholly or in part of silk including

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             silk yarn and hosiery-,               5.    made  wholly  or in part  of  synthetic,               artificial  (man made fibres,  including  yarn               and hosiery of such fibres.’ The  impugned Act is traceable to Items 24 and Z7 of  II  of the 7th Schedule of the Constitution which run as under:               "24.  Industries subject to the provisions  of               (Entries           7 and 52)   of List I."               819               "27.   Production, supply and distribution  of               goods subject to the provisions of Entry 33 of               List III." Therefore,   handloom  industry  has  been  taken   out   of Industrial  Development  and Regulation Act and  a  separate enactment has been made. In  the light of the foregoing provisions, we shall  examine the  question whether Cotton Textile Control Order  and  the impugned  Act can operate in the same field.  Section  6  of the Essential Commodities Act states:               ’Effect  of  orders  inconsistent  with  other               enactments:               Any  order  made under Section  3  shall  have               effect  notwithstanding anything  inconsistent               therewith  contained  in any  enactment  other               than this Act or any instrument having  effect               by  virtue  of any enactment other  than  this               Act." In  view  of the non-obstante clause it is argued  that  the Cotton Textile Control Order will prevail over the  impugned Act. We do not think this argument is correct because the  Cotton Textile Control Order deals with finished products which  is one  of the Items mentioned in Entry 33 of List III  of  the 7th Schedule of the Constitution and the object of an  order issued under Section 3 of the Essential Commodities Act  has already been seen. Clause  20 of the Cotton Textile Control Order  enables  the Commissioner to issue directions just as the present order. When section subsection (1) of Section 3 of the impugned Act says  ’Notwithstanding anything contained in the  Industries (Development  and Regulation) Act, 1951" it means it has  an overriding  effect.   That  was the reason  why  subject  of handloom-textile  was taken out of the purview of the  First Schedule  of  Industries (Development and  Regulation)  Act, 1951  and  a  separate Act had come to  be  passed.   Merely because  clause  20  of the  Cotton  Textile  Control  Order confers  an enabling power that does not mean that an  order issued under the Essential Commodities Act will prevail. 820 In  this  connection,  reliance is placed  by  Mr.  Nariman, learned counsel, on Harishankar Bagla v. The State of Madhya Pradesh, [1955] SCR 380 at 391 which runs as follows:               "Section  6  of the Act cited  above  declares               that an order made under section 3 shall  have               effect  notwithstanding anything  inconsistent               therewith  contained  in any  enactment  other               than this Act or any instrument having  effect               by  virtue  of any enactment other  than  this               Act.  In other words it declares that if there               is  any  repugnancy  in an  order  made  under               section  3  with the provisions of  any  other               enactment,    then    notwithstanding     that               inconsistency the provisions of the Order will               prevail  in  preference to the  provisions  of               other  laws which are thus  inconsistent  with

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             the provisions of the Order." In  dealing with the validity of Sugarcane  Control  Order,, 1955  this Court observed in Ch.  Tika Ramji’s case  (supra) as follows:               "The relevant Entries in the respective  Lists               of  the Seventh Schedule to  the  Constitution               are as follows:               List  I, Entry 52: Industries, the control  of               which  by the Union is declared by  Parliament               by   law  to  the  expedient  in  the   public               interest.               List  II, Entry 24: Industries subject to  the               provisions of entry 52 of List I.               Entry 27: Production, supply and  distribution               of goods subject to the provisions of entry 33               of List III.               List  III, Entry 33: As it stood prior to  its               amendment:-               Trade  and commerce in and production,  supply               and   distribution   of,   the   products   of               industries   where   the   control   of   such               industries by the Union is declared by Parlia-               ment  by  law to be expedient  in  the  public               interest.               Entry 33 as amended by the Constitution  Third               Amendment  Act, 1954: Trade and  commerce  in,               and the               821               production, supply and distribution of,               (a)   the  products of any industry where  the               control  of  such  industry by  the  Union  is               declared by Parliament by law to be  expedient               in the public interest, and imported goods  of               the same kind as such products;               (b)   foodstuffs,  including  edible  oilseeds               and oils;               (c)   cattle  fodder, including  oilcakes  and               other concentrates;               (d)   raw cotton, whether ginned or  unginned,               and cotton- seed; and               (e) raw jute.               Production,  supply and distribution of  goods               was  no doubt within the exclusive  sphere  of               the  State Legislature but it was  subject  to               the  provisions of Entry 33 of List III  which               gave  concurrent powers of legislation to  the               Union  as well as the States in the matter  of               trade  and  commerce in, and  the  production,               supply  and distribution of, the  products  of               industries   where   the   control   of   such               industries  by  the  Union  was  declared   by               Parliament  by  law to the  expedient  in  the               public  interest.  The  controlled  industries               were relegated to Entry 52 of List I which was               the  exclusive province of Parliament  leaving               the  other industries within Entry 24 of  List               II  which the exclusive province of the  State               Legislature.  The products of industries which               were  comprised  in Entry 24 of List  II  were               dealt with by the State Legislatures which had               under Entry 27 of that List power to legislate               in  regard  to  the  production,  supply   and                             distribution of goods, goods according to  the               definition  contained  in  article  366   (12)               including  all raw materials, commodities  and

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             articles.   When,  however  it  came  to   the               products  of  the controlled  industries  com-               prised  in  Entry  52 of  List  I,  trade  and               commerce   in,  and  production,  supply   and               distribution   of,  these  goods  became   the               subject-matter  of  Entry 33 of List  III  and               both               822               Parliament  and  the  State  Legislatures  had               jurisdiction  to legislate in regard  thereto.               The  amendment of Entry 33 of List III by  the               Constitution  Third Amendment Act, 1954,  only               enlarged  the scope of that Entry  without  in               any   manner  whatever  detracting  from   the               legislative  competence of Parliament and  the               State  Legislatures to legislate in regard  to               the same."               At page 420 it was held:               "The  process  of  manufacture  or  production               would  be  comprised in Entry 24  of  List  II               except  where  the industry was  a  controlled               industry when it would fall within Entry 52 of               List I and the products of the industry  would               also  be  comprised  in Entry 27  of  List  II               except  where  they were the products  of  the               controlled  industries  when they  would  fall               within  Entry 33 of List III.  This being  the               position,   it   cannot  be  said   that   the               legislation which was enacted by the Centre in               regard  to  sugar  and  sugarcane  could  fall               within  Entry  52  of  List  I.  Before  sugar               industry  became a controlled  industry,  both               sugar  and sugarcane fell within Entry  27  of               List  II but, after a declaration was made  by               Parliament  in 1951 by Act LXV of 1951,  Sugar               industry became a controlled industry and  the               product  of  that  industry  viz.,  sugar  was               comprised  in Entry 33 of List III  taking  it               out of Entry 27 of List II." Therefore, where the Cotton Textile Control Order deals with the productions while the impugned Act is an Act which deals entirely with handloom.  The order issued under Section 3 of the  Act is only for protection and development of  handloom industry.   There is not question of both he Cotton  Textile Control  Order and the impugned Order operating in the  same field. Hence, this argument is rejected. The  next argument is that clause 20 of the  Cotton  Textile Control  Order enables the Textile Commissioner to  have  an over  all view while under Section 3 of the  impugned  Act regard is to be had only to the handloom industry 823 we  may  now  extract  clause  20  of  the  Cotton  Textiles (Control) Order, 1948 which runs as follows:               "20.  (1) The Textile Commissioner  may,  from               time  to time, issue directions in writing  to               any manufacturer or class of manufacturers, or               manufacturers generally regarding               (a)   die  classes or specifications of  cloth               or  yarn which each manufacturer or  class  of               manufacturers,   or  manufacturers   generally               shall or shall not manufacture, or               (b)   the   maximum  or   minimum   quantities               thereof  which such manufacturer, or class  of               ’manufacturers  generally  shall   manufacture

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             during such period as may be specified in  the               order.               Provided  that in issuing the direction  under               this sub-               clause  the  Textile Commissioner  shall  have               regard to:               (i)   the demand for cloth or yam; and               (ii)  the needs of the general public;               (iii) the special requirements of the industry               for such cloth or    yam;               (iv)  the  capacity  of  the  manufacturer  or               class   of   manufacturer   or   manufacturers               generally,     to    manufacture     different               descriptions  or specifications of  cloths  or               yam; and               (v)   the  necessity to make available to  the               general public cloth of mass consumption.               (2)   While  issuing any direction under  sub-               clause  (1) the Textile Commissioner may  also               provide  that  such direction  shall  be  with               reference  to  the quantity of  cloth  or  yam               packed  by  the  manufacturer,  or  class   of               manufacturers;   or  manufacturers   generally               during  the  period referred to in  that  sub-               clause.               824               (3)   Every   manufacturer,   or   class    of               manufacturers  generally, to whom a  direction               has   been  issued  shall  comply   with   the               direction.               (4)   Where,  on  an application made  by  any               manufacturer  or  class  of  manufacturers  or               otherwise,   the   Textile   Commissioner   is               satisfied  that  any direction issued  by  him               under this clause undue hardship or difficulty               to   any   such  manufacturer  or   class   of               manufacturers he may, by order and for reasons               to  be  recorded in writing, direct  that  the               directions  shall  not apply, or  shall  apply               subject  to  such  modifications  as  may   be               specified  in the order, to such  manufacturer               or class of manufacturers." As  already  seen,  the  objects of  these  two  orders  are different.   Therefore, the order under Section 3(1) of  the impugned  Act (quoted above) does not run counter to  clause 20 of Cotton Textile Control Order. Accordingly, this argument is rejected. Now  we will examine, the question whether the Act  and  the order are violative of Article 19(1)(g) of the Constitution? According to Mr. Krishnamani, learned counsel, if there is a total  reservation so as to create a monopoly that would  be bad in law.  He relies on decision in State of Rajasthan  v. Mohan Lal Vyas, [1971] 3 SCC 705 at 707.     It   was   held thus:               "A  monopoly  right cannot be conferred  on  a               citizen  under the Constitution nor can it  be               justified under the Constitution." This argument, in our opinion, proceeds on a  Misconception. There  is  no  question of monopoly  created  in  favour  of handloom  industry.  Certain kinds of textiles are  reserved to  the handloom industry.  Still "here are number of  items available for powerloom owners ,which they manufacture.  The items  of  textiles generally manufactured in the  mill  and powerloom  sectors have been left out from  reserved  items. Only those items which have traditionally been  manufactured

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on  handlooms  have  been reserved for this  sector.   As  a matter of fact, the reservation orders in favour of handloom have been on the statute book since 1950.  But this has not 825 deterred  the growth of powerloom sector in the  last  three decades.  Recently when the powerloom started producing  the items   which  were  traditionally  being  manufactured   on handlooms,  that caused a serious inroad into  the  handloom industry.   The  result was an unequal competition  for  the handloom sector.  If, as rightly pointed out in the  counter affidavit  of the Union of India, handloom industry  is  the biggest cottage industry in the country and is next only  to agricultural   sector   in   providing   rural   employment, certainly,  the  accusation  that  the  impugned  order  had created a monopoly in favour of handloom industry is totally baseless.  In this connection, the estimates of 1977-78  6th Lok  Sabha  in  its report on powerloom  industry  made  the following observations and it is worthwhile to extract them:               "It  has,  however, to be  ensured  that  this               growth of powerloom industry should not be  at               the  cost  of handloom industry  otherwise  it               will  lead to greater rural  unemployment  and               problem  of  large scale  migration  of  rural               population  to the industrial areas in  search               of  employment.   The  Committee,   therefore,               feels   that  the  growth  of  the   powerloom               industry  should  be regulated in such  a  way               that  it  does not harm the interests  of  the               handloom  industry.  It would be ensured  that               powerloom industry does not become a  ’benami’               of the mill sector but is really developed  by               the conversion of handlooms into powerloom  by               the handloom weavers themselves.  The  Commit-               tee,   therefore,  recommend  that   stringent               measures may be taken to ensure that powerloom               sector  observe the reservations made  by  the               handloom sector and stringent action should be               taken  for  any  violation  of  these  orders.               Simultaneously, the powerloom sector should be               encouraged to produce those varieties of cloth               which  are not being produced by the  handloom               sector.  The Committee have already in Part  I               of  their report, recommended the  formulation               of an integrated textile policy assigning role               to  the various sectors.  The  Committee  hope               that while defining the role of the  powerloom               sector, the above factors will be kept in view               by the Government." Thus,  it will be clear that the reservation orders are  for the continued 826 A.   employment  of  the handloom industry and  are  in  the larger public interest. Even  factually,  the allegation of monopoly  is  incorrect. The stand in the counter affidavit is as follows:               "It  is  submitted that the  items  which  are               generally manufactured in the powerloom sector               have not been reserved for handloom sector  at               the  cost of powerlooms or mill  sector.   The               total production of textile sector at the  end               of  Sixth  Plan (1984-85) was  11,956  million               mts. of which the share of handlooms was 3514.               At the end of Seventh Plan (1989-90) the total               production  in textile is estimated  at  14500               ml. mts. of which the share of handlooms  will

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             be   only  4600.   These   estimated   targets               indicate  that there is sufficient  scope  for               all  the  sectors  including  the  unorganised               powerloom  sector to grow during  the  Seventh               Five  Year Plan.  The differences between  the               handloom  and powerlooms have been defined  in               the  Act itself.  The basic  difference  being               that the handlooms are manually operated while               the  powerlooms are run with the motive  force               of power.’ The protection has been given by the Government to  handloom weavers  because  the  livelihood  of  handloom  weavers  is threatened  due to the production of all types of items  and varieties by the powerloom industry.  It is common knowledge that  the  handloom weavers are economically very  poor  and will  have  no  alternative employment in  the  rural  areas unless protected through reservation of varieties for  them. So poor is the weaver that he could well say in the words of Karl Marx "Half a century on my back and still a pauper. Therefore, the contention that there is a total prohibition, is  untenable  and the case relied on  by  Mr.  Krishnamani, learned counsel, namely, Rustom Cavasjee Cooper v. Union  of India, [1970] 3 SCR 530 has no relevance. No  doubt, there are restrictions under the  impugned  order but the question would be whether they are reasonable.   The Act,  as  seen  above,  has  come  to  be  enacted  for  the protection of the interests of the handloom 827 weavers,  mostly  concentrated  in rural  areas.   They  are pitted  against powerful sector, namely, the miffs  and  the powerloom.   As  such, they face unequal  competition.   The restrictions   are  not  only  reasonable  but  also   fully justified.  Further, the objectives sought to be achieved by way of these reservations should derive support from Article 43 of the Constitution which reads follows:               "43.   Living  wage, etc., for workers   The               State  shall endeavor to secure,  by  suitable               legislation or economic organisation or in any               other   way,  to  all  workers,   agricultural               industrial or otherwise, work, a living  wage,               conditions of work ensuring a decent  standard               of  fife  and full enjoyment  of  leisure  and               social  and  cultural  opportunities  and,  in               particular,  the  State  shall  endeavour   to               promote cottage industries on an individual or               co-operative basis in rural areas.’ The  said article ordains that the State shall endeavour  to promote  cottage  industries on  individual  or  cooperative basis  in  rural areas.  It is a welcome  measure.   We  can usefully  refer to Orient Weaving Mills v. Union  of  India, AIR 1963 SC 98 at 103:               ’The Directive Principles of the Constitution,               contained  in Part IV, lay down  the  policies               and  objectives to be achieved, for  promoting               the welfare of the people.  In the context  of               the  present controversy, the following  words               of Art. 43 are particularly apposite:               promote cottage industries on an individual or               co-operative basis in rural areas.’               It  has rightly been pointed out in  affidavit               filed  on behalf of the respondents  1-4  that               the   exemption   granted  by   the   impugned               notifications  is  meant  primarily  for   the               protection   of  petty  producers  of   cotton

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             fabrics not owning more than four power looms,               from    unreasonable   competition   by    big               producers,  like the petitioner Company.   The               State,   has,   therefore,   made   a    valid               classification between goods produced ’in  big               establishments and similar goods               828               produced  by  small powerloom weavers  in  the               mofussil who are usually ignorant,  illiterate               and  poor and suffer from handicaps  to  which               big establishments like the petitioner Company               are not subject." Equally, Article 46 inter alia requires the State to promote with  special care the educational and economical  interests of  the  weaker sections of the  people.   Therefore,  these restrictions can easily be sustained as reasonable since  it is  in  furtherance  of  the objectives  laid  down  in  the directive principles. In  view  of  what  we have stated  above,  even  if,  these restrictions result in the total exclusion of the  powerloom sector  that  could be upheld as  reasonable.   In  Narendra Kumar’s case (supra) at page 376 it was held thus:               "that  the word "restriction" in  Arts.  19(5)               and  19(6) of the Constitution includes  cases               of   "prohibition’   also;   that   where    a               restriction   reaches  the  stage   of   total               restraint  of  rights special care has  to  be               taken  by  the Court to see that the  test  of               reasonableness is satisfied by considering the               question,  in the background of the facts  and               circumstances under which the order was  made,               taking  into  account the nature of  the  evil               that  was sought to be remedied by  such  law,               the  ratio  of the harm caused  to  individual               citizens   by   the   proposed   remedy,   the               beneficial   effect  reasonably  expected   to               result to the general public, and whether  the               restraint caused by the law was more than  was               necessary  in  the interests  of  the  general               public." On  the  point  of violation of  Article  14,  a  reasonable classification is permissible under the equality clause.  Of course,   the  classification  made  should  be   based   on intelligible differentia.  Further, there should be a  nexus in  such differentia with the objects sought to be  achieved by the particular law.  Article 14 requires that all persons subject  to a legislation must be treated alike.   In  other words,  equals must be treated alike, in like  circumstances and  conditions.  Undoubtedly, the handloom sector  forms  a distinguishable  class  separated from powerloom  sector  or mills  sector.   The  reservation of  certain  articles  for exclusive   production  in  the  handloom  sector  has   the objective of protecting the handloom sector against  unequal and  powerful competition by the mechanised  powerloom/mills sector.  At 829 the  same  time, it is also necessary  to  ensure  continued production coupled with sustained employment to the handloom weavers,  largely concentrated in the rural areas.  This  is also  in  accord with the Government’s  declared  policy  of supporting  handloom  sector  due to  its  large  employment potential.  The classification, hence, has a rational  nexus with the objective of the Act. The  handlooms are operated manually, the number of  persons employed is many times more than powerloom for production of

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similar  quantities of cloth.  The reservation  of  articles for   handlooms  does  not  pose  any  serious   threat   to powerlooms.  It has been proved by the fact that even though the  handlooms reservation orders have been on  the  statute book   since   1950,  the  powerlooms  have   continued   to proliferate  and there is no reason to believe that  any  of these  looms are likely to be closed due to the  Reservation Order.  The powerloom owners are only required to  diversify their  line of production so that they do not produce  cloth reserved   for  handlooms.   As  already  pointed  out   the reservation  for handlooms has continued since 1950 for  the protection  of rural handloom artisans and  their  continued employment in the industry.  Since the Government policy has always been to create more employment particularly in  rural areas, it will be unthinkable to imagine the social problems that  will  be  created if the  employment  of  millions  of handloom  weavers  is taken away by allowing  powerlooms  to produce  all items without any reservation.   Handlooms  and handicrafts  are  the only  traditional  cottage  industries which provide maximum employment in the rural country-side. Hence, we reject this point as well. It has already been noted from the observations of the high- powered Study Team under the Chairmanship of Mr. B Sivaraman as  to  how every new powerloom will put out of  action  six handlooms  in the country.  A handloom actually is a  family industry and not an individual’s field alone. This  means the families of the poor weavers are  ruined  by encouraging   powerloom.   It  may  be  that  the  cost   of production in the powerlooms sector is less but if it is the object of the Government to encourage handloom for continued employment  of handloom weavers in rural  areas,  certainly, nothing   worthwhile  can  be  said  against  the   impugned reservation.  Besides, even under the Notification issued by the Textile Commissioner on 15.4.77 many of the items stated as being produced by the petitioner 830 were  reserved  for the, handloom sector.  These  items  are sarees  with  borders, lungies, chaddars,  bed  sheets,  bed covers,  counter panes, low read pick cloth  table  clothes, napkins,  duster,  towels  and  cotton  crepe  fabrics.   If violating this order, the petitioner has been  manufacturing these  items which are specifically reserved for  handlooms, it  cannot  be,  allowed  to continue  to  indulge  in  such violation  any  further.   Thus,  we  reject  the   argument complaining of violation of Article 14 of the Constitution. Sub-section (1) of Section 3 of the impugned Act states that the  order specifying the articles for exclusive  production of   handloom  could  be  issued  for  the  protection   and development   of  handloom  industry  from  time  to   time. Therefore, the reservation is not for all time to come.   It could  be revised periodically.  It is with this  object  in view,  Rule 3(5) of the Handlooms (Reservation  of  Articles for Production) Rule, 1986 states as follows:               "3(5):     The Advisory Committee may meet  at               such  places  and  at such  times  as  may  be               determined by the Chairman:               Provided  that  the Advisory  Committee  shall               meet  at least once a year to review the  list               of reserved articles." Therefore, at least once in a year there could be a  meeting of the Advisory Committee.  From the counter affidavit it is clear  that in order to have a deeper study of the  problems relating to reservation of production by handloom three sub- committees were constituted: (i)  cotton and art silk fabrics,

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(ii) pure silk fabrics; and (iii) woollen and tribal fabrics. In  order to gain first-hand knowledge of the production  of these  fabrics the sub-committees made field visits.   While touring  different  centres  the  sub-committees  invariably involved local government representatives. It  is  averred  in  the counter  affidavit  that  the  sub- committee  on  silk  visited powerloom  weaving  centres  in Bangalore and Varanasi, while the 831 sub-committee  on  wool during their visits to a  number  of places,  including  Panipat,  Ludhiana,  Kulu,  Imphal   and Srinagar  had occasion to study the problems of the  woollen powerloom   industry  along  with  those  of  the   handloom industry.   The Advisory Committee on cotton met the  repre- sentatives of powerlooms, who placed their views before  the sub-committee  during its sittings at Madras and  Bangalore. Thus, it will be amply clear from what has been stated above that  the  interest of the powerloom sector has  been  taken into   account  and  powerlooms  were   represented   albeit indirectly on the Advisory Committee. Moreover, the sub-committees formed by the earlier  Advisory Committee  had  visited  many a places in  the  country  and discussed the matter with officers of the State  Governments and  met  persons representing  different  textile  sectors. Apart from the reports received from the sub-committees, the representations  received  by the  Government  from  various textile  interests  were  duly considered  by  the  Advisory Committee  before  making  their  recommendations.   It  is, therefore, incorrect to say that proper opportunity was  not provided to the petitioners for making representations. It  is important to note that in the Advisory Committee  the representatives  from  powerloom sector,  mills  sector  and powerloom  silk  sector  have  been  specifically  included. Therefore,  it is meaningless to state that  no  opportunity was afforded to powerloom sector and that under Section 3 of the impugned Act regard is had only to the handloom industry while under clause 20 an over all view of all the industries could be taken. In  view of the foregoing on, we dismiss the  writ  petition and the connected cases. G.N.                    Petition dismissed. 832