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CASE NO.: Appeal (civil)  6880-6883 of 2003

PETITIONER: Union of India & Others

RESPONDENT: Indian Jute Mills Associations & Others

DATE OF JUDGMENT: 05/05/2005

BENCH: ASHOK BHAN & A.K. MATHUR

JUDGMENT: J U D G M E N T

WITH  

CIVIL APPAL NO.7894 OF 2004

BHAN, J.

       This order shall dispose of C.A. No.6880- 83 of 2003 arising from the Division Bench  Judgment of the High Court of Calcutta dated  27.06.2003 in G.A. No.3567 of 2002, A.P.O.T.  No.664 of 2002, A.P.O.T. No. 705 of 2002, G.A.  No.3758 of 2002, W.P. No.1059 of 2002, G.A.  No.3568 of 2002, A.P.O.T. No.665 of 2002, W.P.  No.1059 of 2002, A.P.O.T. No.707 of 2002, G.A.  No.3761 of 2002, W.P. No.1207 of 2002 and   Civil Appeal No.7894 of 2004  arising from  another Division Bench Judgment of the same  High Court dated 6.7.2004 in G.A. No.2229 of  2004, A.P.O.T. No.314 of 2004 and W.P. No.870  of 2004.                  Before adverting to the facts, it may be  stated that the orders passed by the High  Court have worked out with the lapse of time.   We shall take up the two sets of appeals  separately.   

CIVIL APPEAL NO. 6880-6883 OF 2003

                The Jute Packaging Materials (Compulsory  Use in Packing Commodities) Act, 1987  (hereinafter referred to as "the Act") was  enacted by the Parliament to provide for  compulsory use of jute packaging material in  supplying and distribution of certain  commodities in the interests of production of  raw jute and jute packing material and of  persons engaged in the production thereof and  for matters connected therewith.   

       Section 3 (1) of the said Act empowers the  Central Government, notwithstanding anything  contained in any other law for the time being  in force and being satisfied, after  considering the recommendations made to it by

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the  Standing Advisory Committee, that it is  necessary so to do in the interests of  production of raw jute packaging material and  of persons engaged in the production thereof,  direct from time to time, by order published  in the official Gazette that such commodity or  class of commodities or such percentage  thereof, shall be packed for the purposes of  its supply or distribution in such jute  packaging material as may be specified in the  order.

       Under Section 4(1) of the Act it is  incumbent upon the Central Government to  constitute a Standing Advisory Committee with  a view to determining the commodity or class  of commodities or percentages thereof in  respect of which jute packing material shall  be used in their packaging. Under sub-Section  (2) of Section 4 the Standing Advisory  Committee is required to indicate its  recommendation to the Central Government after  considering the matters as indicated in sub- clause (a) to (g) including the protection of  interest of persons engaged in the jute  industry and in the production of raw jute.   

It is not in dispute that such Standing  Advisory Committee was formed and thereafter  from time to time on recommendations of the  said Standing Advisory Committee the Central  Government passed orders for packaging  specified commodities to the extent indicated  in such notification.   

Constitutional validity of this Act was  upheld by this Court in the case of Dalmia  Cement (Bharat) Ltd. and Another Vs.  Union of  India and Others reported in (1996) 10 SCC  104.  It was held that the enactment of the  Act was necessary for agro-based economy of  India and the agricultural crops cultivated in  India.  That the \Act was enacted to provide  economic security and justice to producers of  raw jute and the workers engaged in the  manufacturing of jute packaging material and  the Central Government had taken a balanced  view in directing the use of jute packaging  material for compulsory package of certain  specified commodities or percentage thereof  which was subject to Parliamentary control.   One of the challenges put to the  constitutional validity of the Act was that  the constitution of the Standing Advisory  Committee under Section 4 (1), consisting of  only the Secretaries representing various  departments without associating the jute  industry was arbitrary, unjust and therefore  bad in law.  This contention was rejected.   However, while doing so, this Court observed  that it would be desirable that the industry  or industries representing through recognised  office-bearers may be nominated or given  notice before the Advisory Committee meets to  place their views and material in support

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thereof to evaluate the need for regulation  and extent of regulation thereof.   Para 51 of  this judgment reads:-

"Yet another contention that  requires consideration is that in  the Committee constituted under  Section 4(1) only Secretaries  representing various departments  alone are represented and no one  represents the petitioners in the  Committee and that, therefore, the  Act is void. This contention also  cannot be accepted as a sound  principle of law. However, as seen  from the record, the Committee  consists of the Secretaries  representing various departments.  It would be desirable that the  industry or industries through  recognised office-bearers of the  associations may be nominated or  given notice before the Advisory  Committee meets to place their  views and material in support  thereof to evaluate the need for  regulation and extent of  regulation thereof. The persons  representing the particular  industry would assist the  Committee to properly advise the  Government before issuing  directions/orders under Section 3.  The provisions of the Act contain  guidelines as is self-evident.  Socio-economic justice is the  public policy. It is subject to  parliamentary control. They bear  reasonable nexus to the object  sought to be achieved by the Act."

       By an order dated 01.03.2002 the Central  Government issued an order reducing the extent  of protection in respect of sugar from 100% to  90%.  Subsequently, the Standing Advisory  Committee in its meeting held on 12.04.2002  after hearing the Indian Jute Mills  Association and others made the  recommendations for formation of inter- Ministerial Committee consisting of Ministers  of Textiles, Agriculture and Consumer Affairs,  Food and Public Distribution for the purpose  of formulating a road map for the progressive  dilution of compulsory packaging norms for  food grains and sugar under the Act to  facilitate its repeal.   

       Writ petitions were filed against the  aforesaid order.  The Court passed an interim  order on 25.04.2002 directing the Union of  India not to proceed in respect of such  recommendations made by the Standing Advisory  Committee.  By an order dated 15.05.2002,  although the interim order was extended, the  Union of India was given liberty to hold

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meeting and take decision, but not to give  effect to the same without the leave of the  Court.   

Pursuant to the liberty given, the Central  Government ultimately took the decision on the  recommendation of the inter-Ministerial  Committee to dilute the recommendations in  respect of sugar by 25% and food grains by 20%  for the year July, 2002 to June, 2003 and by  50% and 40% for the year July, 2003 to June,  2004.  Second writ petition was filed  challenging the aforesaid order of the Central  Government.  Both the sets of writ petitions  were taken up together.  The writ petitions  came up for hearing before a Single Judge who  dismissed the same primarily on the ground  that the decision taken by the Central  Government was a policy decision and therefore  beyond the judicial review.  Aggrieved against  the aforesaid order of the Single Judge the  Indian Jute Mills Association and another  filed the appeals which have been disposed of  by the impugned order along with other  connected cases.   

       The Division Bench formulated the  following four questions arising in the  appeals for its determination:-

"1.     Whether the Standing Advisory  Committee which is a creature of  the said Act and is statutorily   obliged to act within the frame  work of the said Act can make  recommendations contrary to the  object and purpose of the Act;  

2.      Whether the impugned  recommendations made by the  Standing Advisory Committee for  creation of a road map for  gradual dilution  of the  protection under the Act for  ultimate repeal of the Act and  for formation of an inter- Ministerial committee for the  aforesaid purpose are dehors the  provision of the Act and without  jurisdiction;

3.      Whether the impugned  recommendations made by the  Advisory Committee and the  ultimate order passed by the  Central Government as per the  recommendation of the inter- Ministerial Committee is in  consonance with object and  purpose of the Act or ultra  vires the same;

4.      Whether in absence of specific  recommendation by the Standing  Advisory Committee the Central

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Government has power to make the  impugned order as to the extent  of protection for future year  for which no recommendation was  made by the Standing Advisory  Committee."

       Aggrieved against the judgment of the  Division Bench the Union of India has filed  these appeals.  As the duration of the  notification was for a period of one year  which has already lapsed the order of the High  Court has worked itself out.  The Division  Bench in the course of its judgment observed:-

"The legislative policy as  contained in the Act is clear and  unambiguous namely, protection of  jute industry and the interest of  million of farmers and workers  connected therewith and the jute  industry itself. The Central  Government therefore cannot act  contrary to such legislative  policy and resort to progressive  dilution of the protection of jute  packaging materials for the  purpose of ultimate repeal of the  Act."

                Shri A. Sharan, learned Additional  Solicitor General of India does not press the  appeals on any point other than the setting  aside of the above quoted observations of the  High Court.   It is contended by him that the  observations made by the Division Bench quoted  above are obiter in nature as the same did not  arise either from the pleadings of the parties  or the contentions raised before the Division  Bench.  The challenge in the writ petition was  regarding the extent of power or jurisdiction  of the Advisory Committee to make its  recommendation to the Central Government.   There was no challenge to the power of the  Central Government regarding the progressive  dilution of the protection of the jute  packaging material for the purpose of ultimate  repeal of the Act.    

       Shri R.F. Nariman, learned senior counsel  appearing for the respondent submitted that  since the  Central Government had acted in its  capacity as a creature under the Act, the High  Court was justified in holding that the  Central Government could not act contrary to  the legislative policy spelt out by the  legislature in the Jute Packaging Materials  (Compulsory Use in Packing commodities) Act,  1987.  Shri Nariman, with reference to the  objects and reasons for the enactment of the  aforesaid Act contended that the purpose of  the Act was to provide for the compulsory use

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of jute packaging material in the supply and  distribution of certain commodities in the  interests of production of raw jute and jute  packing material and of persons engaged in the  production thereof, and for matters connected  therewith and not for the ultimate repeal of  the Act.   

       After considering the respective  submissions put forth by the learned senior  counsels on behalf of the parties we are of  the opinion that the contention raised by the  learned Additional Solicitor General deserves  to be accepted.  On perusal of the writ  petition, the prayers made therein, the  contentions raised by the respective counsels  for the parties before the Division Bench and  the points formulated by the Division Bench  for its consideration we are of the opinion  that the question regarding power of the  Central Government to pass any order regarding  the progressive dilution or protection of the  jute packaging material for its ultimate  repeal was not under challenge.  This point  did not arise from the pleadings of the  parties.  The observations made are without  there being any foundation of facts laid in  the pleadings and the points formulated by the  Division Bench for its consideration.   We are  not even sure as to whether the learned  counsels appearing for the parties before the  High Court had addressed arguments on this  point.  We do not agree with the submissions  made by Shri Nariman that the Central  Government was acting in its capacity as a  creature under the Act.  The Standing Advisory  Committee is constituted under the Act and not  the Central Government.  The observations made  by the High Court being contrary to the  pleadings and obiter in nature are set aside.   The same would not be either binding or taken  as a precedent for any future reference.   

The appeals filed by the Union of India  are dismissed except to the extent indicated  above.  

CIVIL APPEAL NO.7894 OF 2004

       In this appeal, the challenge before the  High Court was to the notification dated  16.4.2004 issued by the Central Government  under The Jute Packaging Materials (Compulsory  Use in Packing Commodities) Act, 1987 for the  period ending 30.06.2004.  In spite of the  interim stay granted by the High Court another  notification was issued on 01.07.2004 for a  period of one month.  Both these notifications  have been quashed by the judgment under  appeal.   

One of the grounds for challenge to the  notifications was that the Central Government

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had issued the notifications on the  recommendations made by the Standing Advisory  Committee, constituted under Section 4(1) of  the Act without associating or hearing the  workers engaged in the jute industry and the  agricultural producers of the jute for whose  benefit the Act had been enacted.   

The writ petition was dismissed by the  Single Judge on 19.05.2004 holding that there  was no provision in the Act either to  associate the workers engaged in the industry  and the agricultural producers of the jute or  for giving of hearing to them by the Standing  Advisory Committee before making its  recommendations to the Central Government.

Aggrieved against the order passed by the  Single Judge, appeals were filed before the  Division Bench.  One of the grounds taken in  the appeal was that the representatives of the  growers and the workers engaged in the  production of raw jute and jute packaging  material ought to have been heard by the  Standing Advisory Committee before making its  recommendation to the Central Government for  the purpose of Section 3(1) of the Act. That  in their absence no meaningful recommendation  which would serve the purpose of the Act could  be made.  The High Court relying upon the  observations made by this Court in para 51  [reproduced in the earlier part of this order]  in Dalmia Cement (Bharat) Ltd. (supra)] held  that though  there was no specific provision  for associating or giving a hearing to the  representatives of the growers and the workers  engaged in the production of raw jute and jute  packaging material it would be proper for the  Standing Advisory Committee to give them  hearing to make a meaningful recommendation to  the Central Government for the purpose of  Section 3(1) of the Act, subject however to  such modification as may be advised by the  Parliament.   The appeal was accepted, order  of Single Judge was set aside, notifications  dated 16.4.2004 and  01.07.2004 were quashed  and a direction was issued to the Central  Government to maintain the status quo with  regard to the use of jute packaging material  as was existing prior to the issuance of the  notification dated 16.4.2004 till a fresh  recommendation was made by the Standing  Advisory Committee.  Following directions were  given to the Standing Advisory Committee:-

"The Standing Advisory Committee  shall fix a fresh date of hearing  and give notice to the appellants  herein and such other persons as  it may consider necessary and  after considering the submissions  made on their behalf, proceed to  make fresh recommendations to the  Central Government keeping in mind  the provisions of Section 4(2) and

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in particular clause (d) thereof  and the Central Government shall,  thereafter, proceed to act in  accordance with Section 3 of the  Act."

       The total duration of the two  notifications was three and a half months  which has lapsed due to efflux of time.  The  order of the High Court to that extent has  already worked out.  Mr. A. Sharan, learned  Additional Solicitor General of India contends  that although the duration of the notification  has already lapsed and the order of the High  Court has already worked out but the  directions issued by the High Court that the  Standing Advisory Committee is required to  give notice or afford a hearing to the  representatives of the growers and the workers  engaged in the production of raw jute and jute  packaging material, being of far reaching  consequences which would be operative for all  times to come, being contrary to the  provisions of the Act and the observations  made by this Court in Dalmia Cement (Bharat)  Ltd. (supra) deserve to be set aside.  

As against this the learned senior counsel  for the respondents contended that to carry  out the objects and purposes for which the Act  was enacted, it was incumbent upon the  Standing Advisory Committee to associate and  hear the representatives of the growers and  the workers engaged in the production of raw  jute and jute packaging material for whose  benefit the Act was enacted, before it could  make any meaningful recommendation to the  Central Government.   

Subject matter of the appeal in this Court  today is not regarding the validity of the  notifications dated 16.4.2004 and 01.07.2004  the duration of which has already lapsed due  to efflux of time.  The question of law which  is being raised is as to whether the High  Court contrary to the provisions of the Act  and the observations made by this Court in  Dalmia Cement (Bharat) Ltd. (supra)  could  direct the Standing Advisory Committee to  afford a hearing to the representatives of the  growers and the workers engaged in the  production of raw jute and jute packaging  material.  The challenge to the constitution  of Standing Advisory Committee consisting of  only the Secretaries representing various  departments without associating the jute  industry or its representative being void was  rejected by this Court in Dalmia Cement  (Bharat) Ltd. (supra).  The Court did not  accept the plea of the appellant that the  representatives of the jute industries should  either be nominated to the Standing Advisory  Committee or that they should be heard by the  Standing Advisory Committee before making its

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recommendations to the Central Government for  the purpose of  Section 3(1) of the Act.   While rejecting the contention this Court  further did observe that, "It would be  desirable that the industry or industries  through recognised office-bearers of the  associations may be nominated or given notice  before the Advisory Committee meets to place  their views and material in support thereof to  evaluate the need for regulation and extent of  regulation thereof.  The persons representing  the particular industry would assist the  Committee to properly advise the Government  before issuing directions/orders under Section  3."

       It would be seen that this Court was  careful not to give a positive direction to  the Central Government either to nominate a  representative of the industry on the Advisory  Board or of affording an opportunity by the  Standing Advisory Committee to hear them  before making its recommendation to the  Central Government.  The only desire expressed  by the Court was that the Standing Advisory  Committee should give a notice to the jute  industry to enable it to place its point of  view before the Advisory Committee for its  evaluation before making the recommendations  to the Central Government.  It is not disputed  before us that the observations made by the  Court are being carried out meticulously.   There is no provision in the Act requiring the  Standing Advisory Committee to afford a  hearing to any person associated with either  the production of the raw jute or engaged in  the production of the jute packaging material  before making its recommendations to the  Central Government.  The directions issued by  the Division Bench run counter to the  provisions of the Act as well as the  observations made by this Court in Dalmia  Cement (Bharat) Ltd. (supra).  The same  deserves to be set aside and are hereby set  aside.

For the reasons stated above, Civil Appeal  Nos. 6880-6883 of 2003 and Civil Appeal No.  7894 of 2004 are allowed to the extent  indicated above.   Regarding the other points  as the duration of the notification is already  over and the order of the High Court has  worked itself out, the appeals are dismissed  as infructuous.   There shall be no order as  to costs.