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PETITIONER: M.   A. RASHEED AND ORS.

       Vs.

RESPONDENT: THE STATE OF KERALA

DATE OF JUDGMENT18/09/1974

BENCH: RAY, A.N. (CJ) BENCH: RAY, A.N. (CJ) KRISHNAIYER, V.R.

CITATION:  1974 AIR 2249            1975 SCR  (2)  96  1974 SCC  (2) 687  CITATOR INFO :  C          1984 SC1271  (26)

ACT: Defence  of India Act, 1971 ss. 3(2)(21) and 38 and  Defence of India Rules,, 1971, r. 114-Notification under prohibiting use  of  machinery for  defibring  coconut  husks-Subjective satisfaction  of  authority-Court’s  power  in  relation  to Notification if violative of Art. 301 of Constitution.

HEADNOTE: The  appellants,  who are owners of Small  Scale  Industrial Units, employ mechanised process for decortication of retted coconut  husks.  The respondent-State issued a  notification in  July  1973,  under r. 114(2) of  the  Defence  of  India Rules,,  1971, imposing a total ban on the use of  machinery for  defibring husks in the district of  Trivandrum,  Quilon and  Alleppey.   The appellants, who were  affected  by  the notification,  challenged the validity of the  notification. The  High Court dismissed the petition.  In appeal  to  this Court,  it  was  contended : (1) that  s.  3(2)(21)  of  the Defence of India Act does not authorise r. 114; (2) that the formation  of  opinion  by  the  State  Government  for  the exercise  of  power under the rule is a  justiciable  issue, that  the court should call for the material on  which,  the opinion had been formed, and examine it to find out  whether a  reasonable  man  or  authority could  have  come  to  the conclusion  that  for securing  equitable  distribution  and availability of retted husks at fair prices a regulation  or prohibition  of  the  manufacture  of  fibre  by  mechanical process  was  necessary; (3) that the reasons given  in  the notification  imposing a total ban on the use  of  machinery were not justified; (4) that there was no application of the mind  by the authority to any genuine materials or  relevant considerations while exercising the power; (5) that s. 38 of the  Defence of India Act requires that, consonant with  the purpose of ensuring the public safety, defence of India  and Civil  defence, there should be minimum interference  by  an authority or person, acting in pursuance of the Act with the ordinary  avocations of life and enjoyment of property;  (6) that  the  notification offended Art. 14; and  (7)  that  it violated Art. 301, of the     Constitution. Dismissing the appeal,

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HELD  :  (1)  Rule 114 is in complete  consonance  with  the powers conferred, under s. 3(2)(21). [102 B] (2)  Where  powers  are conferred on public  authorities  to exercise  the  same when "they are satisfied"  or  when  "it appears to them," or when "in their opinion" a certain State of affairs exists, or when powers enable public  authorities to  take  "such action as they think fit" in relation  to  a subject  matter,  the courts will not readily defer  to  the conclusiveness of an executive authority’s opinion as to the existence of a matter of law or fact upon which the validity of the exercise of the power is predicated.   Administrative decisions  in  exercise of powers  conferred  in  subjective terms  are  to  be  made  in  good  faith  and  on  relevant considerations.  The courts can inquire whether a reasonable man  could  have come to the decision  in  question  without misdirecting  himself on the law or the facts in a  material respect.   The  standard  of  reasonableness  to  which  the administrative  body is required to conform may  range  from the  court’s opinion of what is reasonable to the  criterion of  what  a reasonable body might have decided;  and  courts will find out whether conditions precedent to the  formation of  the  opinion  have a factual basis.   But  the  onus  of establishing   unreasonableness   rests  upon   the   person challenging the validity of the acts. [99 C-D.  E-G] (3)  The  Committee  appointed by the  State  Government  in connection  with, the revision of minimum wages in the  coir industry  reported  that when unemployment is acute  in  the State  it is not practicable to encourage mechanisation  for fibre production till alternative sources of employment  are developed, and 94 recommended  that  the Government might appoint  a  separate committee  to  study  the various  problems  resulting  from mechanisation  in the industry.  Accordingly, a study  group was  appointed  and that group reported that  coir  industry brings  employment  or partial employment to an  area  where there  is  chronic unemployment  and  under-employment,  and hence,   any  kind  of  mechanisation  is  bound  to   cause displacement of people.  The study group therefore suggested a composite plan by which the coir industry should be  woven into the pattern of area development or regional development which  will bring prosperity not only to the  coir  industry but also to many other ancillary industries and  avocations, that  the  pace of mechanisation should be  such  that  none should  be thrown out of employment, and that for those  who are displaced alternative work is to be found in the general development  that is envisaged.  The State Government  found that  out  of 414 mechanised units in the State,  282  units were  in  the  three districts  of  Trivandrum,  Quilon  and Alleppey  and that the balance were in the  remaining  eight districts  of the State, and that the use of  machinery  for the  purpose  of extraction of fibre from husks  in  regions other than Trivandrum, Quilon and Alleppey districts had not affected  the supply of and availability at fair  prices  of husks  for  extraction of fibre in the  traditional  sector. The  Government therefore, was of the ’opinion that  it  was necessary  to  prohibit the use of machinery only  in  those three  districts, but that it was not necessary to  prohibit the  use  of machinery for the production of  fibre  in  the other eight districts. [100 F-101 H] (4)  It  is a matter of policy for the State  Government  to decide  to  what  extent there  should  be  interference  in relation  to enjoyment of property.  Public interest  is  of paramount  consideration and in, the present case the  steps taken were in the larger interests of labour engaged in  the

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coir   industry.    The   notification  was   based   on   a consideration of relevant and useful material.  ’The opinion of the State Government could not be said to have been based on  any  matter extraneous to the scope and purpose  of  the relevant   provisions   of  the  statute.    The   materials supporting  the subjective satisfaction indicate that  there were  reasonable grounds for believing that  the  prescribed state  of  affairs  existed  and  a  course  of  action  was reasonably  necessary  for the given  purpose  of  equitable distribution of coconut husks at fair prices. [102 C-H] (5)  The Government took notice of s. 38 of the  Defence  of India  Act  and  was satisfied about  the  public  interest. Further,  the  notification  does  not  interfere  with  the avocations  and  enjoyment  of property  any  more  than  is necessary  for  the purposes of  equitable  distribution  of husks at fair prices ’to the traditional sector. [103 A-B] (6)  The  classification,  in  the  circumstances,  of   the districts.  is reasonable and bears a nexus to  the  objects sought to be achieved by the impugned notification. [103 D] (7)  The Defence of India Act has been passed by  Parliament and the Rules under the Act have legislative sanction.   The restrictions imposed by them are in the interest of  general public  and  are authorised under  Article  302,  Therefore, there is no violation of Art. 301. [103E-G] Sadhu  Singh  v. Delhi Administration [1966] 1  S.C.R.  243, Rohtas Industries v. S. D. Agarwala [1969] 3 S.C.R. 108, and Liversidge v Anderson [1942] A.C. 206, 228-229, referred to.                          ARGUMENTS For  the  appellants  :  The  Notification  Annexure  A,  is justiciable.   The court is not deprived of jurisdiction  to examine the validity of the order.  The grounds mentioned in Annexure A notification are irrelevant and there is no  real and  proximate connection between the ground given  and  the object  which  the  Government  has  in  view.   The   State Government  never  applied its mind to the  matter  and  the Notification  is  malafide in the sense that  the  statutory power  has  been  exercised for some  indirect  purpose  not connected with the object of the statute or the mischief  it seeks to remedy. (1)  Jaichand Lall Sethia v. State of Bengal  [1966]  Suppl. S.C.R. 464. 95 It  is  open  to court to  enquire  whether  grounds  really existed which would have created that satisfaction on  which alone  the  order  could have been made in  the  mind  of  a reasonable   person.    Though  the  satisfaction   of   the Government is subjective and its power is discretionary  its exercise  depends  upon the honest formation of  an  opinion that   in  order  to  secure  equitable   distribution   and availability at fair prices of husks for use for  production of  fibre in the traditional sector it is necessary  to  ban production  of  fibre by machines.  The existence  of  these circumstances   is  a  condition  precedent  and   must   be demonstrable.  It is therefore open to the Court to  examine the existence of such circumstances. The  Barium Chemicals Ltd. v. The Company Law  Board  [1966] Suppl.  S.C.R. 311-336, 357, Rhotas Industries Ltd. v. S. D. Agarwala  [1969]  3  S.C.R. 108a.  Rose  Clutnis  v.  Papddo Poullous  [1958]  2 All.  E.R. 23, Ridge v.  Baldwin  [1964] A.C. 46, 73. There  has  been  no  application of the  mind  to  all  the relevant  factors  justifying total ban being  imposed  with reference  to  reliable data and materials  in  issuing  the Notification  and  therefore the action is mala  fide.   The action  is  not  an action which is  genuinely  intended  to

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implement  the intention of the Defence of India Act or  the rules  and is not based on any enquiry or  investigation  or data  made  available to the Govt. before  such  action  was taken.   Nor  was it made after any  consultation  or  after reference  to materials published by expert bodies like  the State Planning Commission, the Coir Board, the Coir Advisory Committee  appointed  from  time to  time,  nor  based  upon literature  of  a reliable nature published by  such  bodies aforesaid.   That being so, the notification is ultra  vires the  Defence  of India Act and the rules and for  a  purpose extraneous to the intention of the Defence of India Act. III.      The  purpose for which the notification  has  been issued  is served by the Coconut Husks Control Order,  dated 29-9-1973 and the notifications issued under the Order.  The above Order was issued by the Central Government in exercise of the powers conferred by s. 3 of the Essential Commodities Act, Act (10 of 1953). Two  Notifications  fixing  the fair prices  of  the  retted coconut  husks were issued by the special officer  for  coir (Licensing  Officer) constituted under cl. 4 of  the  Kerala Coconut Husks Control Order 1973. IV.  There is no material before the Government to  conclude that  the price of coconut husks increased only  because  of mechanisation.  On the basis of s. 38, Defence of India Act, the  notification is beyond the needs of the situation.   It is obligatory on the Government to have examined the several alternative   remedies  to  make  available  husks  to   the traditional  sector without banning manufacture of fibre  by machines. V.   The   notification   contravenes  Art.   301   of   the Constitution which guarantees that trade, commerce and inter course throughout the territory of India shall be free. District  Collector  of  Hyderabad v. M/s.   Ibrahim  &  Co. [1970] 3 S.C.R. 498. Article  301  guarantees  freedom of  trade  not  only  from geographical barriers but also from restrictions imposed  on an  individual to carry on trade or business, other  than  a regulatory measure.  A.I.R. 1961 S.C. 232 (233). VI.  It is not open to the Parliament to delegate the  power under Art. 302.  The law passed under Art. 302 has to be  in the interest of the public.  There is nothing in the Defence of  India  Act  to  indicate  that  Parliament  has  imposed restrictions in the interest of public within the meaning of the Article.  If there is no provision in the Act, the power under  Art. 302 cannot be delegated by rules to the  Central Government or the State Government. 96 VII.      The   Notification   banning  the   machinery   of defibering  husks is violative of the fundamental rights  of the petitioners under Art. 14.  It is highly  discriminatory as  its  operation  is  confined  to  the  3  districts   of Trivandrum,  Quilon  and  Alleppey.   Owners  of  defibering machinery in other Districts are all similarly situated like the petitioners. For-  the respondent : (1) Ext.  P. 1 order being issued  in exercise  of power conferred by law made by Parliament  i.e. Defence of India Act 1971 & Defence of India 1971 there  can be  no violation or infringement of Fundamental  Rights  and other  Constitutional  rights.  As a  measure  of  emergency legislation  "the  words in the opinion of" in  Rule  114(2) should be given the same width of meaning as in  "satisfied" in Rule 30 Defence of India Rules 1962 as expounded by  this Hon’ble Court in decisions namely. [1966] Suppl.  S.C.R. 464, 469-470. [1966] 1 S.C.R. 707, 718, 719, 740.

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These  decisions show that the Courts are only  entitled  to look  into  the matter which if in terms of the  Rule,  then Court  is bound to stay its hands and that the recital  will be accepted in the absence of any inaccuracy.  It is open to the  Court  to  satisfy itself, as to the  accuracy  of  the recital  only  if the order suffers from any  lacunas.   The meaning given to the expression, "the reason to believe" are in  the  sentence  as  explained above  in  the  context  of emergency  although the meaning given to  these  expressions will  be  in  the sense ruled by  this  Court  in  Bariunam, Chemicals  case  and  Rohtas  Industries  case  when   these expressions occur in peaceful legislations. For  the  Construction  of these words  in  the  context  of emergency see [1966] 1 S.C.R. 709, 718.  [1969] 3 S.C.R. 108, 132.  [1967] 3 S.C.R. 114, 122.  [1966] 2 S.C.R. 121, 128.  [1961] 1 S.C.R. 243, 247. [1942] A.C. 206, 239, 251-252, 253, 256-257, 263, 239.  wade and  Phiulip  Constitutional  Law, 1970 pp.  631,  632.  De. Smith-Judicial  Control and Administrative Action  PP.  275, 276.  Waynes Legislative Executive and Judicial Powers  1970 4th Edn p. 213.  Halsbury’s Laws of England 4th Edn.  Vol I, p. 23. [1964] A.C. 40, 73. [1974] A.C. 18, 34 (e to g). [1972]  2 All.  ER, 949, 967-968 (h to a) at 970 (J) P.  972 (h) p. 973 982 (g h) P. 983 (a). 2.   Assuming that the ratio of Barium Chemicals Case [1966] Suppl  S.C.R. 311 and of Rohtas Case [1969] 3 S.C.R, 108  is applicable to the notification it is submitted the materials furnished  in  paras  4 to 9 of the  Counter  affidavit  are sufficient to sustain it. 3.   The machines consume enormous quantity of coconut husks starving  out  the  traditional  section.   The  owners   of machinery  are  able  to corner large quantity  of  husk  at exorbitant  pi-ices to the detriment of  traditional  sector because  of  the large saving in wages  resulting  from  the displacement of labour by mechanisation. 97 4.   Due  Compliance  of s. 38 is to be presumed.  [1964]  6 S.C.R. 446. [1966] 2 S.C.R. 121, 132.

JUDGMENT: CIVIL APPELLATE JURISDICTION:Civil Appeals Nos. 2064 of 1973 and 64-65, 163-164 and 189 of 1974. Appeals from the Judgment and Order dated the 19th November, 1973 of the Kerala High Court in O. F. No. 2821 of 1973 etc. T.   S. Krishnamourthy Iyer (In C. A. No, 2064 of 1973)  and N. Sudharakan for the appellants. M. M. Abdul Khader and K. M. K. Nair, for the respondents. The Judgment of the Court was delivered by- RAY,  C.  J.-These  appeals  are  by  certificate  from  the judgment  dated  19  November, 1973 of  the  High  Court  of Kerala. These  appeals  challange the validity of  the  notification dated  26  July, 1973 issued by the State  Government  under Rule 114(2) of the Defence of India Rules, 1971  hereinafter referred to as the Rules. Rule 114(2) is as follows :-                "If  the  Central  Government  or  the  State               Government is of opinion that it is  necessary               or expedient so to do for securing the defence               of  India  and civil  defence,  the  efficient

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             conduct   of   military  operations   or   the               maintenance   or  increase  of  supplies   and               services   essential  to  the  life   of   the               community   or  for  securing  the   equitable               distribution  and availability of any  article               or  thing  at fair prices, it may,  by  order,               provide  for  regulating  or  prohibiting  the               production,     manufacture,    supply     and               distribution, use and consumption of  articles               or  things and trade and commerce  therein  or               for  preventing any corrupt practice or  abuse               of authority in respect of any such matter".                   The impugned notification is as follows:-               "No.     19768/E2/73/ID                  Dated               Trivandrum,                                      26th July, 1973.               S.R.O.  No. 474/73:-Whereas use  of  machinery               for the extraction of fibre from coconut  husk               increased  considerably  in the  districts  of               Trivandrum,  Quilon  and  Alleppey  in  recent               times;               And whereas mechanisation in the production of               such fibre results in very high consumption of               coconut  husks and the consequent  enhancement               of the price of such husks;               And  whereas duo to the very high  consumption               of  coconut husks for the production of  fibre               by using machinery and               L251 Sup CI/75               98               the  enhancement of the price of  such  husks,               sufficient  quantity  of such  husks  are  not               available at fair prices in the said districts               for use in the traditional sector;               And whereas the Government are of opinion that               for  securing the equitable  distribution  and               availability at. fair prices of coconut  husks               in the said districts for production of  fibre               in  the traditional sector it is necessary  to               prohibit  the  use  of a  machinery  in  those               districts for the production of such fibre;               Now,  therefore,  in exercise  of  the  powers               conferred  by Sub-Rule (2) of Rule 114 of  the               Defence  of India Rules, 1971, the  Government               hereby   prohibit  the  production  of   fibre               coconut  husks by the use of the machinery  in               the said districts.               By order of the Governor". The  appellants are owners of Small Scale Industrial  Units. They  employ mechanised process for decortication of  retted coconut   husks.   The  main  processes  involved   in   the manufacture  of  coir yarn are these: First  is  retting  of green  husks.  The green husks are covered with  leaves  and mud.   The  retted husks are then pounded  or  beaten.   The fibre  and  pith  then separate.  The  fibre  is  extracted, cleaned and dried.  Next comes spinning either with the help of ratt or by hand.. Ratt is a mechanical contrivance.   The final   stage  is  bundling  of  coir  yam  for   marketing. Government declared defibring of coconut husks by mechanical means  as  a  small scale industry  eligible  for  financial assistance  under  the Small  Scale  Industries  Development Scheme.  Most of the appellants availed themselves of  loans under  the Scheme.  The appellants alleged in the  petitions before the High Court that ’,be cost involved in  installing machinery  in a proper building for the purpose would  range

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from Rs. 22,000 to Rs. 35,000. The  appellants  challenged the notification on  the  ground that  the formation of opinion by the State  Government  for the purpose of exercise of power under sub-rule (2) of  Rule 114  of the Rules is a justiciable issue and that the  court should  call for the material on which the opinion has  been formed and examine the same to find out whether a reasonable man or authority could have come to the same conclusion that in  its opinion for securing the equitable distribution  and availability of retted husks at fair prices, a regulation or prohibition of the manufacture of fibre from retted husks by mechanical  means is necessary.  The appellants allege  that the  reasons  given in the notification  as  justifying  the imposition  of  the total ban on the use  of  machinery  for defibring  husks  are wholly erroneous and  prima  facie  no reasonable person will consider them as justifying the  said ban.    The  appellants  also  allege  that  there   is   no application  of  the mind of the authority  to  any  genuine materials or to any relevant considerations in the  exercise of  the  drastic power vested in the  authority  under  Rule 114(2) of the Rules. 99 The High Court held that the appellants did not establish by material  that  the opinion formed by the  State  Government could not stand. There  is no principle or authority in support of  the  view that  whenever a public authority is invested with power  to make  an order which prejudicially affects the rights of  an individual   whatever  may  be  the  nature  of  the   power exercised,  whatever  may be the  procedure  prescribed  and whatever  may be the nature of the authority conferred,  the proceedings of the public authority must be regulated by the analogy   of  rules  governing  judicial  determination   of disputed    questions   (See   Sadhu   Singh     v.    Delhi Administration)(1). Where powers are conferred on public authorities to exercise the  same when "they are satisfied" or when "it  appears  to term" or when "in their opinion" a certain state of  affairs exists;  or  when powers enable public authorities  to  take "such  action  as they think fit" in relation to  a  subject matter,   the   Courts  will  not  readily  defer   to   the conclusiveness  of’ an executive authority’s opinion  as  to the  existence  of a matter of law or fact  upon  which  the validity of the exercise of the power is predicated. Where  reasonable  conduct  is  expected  the  criterion  of reasonableness is not subjective, but objective.  Lord Atkin in Liversidge v. Anderson (2) said "If there are  reasonable &rounds,  the judge has no further duty of deciding  whether he would have formed the same belief any more than, if there is  reasonable  evidence  to  go to a  jury,  the  judge  is concerned  with  whether  he would have  come  to  the  same verdict".    The  onus  of  establishing   unreasonableness, however,  rests upon the person challenging the validity  of the acts.  Administrative   decisions  in  exercise  of  powers   even conferred  in subjective terms are to be made in good  faith on  relevant considerations.  The courts inquire  whether  a reasonable  man could have come to the decision in  question without  misdirecting himself on the law or the facts  in  a material  respect.  The standard of reasonableness to  which the  administrative  body is required to conform  may  range from  the court’s own opinion of what is reasonable  to  the criterion of what a reasonable body might have decided.  The courts  will  find out whether conditions precedent  to  the formation of the opinion have a factual basis.

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In  Rohtas  Industries Ltd. v. S. D. Agarwala &  Anr.(3)  an order under section 237(b) (i) and (ii) of the Companies Act for  investigation  of  the  affairs  of  the  company   was challenged  on  the ground that though the  opinion  of  the Government is subjective, the existence of the circumstances is  a condition precedent to the formation of  the  opinion. It was contended that the Court was not precluded from going behind  the recitals of the existence of such  circumstances in the order, but could determine whether the  circumstances did in fact (1) [1966] 1 S.C.R. 243. (2) [1942] A. C. 206, 228-229. (3)  [1969] 3 S. C. R. 108. 100 exist.    This  Court  said  that  if  the  opinion  of   an administrative  agency  is the condition  precedent  to  the exercise of the power, the relevant matter is the opinion of the  agency  and  not the grounds on which  the  opinion  is founded.  If it is established that there were no  materials at  all  upon which the authority could form  the  requisite opinion,  the Court may infer that the authority passed  the order  without applying its mind.  The opinion is  displaced as  a  relevant  opinion if it could not be  formed  by  any sensible person on the material before him. It  is appropriate to refer to the Report of  the  Committee appointed  by  the State Government to  hold  enquiries  and advise  the  Government in respect of  revision  of  minimum wages fixed for employment in Coir Industry.  The  Committee was  constituted in the year 1969.  The Committee  gave  its final  report on 25 January, 1971.  The Report is  published by  the Government of Kerala in 1971.  The findings  of  the Committee  are  these.   With  the  help  of  high   powered machines,  fibre  from  husks on  1,000  coconuts  could  be extracted in 25 to 30 minutes. 10 workers would be  required for effective attending to that work. 10 workers in 8  hours on  an average could defibre husks of about 12000  coconuts. 30  workers  would be required to remove the  skins  of  the retted  husks.  In the usual course, 120 workers would  have to be employed for beating husks of 12000 coconuts by  hand. In  short,  by  the introduction of a  single  high  powered machine,  80  persons  would  lose  their  employment.   The Committee felt that under the circumstances when  employment is acute especially in that State, it is not practicable  to encourage   mechanisation   for   fibre   production    till alternative so of employment is developed.  Therefore, it is a wise course to regulate the expansion of the use of machi- nery  with high productive capacity in order to  retain  the labour force already working in this field. One  high powered machine does the work of about 90  workers employing  only  10  workers  to  operate  it.   The   fibre extracted  with  the help of machinery is not used  for  the production  of coir yam by a majority of employers in  North Malabar  area.   The fibre is sold to  outside  agencies  in Coimbatore,  Salem etc. and not used for spinning coir  yam. The Committee recommended that the Government might  appoint a  separate  committee  to study  the  various  problems  on account  of mechanisation in the industry and make  suitable recommendations in that behalf. A   Study   Group  was  appointed  to  make  a   report   on mechanisation in Coir Industry in Karela.  The report of the Study Group is dated 13 April, 1973.  It is published by the State Planning Board in May, 1973. The  Study Group at pages 33 and 34 of the Report stated  as follows.   In  a country like ours  where  unemployment  and underemployment  loom large, any situation which  brings  in

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unemployment is not to be favored.  Where again  exceptional benefits are to flow in as a result of mechanisation, and by thoughtful.  and  timely state action  the  painful  effects resulting from mechanisation could be checkmated 101 it is not always desirable to persist with age-old  methods. Coir Industry brings employment or partial employment to  an area   where  there  s  chronic  unemployment   and   under- employment.   Any  kind of mechanisation is bound  to  cause some  displacement  of people.  But human values  should  be given  the  highest priority and any  measure  which  brings suffering  to  those engaged in an industry  cannot  be  ac- ceptable.  Mechanisation can bring steady employment to  the few.   It would also promote better remuneration.  The  only difficulty is that it an take in lesser number of persons. The  Study Group suggested that a composite plan  should  be thought  on these lines.  The Coir Industry should be  woven into the pattern of area development or regional development which win bring prosperity not only to the coir industry but also to many other ancillary industries and avocations.  The objective should be to provide at least 300 days’ work in  a year  at  reasonable wages to an those engaged in  the  coir industry.   The  Study Group recommended that  the  pace  of mechanisation should be such that none should be thrown  out of employment, and for those who are displaced,  alternative work  is  to  be found in the general  development  that  is envisaged  in  the all round development plan  which  should think  of  not  only the coir industry but  also  the  other industries  and avocations possible to be introduced  in  an area. It is in evidence that mechanisation progressed at a  fairly high  rate in the three districts of Trivandrum, Quilon  and Alleppey.   Out of 414 mechanised units in the whole of  the Kerala  State consisting of 11 districts, 283 are  in  these three  districts alone.  There, is a heavy concentration  of mechanised  units in the three districts.  The figure  given is that only 10 workers are required for defibring husks  of 12000  coconuts  a  working day of 8 hours  by  the  use  of machines  as  against 120 workers by the  process  known  as hand-method.  The mechanical work is done quickly to consume coconut  husks  in very large quantities.   There  has  been large   scale   unemployment  of  labour  engaged   in   the traditional method and there is serious unrest in the area. The State Government found in the context and background  of the Reports and materials that the use of machinery for  the purpose  of  extraction of fibre from husks in  the,  region other than Trivandrum, Quilon and Alleppey Districts has not affected the supply and availability at fair prices of husks for extraction of fibre in the traditional sector as in  the case  of the districts of Trivandrum, Quilon  and  Alleppey. The situation in other 8 districts, according to the  State, does  not  require action under Rule 114 of the  Defence  of India  Rules.  Price increase of husk in these  8  districts was not comparable with that in the districts of Trivandrum, Quilon  and  Alleppey.  The Government,  therefore,  was  of opinion  that  for securing the equitable  distribution  and availability at fair prices of coconut husks for  production of  fibre  in  the traditional sector  in  the  remaining  8 districts of the State it is not necessary in the prevailing circumstances  to  prohibit  the use  of  machinery  in  the remaining 8 districts for the production of fibre. 102 The  appellants also contended that section 3(2)(21) of  the Defence of India Act does not support Rule 114 and  secondly

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section 38 of the Defence of India Act is violated.  Section 3 (2) (21) of the Defence of India Act confers power on  the authority  to  make  orders providing- inter  alia  for  the control  of trade or industry for the purpose of  regulating or increasing the supply of, or for maintaining supplies and services  essential to the life of the community.  Rule  114 is  in complete consonance with the powers  conferred  under the  aforesaid section 3(2)(21).  Section 38 of the  Defence of  India Act states that any authority or person acting  in pursuance  of  this Act shall interfere  with  the  ordinary avocations of life, and the enjoyment of property as  little as may be consonant with the purpose of ensuring the  public safety  and  interest  and the defence of  India  and  civil defence.  It is a matter of policy for the State  Government to  decide  to what extent there should be  interference  in relation to the enjoyment of property.  The public  interest is  of  paramount consideration.  In the  present  case  the steps taken are in the larger interests of labour engaged in the coir industry.  The preeminent question is that it is an emergency legislation.  In emergency legislation the  causes for  inducing the formation of the opinion are that coir  is one of the most labour intensive industries in Kerala and it is  estimated  that more than 4-1/2 lakhs  of  worker-,  are employed  in  the  various process  of  coir  industry  like getting, hand-spinning, spindle spinning and manufacture  of coir  mats  and matting and that about 10  lakhs  of  people depend   upon   this   industry   for   their    sustenance. Mechanisation  in  Coir Industry has been  taking  place  in different parts of the State.  The non-mechanised sector  of this  industry is so labour-intensive that mechanisation  of fibre  production  is strongly opposed  by  workers  because mechanisation  results in very high consumption  of  coconut husks by the mechanised units and the consequent enhancement of  price  of husks and the non-availability  of  sufficient quantity  of husks at fair price for use in the  traditional sector,  viz.,  hand  beating of  husks.   There  have  been serious tensions including law and order situations. Because  of the very high consumption of coconut  husks  for the   production  of  fibre  by  using  machinery  and   the enhancement of the price of such husks, sufficient  quantity of  such  husks  are not available at  fair  prices  in  the Districts of Trivandrum, Quilon and Alleppey for use in  the traditional  sector.  Therefore for securing the equit  able distribution  and  availability at fair  prices  of  coconut husks in the said three districts for production of fibre in the  traditional sector. it is necessary to prohibit use  of machinery in these three districts. The  State  Government  found  on  materials  that  use   of machines. affected the availability of retted coconut  husks for equitable distribution at fair prices.  The notification is  on  the consideration of relevant and  useful  material. The  opinion  of the State Government cannot be said  to  be based  on any matter extraneous to the scope and purpose  of the relevant provisions of the statute.  The materials  sup- porting the subjective satisfaction indicate that there  are reasonable  grounds for believing that the prescribed  state of  affairs  exists  and  course  of  action   is-reasonably necessary for the given purpose of equitable distribution of coconut husks at fair prices. 103 The notification is issued after due care and caution on the basis  of  reliable and sufficient data obtained  by  proper investigation and enquiries.  The Government took notice  of section  38  of the Defence of India  Act.   The  Government became   satisfied   about   the   public   interest.    The

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notification  does  not interfere with  the  avocations  and enjoyment  of property any more than is necessary for  those purposes of equitable distribution of husks at fair price to the traditional sector. An  argument  was advanced that  the  notification  offended Article 14.    The course of action which the State  adopted is that it became necessary to prohibit the use of machinery in  the districts of Trivandrum, Quilon and Alleppey in  the traditional  sector.  It appears that out of 414  mechanised units  in the State 283 units are in the Southern region  of Kerala  State consisting of Trivandrum, Quilon and  Alleppey and the balance 131 mechanised units are in the remaining  8 districts  of  the  State.  The use  of  machinery  for  the purpose  of  extraction of fibre from husks  in  the  region other than Trivandrum, Quilon and Alleppey districts has not at present affected the sup and availability at fair  prices of  husks for extraction of fibre in the traditional  sector as in the case of the three Districts.  The situation in the 8  districts does not require action at the present  moment. The  classification is reasonable.  It bears a nexus to  the objects sought to be achieved by the impugned  notification. In  order to secure equitable distribution and  availability at fair prices of coconut husks in the remaining 8 districts of  the  State for production of fibre  in  the  traditional sector, it is not necessary in the prevailing conditions  to prohibit the use of machinery in the remaining 8 districts. It was also submitted that the notification offended Article 301.    Article  302  states  that  the  State  can   impose restrictions   on   the  freedom  of  trade,   commerce   or intercourse between one State and another or within any part of the territory of India.  It was said that the Defence  of India  Act  is  not  a  law  made  by  Parliament,  imposing restrictions  is  contemplated  under  Article,  302.    The Defence  of  India Act has been passed by  Parliament.   The Rules   under  the  Act  have  legislative  sanction.    The restrictions  are  imposed in the interest  of  the  general public.  The restrictions are reasonable in the interest  of the industry and public. For the foregoing reasons the judgment of the High Court  is upheld.   The  appeals are dismissed.  In view of  the  fact that  the High Court directed the parties to bear their  own costs  we  also direct that the parties will  pay  and  bear their own costs. V.P.S. Appeals dismissed. 104