Dismissed

M.K. Abdul Reheem v. State of Kerala

Kerala HC1 Jun 2020WP(C)/6411/2015

Case brief

AI extract

What is this about?

In this PIL alleging price hike of cement and seeking directions to the State to declare it an essential article under the Kerala Essential Commodities Act and fix prices, the High Court held that the petitioners failed to place necessary materials to prove the need for regulation and declined to interfere with the executive and legislative domains without evidence.

What did the court decide?

The writ petition was dismissed as the petitioners had not made out a case to secure any declaratory relief without placing appropriate material.

M.K. Abdul Reheem Vs State of Kerala — Pension and Retirement Benefits | Kerala HC (2020)

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IN THE HIGH COURT OF KERALA AT ERNAKULAM

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PRESENT

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THE HONOURABLE THE CHIEF JUSTICE MR.S.MANIKUMAR

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THE HONOURABLE MR. JUSTICE SHAJI P.CHALY

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MONDAY, THE 01ST DAY OF JUNE 2020 / 11TH JYAISHTA, 1942

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WP(C).No.6411 OF 2015(S)

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PETITIONER/S:

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1 M.K. ABDUL RAHEEM, GOVT. CONTRACTOR, RESIDING AT MUNDAKKAL HOUSE, KUTTAMASSERY, THOTTUMUGHOM P.O., ALUVA-683 105.

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2 K.J..VARGHESE CENTRAL COMMITTEE MEMBER KERALA GOVT.CONTRACTOR'S FEDERATION, RESIDING AT KOORAN HOUSE, KARIYADU, MEKKADU P.O., ANGAMALY, PIN-683 581.

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BY ADVS. SRI.RAJU JOSEPH (SR.) SRI.J.JULIAN XAVIER SRI.K.T.POULOSE (KORATTY)

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RESPONDENT/S:

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1 STATE OF KERALA, REPRESENTED BY THE CHIEF SECRETARY, SECRETARIAT, THIRUVANANTHAPURAM, PIN-695 001.

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2 MS. MADRAS CEMENTS LIMITED, RAMAMANDIRAM RAJAPALAYAM, TAMIL NADU HAVING ITS BRANCH OFFICE AT 40/6955, 3RD FLOOR OMANA BUILDING, JEW STREET, ERNAKULAM,PIN-680 035.

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3 MS. INDIA CEMENTS LIMITED REGISTERED OFFICE AT DHUN BUILDING, 827, ANNA SALAI, CHENNAI, HAVING ITS BRANCH OFFICE AT DOOR NO.41/997, DEVIKRIPA(ARCRA-52), PULLEPPADY CROSS ROAD, KOCHI-682 018.

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4 MS.ULTRA TECH CEMENT LIMITED, HEAD OFFICE B-WING 2ND FLOOR, AHURA CENTRE, MAHALAKALI CAVES ROAD, ANDHERI EAST, MUMBAI HAVING ITS BRANCH OFFICE, NO.39/4013, OFFICE-A, 8TH FLOOR, KG OXFORD BUSINESS CENTRE, SREEKANDATH ROAD, RAVIPURAM, ERNAKULAM, KOCHI-682 016.

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5 MS.DALMIA CEMENTS LIMITED REGISTERED OFFICE, DALMIAPURAM, THIRICHIRAPPALY, TAMIL NADU, HAVING ITS BRANCH OFFICE AT OXFORD BUSINESS CENTRE, 8TH FLOOR, SREEKANDATH ROAD, RAVIPURAM, ERNAKULAM, KOCHI-682 016.

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6 MS.MALABAR CEMENTS LIMITED, REGISTERED OFFICE, WALAYAR, PALAKKAD DISTRICT, PIN-678 624.

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7 MS.CHETTINADU CEMENTS HEAD OFFICE RANI SEETHAI HALL, 5TH FLOOR, 603, ANNA SALAI, CHENNAI, HAVING ITS BRANCH OFFICE LAYAM ROAD, NEAR KALYAN SILKS, ERNAKULAM, KOCHI-682 017.

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8 MS.AMBUJA CEMENTS CORPORATE OFFICE ELEGANT BUSINESS PARK, MIDC CROSS ROAD-B, ANDHERI(E) MUMBAI, HAVING ITS BRANCH OFFICE AT UNIT KOCHIN, BEHIND Q-1, BERTH MATTANCHERY, WHARF, WELLINGTON ISLAND, KOCHI-682 003.

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9 JSW CEMENTS KOCHI, 3RD FLOOR, PENTA SHOPPING CENTRE, JANATHA JUNCTION, PALARIVATTOM, KOCHI-682 025.

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R1 BY GOVERNMENT PLEADER R2 BY ADV. SRI.K.P.SUJESH KUMAR R3 BY ADV. SRI.P.R.AJITHKUMAR R3 BY ADV. SRI.K.MANOJ CHANDRAN R4, R6, R8-9 BY ADV. SRI.K.JOHN MATHAI R4, R6, R8-9 BY ADV. SRI.JOSON MANAVALAN R4, R6, R8-9 BY ADV. SRI.KURYAN THOMAS R4, R6, R8-9 BY ADV. P.GOPINATH MENON R4, R6, R8-9 BY ADV. SRI.M.GOPIKRISHNAN NAMBIAR R4, R6, R8-9 BY ADV. SRI.P.BENNY THOMAS R6 BY ADV. SRI.K.ANAND (SR.) R7 BY ADV. SRI.GEORGE JACOB (JOSE)

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SR. GP. SRI. SURIN GEORGE IPE FOR R1

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THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 01.06-2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

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JUDGMENT

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SHAJI P. CHALY, J

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This is a Public Interest Litigation filed by two civil contractors undertaking government works seeking a writ of mandamus directing the first respondent to declare 'cement' as an essential article by a notified order and further by a notified

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order to control the price at which the cement may be bought and sold and also for a direction to the first respondent to reduce

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the price of cement of the 6^th respondent i.e., M/s. Malabar Cements Limited, a company owned by the State Government, to the rate that was prevalent during June, 2014, evident from Ext.P1.

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The material contentions advanced by the petitioners are

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that the market price of ingredients for manufacturing the

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cement, like limestone, clay, industrial by-products, such as

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slag, fly ash etc. have come down drastically. So also, yet

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another component which may have an effect on the price of cement is cost of transportation and the same has also come down due to the fall in the price of petroleum products. In spite of this, the manufacturing companies i.e., respondents 2 to 9 are periodically increasing the price of cement without any reason. It is further submitted that in 2014, the price of the cement per bag

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for a 50 kg. bag was Rs.248/- evident from Ext.P1. However, by the second week of February, 2015, it was increased to Rs.362/evident from Ext.P2 and the petitioners apprehend that all the manufacturing companies have decided to increase the price

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from March, 2015, and it seems it was declared that the price of cement per bag would be Rs.450/-. That apart, it is submitted

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that the main source of employment in Kerala is the construction

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activities and due to the escalation of cement price, the construction activities had to be slowed down and consequential

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employment in the unorganised sector have also come down considerably. Other legal contentions are also raised by the petitioners to canvas the proposition that the State Government

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is duty bound to declare the 'cement' as an essential article as

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per the powers conferred under the Kerala Essential Articles

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Control Act, 1986 ('the Act, 1986' for brevity)

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It is the specific case of the petitioners that Section 3 of

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the Act, 1986 confers power to the State Government to control

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production, supply, distribution etc. of essential articles and

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Section 3(2)(b) gives specific power for controlling the price at

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which essential articles may be brought or sold. With the above

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background, the grounds raised by the petitioners are that the price of cement is being increased by the manufacturing

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companies jointly forming themselves into a cartel by which the competition in the market is avoided which has no correlation to the cost of production or other incidental charges, including transportation charges. Therefore, the Manufacturing Companies are getting unjust enrichment at the cost of the public, hampering industrial growth. It is also pointed out that the Act was enacted by the State Legislature on realising the requirement for control, of the production and supply, including the market price of commodities, which are not within the purview of the Essential Commodities Act, and by amendment of Essential Commodities Act, 2006, cement and such other articles were removed from the definition of Essential Commodities Act.

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W.P.(C) No. 6411/2015 : 7 :

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Therefore, it is the prerogative of the State Government to

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intervene in the market and control the price of the cement.

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We have heard learned Senior Counsel for the

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petitioners, Sri. Raju Joseph assisted by Sri. Julian Xavier, learned

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Senior Government Pleader, Sri. Surin George Ipe for the first respondent and Sri. M. Gopikrishna Nambiar for respondents 4 to

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9, and perused the pleadings and documents on record.

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Learned Senior Counsel for the petitioners advanced

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arguments in accordance with the contentions discussed above. On the other hand, the learned Government Pleader submitted

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that the petitioners are not at liberty to compel the Government

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to include the cement as an essential article under the Act, 1986.

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It is also submitted that if the petitioners were really aggrieved,

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they ought to have approached the Government with a suitable

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W.P.(C) No. 6411/2015 : 8 :

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representation enabling the government to conduct a study and draw a feasibility report. That apart, the prime contention

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advanced was that the petitioners have not produced any materials along with the writ petition so as to enable this Court

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to identify as to whether the reliefs as is sought for by the petitioners are sustainable or not. The learned counsel appearing for the Manufacturing Companies also addressed the

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similar arguments as that of the learned Government Pleader and

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also that the price is fixed taking into account various vital and requisite factors.

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We have evaluated the rival submissions. The Kerala

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Essential Commodities Act, 1996 was introduced for the control

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of production, supply and distribution of, and trade and commerce in, certain articles. Section 3 deals with the power to

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: 9 :

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control production, supply, distribution etc. of essential articles,

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which reads thus:

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“3. Power to control production, supply distribution, etc., of essential articles .- (1) If the Government are of opinion that it is necessary or expedient so to do for maintaining or increasing the supplies of any essential article or for securing their equitable distribution and availability at fair prices, they may, by notified order, provide for regulating or prohibiting the production, supply and distribution thereof and trade and commerce therein.

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(2) Without prejudice to the generality of the powers conferred by sub-section (1), an order made thereunder may provide-

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(a) for regulating by licences, permits or otherwise the production or manufacture of any essential article;

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(b) for controlling the price at which any essential article may be bought or sold ;

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(c) for regulating by licences, permits, or otherwise the storage, distribution, transport, disposal, acquisition use or consumption of any essential article ;

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(d) for prohibiting the withholding from sale of any essential article ordinarily kept for sale;

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(e) for requiring any person holding in stock any essential article to sell the whole or a specified part of the stock to the Government or to an officer or agent of the Government or to such other person or class of persons and in such circumstances as may be specified in the order;

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(f) for regulating or prohibiting any class of commercial or financial transactions relating to any essential article, which, in the opinion of the authority making the order, are, or if unregulated are likely to be detrimental to the public

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: 10 :

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interest;

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(g) for collecting any information or statistics with a view to regulating or prohibiting any of the aforesaid matters;

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(h) for requiring persons engaged in the production, supply or distribution of, or trade or commerce in, any essential article to maintain and produce for inspection such books, accounts and records relating to their business and to furnish such information relating thereto as may be specified in the order;

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(i) for regulating the processing of any essential article;

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(j) for exercising over the whole or any part of an existing undertaking, such functions of control and subject to such conditions, as may be specified in the order ;

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(k) for any incidental and supplementary matters including in particular the entering and search of premises, vehicles, vessels and aircraft, the seizure by a person authorised to make such search of any article in respect of which such person has reason to believe that a contravention of the order has been, is being or is about to be committed, the grant or issue of licences, permits or other documents, and the charging of fees therefor.

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(3) Where any person sells any essential article in compliance with an order made with reference to clause (e) of sub-section (2), there shall be paid to him the price therefor, as hereinafter provided:-

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(a) where the price can, consistently with the controlled price, if any, fixed under this section, be agreed upon the agreed price ;

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(b) where no such agreement can be reached, the price calculated with reference to the controlled price, if any;

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(c) where neither clause (a) not clause (b) applies, the price calculated at the market rate prevailing in the locality at the date of sale.”

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: 11 :

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'Notified order' is defined to mean 'an order notified in

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the gazette. On a reading of Section 3 of Act, 1986, it is true that the Government is vested with powers to notify an order, if it

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is necessary or expedient so to do for maintaining or increasing the supply of any essential article or for securing their equitable distribution and availability at fair prices. Other powers are also

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conferred on the State Government.

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In our considered opinion, going by the provisions of the

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Act, before declaring any article as an essential article as per the

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provisions of Act, 1986, the Government will have to make a due

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enquiry taking in to account various material factors so as to control the price, and the Government should also be satisfied

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that if any article if unregulated are likely to be detrimental to the

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public interest. In order to arrive at such satisfaction, the

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Government has to collect any information or statistics to regulate or prohibit any of the articles. In order to identify the

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issue, the Government is also duty bound to require the persons engaged in the production, supply and distribution or trade or commerce to maintain and produce for inspection such books, accounts and records relating to their business and furnish such information relating thereto as may be specified in the order. It

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is also significant to note that without conducting an in-depth

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study, the Government is not at liberty to declare any article as an essential article under Act, 1986. It is true that the production, supply and distribution of goods are guided by Entry

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33 of List III, and included as item No. 27 in list II of 7^th Schedule to the Constitution. It is also evident that the Government of India as per notification No. SO.1844 dated 18.06.1966 declared

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cement as an essential commodity by virtue of the powers

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conferred under Section 3 of the Essential Commodities

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Act,1955. The power under Section 3 of the Essential

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Commodities Act was delegated to the State Government by virtue of the powers conferred under Section 5 of Act 1955, and

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the State Government had issued the Kerala Cement Distribution (Licensing and Regulation) Order, 1974, in order to control the distribution of cement. Therefore, according to the petitioners, the Central and State Governments were taking measures to control the price of cement and to prevent hoarding and blackmarketing of cement. However, by passage of time, several cement manufacturing companies have come up in the country

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and cement became no more a scarce item. By virtue of the Amendment Act 54 of 2006, which came into force on and with

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effect from 12.02.2007, the definition of 'essential commodity'

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was deleted from the statute book and Section 2A was inserted in

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the parent Act, by which the Central Government was conferred

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with power to remove any commodity from the said schedule in consultation with the State Governments. Later, as per order, SO

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No. 168E, the Central Government has decided for the removal of price and distribution control of cement with effect from first day

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of March, 1989 and by virtue of the powers conferred by Sections

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18G and 25 of the Industries (Development and Regulation) Act, 1951 (65 of 1951), the Cement Control Order, 1967 was amended, whereby the power to vary the prices and to alter the

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schedule was deleted.

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It is important to note that the inclusion of an article as

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an essential article in the Act, 1986 can be done by the State

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Government only on a threadbare study as is contemplated under the Act, 1986. Moreover, such a decision is to be taken by the Government in accordance with the policy of the Government taking into account various factual materials and components for declaring a policy with respect to the inclusion of an article as an essential article in accordance with the provisions of Act, 1986. It is an admitted fact that the petitioners have not approached the State Government seeking inclusion of cement as an essential

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article. However, the contention of the learned Senior Counsel for the petitioners is that this Court is vested with powers to declare so, and it was accordingly that a prayer directing the first respondent to declare the cement as an essential article by a notified order is sought for. However, no materials are placed

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before this Court to arrive at any conclusion with respect to the

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W.P.(C) No. 6411/2015 : 16 :

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relief sought for by the petitioners.

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Moreover, a public interest litigant should always place appropriate materials and proof before this Court so as to enable this Court to identify the situation and grant any reliefs. It is a well settled proposition in law that in a Public Interest Litigation, the court should be satisfied about the credentials of the petitioner, the prima facie correctness or nature of information given by him, and the information furnished being not vague and indefinite. That apart, the information should show the gravity and seriousness involved. It is also a well settled proposition that nobody should be allowed to indulge in wild and reckless allegations and the court should be extremely careful to see that under the guise of redressing a public grievance, it does not encroach upon the sphere reserved by the Constitution to the

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Executive and the Legislature.

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It is also a well settled proposition that the

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constitutional court while exercising the power of judicial

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discretion should demonstrate judicial restraint in administrative

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action, because the constitutional courts are not sitting as a court of appeal, but only review the manner in which the decision was made. It is also equally important to note that the constitutional

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courts are not equipped to arrive at such conclusions which are

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administratively to be decided taking into account the material inputs so as to arrive at definite conclusions. The powers conferred on the legislature and the Government cannot be

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interfered with by the court at the threshold stage and then issue

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directions and declarations, and if the court steps into the legislative area and issues, such directions without any expertise

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W.P.(C) No. 6411/2015 : 18 :

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it would be clear interference with the legislative power which is deprecated by the framers of the Constitution by segregating the powers by and between the legislature, executive and the judiciary.

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We are also conscious of the fact that a public interest

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litigation can be entertained by a constitutional court, if sufficient

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materials are placed before the court and the court finds that

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there is any serious and patent latches on the part of the Government in taking any action, or has taken any action detrimental to the larger public interest. However, in order to identify such issues, there should be sufficient materials before

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the Court, and the constitutional court is not expected to conduct

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a roving and deep seated enquiry in order to dig the materials

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and to give relief to such public interest litigant.

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: 19 :

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Taking into account all these aspects, we are of the

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definite view and opinion that the petitioners have not made out

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any case to secure any declaratory reliefs as is sought for in the

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writ petition.

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In the result, this writ petition is dismissed.

sd/-

S. MANIKUMAR,

CHIEF JUSTICE.

sd/- SHAJI P. CHALY, JUDGE.

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SHAJI P. CHALY,

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: 20 :

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APPENDIX

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PETITIONER'S/S EXHIBITS:

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EXHIBIT P1 EXT.P1: A TRUE COPY OF THE BILL SHOWING THE RATE OF CEMENT PER BAG OF RS.50/-KG., AS ON 12.6.2014. EXHIBIT P2 EXT.P2: A TRUE COPY OF THE BILL DATED 21.2.2015 SHOWING THE RATE OF CEMENT PER BAG OF RS.50/0KG., AS ON 21.2.2015.

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RESPONDENTS' EXHIBITS: NIL

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/True Copy/

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P.S to Judge.

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M.K. Abdul Reheem v. State of Kerala

Case brief

What is this about?

What did the court decide?

M.K. Abdul Reheem v. State of Kerala

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Statutes considered

Parties & counsel

Coram

Case details

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