STATE OF TAMIL NADU AND ORS.versusSANJEETHA TRADING CO. AND ORS.

A                    STATE OF TAMIL NADU AND ORS.
                                          v.
                    SANJEETHA TRADING CO. AND ORS.

                              SEPTEMBER 24, 1992 .

B                    [P.B. SAWANT AND N.P. SINGH, JJ.)

          Tamil Nadu Essential Articles Control and Requisitioning Act,
    1949/Tamil Nadu Timber (Movement Control) Order, 1982:

c ment Section 3/Clause 3-Timber declared as an essential articl&-Amend·
       of clause by Notification dated 22nd September, 1983, prohibiting
    movement and transport of timber outside State-Constitutional validity of.

          Constitution of India, 1950:

          Articles 19(1)(g), 301 and 304(b)-fnter-State trade and com-
D
    merc&-Timber declared as essential article-Prohibition on movement and
    transport of timber outside the 'State'--Validity of-Whether ban regulatory in
    nature.

          By notification dated 2nd November, 1982, issued by the appellant·
E State, in exercise of the power conferred by clause (a) of Section 2 of the
    Tamil Nadn Essential Articles Control and Requisitioning Act, 1949, tlm·
    her was declared to be an essential article. By another notification of the
    same date the Tamil Nadu Timber (Movement Control) Order, 1982 came
    into force. Under Clause 3 of the Movement Control Order no person was
    entitled to transport timber from any place within the State of Tamil Nadu
F   to any place outside the State, except under and in accordance with the
    terms and conditions of a permit issued under the Tamil Nudu Timber
    Transit Rules, 1968.

          By notification dated 22nd September, 1983, the expressioms 'except
G   under and in accordance with the terms and conditions of a permit issued
    under the Tamil Nadu Timber Rules, 1968' in Clause 3 of the Order were
    omitted. The effect of the amendment was that there was a complete ban
    on the movement of the timber from the State of Tamil Nadu to any place
    outside the State.

H         The constitutionality of the amendment was questioned by the
                                         840
             STATEOFT.N. v.SANJEETHATRADINGCO.                            841

respondents before the High Court contending that total ban on the               A
movement of the timber from the appellant-State to any other State was
not only violative of Article 19(1)(g) of the Constitntion but also of Artifle
301 of the Constitution, which ensured every citizen, subject to the
provisions of Part XIII of the Constitution, free trade, Commerce and
intercourse throughout the territory of India.
                                                                                 B
      The High Court held that the amendment in question was violative
of Articles 19(1) (g) and 301 of the Constitution and as such unconstltu,
tlonal and invalid.

      In the appeal before this Court on behalf of the appellant-State it C
was submitted that as the act had been framed to provide for powers to
control the supply, distribution, transport and prices of essential articles
and trade and commerce therein, after Issuance of notification dated 2nd
November, 1982, by the State Government, declaring timber to be an
essential article, it was open to the State Government to prollibit the
movement or transport of timber outside the State taking Into considera- D
lion Qie Interest of people of the State, and that although a complete ban
had been imposed on the movement and transport of a timber, the said
ban should not be deemed to be a restriction because it amounted only to
regulation of trade in timber.

      Allowing the appeals, this Court,
                                                                                 E

       HELD : 1.1. The framers of the Constitution while saying under
Article 301 of the Constitution that trade, commerce and Intercourse
throughout the territory of India should be free were quite conscious of
the fact that public Interest may require such freedom to be curbed or F
curtailed. That is '!hY under Article 302 or the Constitution, Parliament
was empowered to Impose such restrictions on the freedom of trade,
commerce or Intercourse between one State and another or within any part
                                                                 ' by law.
of the territory of India as may be required in the public Interest
However, the expression 'reasonable' did not precede the word G
'restrictions'. Same thing was provided so far as State Legislatures were
concerned under Article 304(b), vesting them with power to Impose "sucb
reasonable restrictions' on freedom or trade, commerce or intercourse
with or within that State as may be required in the ·public interest by law.
In Article 304(b) the expression 'reasonable' precedes 'restrictions' and r.
further check has been provided by saying in the proviso to the said article H
    842                  SUPREME COURT REPORTS [1992] SUPP.1 S.C.R.

A that no bill or amendment for the purpose of clause (b) should be intro·
    duced or moved In the Legislatui;e of a State without the previous sanction
    of the President. [852 F·H; 853-A]

          1.2. In the larger interest of the Nation, there most be free Dow of
    trade, commerce and intercourse both inter-State and intra-State but at
B   the same time the regional problems cannot be ignored altogether. When·
    ever there Is a clash between the national Interest and the interest of the
    State because of which any crisis is created, the Union has power of
    Intervention. [853 C-D]

C          1.3. The expression 'free trade' cannot be Interpreted In an on·
    qualified manner. Any prohibition on movement of any article from one
    State to another has to be examined with reference to the facts and
    circumstances of that particular case • whether it amounts to regulation
    only, taking into consideration the local conditions prevailaing, the neces-
    sity for such prohibition and what public interest Is sought to be served
D   by imposition thereof. [853 D·E]

          1.4. Whenever such prohibitions are introduced In exercise of the
    powers, conferred by the Essential Commodities Act or any parallel or
    similar Act Including the Act in question the scope of enquiry or scrutiny
E   can only be to a limited extent because such Acts exist for maintaining,
    Increasing or securing supplies of essential articles and for arranging
    equitable distribution and availability thereof at fair prices to the common
    man under emergent situations. [853-H; 854-A]

          1.5. The Essential Commodities Act conceives the larger welfare of
F   the largest numbers and contemplates measures to control the essential
    commodities or articles which are vital to human existence in the society.
    With that object in view, framers of the Act vested wide powers of control
    over the essential articles in the State Governments. The situations
    prevailing in any particular State may require complete prohibition on the
    movement of any essential article or commodity outside the State. That is
G   why, in the context of the provisions of the l!:ssential Commodities Act, It
    has been stated by this Court that imposition of complete prohibition on
    the movement of the essential commodities from one State to another may
    In some circumstances amount to regulation of trade in such commodities
    and It need not always amount to restriction. However, in cases where total
H   prohibition has been Imposed on the movement of goods or articles from
             STATEOFT.N. v. SANJEETHA TRADING CO.                      843

one State to another, which have not been declared to be essential com· A
moditles or articles, the State, which has imposed such ban, has to satisfy
the Conrt that in spite of total prohibition it amounts only to regulation
of the trade in such articles or that even if it was a restriction it was
reasonable within the meaning Article 304(b) of the Constitution and bas
been imposed law as required by Article 304(b). [854 A·C]
                                                                              B
      1.6. In the instant case, reportedly there was shortage of timber and
the total export of timber outside the State was only 2% to 4% of the total
timber, and therefore, in order to satisfy the local requirement of timber
and to make timber which was an essential article available to the common
man at a reasonable price It was considered necessary by the State to         C
Impose the prohibition in question on the movement and transport of
timber outside the State. The declaration of timber as an essential article
was neither challenged, nor was it suggested that It had been made on
extraneous considerations and not in public Interest. As such, it bas to be
assumed that for arranging the supply of timber at fair prices and for
equitable distribution thereof, the prohibition bas been imposed. Jn such     D
a situation, the prohibition should be deemed to be regulatory II! nature
and not restrictive so as to attract Article 301 or 304 or 19(l)(g) of the
Constitution. [855 B-F]

      Mis Bishamber Dayal Chandra Mohan v. State of U.P., A.l.R. 1982         E
S.C. 33 and Krishan Lal Praveen Kumar v. State of Rajasthan, A.l.R. 1982
S.C. 29, relied on.

      Atiabari Tea Co. Ltd. v. The State of Assam, A.I.R. 1961 S.C. 232;
Automol/ile Transport (Rajasthan) Ltd. v. State of Rajasthan, A.I.R. 1962
S.C. 1406; State of Tamil Nadu v. Mis Hind Stone, A.l.R. 1981 S.C. 711; K. F
Ramanathan v. State of Tamil Nadu, A.I.R. 1985 S.C. 660 and State of
Mysore v. H. Sanjeeviah, A.l.R. 1967 S.C. 1189, referred to.

      Hughes and Vale Proprietary Ltd. v. State of New South '¥ales, [1955]
A.C. 241 and Charles H. Baldwin v. G.A.F. Seeling, Inc., [1934] 294 U.S.      G
511, referred to.

     CIVIL APPELLATE .JURISDICTION: Civil Appeals Nos. 3253-
3258 of 1990 etc.

      From the Judgment and Order dated 27.7.1987 of the Madras High          H
    844                   SUPREME COURT REPORTS (1992) SUPP. l S.C.R.

A   Court in W.P. Nos. 4668, 7867, 8663, 9294 and 12636 of 1984, 3718, 4161
    and 4208 of 1985, 2225, 2726, 8104, 8105, 9246, 9757 and 11265 of 1987 and
    Writ Appeal Nos. 872 of 1985, 980 and 1103 of 1986, 497 and 498 of 1987.

          R. Mohan and T. Raja for the Appellants.

B         K.K. Venugopal, Sivasubramaniam, V. Balachandran, K.V.
    Vijaykumar, K.V. Vishwanathan, K.R. Nambiar and K.R .. Nagaraja for the
    Respondents.

          The Judgment of the Court was delivered by

c         N.P. SINGH, J. These appeals have been filed on behalf of the State
    of Tamil Nadu, for setting aside the judgment of the High Court, holding
    that the amendment introduced by notification dated 22nd September,
    1983 in cluase ;3 of the Tamil Nadu Timber (Movement Control} Order,
    1982, was violative of Article 19(1)(g) and Article 301 of the Constitution
D   and as such unconstitutional and invalid.

           The Tamil Nadu Timber (Movement Control) Order 1982
    (hereinafter referred to as 'Movement Control Order') was notified in
    exercise of the power conferred by section 3 of the Tamil Nadu Essential
    Articles Control and Requisitioning Act, 1949 (hereinafter referred to as
E   'the Act'). The Act aforesaid was originally entitled "Madras Essential
    Articles Control and Requisitioning (Temporary Powers) Act, 1949". The
    preamble of the Act says that it was to provide "powers to control the
    supply, distribution, transport and prices of essential articles and trade and
    commerce therein ......... .". Section 2(a) defines "essential article" to mean
F   any of the articles specified in the schedule to the said Act and "any other
    article which may be declared by the State Government by notified order
    to be an essential article". Under section 3 the State Government for
    "maintaining, increasing or securing supplies of essential articles or for
    arranging for their equitable distribution and availability at fair prices may
G   by notified order provide for regulating or prohibiting the supply, distribu·
    tion and transport of essential articles and trade and commerce therein".
    From time to time the life of the said Act was being extended. It can1e to
    an end on 25.1.1956. In April, 1956 Tamil Nadu Act VI of 1956 was passed
    to re-enact the Madras Essential Article Control and Requisitioning (Tem-
    porary Powers) Act, 1949. Ultimately by Tamil Nadu Act X of 1979, the
H   Act was made permanent and the words "Temporary Powers" in the title
     STATE OFT.N. v. SANJEETiiA TRADING CO. [N.P. SINGH, J.]              845

of the Act were deleted. It appears that before the High Court it was an         A
admitted position that the Act shall be deemed to be a post-Constitution
Act in view of the enactment aforesaid. That position was not challenged
even before this Court. However, it was pointed out on behalf of the
appellant-State that the Act was made a permanent Act, by Tamil Nudu
Act X of 1979, which had been reserved for the consideration of the              B
President and has received his assent.

       By a notification dated 2nd Novemer, 1982 issued in exercise of
powers conferred by clause (a) of section 2 of the Act, timber was declared
to be an essential article. In view of notification of the same date issued in
exercise of powers under section 3 of that very Act, the aforesaid Move-         C
ment Control Order came in force. Clause 2 of the Movement Control
Order defines "timber" saying, unless the context otherwise requires, "tim-
ber' includes trees when they have fallen or have been felled, and all wood,
whether cut up or fashioned or hollowed out for any purpose or not'.
Clause 3 of the said Order prescribed the condition for transport of timber-
                                                                                 D
        "Prohibition of transpo1t of timber:- No person shall
        transport, move or otherwise carry or prepare or attempt
        to transport, move or otherwise carry, or and or abet in
        the transport, movement or otherwise carrying of timber
        from any place within the State of Tamil Nadu to any place               E
        outside the State except under and in accordance with the
        terms and conditions of a pennit issued under the Tamil
        Nadu Timber Transit Rules, 1968."

                                                          (Emphasis added)
                                                                                 F
In view of clause 3 aforesaid no person was entitled to transport timber
from any place within the State of Tamil Nudu to any place outside the
State except under and in accordance with the terms and conditions of a
permit issued under the Tamil Nadu Timber Transit Rules.

      By the impugned notification dated 22nd September, 1983, the ex- G
pressions "except under ·and in accordance with the terms and conditions
of a permit issued under the Tamil Nadu Timber Rules, 1968" were
omitted The effect of the amendment is that clause 3 of Movement Control
Order now prohibits transport and movement of timber "from any pl11.ce_
within the State of Tamil Nadu to any place outside the State''. By that very H
    846                   SUPREME COURT REPORTS [1992) SUPP. l S.C.R.

A   notification certain types of wood (a) sandalwood sold in auctions con-
    ducted by Forest Department, (b) rosewood of export quality, (c) red
    sanders intended for export, (d) timber belonging to other States passing
    through Tamil Nadu, (e) casuarina, and (f) finished produce such as doors,
    windows, articles of furniture and boxes, were excluded from the definition
B   of 'timber'.

           After amendment of clause 3 aforesaid, now there is a complete ban
    on the movement of the timber from the State of Tamil Nadu to any place
    outside the sai~ State. The constitutionality of the amendment aforesaid
    was questioned by the writ petitioners before the High Court saying that
C   total ban on the movement of the timber from the State of Tamil Nadu to
    any other State was not only violative of Article 19(1)(g) of the Constitution
    but also of Article 301 of the Constitution, which ensures every citizen,
    subject to the provisions of Part XIII of the Constitution, free trade,
    commerce and intercourse throughout the territory of India.

D          The reasons disclosed on behalf of the State before the High Court
    for imposing a complete ban on the movement of the timber outside the
    State, are (i) to prevent the indiscriminate felling of trees in the Hill
    Regions for ecological reasons; (ii) to prevent the abnormal rise in the
    prices of timber in the market within the State; (iii) to make available
E   timber for local consumption, by the common man as well as industries and
    that (iv) if ban is imposed on the movement of timber outside the State it
    would help the development of small scale industries within the State.

          It was neither disputed nor could have been disputed on behalf of
    the appellant-State that after deletion of the expression "except under and
F   in accordance with the terms and conditions of a permit issued under the
    Tamil Nadu Timber Transit Rules, 1%8" from clause 3 of the Movement
    Control Order by the aforesaid notification dated 22nd September, 1983,
    there has been a complete prohibition on the transport and movement of
    timber from any place within the State of Tamil Nadu to any place outside
G   the State. Earlier any such transport or movement of timber was permis-
    sible under and in accordance with the terms and conditions of a permit
    issued under the Tamil Nadu Timber Transit Rules.

         The question is whether this infringes in any manner Article 301 of
    the Constitution which ensures that trade, commerce and intercourse
H   throughout the territory of India shall be free. The framers of the Constitu-
     STATE OF T.N. v. SANJEETHA TRADING CO. [N.P. SINGH, J.]             847

tion thought such intercourse necessary, so that there should be an A
economic unity of India and there should not be regional or territorial
barriers. At the same time, being conscious of the fact that such freedom
of trade, commerce and intercourse through out the territory of India may
require to be curbed or curtailed under certain situation taking into
consideration the public interest, liberty was given to the Parliament as well B
as to the Legislatures of the States under Articles 302, 303 and 304 of the
Constitution to impose reasonable restrictions on such freedom of trade
and commerce or intercourse between one State and another, by following
the procedures prescribed in the aforesaid articles.

      In the facts and circumstances of the present case, as no law has been C
made by the Parliament imposing and restriction in respect of timber
within the State of Tamil Nadu, we are not concerned with Article 302 or
303; we are concerned only with the question as to whether, the prohibition
on transport of timber outside the State of Tamil Nadu is in any way hit
by Article 304 of the Constitution. But before Article 304 comes into play, D
it has to be held that the prohibition introduced by the amendment on
movement and transport of timber amounts to restriction.

      It cannot be disputed that by complete prohibition on the transport
of timber from the State of Tamil Nadu to any other State, the trade and
commerce in timber grown in the State of Tamil )'ladu has been affected         E
and till the prohibition continues there is no inter-State trade in timber as
conceived by Article 301 of the Constitution. What is the object of ensuring
the free movement of trade and commerce has been examined by this
Court from time to time. In the well known case of Atiabari Tea Co. Ltd.
v. The State of Assam, AIR 1%1 SC 232, it was said :-                           F

        '1n drafting the relevant Articles of Part XIII the makers
        of the Constitution were fully conscious that economic
        unity was absolutely essential for the stability and progress
        of the federal polity which had been adopted by the
        Constitution for the governance of the country. Political               G
        freedom which had been won and political unity which
        had been accomplished by the Constitution, had to be
        sustained and strengthened by the bond of economic unity.
        It was realised that in course of time different political
        parties believing in different economic theories or                     H
    848                   SUPREME COURT REPORTS (1992] SUPP. 1 S.C.R.

A            ideologies may come in power in the several constituent
             units of the Union and that may conceivably give rise to
             local and regional pulls and pressures in economic mat-
             tefs."

          However, in the case of Automobile Transpolt (Rajasthan Ltd. v. State
B of Rajasthan, AIR 1962 SC 1406, the majority judgment approved the
    judgment in the case of Atiabari Tea Co. Ltd. (supra) subject to this
    clarification :-

             "Regularory measures or measures imposing compen-
             satory taices for the use of trading facilities do not come
c            within the purivew of the restrictions contemplated by Art.
             301 and such measures need not comply. with the require-
             ments of the proviso to Art. 304 (b) of the Constitution."

          On behalf of the appellant-State it was pointed out that as the Act
D has been framed to provide for powers "to control the supply, distribution,
    transport and prices of essential articles and trade and commerce therein"
    after issuance of aforesaid notification dated 2nd November, 1982 by the
    State Government, declaring 11 timber" to be an 11 essential article", it was
    open to the State Government to prohibit the movement or transport of
    timber outside the State taking into consideration the interest of people of
E   the State. The stand of the appellant-State is that although a complete ban
    has been imposed on the movement and transport of a timber, said ban
    shall not be deemed to be a restriction because it amounts only to regula-
    tion of trade in timber. RefereJtce in this connection was made to the
    judgments of this Court in the ·cases of State of Tamil Nadu v. Mis Hind
F   Stone, AIR 1981 SC 711 and K Raman¢han v. State of Tamil Nadu, AIR
    1985 SC 660. In the case of Mis Hind Stone (supra), the validity of Rule
    8-C of the Tamil Nadu Minor Mineral Concession Rules, 1959 came up
    for consideration. The said Rules had been framed in exercise of the power
    under section 15 of the Mines and Minerals (Regulation and Development)
G   Act, 1957. By aforesaid Rule 8-C, leases for quarrying black granite in
    favour of private parties were banned. Leases were to be granted in favour
    of the corporation wholly owned by the State Government. The validity of
    Rule 8-C was questioned on various grounds including the ground of being
    violative of article 301 of the Constitution. In that connection it was said :-

H            "The submission of the learned counsel that the impugned
     STATEOFT.N. v. SANJEETIIA TRADING CO. [N.P.S!NGH,J.]              849

        rule contravened Articles 301 and 303 of the Constitution             A
        is equally without force. Now, "the restrictions freedom
        from which is guaranteed by Article 301 would be such
        restrictions as directly and immediately restrict or impede
        the free flow or movement of trade".

Rule 8-C aforesaid did not contain any provision in respect of transport of   B
black granite.

      From the case of K Ramanathan (supra) it will appear that in
exercise of the power conferred· under section 3 of the Essential Com-
modities Act, 1955 read with Government of India, Ministry of Agriculture     C
(Department of Food) Order dated June 9, 1978, with the prior concur-
rence of the Government of India the State Government promulgated the
Tamil Nadu Paddy (Restriction on Movement) Order, 1982 on October 22,
1982. Clause 3(1) of the Order originally was as follows :-

        "No person shall transport, move or otherwise carry or                D
        prepare or attempt to transport, move or otherwise carry,
        or aid or abet in the transport, movement or otherwise
        carrying of paddy outside the State by road, rail or other-
        wise except under and in accordance with the conditions
        of a permit issued by an authorized officer.'                         E
On June 20, 1983, the State Government introduced an amendment in
clause 3 which is as follows :-

        "No person shall transport, move or otherwise carry or
        prepare or attempt to transport, move or otherwise carry,             F
        or aid or abet in the transport, movement or otherwise
        carrying of paddy outside the Thanjavur District, Chidam-
        baram and Kattumannarkoil Taluks in South Arcot Dis-
        trict and Musiri, Kulithalai, Lalgudi and Tiruchirapalli
        Taluks in Tiruchirapalli District.'
                                                                              G
The constitutional validity of clause 3(1A) of the Order aforesaid placing
a complete ban on the transport, movement or otherwise carrying of the
Paddy outside Thanjavur District and other Talukas mentioned therein was
challenged. One of the grounds of the challenge was that it violated
Articles 301 and 304 of the Constitution inasmuch as it cannot be held to     H
    850                   SUPREME COURT REPORTS [1992] SUPP.1 S.C.R.

A   be a reasonable restriction either within the meaning of Article 304(b) or
    Article 19(6) of the Constitution. The stand of the State was that it did not
    amount to restriction but only regulation. In that connection it was said :-

            'The word 'regulation' cannot have any rigid or inflexible
            meaning as to exclude 'prohibitinn'. The word 'regulate'
B           is difficult to define as having any precise meaning. It is a
            word of broad import, having a broad meaning, and is very
            comprehensive in scope. There is a diversity of opinion as
            to its meaning and its application to a particular state of
            facts, some Courts giving to the term a somewhat
c           restricted, and others giving to it a liberal construction.
            The different shades of meaning are brought out in Cor-
            pus Juris Secundum, vol. 76 at p. 611:'



D           'One of the ways in which such regulation or control over
            the production, supply and distribution of, and trade and
            commerce in, an essential commodity like foodstuffs may
            be exercised by placing a ban on inter-State or intra-State
            movement of foodstuffs to ensure that the excess stock of
            foodstuffs held by a wholesale dealer, commission agent or
E
            retailer is not transported to places outside the State or from
            one district to another with a view to maximise the
            procurement of such foodstuffs from the growers in the
            surplus areas for their equitable distribution at fair prices
            in the deficit areas. The placing of such ban on export of
F           foodstuffs across the State or from one part of the State
            to another with a view to prevent outflow of foodstuffs
            from a State which is a surplus State ,prevents the spiral
            rise in prices of such foodstuffs by artificial creation of
            shortage by unscrupulous traders.' (Emphasis added)
G       However, on behalf of the writ-petitioners reliance was placed on the
  judgment of a Constitution Bench of this Court in the case of State of
  Mysore v. H. Sanjeeviah, AIR 1967 SC 1189. The Mysore Forest Act, 1900
  pmpowered the State Government to make Rules. The Rules so frruned
  prohibited transportation of Forest Produce between. sunset and sunrise.
H In that connection it was said :-
     STATE OF T.N. v. SANJEETIIA TRADING CO. [N.P. SINGH, J.]           851

        'The power which the State Government may exercise is                 A
        the power to regulate transport of forest produce, and not
        the power to prohibit or restrict transport. Prima facie, a
        rule which totally prohibits movement of forest produce
        during the period between sunset and surise is prohibitory
        or restrictive of the right to transport forest produce.'
                                                                              B


        "Article 301 in terms prohibits the imposition of any
        restriction on trade, commerce and intercourse
        throughout the territory of India, and by the enactment of
        the two provisos clearly a restriction is imposed upon the
                                                                              c
        freedom of trade. The provisos to the rule enacted by the
        State Government must therefore be deemed to be invalid
        as infringing the guarantee under Art. 301 on the freedom
        of trade, commerce and intercourse."
                                                                              D
But about ·aforesaid H. Sanjeevia's case (supra) it was said in the case of
K. Ramanathan (supra) :-·

        'In Sanjeeviah case, the question arose whether two
        provisos framed by the State Government under S. 37 of
        the Mysore Forest Act, 1900 which empowered the
                                                                              E
        making of rules to regulate the transit of forest produce
        which placed absolute prohibition against transportation
        of forest produce between sunset and sunrise and a
        qualified prohibition in certain circumstances, was beyond
        the rule making power of the State Government. The                    F
        contention on behalf of the State was that two provisos
        were regulatory and not prohibitory. In repelling the con-
        tention, the Court observed:

            "The power which the State Government may exercise
        is the power to regulate transport of forest produce, and             G
        not the power to prohibit or restrict transport. Prima facie,
        a rule which totally prohibits movement of forest produce
        during the period between sunset and sunrise is
        prohibitory or restrictive of the right to trasnport forest
        produce."                                                             H
    852                    SUPREME COURT REPORTS [1992] SUPP. l S.C.R.

A            These observations do not lay down any rule of universal
             application."

    The view expressed by this Court in the. case of K. Ramanathan (supra)
    supports the appellant-State. to a great extent inasmuch as even "timber"
B   has been declared to be an essential article in accordance with section 2(a)
    of the Act. The Movement Control Order has been made under section 3
    of the Act which vests power in the State Government "for maintaining,
    increasing or securing supplies of essential articles or for arranging for
    their equitable distribution and availability at fair prices" to issue order "for
    regulating or prohibiting the supply, distribution and transport of essential
C   articles". The notification aforesaid dated 2nd November, 1982 by which
    the Movement Control Order was notified says that "the Government of
    Tamil Nadu are of the opinion that for securing the supply of timber an
    essential article, to the various small scale industries within the State of
    Tamil Nadu and also to the common man as well as industiies, it was
D   necessary to provide for prohibiting the transport of timber".

          In the cases of Mis Bishamber Dayal Chandra Mohan v. State of U.P.,
    AIR 1982 SC 33 and Kfishan Lal Praveen Kumar v. State of Rajasthan, AIR
    1982 SC 29, also this Court held that complete prohibition on movement
    of wheat from one State to another under clause (d) of sub-section (2) of
E   section 3 of the Essential Commodities Act was regulatory in character and
    does not amount to restriction within Article 301 or 304 of the Constitution.

           The framers of the Constitution while saying under Article 301 of the
    Constitution that trade, commerce and intercourse throughout the territory
F   of India shall be free were quite conscious of the fact that public interest
    may require such freedom to be curbed or curtailed and that is why under
    Article 302 of the Constitution, Parliament was empowered to "impose such
    restrictions on the freedom of trade, commerce or intercourse between one
    State and another or within any part of the territory of India as may be
G   required in the public interest" by law. However, the expression
    'reasonable' did not precede the word 'restrictions'. Same thing was
    provided so far State Legislatures were concerned under Article 304(b),
    vesting them with power to impose "such reasonable restrictions" on
    freedom of trade, commerce or intercourse with or within that State as may
    be required in the public interest by law. It need not be pointed out that
H   in Article 304(b) the expression 'reasonable' precedes 'restrictions' and a
     STATE OFT.N. v. SANJEETHA TRADING CO. [N.P. SINGH,J.]           . 853

further check has been provided by saying in the proviso to the said article A
that "no Bill or amendment for the purpose of clause (b) shall be intro-
duced or moved in the Legislature of a State without the previous sanction
of the President".

       It has been rightly said that "there is such a mix up of exception upon
exception in the series of articles in Part XIII that a purely textual inter- B
pretation may not disclose the true intendment of the articles". The framers
of the Constitution neither wanted to ensure the freedom of trade and
commerce on the pattern of the freedom guaranteed by section 92 of the
Austsralian Constitution nor they thought it proper that the different States
should have unfettered and unrestricted power while imposing prohibitions C
on inter-State trade. In the larger interest of the Nation, there must be free
flow of trade, commerce and intercourse both inter-State and intra-State
but at the same time the regional problems cannot be ignored altogether.
Whenever there is a clash between the national interest and the interest of
the State because of which any crisis is created, the Union has power of
intervention. According to us, the expression "free trade" cannot be inter- D
preted .in an unqualified manner. Any prohibition on movement of any
article from one State to another has to be examined with reference to the
facts and circumstances of that particular case - whether it amounts to
regulation only, taking into consideration the local conditions prevailing,
the necessity for such prohibition and what public interest is sought to be E
served by imposition thereof. Privy Council in Hu/jles and Vale Proprietary
Ltd. v. State of New South Wales, [1955] A.C. 241 said :-

        "Every case must be judged on its own facts and in its own
        setting of time and circumstance, and it may be that in              F
        regard to some economic activities and at some stage of
        social development it might be maintained that prohibition
        with a view to State monopoly was the only practical and
        reasonable manner of regulation, and that inter-State
        trade, Commerce and intercourse thus prohibited and
        thus monopolized remained absolutely free."                          G

Whenever such prohibitions are introduced in exercise of the powers,
conferred by the Essential Commodities Act or any Parallel or similar Act
including the Act with which we are concerned in the present case, the
scope of enquiry or scrutiny can only be to a limited extent because such H
    854                       SUPREME COURT REPORTS (1992) SUPP. 1 S.C.R.

A Acts exist for maintaining, increasing or securing supplies of essential
    articles and for arranging equitable distribution and availability thereof at
    fair prices to the common man under emergent situations. The Essential
    Commodities Act conceive• the larges welfare of the largest numbers and
    contemplates measures to control the essential commodities or articles
    which are vital to human existence in the society. With that object in view,
B
    framers of the Act vested wide powers of control over the essential articles
    in the State Governments. The situations prevailing in any particular State
    may require complete prohibition on the movement of any essential article
    or commodity ontside the State. That is why in the context of the provisions
    of the Essential Commodities Act, it has been said by this Court that
C   imposition of complete prohibition on the movement of the essential
    commodities from one State to another may _in some circumstances amount
    to regulation of trade in such commodities and it need not always amount .
    to restriction.


D          The matter may be different where total prohibition has been im-
    posed on the movement of goods or articles from one State to another
    which have not been declared to be essential commodities or articles. In
    those cases the State, which has imposed such ban, has to satisfy the Court
    that in spite of total prohibition it amounts only to regulation of the trade
    in such articles or that even if it was a restriction it was reasonable within
E   the meaning of Articles 304(b) of the Constitution and has been impose by
    law as required by Article 304(b). Sometimes it is being said that many
    artificial barriers on movement of produce of a particular State are being
    contemplated or imposed only on the consideration of "My-State-My-
    people". This will only amount to the protection of regional interests for
F   political end and not of public interest. This was not conceived by Chapter
    XIII of the Constitution. In Charles H. Baldwin v. GA.F. Seeling, Inc.,
    [1934) 294 US 511, while dealing with the commerce clause in the
    American Constitution, Cardozo, J. observed :-


G           "This part of the Constitution was framed under the
            dominion of a political philosohy less parochial in range.
            It was framed upon the theory that the peoples of the
            several states must sink or swim together and that in the
            long run prosperity and salvation are in union and not
H            division.   11
     STATE OFT.N. v. SANJEETHA TRADING CO. [N.P.SINGl'l,J.]              855

       So far the present case is concerned, first the timber was declared A
as an essential article within the meaning of the Act. Thereafer a notified
order was promulgated first restsricting the transport and movement of
timber outside the State except on the basis of permit to be granted in
accordance with Tamil Nadu Timber Transit Ruies. Later that part was
deleted and a complete ban on movement of timber from that State to any
other State has been imposed. In the counter-affidavit filed before the High B
Court, it was stated that there was shortage of timber and the total export
of timber outside the State was only 2% to 4% of the total timber. It was
also impressed that in order to satisfy the local requirement of timber and
to make timber which is an essential article available to the common man
at a reasonable price it was necessary to impose impugned prohibition on C
the movement and transport of timber outside the State. The writ-
petitioners did not challenge the declaration of timber as an essential
article. It was not suggested that the declaration of timber as an essential
article has been made on extraneous considerations and not in public
interest. As such it has to be assumed that for arranging the supply of D
timber at fair prices and for equitable distribution thereof the prohibition
has been imposed. In such a situtation there is no escape from the con-
clusion that prohibition shall be deemed to be regulatory in nature and not
restrictive so as to attract Article 301 or 304 or 19{1){g) of the Constitution.

     The appeals are accordingly allowed and the judgment of the High           E
Court is set aside. However, in the circumstances of these cases, there shall
be no order as to the costs.

N.P.V.                                                     Appeals allowed.