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Delhi High Court
S.K.N.Associates P. Ltd. & Anr vs Uoi & Anr on 27 August, 2025
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 04.08.2025.
Judgment pronounced on: 27.08.2025.
+ LPA 1220/2007
S.K.N. ASSOCIATES P. LTD. & ANR. .....Appellants
Through: Mr. Anil Sapra, Senior
Advocate with Mr. Sanjeet
Singh, Mr. Akshay Sapra, Mr.
Sarthak Katyal and Mr. Rakshit
Das, Advocates.
versus
UOI & ANR .....Respondents
Through: Ms. Monika Arora (CGSC)
with Mr. Subhrodeep Saha and
Ms. Anamika Thakur,
Advocates.
Mr. B.K. Sood, Advocate for
Respondent No. 2.
Mr. Avneesh Garg, Mr. Rohit
Rishi, Mr. P. Sinha, Ms. Pavitra
Singh and Ms. Iptisha,
Advocates for Respondent No.
3.
Ms. Savita Rustogi, Mr. Ashu
Tewathia and Ms. Ishita Gupta,
Advocates for Respondent No.
6.
+ W.P.(C) 14682/2006
S.K.N. ASSOCIATES P. LTD. & ANR. .....Appellants
Through: Mr. Anil Sapra, Senior
Advocate with Mr. Sanjeet
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Signing Date:29.08.2025
12:45:14
Singh, Mr. Akshay Sapra, Mr.
Sarthak Katyal and Mr. Rakshit
Das, Advocates.
versus
UNION OF INDIA & ORS .....Respondents
Through: Ms. Monika Arora (CGSC)
with Mr. Subhrodeep Saha and
Ms. Anamika Thakur,
Advocates.
Mr. Avneesh Garg, Mr. Rohit
Rishi, Mr. P. Sinha, Ms. Pavitra
Singh and Ms. Iptisha,
Advocates for Respondent No.
3.
Ms. Savita Rustogi, Mr. Ashu
Tewathia and Ms. Ishita Gupta,
Advocates for Respondent No.
6.
Mr. B.K. Sood, Advocate for
Respondent No. 7.
CORAM:
HON'BLE MR. JUSTICE ANIL KSHETARPAL
HON'BLE MR. JUSTICE HARISH VAIDYANATHAN
SHANKAR
JUDGMENT
HARISH VAIDYANATHAN SHANKAR, J.
1. The present petition, being W.P.(C) No. 14682/2006, has been
filed, inter alia, challenging the Order dated 26.04.20001 issued by
the Ministry of Petroleum and Natural Gas 2 , whereby the
Respondents, by virtue of its powers under Section 3 of the Essential
1
Impugned Order dated 26.04.2000
2
Ministry
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Commodities Act, 1955 3 , has sought to regulate petroleum and
petroleum products by including therein certain items which are
ancillary to and used in the supply and distribution of the restricted
products.
2. Though the Petitioners have also sought certain other reliefs, in
the nature of a writ of mandamus for registration of the Petitioner
No.1 as one of their suppliers and to authorize them to supply
regulators, as also a writ in the nature of mandamus seeking a
direction for the non-interference with the manufacture and sale of
pressure regulators, the said reliefs as are elaborated in Paras (b) and
(c) of the Prayer have not been pressed.
3. Learned Senior Counsel for the Petitioner has only pressed into
service the challenge to the Impugned Order passed by the Ministry. It
is further submitted by the learned Senior Counsel that this challenge
has a direct and consequential bearing on LPA No. 1220/2007, which
has been preferred by the Petitioners against the Judgment dated
05.09.20074 passed by the learned Single Judge of this Court in W.P.
(C) No. 2753/2007. By the said Judgment impugned in the LPA
aforementioned, the learned Single Judge held that there was no
cancellation of the license for pressure regulators, but merely a case of
non-renewal of the license in respect of regulators with a collar
diameter of 25.6 mm, as the same came to be deleted. Such variation
was, in turn, a consequence of the Order impugned in the present writ
petition.
4. In view of the same, by way of the present judgement, while
dealing with the issues and challenges raised in W.P.(C) No.
3
Act
4
Impugned Judgment dated 05.09.2007
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14682/2006, we intend to dispose of both W.P.(C) No. 14682/2006
and LPA No. 1220/2007 by a common judgement.
5. Learned Senior Counsel for the Petitioner in W.P.(C) No.
14682/2006 has raised a two-fold challenge to the Impugned Order
dated 26.04.2000.
6. The first contention of the learned Senior Counsel is that the
goods in question – i.e., the pressure regulators – do not qualify as
„Essential Commodities‟, and resultantly, there arose no cause for the
passage of the Impugned Order dated 26.04.2000. In support of this
argument, reliance is placed on Section 2A(1) of the Act wherein
„essential commodity’ has been defined as a commodity which is
specified in the Schedule appended to the Act and it is contended that
by the use of word „means’ the same excludes the possibility of there
being an inclusive definition and the definition would have to be
restricted only to such of those commodities as are set out in the
Schedule appended to the Act. Section 2A (1) of the Act reads as
follows: –
“2A. Essential commodities declaration, etc.- (1) For the
purposes of this Act, essential commodity means a commodity
specified in the Schedule.”
7. The Schedule appended to the Act, more specifically, at Item 5,
specifies “5. petroleum and petroleum products”. The learned Senior
Counsel would, thus, contend that the definition being an exhaustive
one, due to the use of the word „means’, cannot „include’ within its
ambit pressure regulators. He would, thereafter, in support of his
contentions, rely upon the judgment of the Bombay High Court in
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Agarwal Ayengar and Co., Ltd. v. State5. The relevant paragraphs of
the said judgment are as follows:
“1. The learned counsel, who appears on behalf of the appellants,
contends, however, that s. 3 of the Essential Supplies (Temporary
Powers) Act, 1946, even after the amendment of the Act, by which
cotton and certain other commodities were added to the definition
of „essential commodities‟ in the Act, did not permit the Central
Government to direct by an Order that there should be exercised by
the Textile Commissioner control over the supply or the prices of
lickerin wire. He says that the section merely permits the Central
Government by a notified Order to regulate the production,
distribution and supply of an essential commodity and trade and
commerce therein. It does not permit directly control over the
production, distribution and supply of commodities, which are not
essential commodities, nor does it permit the regulation of the trade
and commerce in such non-essential commodities. If we look at the
section itself, it is obvious that the commodities, of which the
production, distribution and supply is permitted to be regulated, are
essential commodities; and similarly the commodities in which
trade and commerce is permitted to be regulated are essential
commodities. But even though that is what appears to be the prima
facie meaning of the section, it is contended on behalf of the State
that, for certain reasons, which it would be convenient to state a
little later, if the Central Government found it necessary, in order
to control supply and distribution of the essential commodities and
trade and commerce therein, to control the production, distribution
and supply of the commodities, which are not essential, and trade
and commerce in such commodities, s. 3 will permit the Central
Government so to provide by a proper Order. The learned
Government Pleader, who appears on behalf of the State, says
that the words “regulating the production, distribution and
supply of essential goods and trade and commerce therein” are
very wide words, and in case they can be made to bear a wider
interpretation, then, there is no reason why a narrower
interpretation should be placed upon them. Now, we quite
understand that, in case we find that the words have got two
meanings, one, a wider one, and one, a narrower one, and it would
be carrying out the intention of the Legislature, that is, to accept
the wider meaning would assist in the removal of the mischief
which the Act was enacted in order to obviate, then, we should
accept the wider meaning rather than the narrower meaning. But if
we look at the words themselves, we do not think that it can be said
that the words are capable of bearing the interpretation which the
learned Government Pleader states that they are. The words
“regulating the production, distribution and supply of essential5
1951 SCC OnLine Bom 32
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commodities and trade and commerce therein” seem to us to be
plain enough, and by no stretch of imagination can it be said
that, when the powers of the Central Government are to
regulate the production, distribution and supply of essential
commodities and trade and commerce therein, nevertheless
because it would assist in the regulation of the objects which
the Legislature have in view to control the production,
distribution and supply of non-essential commodities also, it
would be permissible to interpret the words to mean to control
the production, distribution or supply or trade and commerce
of non-essential commodities. We think that the argument has
merely got to be stated in order to make out that it is plainly
unmaintainable. The learned counsel, who appears on behalf of the
appellants, points out as against this that, when it was thought
necessary to give powers to the Central Government by an Order
for regulating the production, distribution and supply of cotton and
trade and commerce therein, it was thought necessary to amend the
definition of essential commodity and add thereto cotton; and he
says that it was further considered necessary to amend the Imperial
Act, under the powers given by which the Essential Supplies
(Temporary Powers) Act itself was enacted, by adding to the
commodities, of which the production, distribution and supply
could be regulated, and in which trade and commerce could be
regulated, the commodity, cotton. There are other commodities
which were also added to the commodities mentioned in the
Imperial Act; but for the present argument it would suffice to
mention cotton, and he says that, in case it was considered
necessary to add cotton to the essential commodities which were
defined in the Essential Supplies (Temporary Powers) Act, and to
add the commodity „cotton‟ to the commodities, with regard to the
production, distribution and supply of which the Central
Legislature was, during the stated period, empowered to enact, it
cannot possibly be argued that, by the same words used in s. 3 of
the Essential Supplies (Temporary Powers) Act, powers were
intended to be given to the Central Government to control the
production, distribution and supply of non-essential commodities
and trade and commerce therein. Now, we called upon the learned
Government Pleader to tell us why, if those words which find a
place in s. 3 of the Essential Supplies (Temporary Powers) Act
were of such import, it was considered necessary to amend the
Imperial Act, under which powers were conferred upon the Central
Legislature to legislate upon the production, distribution and
supply of cotton and trade and commerce therein. He says that may
possibly be due to the fact that, whereas in regard to small things
like lickerin wire or hydro sulphite of soda there was not what he
called an independent market, there is in regard to cotton an
independent market, in which both transactions for ready delivery
and for future delivery take place. Now, we have no doubt that was
the reason which prompted the amendment of both the Essential
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Supplies (Temporary Powers) Act as well as the Act of the
Imperial Parliament. That explains why it was thought necessary to
take any action at all; but it does not explain why, if action could
have been taken with regard to the control of the production,
distribution and supply of a raw material of the cotton textile
industry under the powers conferred by the Central Act, it was
considered necessary to amend the definition of essential
commodities by adding to it the word „cotton‟. The only argument
which can possibly be made in that case is that this was done by
way of what may be called abundant caution. Undoubtedly, there is
a large trade in cotton going on and it was perhaps thought that
those who were interested in the cotton trade may not accept
as intra vires any legislation upon the control over the production,
distribution and supply of cotton, if it was embarked upon under
the powers given by s. 3 of the Essential Supplies (Temporary
Powers) Act. But even so when an inference is sought to be drawn
from this, the possibility must remain that the amendments were
made by way of abundant caution, and not on the ground that it
was not intended that there could not be control of supply and the
prices of things required for manufacture of cotton textiles under
the powers given to the Central Government by s. 3.
****
3. It is necessary, besides, to point out that, when originally the
Essential Supplies (Temporary Powers) Act was enacted, there was
conferred, in the first instance, upon the Central Government a
general power to regulate the production, distribution and supply of
essential commodities and trade and commerce therein. But s. 3
had also got another sub-section. That is sub-s. (2) which, without
prejudice to the general powers conferred by sub-s. (1), specifically
granted certain powers to the Central Government. They were to
provide by an Order among other things control of the price at
which the essential goods themselves were to be sold. The
Legislature obviously, therefore, seems to have thought it
necessary to enact certain cases in which, may be in order to avoid
a doubt, the specific powers of the Central Government should be
enumerated, and if there was an intention that the power to regulate
the production, distribution and supply of, and trade and commerce
in, the essential commodities should include powers to control the
prices of the raw materials, the machinery or parts of the
machinery required for cotton manufacture, we should have
thought that the Legislature would have mentioned them among
the specific powers which it was conferring the Central
Government under sub-s. (2). It did not do so at the outset; but it
did not do so even when subsequently a question arose as to
whether cotton would have to be added as an essential commodity
to the commodities defined as essential commodities by the
Essential Supplies (Temporary Powers) Act, 1946. This is a strong
argument against the State.
****
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9. Chainani, J.:–I wish to add a few words in regard to the
question whether the Cotton Textiles (Control) Order, 1948, issued
by the Central Government on August 2, 1948, and the earlier
Order issued on the same subject on February 19, 1948, are intra
vires, in so far as they relate to lickerin wire and whether the
Cotton Textiles (Raw Materials and Stores) Order, 1946, issued on
September 28, 1946, continued to remain in force after the Defence
of India Rules came to an end on September 30, 1946, in so far as
it related to lickerin wire. Under the Government of India Act,
1935, the Central Legislature could not legislate with regard to
production, supply and distribution of goods and trade and
commerce within the Province. The legislation with regard to these
subjects could only be enacted by the Provincial Legislatures. See
entries Nos. 27 and 29 in list II in the 7th Schedule to the
Government of India Act. When the Defence of India Rules were
about to come to an end, it was considered necessary to empower
the Central Legislature to legislate with regard to the production,
supply and distribution of certain commodities and trade and
commerce therein. The Government of India Act was, therefore,
amended in March 1946 by the India (Central Government and
Legislature) Act, 1946. Section 2 of this Act provided inter
alia that notwithstanding anything in the Government of India Act,
1935, the Indian Legislature shall have power to make laws with
respect to trade and commerce (whether or not within a province)
in and the production, supply and distribution of, cotton and
woollen textiles, paper, foodstuffs petroleum and petroleum
products, spare parts of mechanically propelled vehicles, coal, iron
and steel and mica. In exercise of the powers conferred on the
Central Legislature, the Essential Supplies (Temporary Powers)
Ordinance No. XVIII of 1946 was issued on September 25, 1946.
This came into force on October 1, 1946, when the Defence of
India Rules expired. Section 3 of the Ordinance empowered the
Central Government to provide by notified Order for regulating or
prohibiting the production, supply and distribution of certain
commodities, which were specified as essential commodities in s. 2
of the Ordinance, and trade and commerce in these commodities.
The Ordinance also continued certain Orders which were
previously in force and which were issued under the Defence of
India Rules. The commodities specified as essential commodities
in the Ordinance were food-stuffs, cotton and woollen textiles,
paper, petroleum and petroleum products, spare parts of
mechanically propelled vehicles, coal, iron and steel and mica, i.e.,
the same commodities in respect of which the Central Legislature
was authorised to make laws by the India (Central Government and
Legislature) Act, 1946. The Ordinance was replaced by the
Essential Supplies (Temporary Powers) Act, 1946, on November
19, 1946. Thereafter it appears that it was considered necessary to
empower the Central Government to issue orders with regard to
cotton and certain other commodities. The Government of India
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Act, 1935, was, therefore, amended by the Constituent Assembly
by the India (Central Government and Legislature) Amendment
Act, 1949, on June 4, 1949. By this Act, the Central Legislature
was empowered to pass laws with regard to raw cotton, cotton
seed, coke and other derivatives of coal. In exercise of the powers
conferred on the Central Legislature by the Act passed by the
Constituent Assembly, the Essential Supplies (Temporary Powers)
Ordinance No. XIV of 1949 was issued on June 27, 1949. This
amended the preamble of the Essential Supplies (Temporary
Powers) Act, 1946, and also added the following commodities in
the list of essential commodities in s. 2 of that Act, raw cotton,
cotton seed and coke and other derivatives of coal. This Ordinance
was replaced by the Essential Supplies (Temporary Powers Second
Amendment) Act, 1949. It will, therefore, be seen that cotton
textiles was one of the essential commodities mentioned in the
Essential Supplies (Temporary Powers) Act, 1946, in regard to
which the Central Government was authorised to issue orders
under s. 3 of the Act. Cotton is an essential raw material necessary
for manufacturing cotton textiles. In 1949, both the Government of
India Act and subsequently the Essential Supplies (Temporary
Powers) Act, 1946, were amended in order to enable the Central
Legislature to legislate, and the Central Government to issue
orders, with regard to cotton. It has, therefore, been contended by
Mr. Purushottam, and there is undoubtedly considerable force in
this argument, that the fact that the Legislature amended the
Essential Supplies (Temporary Powers) Act, 1946, in order to
enable the Central Government to control cotton shows that the
Legislature’s intention clearly was that the powers of the Central
Government should be confined to the commodities specified as
essential commodities in s. 2 of the Act and should not extend to
other articles, which it might be considered desirable or necessary
to control, in order to better achieve the object of the Act, viz. to
control the production, supply and distribution of and trade and
commerce in the commodities specified as essential commodities.
This contention finds support in the provisions of s. 3. Sub-section
(1) of this section runs as follows:
“The Central Government, so far as it appears to it to be
necessary or expedient for maintaining or increasing
supplies of any essential commodity, or for securing their
equitable distribution and availability at fair prices, may
by notified order provide for regulating or prohibiting the
production, supply and distribution thereof and trade and
commerce therein.”
The words, “thereof” and “therein” have obviously reference to the
words „essential commodity‟ used in the earlier part of the sub-
section. Sub-section (2) provides inter alia as follows:
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“Without prejudice to the generality of the powers
conferred by sub-section (1), an order made thereunder
may provide:
(a) for regulating by licences, permits or
otherwise the production or manufacture of
any essential commodity,
(c) for controlling the prices at which any
essential commodity may be bought or sold,
(d) for regulating by licences, permits or
otherwise the storage, transport, distribution,
disposal, acquisition, use or consumption of
any essential commodity,
(e) for prohibiting the withholding from sale of
any essential commodity ordinarily kept for
sale,
(f) for requiring any person holding stock of an
essential commodity to sell the whole or a
specified part of the stock at such prices and to
such persons or class of persons or in such
circumstances, as may be specified in the
order.”
These provisions, therefore, empower the Central Government to
issue orders with regard to essential commodities only and not with
regard to any other articles. Mr. Purushottam has, therefore, urged
that as lickerin wire is not specified as an essential commodity in
the Act, the Central Government was not competent to issue any
order with regard to it and that consequently the various orders
issued by it, in so far as they relate to lickerin wire, are ultra vires.
****
12. The words used in both the sub-ss. (1) and (2) of s. 3 are also
clear and unambiguous and empower the Central Government to
issue orders only with regard to the commodities specified as
essential commodities in the Act. The inference that the Legislature
intended to confine the powers of the Central Government to
essential commodities only and did not intend to authorize it to
issue orders with regard to other commodities is also borne out by
the fact that the Act was amended in 1949 in order to empower the
Central Government to issue orders with regard to cotton. I am,
therefore, of the opinion that the Central Government was not
competent to issue any order in regard to lickerin wire either under
the Essential Supplies (Temporary Powers) Ordinance, 1946, or
under the Essential Supplies (Temporary Powers) Act, 1946. These
enactments continued in force only those orders issued under the
Defence of India Rules which could be issued in exercise of the
powers conferred by these enactments. As in exercise of these
powers the Central Government could not make any order in
regard to lickerin wire, the Cotton Textiles (Raw Materials and
Stores) Order, 1946, issued under the Defence of India Rules did
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not continue in force after September 30, 1946, in so far as it
related to lickerin wire.”
(emphasis supplied)
8. In support of this contention that the powers of the Central
Government are limited only to the Essential Commodities as
specified in the schedule and cannot extend to the regulators, he would
thereafter rely upon the judgment of the Kerala High Court in
Ahamed Koya v. Murugesa Mudaliar Son & Co.6, and in particular
paragraph nos. 17 and 22 thereof, in further support of the said
provision. Relevant paragraphs of the said judgment are as follows:
“17. Clause 5 gave power to the Central Government by
notification to exclude any contract or class of contracts from the
provisions of that order. There is also no dispute that no such
exclusion has been granted by the Central Government regarding
oilcakes with which we are concerned. The schedule specified two
main articles to which that Order applied. Item (1) was vegetable
oils and that item had 8 sub-items dealing with 8 different types of
oil. Item (2) dealt with oilcakes and that item also had 8 sub-items
dealing with different types of cakes. Therefore, it is quite clear
that oilcakes were brought within the prohibitions mentioned in the
Order of 1944.
****
22. Section 3 of the Ordinance gave power to the Central
Government by Notified Order for providing, regulating or
prohibiting, etc., regarding any Essential commodity. Clause 2 of
Section 3 dealt with several provisions that could be made under
the Order issued under section 3(1). Section 3(2) deals with several
matters and it is not necessary to go into them in any great detail.
Section 5 provided for continuing in force of certain Orders. It runs
as follows:
“Continuance in force of existing Orders — Until other
provisions are made under this Ordinance, any order,
whether notified or not, made by whatever authority under
rule 80-B or sub-rule (2) or sub-rule (3) of rule 81 of the
Defence of India Rules, in respect of any matter specified
in section 3 which was in force immediately before the
commencement of this Ordinance shall, notwithstanding
the expiration of the said rules, continue in force so far as
consistent with the Ordinance and be deemed to be an
order made under Section 3, and all appointments, made,
licences or permits granted and directions issued under
6
1957 SCC OnLine Ker 23
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any such order and in force immediately before such
commencement shall likewise continue in force and be
deemed to be made, granted or issued in pursuance of this
Ordinance.”
9. He would also refer to the judgment of the Hon‟ble Supreme
Court in S. Samuel, M.D., Harrisons Malayalam v. Union of India7,
and paragraphs 10, 11 and 28 thereof, and also the judgment rendered
in Girdharmal Kapur Chand v. Dev Raj Madan Gopal 8 , more
particularly paragraph 10 thereof.
10. He would conclude by referring to the judgment of the Hon‟ble
Supreme Court in State of U.P. v. Chhabra Bricks & Tiles Mfg. Co.9.
Relevant paragraphs of the said judgement are reproduced herein
below: –
“3. The U.P. Coal Control Order (“the said Order”) was issued in
exercise of powers conferred by Section 3 of the Essential
Commodities Act, 1955. It defined “bricks” to mean bricks or tiles
produced with the aid of slack coal but did not include firebricks or
refractory bricks and tiles. A “brick kiln” meant any kiln in which
bricks were manufactured with the aid of coal and the premises
appurtenant thereto. Para 4 of the said Order dealt with licensing
thereunder; it said that no person could import coal or carry on
business as a coal agent or coal-depot holder or run a brick kiln
with coal except under and in accordance with the terms and
conditions of a licence issued under the said Order. Para 5 dealt
with the issue of licences and sub-para (b) thereof said that every
licence granted or renewed under the said Order, inter alia, in
Form D for running a brick kiln with slack coal would be subject to
the conditions specified therein and such other conditions as the
State Coal Controller or District Magistrate might prescribe from
time to time. Para 8 of the said Order dealt with directions
regarding import, purchase, sale, storage and distribution; it
required the licensee of a brick kiln under the said Order to comply
with any direction that might be issued to him from time to time by
the State Coal Controller or the District Magistrate, inter alia, in
respect of the sale and distribution of bricks. Sub-para (iv) of para
8 and the Note thereunder read thus:
7
(2004) 1 SCC 256
8
1963 SCC OnLine SC 213
9
(2000) 2 SCC 111
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“(iv) A licensee in Form „D‟ or a person running a brick
kiln with coal–
(a) shall not utilise or cause to be utilised coal
allotted to him or in stock with him for a
purpose other than burning bricks and shall not
divert or transfer any such coal to any other
person or any other brick kiln, even though
owned by him, except under a written
authority from the District Magistrate;
(b) shall sell the whole or a specified part of
his stock of bricks produced with the aid of
slack coal to a person as may be specified in a
permit issued in that behalf of the District
Magistrate and addressed to him;
(c) shall manufacture with the aid of slack coal
bricks of such sizes as may be fixed by the
District Magistrate and shall further sell them
at such prices as may be fixed by the District
Magistrate for different sizes and classes of
bricks.
Note.–For the purpose of this sub-clause, the District
Magistrate may, subject to any direction of the State
Government by general or special order fix–
(a) the sizes of which bricks with the aid of
slack coal are to be manufactured; and
(b) the maximum price at which different
classes of such bricks may be sold to the
public in general and in bulk to construction
agencies in the public section particularly by
any person, such price, being based on the
estimated cost of manufacture of such bricks
plus reasonable margin of profit thereon:
Provided that different prices may be fixed in respect of
different classes and sizes of such bricks for different
localities in the district having regard to different
circumstances pertaining thereto.”
Para 12 of the said Order dealt with the export of coal and bricks
and stated that no person could export, cause to be exported or
offer for export coal or bricks produced with the aid of slack coal
from within the State without obtaining the prior written
permission of the State Coal Controller. Form D in the said Order
prescribed the form of the licence for running a brick kiln. Clause
(4) of the conditions thereof required the licensee to comply with
general or special directions issued by the State Coal Controller or
the licensing authority from time to time with regard to, inter alia,
the disposal and sale of any stock of bricks.
****
7. Coal being an essential commodity, the State Government is
certainly entitled to regulate its use. To that extent it is entitled to
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regulate its use in brick kilns and require those who run brick kilns
using coal to obtain licences under the said Order. The earlier order
of this Court in the case of Janta In. Udyog [1991 Supp (2) SCC
506 : 1991 SCC (Cri) 1073] does not, therefore, lay down the law
correctly. That power, however, does not extend to the control in
any manner of the bricks so produced. All that is requisite for the
purposes of control of coal is that there should be no misuse of coal
in the production of bricks. The bricks themselves can be freely
disposed of.
8. With this in mind, it is necessary to identify and strike down
those provisions of the said Order which control not the coal but
the bricks. In regard to para 5(b) and in para 8(i)(B), it is necessary
to make it clear that no condition may be specified or direction
issued that relates to the sale and distribution of bricks. Sub-para
(iv) of para 8 and the Note thereto, which we have extracted above,
deals, except in clause (a) thereof, entirely with bricks and to that
extent, para 8 must be quashed. Para 12, insofar as it applies to the
export of bricks, must also be quashed. Insofar as the licence in
Form D is concerned, the condition that requires a licensee to
comply with general or special directions issued in regard to the
disposal or sale of any stock of bricks is quashed.”
11. In sum, the crux of the learned Senior Counsel‟s argument is, as
already mentioned earlier, centered around the interpretation of the
usage of the word „means’ in Section 2A of the Act, read with the
Schedule, which only provides for petroleum and petroleum products
as the commodities.
12. To bolster the argument, the learned Senior Counsel would also,
albeit not very strenuously, seek to canvas that as of today, the rigors
as had been sought to be imposed in 2007 may not really be applicable
since now Liquefied Petroleum Gas10 is available by way of direct
piping to households and the rigors of such restriction are of
considerably lesser import as of now.
13. The second limb of the learned Senior Counsel‟s argument is
that the Impugned Order dated 26.04.2000 violates the Petitioners‟
Fundamental Right under Article 19(1)(g) of the Constitution of
10
LPG
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India 11 , insofar as the Petitioners are a manufacturer of pressure
regulators and are duly certified by the Bureau of Indian Standards.
He would also contend that, in fact, such a restriction on trade is
impracticable and would not achieve the objective that is espoused.
He would, in support of the same, argue that when the cylinders are
freely available, it does not stand to reason that regulators should not
be permitted to be made available by the Petitioners.
14. Per Contra, learned counsel for Respondent No. 1, being Union
of India, would refer to the written submissions handed over across
the Bar and refer to Clauses 4 and 7 of the Impugned Order dated
26.04.2000, which reads as follows: –
“4. Restriction on storage and transport of liquefied petroleum gas
–
(1) No person shall –
(a) fill any cylinder with liquefied petroleum gas or
transfer liquefied petroleum gas from one cylinder to
another cylinder or from one container to another
container unless authorised by the Chief Controller of
Explosives;
(b) transport or store a cylinder filled with liquefied
petroleum gas except in an upright position;
(c) store or use or cause to be stored or used a cylinder
filled with the liquefied petroleum gas except in a cool,
dry, well-ventilated and accessible place under cover,
away from boilers, open flames, steam pipes or any
potential source of heat;
(d) remove the seal prior to use of the cylinder:
Provided that the distributor or his authorised
representative or the delivery person may remove such
seal in the presence of the consumer either for testing,
checking or installation of the cylinder;
(e) use cylinder, pressure regulator and gas cylinder valve
other than those specified in Schedules II and III.
(2) No transporter or delivery person shall deliver or cause to
deliver liquefied petroleum gas either in cylinder or in bulk to any
person other than the consumer or distributor.
****
11
Constitution
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7. Possession, supply or sale of liquefied petroleum gas
equipments. –
(1) No person shall –
(a) supply or sell filled or empty cylinder, gas cylinder
valve and pressure regulator to any person other than a
Government Oil Company or a parallel marketeer;
(b) unless authorised by a Government Oil company or a
parallel marketeer, supply or sell filled or empty cylinder,
gas cylinder valve and pressure regulator to any person
other than a consumer;
(c) possess filled or empty cylinder, gas cylinder valve or
pressure regulator, unless he is a distributor or a consumer.
(2) Every manufacturer of cylinder, gas cylinder valve and pressure
regulator shall destroy by crushing those cylinders, cylinder valves
and pressure regulators which do not conform to the Indian
Standards.”
15. Learned counsel would also refer to the definitions, more
specifically Clause 2(m), which reads as under:
“2. Definitions – In this Order, unless the context otherwise
requires, –
****
(m) “Pressure regulator” means the equipment used for
regulating the flow and pressure of liquefied petroleum gas from a
cylinder to a gas stove:”
16. Learned counsel for the Union of India would contend that the
Impugned Order dated 26.04.2000 has been passed in exercise of the
Government‟s power to regulate LPG and its products. It is the
contention of the learned counsel for the Union of India that the
attempt on the part of the Petitioner to segregate the pressure regulator
from the composite product, which is the LPG cylinder with its
regulator, is completely misconceived. It is the case of the Union of
India that the regulator and the cylinder are intrinsically linked to each
other, and either one would be of no use without the other.
17. It is the further case of the Union of India that since this
regulator has no functional use or requirement other than for use with
the cylinder, especially since it ensures proper pressure regulation and
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safe usage, permitting its independent sale would not be in
consonance with the very objective of the Government to regulate
petroleum products.
18. Learned counsel for the Union of India would thereafter
contend that the regulation of the manner in which petroleum products
are to be sold is necessary and in the public interest and is resultantly
saved by operation of Article 19(6) of the Constitution. Article 19(6)
of the Constitution reads as follows: –
“19. Protection of certain rights regarding freedom of speech,
etc.-
***
(6) Nothing in sub-clause (g) of the said clause shall affect the
operation of any existing law in so far as it imposes, or prevent the
State from making any law imposing, in the interests of the general
public, reasonable restrictions on the exercise of the right conferred
by the said sub-clause, and, in particular, [nothing in the said sub-
clause shall affect the operation of any existing law in so far as it
relates to, or prevent the State from making any law relating to,–
(i) the professional or technical qualifications necessary
for practising any profession or carrying on any
occupation, trade or business; or
(ii) the carrying on by the State, or by a corporation owned
or controlled by the State, of any trade, business, industry
or service, whether to the exclusion, complete or partial, of
citizens or otherwise.”
19. It is thus the contention of the learned counsel for the Union of
India that the Impugned Order is a reasonable restriction which has
been imposed by the Government in the interest of the general public,
in exercise of its powers. In support of such reasonable restrictions
being permissible, learned counsel for the Union of India would first
refer to the judgment of the Hon‟ble Supreme Court in Khoday
Distilleries Ltd. v. State of Karnataka12, and in particular paragraph
nos. 12 and 17, which read as under: –
12
(1995) 1 SCC 574
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“12. Article 19(1)(g) provides that all citizens shall have the right
to practise any profession or to carry on any occupation, trade or
business. This right conferred by the aforesaid provision is
circumscribed by the provisions of clause (6) of the very article
which reads as follows: –
“(6). Nothing in sub-clause (g) of the said clause shall affect
the operation of any existing law insofar as it imposes, or
prevent the State from making any law imposing, in the
interests of the general public, reasonable restrictions on
the exercise of the right conferred by the said sub-clause,
and, in particular, nothing in the said sub-clause shall
affect the operation of any existing law insofar as it relates
to, or prevent the State from making any law relating to,–
(i) the professional or technical qualifications
necessary for practising any profession or
carrying on any occupation, trade or business,
or
(ii) the carrying on by the State, or by a
corporation owned or controlled by the State,
of any trade, business, industry or service,
whether to the exclusion, complete or partial,
of citizens or otherwise.”
Thus Article 19(1)(g) read with Article 19(6) spells out a
fundamental right of the citizens to practise any profession or to
carry on any occupation, trade or business so long as it is not
prohibited or is within the framework of the regulation, if any, if
such prohibition or regulation has been imposed by the State by
enacting a law in the interests of the general public. It cannot be
disputed that certain professions, occupations, trades or businesses
which are not in the interests of the general public may be
completely prohibited while others may be permitted with
reasonable restrictions on them. For the same purpose, viz., to
subserve the interests of general public, the reasonable restrictions
on the carrying on of any profession, occupation, trade, etc., may
provide that such trade, business etc., may be carried on
exclusively by the State or by a Corporation owned or controlled
by it. The right conferred upon the citizens under Article 19(1)(g)
is thus subject to the complete or partial prohibition or to
regulation, by the State. However, under the provisions of Article
19(6) the prohibition, partial or complete, or the regulation, has to
be in the interests of the general public.
****
17. Apart from the restrictions placed on the right under Article
301, by the provisions of Articles 19(6), 47, 302 and 303, the
provisions of Article 304 also place such restrictions on the said
right. So do the provisions of Article 305, so far as they protect
existing laws and laws creating State monopolies. The provisions
of the aforesaid articles, so far as they are relevant for our purpose,
read together, therefore, make the position clear that the right
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conferred by Article 19(1)(g) is not absolute. It is subject to
restrictions imposed by the other provisions of the Constitution.
Those provisions are contained in Articles 19(6), 47, 302, 303, 304
and 305.”
20. Learned counsel for the Union of India would also refer to the
judgment of the High Court of Madras in A.K. Subbaraja v. Union of
India13, and in particular paragraphs 13 and 17 and 18, which read as
under:
“13. I have carefully considered and analysed the arguments of
both the learned Senior Counsel and I am of the view that the case
put forward by the respondent merits acceptance, since, I am of the
view, that the impugned order has been issued for the good of the
public and in the over-all interest of the country. Therefore, I hold
that the impugned order is legally valid. I am also of the view that
the Central Government is competent to issue the impugned order
under Ss. 2 and 3 of the Essential Commodities Act to prohibit the
production and sale of inefficient wick stoves to conserve kerosene
in the over-all interest of the country. As stated supra, the Essential
Commodities Act empowers the Government to take steps for
regulation of production, trade and commerce in essential
commodities for the common good. Section 3 of the Act provides
for regulating and prohibiting production, supply and distribution
of any essential commodity to achieve the objectives enshrined in
the Act. The impugned order is, therefore, fully enforceable and
legally valid under the Essential Commodities Act and its
objectives are in conformity with the objectives of the Act. I am
also of the view that the petitioners fundamental rights are not in
any manner infringed. The petitioners are free to carry on their
trade or business and no restriction is imposed on them and the
only restriction is that they have to manufacture and sell or
distribute any non-pressure kerosene stove which conforms to the
specifications under the Control Order and that it would be with
ISI Certification Mark. This, in my opinion, is a reasonable
condition and requirement. This is the view I have taken in the
decision reported in Danya Electric Company v. The State of Tamil
Nadu, 1992 Writ LR 429.
****
17. Applying the above test to the case on hand, I am of the view,
that the impugned order is reasonable and also in public interest.
The object of the impugned order is to secure the common good of
the people and it clearly fulfils the directives of the Constitution of
India. The restrictions imposed under the impugned order are not
arbitrary or excessive in nature and that they are only in the interest13
1993 SCC OnLine Mad 207
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of the general public. There is a direct and proximate nexus and
reasonable connection between the restriction imposed and the
object sought to be achieved. In order words, the Court has to see
whether by virtue of the restriction imposed on the right of the
citizen, the object of the statute is really fulfilled or frustrated. I am
of the view that the restrictions imposed on the petitioners will not
in any way frustrate the object of the statute.
18. Let me now consider the decision cited by Mr. R.
Krishnamurthi, learned Senior Counsel for the petitioners, reported
in The Hamdard Dawakhana (Wakf), Delhi v. The Union of India,
AIR 1965 SC 1167, which deals with the provisions of the
Essential Commodities Act and the Fruit Products Order. The Act
was passed in the year 1955 for the purpose of controlling the
production, supply and distribution of, and trade and commence in
certain commodities in the interests of the general public. The
commodities which were intended to be brought within the
purview of the Act were essential commodities as defined by S.
2(a) of the Act. Amongst them are included foodstuffs including
edible oil seeds and of commodity for the purpose of this Act
covered by S. 2(a)(xi) and any other class of commodity which the
Central Government may, by notified order, declare to be an
essential commodity for the purposes of this Act, being a
commodity with respect to which Parliament has power to make
laws by virtue of Entry 33 in List III in the Seventh Schedule to the
Constitution.”
21. Learned counsel for the Union of India would also rely upon the
judgment of the Hon‟ble Supreme Court in M/s Baspa Organics Ltd.
v. United India Insurance Co. Ltd.14, and in particular paragraph nos.
25, 26 and 28, which are reproduced herein below:
“25. A glance at the Notification dated 21-11-2001, amending the
2000 Order, as well as the said order itself, reveals that both were
issued in exercise of the powers of the Central Government under
Section 3(1) of the Essential Commodities Act. This statute, as is
evident from its Statement of Objects and Reasons, was enacted to
provide for the control of the production, supply and distribution of
and trade and commerce in certain commodities, in the interest of
the general public. Further, Section 3 empowers the Central
Government to pass orders providing for the regulation or
prohibition of the production, supply and distribution of any
essential commodity, and trade and commerce therein, under
certain conditions. Section 3(1), in particular, reads as follows:
“3. Powers to control production, supply, distribution,
etc. of essential commodities.–(1) If the Central14
(2020) 12 SCC 153
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Government is of opinion that it is necessary or expedient
so to do for maintaining or increasing supplies of any
essential commodity or for securing their equitable
distribution and availability at fair prices or for securing
any essential commodity for the defence of India or the
efficient conduct of military operations, it may, by order,
provide for regulating or prohibiting the production,
supply and distribution thereof and trade and commerce
therein.”
26. Clearly, orders under Section 3(1) may pertain to the following
objectives:
26.1. Maintaining or increasing supplies of any essential
commodity.
26.2. Securing the equitable distribution and availability at
fair prices of such commodity.
26.3. Securing any essential commodity for the defence of
India or the efficient conduct of military operations.
****
28. Thus, it is clear that the Central Government has the power to
pass orders under the Essential Commodities Act to provide for
licensing regimes governing the storage of an essential commodity,
in pursuance of the three objectives set out in Section 3(1). The
2000 Order, in our considered view, is one such order, providing
for a licensing regime regulating the acquisition, sale, storage and
prevention of use in automobiles of solvents, raffinates and slops,
particularly for the purposes of the Essential Commodities Act.
There is nothing in the said Order to suggest that it intends to
replace or modify any other existing licensing regime under any
other law in force, including the Petroleum Act and the Rules
formulated thereunder.”
22. Learned counsel for the Bureau of Indian Standards/
Respondent No. 7 would submit that the premise of the Petitioner‟s
challenge is incorrect insofar as the cylinders regularly available in the
market are of a different specification, particularly with respect to the
pressure regulator that is employed in them. He would submit that the
particular pressure regulator that is in question in the present case has
a collar diameter of 25.6 mm, which is manufactured only by the
public sector oil corporations. He would thus submit that the
foundational premise of the learned Senior Counsel for the Petitioner
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that there is a violation of Article 19(1)(g) of the Constitution is
incorrect and misplaced.
23. We have heard the learned Senior Counsel for the Petitioner and
the learned counsels for Respondent Nos. 1 and 7.
24. At the outset, this Court is of the considered view that the term
‘petroleum products’ as set out in the Schedule cannot be interpreted
in the narrow manner sought to be canvassed by the learned Senior
Counsel for the Petitioner. It is a matter of common knowledge that, in
the absence of a pressure regulator, an LPG cylinder would effectively
become unusable for the general public.
25. Upon a careful examination of the record, we find no infirmity
in the Impugned Order dated 26.04.2000. We find merit in the
submission advanced by the learned counsel for the Union of India
that a pressure regulator cannot be treated as an independent or
standalone device; rather, it constitutes an integral and inseparable
component of the LPG cylinder system. Having regard to the inherent
nature of the commodity and the broader regulatory objective of the
Government, namely, to ensure safety, control, and equitable
distribution in the use of petroleum and petroleum products, the
regulator must necessarily be understood as forming part of a
composite whole.
26. The comparison sought to be drawn by learned Senior Counsel
for the Petitioner, by citing the example of piped gas supply to
households, does not advance the Petitioner‟s case. While piped gas
distribution is indeed prevalent in India, its reach in practice remains
confined predominantly to a few metropolitan and major urban
centers.
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27. In contrast, the overwhelming majority of households and
consumers across the country continue to depend almost entirely upon
traditional LPG cylinders along with their regulators for meeting their
domestic fuel requirements and other essential purposes.
28. It cannot be overlooked that a vast section of the population in
this country is directly dependent upon LPG cylinders for fulfilling its
day-to-day domestic needs, particularly for cooking and other
indispensable household activities. Given such widespread reliance, it
becomes imperative that the availability, distribution, and pricing of
LPG be strictly regulated in order to safeguard the interests of the
general public. Any lapse in such regulation would inevitably open
avenues for hoarding, profiteering, and black-marketing, thereby
depriving ordinary citizens of access to this vital commodity.
29. In this context, regulation of the LPG regulator itself, having a
collar diameter of 25.6 mm, assumes particular importance. The
requirement of uniformity in the regulator serves a critical purpose; as
it prevents misuse by restricting the possibility of households
simultaneously connecting and consuming multiple cylinders at will,
which would otherwise exacerbate scarcity and undermine equitable
distribution. In the absence of such checks, the system would lend
itself to unfair usage, defeating the very objective of ensuring fair and
reasonable access to all sections of society.
30. We are also in agreement with the submission advanced by the
learned counsel for the Union of India that Article 19(1)(g) of the
Constitution does not confer an unfettered or absolute right. As
consistently held by the Hon‟ble Supreme Court, including in Khoday
Distilleries Ltd. (supra), the freedom to carry on trade or business is
subject to reasonable restrictions in the interests of the general public.
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31. It is further pertinent to note that different types of LPG
cylinders are available in the market, manufactured with specifications
that differ from the cylinder presently under consideration,
particularly in relation to the design and compatibility of the pressure
regulator used. The regulator in question, having a collar diameter of
25.6 mm, is manufactured exclusively by public sector oil
corporations. However, there is no prohibition on the manufacture of
regulators with collar diameters other than 25.6 mm. The Petitioner is,
therefore, fully at liberty to design, manufacture, and market
regulators of alternative specifications, subject of course to
compliance with applicable statutory norms and safety standards.
What is specifically reserved and regulated is only the 25.6 mm collar
diameter regulator, owing to its direct and integral linkage with the
public distribution system for LPG, while all other categories of
regulators remain open for unrestricted manufacture.
32. In view of the above, we hold that the restriction in question
cannot be said to be violative of the Fundamental Rights guaranteed
under Article 19(1)(g), inasmuch as the same is protected by the
permissible limitations embodied in Article 19(6). The restriction is
both reasonable and justified, having regard to the nature of the
commodity involved. In any event, the regulator under challenge,
being integrally connected with LPG cylinders, falls squarely within
the ambit of an Essential Commodity as defined under Section 2A
read with Item 5 of the Schedule appended to the Act thereof.
33. In light of the foregoing facts, circumstances, and the settled
position of law discussed above, we are of the considered view that
the present challenge is devoid of merit and cannot be sustained.
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34. Resultantly, both W.P.(C) No. 14682/2006 and LPA No.
1220/2007, the fate of which, as fairly conceded by learned Senior
Counsel for the Petitioner, is directly dependent on the Writ Petition,
stand dismissed.
35. The Writ Petition and LPA, along with any pending
applications, stand disposed of in the above terms.
36. No order as to costs.
ANIL KSHETARPAL
(JUDGE)
HARISH VAIDYANATHAN SHANKAR
(JUDGE)
AUGUST 27, 2025/nd/sm/va
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