Writ Petition No.9610 of 2012,Writ Petition No.7305 of 2011,Writ Petition No.9710 of 2011

5th February, 2013

Petitioner Counsel: Shri JANAK DWARKADAS, Shri SHARAN JAGTIANI, Shri KUNAL VIJANI, Shri ANKIT VIRMANI and Shri KUNAL MIMANI i/by M/s. WADIA GHANDY
Respondent Counsel: Shri KEVIC SETALVAD, shri H.V. MEHTA, Shri PARAG VYAS and Shri A.R. VERMA, Ms. APARNA WAGLE i/by M/s. DEVEN DWARKADAS, Shri S.K. SHINDE, Shri N.P. DESHPANDE, Shri VAIBHAV JOGLEKAR, Shri NIKHIL S. DAVARE, Shri NAVROJ SEERVAI, SHRI SANTOSH KUMAR MISHRA, Shri K.G. SINGHANIA, Shri PRAVEEN AGARWAL

Cases Cited:
State of Andhra Pradesh & Others Vs. McDowell and Co. and Others, (1996) 3 SCC 709 [Para 2]
Bhola Prasad Vs. Emperor, AIR (29) 1942 Federal Court 17 [Para 2]
S.R. Bommai Vs. Union of India, (1994)3 SCC 1 [Para 2]
Pyarali K. Tejani Vs. Mahadeo Ramchandra Dange and Others, AIR 1974 SC 228 [Para 3]
Bhavesh D. Parish and Others Vs. Union of India and Another, AIR 2000 SC 2047 [Para 3,4,10]
Karnataka Bank Ltd. Vs. State of Andhra Pradesh, (2008) 2 SCC 254 [Para 6]

JUDGMENT

A. S. OKA, J. :- These Petitions which are already admitted for final hearing are today fixed for hearing as to interim relief. Essentially, the challenge in these Petitions is to the validity of Section 3(1)(j) of the Food Safety and Standards Act, 2006 ( hereinafter referred to as "the said Act of 2006") in so far as inclusion of alcoholic drinks in the definition of the word "food". The challenge is also to the application of the said Act of 2006 and the Rules and Regulations framed thereunder in so far as the alcohol drinks are concerned. The challenge is on the ground that the said Rules and Regulations are ultra vires the provisions of Article 246(3) of the Constitution of India read with Entry Nos.6 and 8 of List II ( read with Entry No.1 of List II) to the Schedule VII of the said Act of 2006. Rule has been issued in these Petitions. Essentially, the prayer for interim relief is for staying the operation and implementation of the said Act of 2006 and the Rules and Regulations framed thereunder in so far as the alcoholic drinks are concerned. Detailed submissions have been made by Shri Seervai, learned senior counsel appearing for the Petitioners in Writ Petition No.9710 of 2011, Shri Dwarkadas, learned senior counsel appearing for the Petitioners in Writ Petition No.9610 of 2012 and Shri Joglekar, learned counsel appearing for the Petitioners in Writ Petition No.7305 of 2011. Shri Setalvad, the learned Additional Solicitor General of India appearing for the Union of India has opposed the prayer for grant of interim relief.

2. The Petitioners have relied upon a decision of the Apex Court in the case of State of Andhra Pradesh & Others v. McDowell and Co. and Others [(1996)3 SCC 709]. Shri Seervai, the learned senior counsel appearing for the Petitioners in Writ Petition No.9710 of 2011 laid emphasis on the said decision and submitted that the issue is covered by the said decision. He also relied upon a decision of the Federal Court in the case of Bhola Prasad v. Emperor [AIR(29)1942 Federal Court 17]. The submission of the learned counsel appearing for the Petitioners is that in view of the decision of the Apex Court in the case of S.R. Bommai v. Union of India [(1994)3 SCC 1], a Nine Judge Bench of the Apex Court opined that within the sphere allotted to the States by the Schedule VII, they are supreme. Our attention was invited to the Entry Nos.52 and 7 in List-I and Entry No.33 in concurrent List (List III). He submitted that in view of the Entry No.8 in List II, the power to make laws with respect to the production, manufacture, possession, transport, purchase and sale of intoxicating liquors vests to the State Legislature. The Entry No.24 of List II is a general entry relating to industries which is specifically made subject to the provisions of Entry Nos.7 and 52 in the List. The submission is that the industries dealing in production and manufacture of liquors do not fall in Entry No.24 but they fall in Entry No.8 of List II. The submission is that the Entry No.52 in List-I which deals with control of industries does not give power to the Parliament to deal with control of industries engaged in production and manufacture of intoxicating liquors. It is pointed out that the Entry No.24 in List II is specifically made subject to Entry No.52 in List I but the Entry No.8 in the List II is not made subject to the Entry No.52 in List I. It was submitted that as the production and manufacture of intoxicating liquors is governed by the Entry No.8 in List II, no Central Law whether made with reference to an entry in List I or with reference to an entry in the List III can affect the validity of the State enactment. It is submitted that what is covered by the Entry No.8 of List II is a prohibited field for the Union. It was pointed out that there was a similar Entry No.31 in the Provincial Legislature List under the Government of India Act, 1935. Relying upon the decision of Bhola Prasad (supra), it was contended that the Entry No.8 which deals with intoxicating liquors with reference to the production, manufacture, possession, transport, purchase and sale covers a power to legislate to prohibit intoxicating liquors in the State. It was submitted that in view of the law laid down by the Apex Court in the case of State of Andhra Pradesh v. Mcdowell & Co. and Others (supra), the position of law is crystal clear that framing of law as regards the production, manufacture, possession, transport, purchase, sale, prohibition and control of intoxicating liquors is exclusively within the domain of the State Legislature. It was submitted that the subject is not covered by any of the items in List I of the Schedule VII.

3. Another submission canvassed is that the field is already occupied by the provisions of the Bombay Prohibition Act, 1949 (hereinafter referred to "the said Act of 1949") and various rules and regulations such as Bombay Foreign Liquor Rules, 1953, The Maharashtra Distillation of Spirit and Manufacture of Potable Liquor Rules, 1966 and the Maharashtra Country Liquor Rules, 1973 which govern production, manufacture, possession, transport and sale of Indian made foreign liquor and country liquor. It is contended that the said Act and the Rules are the complete Code. In support of the said proposition, Shri Joglekar, the learned counsel appearing for the Petitioners in Writ Petition No.7305 of 2011 has submitted a chart setting out the provisions of various Rules and Regulations framed under the said Act of 1949 and the Rules and Regulations framed under the said Act of 2006. It is pointed out that elaborate provisions have been made under the Rules and Regulations under the Act of 1949 which are already holding the field. It is pointed out that the said Act of 2006 wants to regulate the issues concerning safety aspects of alcoholic drinks including the issues like license and registration, etc. Attention of the Court is invited to the terms and conditions of the licenses issued under the said Act of 1949 and the rules and regulations framed thereunder. It is pointed out that approval for labels is required to be obtained from the Department of Excise of the State Government. It is submitted that requirement of obtaining approval for labels afresh pursuant to the registration under the said Act of 2006 would lead to anomalies and possibly a conflicting situation. It is pointed out that all the manufacturers are forced to apply for license under the said Act of 2006. It is submitted that as the subject is exclusively domain of the State Legislature and as there is hardly any doubt about the legal position, a drastic interim relief as prayed for deserves to be granted. On the other hand, the learned Additional Solicitor General of India relied upon the Statement of Objects and Reasons of the said Act of 2006. His contention based on the decision of the Apex Court in the case of Pyarali K. Tejani v. Mahadeo Ramchandra Dange and Others (AIR 1974 SC 228) is that the word "food" is a very general term and applies to all that is being consumed by human beings for nourishment and takes in subsidiaries. He, therefore, submitted that a definition of "food" in clause (j) of Subsection (1) of Section 3 of the said Act of 2006 is a of a wider import which includes alcoholic drink as it is intended for human consumption. He submitted that several aspects provided in the said Act of 2006 operate in a different field. He urged that in any event the law is well settled that the Legislative will should not normally be put under suspension pending final disposal of a Writ Petition as there is a presumption in favour of constitutional validity of Legislation. Reliance was placed on a decision of the Apex Court in the case of Bhavesh D. Parish and Others v. Union of India and Another (AIR 2000 SC 2047).

4. We have given careful consideration to the submissions. We may note here that in these Petitions, there is a challenge to the validity of the provisions of the said Act of 2006 in so far as inclusion of alcoholic drink in the definition of Food in Section 3(1)(j) is concerned. Only question before us today is whether pending the final hearing of the petitions, a drastic interim relief of virtually staying the relevant provisions of the said Act of 2006 in relation to the alcoholic drinks can be granted. In this behalf, it will be necessary to make a reference to the Paragraph 30 of the decision of the Apex Court in the case of Bhavesh D. Parish (supra). In Paragraph 30, the Apex Court has held thus:-

"30. Before we conclude there is another matter to which we must advert to. It has been brought to our notice that Section 45S of the Act has been challenged in various High Courts and few of them have granted the stay of provisions of Section 45S. When considering an application for staying the operation of a piece of legislation, and that to too pertaining to economic reform or change then the courts must bear in mind that unless the provision is manifestly unjust or glaringly unconstitutional, the courts must show judicial restrain in staying the applicability of the same. Merely because a statute comes up for examination and some arguable point is raised, which persuades the courts to consider the controversy, the legislative will should not normally be put under suspension pending such consideration, it is now wellsettled that there is always a presumption in favour of the constitutional validity of any legislation, unless the same is set-aside after final hearing and, therefore, the tendency to grant stay of legislation relating to economic reform, at the interim stage, cannot be understood. The system of checks and balances has to be utilised in a balanced manner with the primary objective of accelerating economic growth rather than suspending its growth by doubting its constitutional efficacy at the threshold itself." (emphasis added)

5. In Paragraph 31 of the said decision, the Apex Court proceeded to observe thus:

"31. While the courts should not abrogate its duty of granting interim injunctions where necessary, equally important is the need to ensure that the judicial discretion does not abrogate from the function of weighing the overwhelming public interest in favour of the continuing operation of a fiscal statute or a piece of economic reform legislation, till on a mature consideration at the final hearing, it is found to be unconstitutional. It is, therefore, necessary to sound a word of caution against intervening at the interlocutory stage in matters of economic reforms and fiscal statutes." (emphasis added)

6. It will be necessary to make a reference to the decision of the Apex Court in the case of Karnataka Bank Ltd. v. State of Andhra Pradesh, (2008) 2 SCC 254. Paragraph 19 thereof reads thus :

"19. The rules that guide the constitutional courts in discharging their solemn duty to declare laws passed by a legislature unconstitutional are well known. There is always a presumption in favour of constitutionality, and a law will not be declared unconstitutional unless the case is so clear as to be free from doubt; "to doubt the constitutionality of a law is to resolve it in favour of its validity". Where the validity of a statute is questioned and there are two interpretations, one of which would make the law valid and the other void, the former must be preferred and the validity of law upheld. In pronouncing on the constitutional validity of a statute, the court is not concerned with the wisdom or un-wisdom, the justice or injustice of the law. If that which is passed into law is within the scope of the power conferred on a legislature and violates no restrictions on that power, the law must be upheld whatever a court may think of it. (See State of Bombay v. F.N. Balsara1.)" (emphasis supplied)

7. It will be necessary to make a reference to the Statement of Objects and Reasons of the said Act of 2006. In the Statement of Objects and Reasons, the origin of the said Act of 2006 has been traced. Paragraph 4 of the Statement of Objects and Reasons reads thus:

"In this background, the Group of Ministers constituted by the Government of India, held extensive deliberations and approved the proposed Integrated Food Law with certain modifications. The Integrated Food Law has been named as "The Food Safety and Standards Bill, 2005". The main objective of the Bill is to bring out a single statute relating to food and to provide for a systematic and scientific development of Food Processing Industries. It is proposed to establish the Food Safety and Standards Authority of India, which will fix food standards and regulate/monitor the manufacturing, import, processing, distribution and sale of food, so as to ensure safe and wholesome food for the people. The Food Authority will be assisted by Scientific Committees and Panels in fixing standards and by a Central Advisory Committee in prioritization of the work. The enforcement of the legislation will be through the State Commissioner for Food Safety, his officers and Panchayati Raj/ Municipal bodies." (emphasis added)

8. Clause 5 thereof provides that the main feature of the Act is single reference point for all matters relating to Food Safety and Standards, Regulations and Enforcement. Another object is to shift from mere regulatory regime to self-compliance through the Food Safety Management Systems. The Act seeks to make the food business operators responsible to ensure that food processed, manufactured, imported or distributed is in compliance with the domestic food laws. Clause 6 of the Statement of Objects and Reasons reads thus:

"6. The above said Bill is contemporary, comprehensive and intends to ensure better consumer safety through Food Safety Management Systems and setting standards based on science and transparency as also to meet the dynamic requirements of Indian Food Trade and Industry and International trade.

The Bill seeks to achieve the aforesaid objectives." (emphasis added)

9. In this context, it will be necessary to make a reference to the first clause of the Statement of objects and reasons of the said Act of 2006 which reads thus:

"Multiplicity of food laws, standard setting and enforcement agencies pervades different sectors of food, which creates confusion in the minds of consumers, traders, manufacturers and investors. Detailed provisions under various laws regarding admissibility and levels of food additives, contaminants, food colours, preservatives, etc., and other related requirements have varied standards under these laws. The standards are often rigid and nonresponsive to scientific advancements and modernization. In view of multiplicity of laws, their enforcement and standard setting as well as various implementation agencies are detrimental to the growth of the nascent food processing industry and is not conducive to effective fixation of food standards and their enforcement." (emphasis added)

Perhaps, that is the reason why under Section 89 of the said Act of 2006, an overriding effect has been given to the provisions of the said Act of 2006 over all other food related laws.

10. At this stage, it will not be appropriate to record a final finding on the issue whether the field is already occupied or whether the subject is within the exclusive domain of the State Legislature in as much as the said issue will have to be decided at the time of final hearing. Not only in the decision in the case of Bhavesh D. Parish (supra) but in several decisions, the well settled law has been reiterated that there is always a presumption as regards the constitutional validity of any legislation. Therefore, the Apex Court, in the said decision, has deprecated the tendency to grant stay of legislation relating to economic reforms.

11. An attempt is made by the said Act of 2006 for laying down science based standards for all categories of articles of food. An attempt is also made to ensure availability of safe food for consumption. The object seems to be to have a single reference point for all matters relating to food safety and standards, regulations and enforcement. One of the main objects appears to be to have a comprehensive law intended to ensure better consumer safety through food safety management systems. For ensuring better consumer safety, the aim appears to be of setting higher standards of quality based on the science.

12. Apart from legal submissions, the submissions are made on factual aspects. However, the said Act of 2006 has been enacted essentially to ensure better consumer safety. A new concept of food safety management system is being introduced. Even in this case, there is an overwhelming public interest in favour of the continuing operation of the said Act of 2006. In depth hearing is required at the stage of final hearing of the Petitions for coming to a final conclusion regarding validity of the statute. Considering the overwhelming and larger public interest and considering the well settled principle regarding presumption as regards the constitutionality of legislation, this is not the case where any interim relief can be granted pending final disposal of the Writ Petitions. Moreover, the presumption of constitutionality cannot be brushed aside at this stage. It will be open for the Petitioners to apply for registration and/or grant of licenses under the said Act of 2006 without prejudice to their rights and contentions in the pending Petitions.

13. Subject to what is observed above, the prayer made for interim relief in these Petitions is rejected.

Petition dismissed.