top of page
  • Writer's pictureLLC

Article 19 part 6

Supreme Court of India

Akadasi Padhan vs State Of Orissa on 5 December, 1962

The essential attributes of the law creating a monopoly will vary with the nature of the trade or business in which the monopoly is created. They will depend upon the nature of

the commodity, the nature of commerce in which it is involved and several other circumstances. A law relating to State monopoly in respect of road

transport or air transport would not normally infringe the citizen's fundamental right under Art. 19 '(1) (f). Likewise, a State monopoly to manufacture steel, armaments,

transport vehicles or railway engines and coaches can be provided for by law and that would not normally impinge on Art. 19 (1) (f). However, if the law creating such

monopolies makes incidental provisions directly impinging on the citizens' right under Art. 19 (1) (f), the case would be different.

Having regard to the scheme of the State monopoly envisaged by the Act, s. 4 cannot be said to be such an essential part of the said monopoly as to fall within the expression "law

relating to" under Art. 19 (6). The validity of s. 4 has to be tested in the light of the first part of Art. 19 (6) so far as the petitioner's rights under Art. 19 (1) (g) are concerned and under Art. 19 (5) so far as his rights under Art. 19 (1) (f) are concerned, So tested, the restrictions

regarding the fixation of prices prescribed by s. 4 are reasonable and in the interest of the general public both under Art. 19 (5) and Art. 19 (6). Hence s. 4 is valid.

Section 3 of the Act is also not open to any challenge. This section allows either the Government or an officer of the Government authorised in that behalf or an agent in

respect of the unit in which the leaves have grown, to purchase or transport Kendu leaves. The Court was satisfied that the two categories of persons specified in cls. (b) and

(c) are intended to work as agents of the Government and all their actions and dealings in pursuance of the provisions of the Act would be actions and dealings on behalf of the

Government and for the benefit of the Government. If s. 3 is valid, s. 8 which authorises the appointment of agents, must also be held valid.

When the State carries on any trade, business or industry it must inevitably carry it on either departmentally or through its officers appointed for that purpose. In the very nature

of things, the State cannot function without the help of its servants or employees and that inevitably introduces the concept of agency in a narrow and limited sense. There are

some trades or businesses in which it may be inexpedient to undertake the work of trade or business departmentally or with the assistance of State servants. in such cases, it is open to the State to employ the services of agents, provided the agents work on

behalf of the State and not for themselves. Rule 7 (5) provides that on appointment as agent the person appointed shall execute an agreement in such form as Government may direct. This rule is bad because it leaves it to the sweet will and pleasure of the officer concerned

to fix any terms and conditions on an ad hoc basis. This is beyond the competence of the State Government. The terms and conditions of the agreement must be prescribed by rules.

When the agreement actually made in this case is considered, it leaves no room for doubt that the person appointed under the agreement to work the monopoly of the State is not an

agent in the strict and narrow sense of the term contemplated by Art. 19 (6) (ii). The agent appointed under this agreement seems to carry on the trade substantially on

his own account. If he makes any profit after paying the amount specified in the contract, that profit is his. If he incurs any loss, that loss is his. He is not made accountable to tile State Government and the State Government is not responsible for his actions. It is impossible to hold that the agreement is consistent with the terms of s. 3 of the Act. Hence, the agreement is invalid. The State Government cannot implement the provisions of the Act with the assistance of agents appointed under the said invalid agreement.

Supreme Court of India

Excel Wear Etc vs Union Of India & Ors on 29 September, 1978

The right to close down a business cannot be equated with a right not to start or carry on n business at all. The extreme proposition urged on behalf of the employer by equating the two rights and placing them at par is not quite apposite and sound. If one does not start a business

at all, then perhaps under no circumstances, he can be compelled to start one. Such a negative aspect of a right to carry on a business may be equated with the negati