The Tabocco Institute Of India vs Union Of India

consideration. Petitioners in these writ petitions have

challenged the validity of the Cigarettes and Other Tobacco

Products (Packaging and Labelling) Rules, 2008 (for short,

'COTP Rules, 2008') as amended by the Cigarettes and Other

Tobacco Products (Packaging and Labelling) Amendment Rules,

2014 (for short, 'COTP Amendment Rules, 2014'). Indeed 2008

Rules (unamended) are also challenged in some of the writ

petitions.

2. In furtherance of the purpose and object of the Cigarettes

and Other Tobacco Products (Prohibition of Advertisement and

Regulation of Trade and Commerce, Production, Supply and

Distribution) Act, 2003 (for short, 'COTPA') and to prohibit 63

advertisement of, and to provide for regulation of trade and

commerce in, and production, supply and distribution of,

cigarettes and other tobacco products, COTPA has been

enacted. The enactment provides for mandatory requirement to

carry such specified warnings against the use of cigarettes and

other tobacco products on packages of such products in such

form and manner as may be prescribed by the rules made

under the COTPA. Without such specified warnings including

pictorial warnings, production, supply or distribution of

cigarettes or any other tobacco products, is prohibited as per

Section 7(1). Even carrying on of trade or commerce in

cigarettes and other tobacco products is also prohibited, unless

every package bears on its label, the specified warning as per

Section 7(2). Similarly, import of cigarettes and other tobacco

products for distribution, supply or for sale is also prohibited

unless it carries such specified warning as per Section 7(3). The

specified warning is required to be displayed on one of the

largest panels of the package, in which the product is packed,

as per Section 7(4).

3. The manner in which the specified warning shall be made

is stipulated in Section 8. It requires that the same has to be 64

legible and prominent; conspicuous as to size and colour; and

in such style or type of letter as specified in the rules made

under the COTPA. The size of letters or figures or both used on

such warnings vide Section 10, shall be as prescribed in the

rules made under the COTPA.

4. Section 31 empowers the Central Government to make

rules to carry out the provisions of COTPA, particularly to

provide for the form and manner in which warning shall be

given in respect of the products; the height of the letter or figure

or both to be used in specified warning. Every rule made under

the COTPA shall be laid before each house of the Parliament for

a total period of 30 days which may be comprised in one

session or in two or more successive sessions, and if, before the

expiry of the session immediately following the session or the

successive session, both houses agree for making any

modification in the Rule or both houses agree that the rules

shall not be made, then the rule will have the effect only as

modified or be of no effect.

5. In exercise of the power under Section 31, the Central

Government framed COTPA Rules, 2008. Rule 3 provided for

the manner of labeling and packing. As per Rule 3(1)(a), the 65

'specified health warning' had to be exactly as specified in the

Schedule to the Rules; specified health warning was required to

cover at least 40% of the principal display area on one side of

the largest panel.

6. By way of amendment to COTPA Rules, 2008, COTPA

Amendment Rules 2014 have been framed by the Central

Government. As per the said amendment, Rule 3(1)(b) requires

that the specified health warning on the package shall cover

85% of the principal display area of the package on the largest

panels of both sides and insofar as cylindrical or conical type of

package, the warning shall appear diametrically opposite to

each other on two largest sides of faces covering 85% of each

side; on both sides of display area 60% shall cover pictorial

health warning and 25% shall cover textual health warning.

Rule 3(1)(c) requires that none of the elements of the specified

warning are severed, covered or hidden in any manner when

the package is sealed or opened. Rule 3(1)(h) provides that every

package containing the product shall contain the following

particulars, namely (a) name of the product; (b) name and

address of the manufacturer or importer or packer; (c) origin of

the product (for import); (d) quantity of the product; (e) date of 66

manufacture; and (f) any other matter as may be required by

the Central Government in accordance with the international

practice.

7. In the Schedule appended to the Rules, in paragraph 1(i)

dealing with the textual health warning, it is mandated that the

word 'WARNING' shall appear in white font colour on a red

background and the words 'SMOKING CAUSES THROAT

CANCER' shall appear in white font colour on a black

background. For smokeless form of tobacco products, the

words 'WARNING' shall appear in white font colour on a red

background and the words 'TOBACCO CAUSES MOUTH

CANCER' shall appear in white font colour on a black

background. As per paragraph 1(ii) of the Schedule, pertaining

to pictorial health warning covering 60% of the principal display

area the manner in which it has to be printed has been

enumerated. In paragraph 2(a) of the Schedule, the specified

health warning for smoking form of tobacco products - image

(1) containing the following picture which shall be followed for a

period of 12 months following its commencement is shown. The

said picture is printed hereunder for better appreciation: 67

8. In paragraph 2(b) of the Schedule, image (2) to be printed

in the specified health warning which shall come into effect

after the end of 12 months whereunder image (1) was carried is

specified and printed. The said picture is printed hereunder:

9. Paragraph 2(c) of the Schedule pertains to smokeless

forms of tobacco products to be specified on every package for a

period of 12 months following its commencement. The said

picture is shown hereunder:

68

10. Paragraph 2(d) deals with image (2) to be printed as

specified health warning after the expiry of 12 months. The

same is shown hereunder:

11. Paragraph 3(1) of the Schedule deals with the size of the

specified health warnings. It states that on each panel of the

tobacco package, the size of the specified health warning shall 69

not be less than 3.5 cm (width) X 4 cm (height), so as to ensure

that the warning is legible, prominent and conspicuous.

12. Paragraph 3(2) of the Schedule mandates that the size of

all components of the specified health warning shall be

increased proportionally according to increase of the package

size to ensure that the warning covers 85% of the principal

display area.

13. Thus Central Government issued notification amending

COTP Rules increasing the extent of specified warning from

40% on one side of the largest panel to 85% of the principal

area of the package on both sides along with other amendments

noted above as per notification dated 15.10.2014. The Rules

were to come into force from 01.04.2015. Several objections

were raised to the amendment by members of Parliament as

also the general public. The Rules were laid before the

Parliament as required under Section 31 (3) of COTPA. In June

2015, the matter was referred to Parliamentary Committee on

subordinate legislation. In December, 2014 and January, 2015,

W.P.Nos.56789/2014 and 59587 and 59460/2014 were filed. In

all these writ petitions, petitioners challenged the notification

dated 15.10.2014 issued by the Ministry of Health and Family 70

Welfare, Government of India, notifying 2014 Amendment to

COTP Rules as illegal, invalid and ultra vires the 2003 Act and

as also the provisions of the Constitution of India. However, in

W.P.No.4470/2015 filed on 03.02.2015, an additional prayer

has been sought laying challenge to the COTPA as

unconstitutional. But, during the course of arguments, by filing

a memo, learned Counsel for petitioner has given up the

challenge made to the validity of the provisions of COTPA.

14. The Parliamentary Committee on sub-ordinate legislation

which undertook examination of the provisions of COTP

Amendment Rules, 2014, presented its interim report on

16.03.2015 before the Lok Sabha. The Committee

recommended that implementation of COTP Amendment Rules,

2014, may be kept in abeyance till the committee finalized the

examination of the subject and arrived at appropriate

conclusions and presented an objective report to the

Parliament. In this report, the Committee opined that COTP

Amendment Rules, 2014 would have a socio-economic impact

on the livelihood of the workers associated with the tobacco

industry and that it was imperative to address the

apprehensions and views expressed by the stakeholders 71

including the Ministry of Labour and Employment, Ministry of

Agriculture. The Committee felt that comprehensive

examination of the COTP Amended Rules, 2014 was necessary

before they were brought into effect.

15. The Central Government accepted the said

recommendation contained in the interim report and issued a

notification by way of Corrigendum to COTP Amendment Rules,

2014 to substitute sub-rule (2) of Rule 1 of the COTP

Amendment Rules, 2014 providing for deferring the

commencement of COTP Amended Rules, 2014 to such date as

the Central Government may by notification in the Official

Gazette appoint. This Corrigendum was issued on 26.03.2015.

However, in W.P.No.8680/2015 (PIL) filed before the Rajasthan

High Court, interim order was passed staying the operation of

the Corrigendum dated 26.03.2015 which prevented

implementation of COTP Amendment Rules, 2014. It is

necessary to notice here that the said order dated 03.07.2015

was an exparte order. The Court, it appears, was not informed

of the matter being seized before the Parliamentary Committee

on subordinate legislation which was considering the views of

various stakeholders, nor is there anything to show that the 72

interim report presented by the Parliamentary Committee

recommending to keep in abeyance implementation of COTP

Amendment Rules, 2014 was brought to the notice of the Court.

16. As the Central Government did not act in accordance

with the interim order of stay and the interim direction issued

by the Rajasthan High Court, contempt petition in

CCC.No.800/2015 was filed on 21.07.2015 before the

Rajasthan High Court against the Union of India for non-

compliance of the interim order dated 03.07.2015. Notice was

issued in the contempt petition and the matter was ordered to

be connected with W.P.No.8680/2015 vide order dated

28.07.2015.

17. On 24.09.2015, the Central Government issued

notification declaring that COTP Amendment Rules, 2014 shall

be effective from 01.04.2016. By that time, on 15.03.2016

itself, the Committee on subordinate legislation had submitted

its final report after considering the views, apprehensions and

difficulties of all the stakeholders including various

departments of Government of India, thereby recommending

that the pictorial warnings to be printed on the packages could

be 50% instead of 85%. However, as the Central Government 73

had already issued the notification dated 24.09.2015, the

requirement of 85% pictorial warning to be printed on both

sides of the largest panels became effective from 01.04.2016.

As a result, the manufacturers, distributors, traders, tobacco

growers and other affected persons filed these batch of writ

petitions before various High Courts including before different

Benches of High Court of Karnataka challenging the validity of

COTP Amendment Rules, 2014.

18. The Apex Court as per order dated 04.05.2016 passed in

Special Leave Petition (C) Nos.10119-10121/2016 and

connected cases, has transferred all these cases from different

High Courts with a direction that they shall be heard by the

Karnataka High Court. The said order of the Apex Court reads

as under:

"Heard learned counsel appearing for the parties.

Mr. Arvind P. Datar, learned senior counsel submits that the subject-matter of challenge in writ proceedings in which the impugned order has been passed pertains to the constitutional validity of the Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014 (hereinafter referred to as the Rules) framed by the Government of 74

India and the same is pending before the Karnataka High Court.

Mr. Ranjit Kumar, learned Solicitor General has handed over a list of cases on the issue pending before various High Courts. It is seen from the list that most of the matters are pending before the Karnataka High Court and few of them are pending in Bombay, Gujarat and Delhi High Courts.

It has been contended before us by learned counsel appearing for the parties that all the matters which are pending before different High Courts be transferred to a particular High Court so that the matters can be heard and disposed of at a time.

In view of that, it is considered appropriate, at this stage, to transfer all the matters pending before the different High Courts to the Karnataka High Court.

We, therefore, transfer all matters pending before various High Courts, as referred to hereinabove, on the issue to the Karnataka High Court. We request the Hon'ble Chief Justice of the Karnataka High Court to constitute a Bench, which would dispose of the same within a period of six weeks from date. We further make it clear that the matters should be disposed of by the Principal Bench of the Karnataka High Court.

We have also been informed that the cases transferred include Public Interest Litigation petitions pending for implementation of the said Rules. In view 75

of that, we would also request the Chief Justice of the Karnataka High Court to decide whether the cases transferred hereby would be taken up by a Division Bench or a Single Bench in accordance with the Rules of the said High Court.

Stay, if any, already granted by any High Court shall not be given effect to till the cases are finally disposed of.

We make it clear that any other order passed by any High Court including the order passed by this Court dated 06.05.2009 on the Interlocutory Applications filed in Writ Petition (C) No.549/2008 with regard to the stay shall not stand in the way of the Karnataka High Court to decide the matter on merits.

The Secretary General of this Court is directed to send a copy of this order to the Registrar Generals of the concerned High Courts where similar matters are pending with a request to take necessary steps for sending the relevant records/documents to the Karnataka High Court within a period of two weeks from the date of receipt of copy of this order.

The Special Leave Petitions and the Writ Petitions stand disposed on the aforestated terms."

This is how all these matters have been heard together and are

being disposed of by this common order.

76

19. Background facts regarding the COTPA and the Rules:

The COTPA has been enacted by the Parliament for the purpose

of prohibiting the advertisement and to provide for regulation of

trade and commerce in the matter of production, supply and

distribution of cigarettes and other tobacco products and for

matters connected therewith or incidental thereto. Preamble to

COTPA makes specific reference to Fourteenth Plenary meeting

of the World Health Organization held on 15.06.1986, wherein

the Member States were urged to implement the measures to

ensure that effective protection was provided to non-smokers

from involuntary exposure to tobacco smoke and to protect

children and young people from being addicted to the use of

tobacco. A reference is also made to the concerns expressed in

the 43rd World Health Assembly meeting held on 17.05.1990

urging the Member States to consider in their tobacco control

strategies plans for legislation and other effective measures to

protect their citizens with special attention to risk groups such

as pregnant women and children from involuntary exposure to

tobacco smoke, discouraging the use of tobacco and imposition

of progressive restrictions and also to take concerted action to

eventually eliminate all direct and indirect advertising,

promotion and sponsorship concerning tobacco.

77 20. In the light of the above, Parliament considered it

expedient to enact a comprehensive law on tobacco in public

interest and to protect public health. The Preamble further

states that it was found expedient to prohibit consumption of

cigarettes and other tobacco products which were injurious to

health with a view to achieving improvement of public health in

general as enjoined by Article 47 of the Constitution of India.

21. The Statement of Objects and Reasons appended to the

enactment takes note of the fact that tobacco is universally

regarded as one of the major public health hazards responsible

directly or indirectly for an estimated eight lakh deaths

annually in the country. There is also reference to the fact that

for treatment of tobacco related diseases and the loss of

productivity caused therein, it is costing the country almost

Rs.13,500 crores annually, which more than offsets all the

benefits accruing in the form of revenue and employment

generated by tobacco industry. There is also reference to the

need felt for a comprehensive legislation to prohibit advertising

and regulation of production, supply and distribution of

cigarettes and other tobacco products as recommended by the

Parliamentary Committee on Subordinate Legislation (Tenth 78

Lok Sabha) and number of points suggested by the Committee

on Subordinate Legislation which had been incorporated in the

Bill. It is further stated that the proposed Bill intended to put

total ban on advertising of cigarettes and other tobacco

products and to prohibit sponsorship of sports and cultural

events either directly or indirectly as well as sale of tobacco

products to minors.

22. The enactment proposed to make Rules for the purpose of

prescribing the contents of the specific warnings, the language

in which they are to be displayed and also for displaying the

quantities of nicotine and tar contents of the said products. The

objective of the proposed enactment, as stated in the Statement

of Objects and Reasons is to, 'to reduce the exposure of people

to tobacco smoke (passive smoking) and to prevent the sale of

tobacco products to minors and to protect them from becoming

victims of misleading advertisements'. It is also clear from the

statement of objects that the measures would result in a

healthier life style and protection of the right to life enshrined in

the Constitution, apart from implementing Article 47 of the

Constitution which inter alia required the State to make

endeavour to improve public health of the people. 79

23. Article 47 of the Constitution provides that the State shall

regard the raising of the level of nutrition and the standard of

living of its people and the improvement of public health as

among its primary duties and, in particular, the State shall

endeavour to bring about prohibition of consumption except for

medical purposes of intoxicating drinks and of drugs which are

injurious to health.

24. Article 47 of the Constitution contains one of the

Directive Principles of State Policy which is fundamental in the

governance of the country and the State has the power to

completely prohibit the manufacture, sale, possession,

distribution and consumption of intoxicating drinks and also

certain drugs that are injurious to health. Therefore, it is the

privilege of the State and it is for the State to decide to bring

about prohibition with regard to liquor an intoxicating drink or

with regard to certain drugs which are injurious to health. A

citizen has, therefore, no fundamental right to trade or business

in such drugs or intoxicating drinks that are regarded as res

extra commercium.

80

25. Article 47 makes it clear that improvement of public

health is one of the primary duties of the State. Thus, it is clear

that when the Parliament enacted COTPA, it was discharging its

primary duty as stated in Article 47 to improve public health of

the people. It is necessary to notice that though in the Preamble

to COTPA it has been stated that it was found expedient to

prohibit the consumption of cigarettes and other tobacco

products which were injurious to health with a view to

achieving improvement in public health in general as enjoined

by Article 47 of the Constitution, the provisions of COTPA are

not enacted to prohibit consumption of cigarettes and other

tobacco products. A careful scrutiny and analysis of various

provisions of COTPA would make it very clear that COTPA is not

enacted with a view to prohibit consumption of cigarettes and

other tobacco products.

26. COTPA, no doubt, prohibits smoking in public place as

per Section 4 which reads as under:

"4. Prohibition of smoking in a public place.- No person shall smoke in any public place:

Provided that in a hotel having thirty rooms or a restaurant having seating capacity of thirty 81

persons or more and in the airports, a separate provision for smoking area or space may be made."

27. Another provision which enacts prohibition is contained

in Section 6, which reads as under:

"6. Prohibition on sale of cigarette or other tobacco products to a person below the age of eighteen years and in particular area.- No person shall sell, offer for sale, or permit sale of, cigarette or any other tobacco product -

(a) to any person who is under eighteen years of age, and

(b) in an area within a radius of one hundred yards of any educational institution."

28. Except these two provisions in the enactment, all other

provisions pertain to prohibition of advertisement and

regulation of trade and commerce, production, supply and

distribution.

29. Important provisions of COTPA which have bearing on the

question.

Section 2 contains a declaration as to expediency of

control by the Union over the tobacco industry. It reads as

under:

82

"2. Declaration as to expediency of control by the Union.- It is hereby declared that it is expedient in the public interest that the Union should take under its control the tobacco industry.

30. Section 3 is the definition clause. It is useful to refer to

Section 3(a) which defines the term 'advertisement'. It reads as

under:

"(a) 'advertisement' includes any visible representation by way of notice, circular, label, wrapper or other document and also includes any announcement made orally or by any means of producing or transmitting light, sound, smoke or gas."

31. Section 3(o) defines the term 'specified warning'. It reads

as under:

"(o) 'specified warning" means such warnings against the use of cigarettes or other tobacco products to be printed, painted or inscribed on packages of cigarettes or other tobacco products in such form and manner as may be prescribed by rule made under this Act."

32. Section 5 lays down Prohibition of advertisement of

cigarettes and other tobacco products. It bars advertisement of

cigarettes or any other products and also taking part in any

such advertisement which directly or indirectly suggests or 83

promotes the use or consumption of cigarettes or any other

tobacco products. Sub-clause (2) of Section 5 enacts a

prohibition prohibiting display of any advertisement of

cigarettes or any other tobacco product for any direct or indirect

pecuniary benefit, or sell or cause to sell, or permit or authorize

to sell a film or video tape containing advertisement of

cigarettes or any other tobacco product, or distribute, cause to

distribute or permit or authorize to distribute to the public any

leaflet, hand-bill or document which contains such

advertisement, or erect, exhibit, fix or retain upon or over any

land, building, wall, hoarding, frame, post or structure or upon

or in any vehicle or shall display in any manner whatsoever in

any place any advertisement of cigarettes or any other tobacco

product. The only exception provided is,

(a) an advertisement of cigarettes or any other tobacco product in or on a package containing cigarettes or any other tobacco product;

(b) advertisement of cigarettes or any other tobacco product which is displayed at the entrance or inside a warehouse or a shop where cigarettes and any other tobacco products are offered for distribution or sale. 84

33. Sub-clause (3) of Section 5 also prohibits promotion or

any agreement to promote the use or consumption of cigarettes

or other tobacco products or any trade mark or brand name of

cigarettes or any other tobacco product in exchange for a

sponsorship, gift, prize or scholarship given or agreed to be

given by another person.

34. Section 7 enacts restrictions on trade and commerce in,

and production, supply and distribution of cigarettes and other

tobacco products. Broadly stated, this provision provides that

no person shall produce, supply and distribute cigarettes which

do not carry the specified warning and that the specified

warning shall cover not less than one of the largest panels of

the cigarettes. It also provides that nicotine and tar contents

should not exceed the maximum permissible limit as prescribed

and that these contents must be displayed on the package. The

provision also makes it clear that the specified warning could

include the pictorial warning as may be prescribed. Such

specified warning shall be used even on imported cigarettes or

tobacco products.

85

35. Section 8 deals with the manner in which specified

warnings shall be made. It provides that the specific warning on

any package shall be,

(a) legible and prominent;

(b) conspicuous as to size and colour;

(c) must be presented in such style or type of lettering boldly and clearly in distinct contrast to other letters or graphic material used on the package; it shall be printed, painted or inscribed on the package in a colour which contrasts conspicuously with the background of the package or its labels.

The manner in which a specified warning shall be printed, painted or inscribed on a package shall be so packed as may be specified in the Rules made under this Act. Section 8 further provides that every package containing cigarettes or other tobacco products shall be so packed as to ensure that the specified warning appearing thereon, on its label, is, before the package is opened, visible to the consumer.

36. Section 9 deals with the language in which the specified

warning shall be expressed. Section 10 deals with the size of

letters and figures. It reads as under:

"10. Size of letters and figures.- No specified warning or indication of nicotine and tar contents in 86

cigarettes and any other tobacco products shall be deemed to be in accordance with the provisions of this Act if the height of each letter or figure, or both used on such warning and indication is less than the height as may be prescribed by rules made under this Act."

37. Sections 12 & 13 provide for power of entry and search,

and also power to seize. Section 14 provides for confiscation of

package, in respect whereof, any provision of the Act has been

or is being contravened. Section 15 provides an option to be

given by the Court to the owner of the confiscated package to

pay in lieu of confiscation, costs which shall be equal to the

value of the goods confiscated. On such payment, the seized

packages shall be returned to the person from whom they were

seized with a condition that they shall be sold, supplied, etc.,

only after inscribing the specified warning on each such

package. Section 16 makes it specific that confiscation of such

packages shall not prevent imposition of any punishment to

which the person affected is liable under the provisions of the

Act or under any other law.

38. Section 20 provides for punishment for failure to give

specified warning and nicotine and tar contents. It provides

that producer or manufacturer of the products which do not 87

contain specific warning shall be punished with imprisonment

which may extend to two years if it was a first conviction or

with fine, which may extend to Rs.5,000/- or with both. If it is

the second or subsequent conviction, the sentence of

imprisonment may extend to five years and with fine which may

extend to Rs.10,000/-. Section 20(2) also prescribes

punishment for any person who sells or distributes cigarettes or

tobacco products which do not contain specified warning, for a

term which may extend to one year or with fine upto Rs.1,000/-

or with both and for its second or subsequent conviction, the

imprisonment may extend to two years and fine may extend to

Rs.3,000/-.

39. Section 22 provides for punishment for advertisement of

cigarettes and tobacco products. If anyone contravenes Section

5, he is liable for conviction or imprisonment for a term which

may extend to two years or with fine upto Rs.1,000/-. If it is a

case of second or subsequent conviction, imprisonment which

may extend to five years and with fine which may extend to

Rs.5,000/-.

40. Section 30 provides for power in favour of the Central

Government by issuing notification to add any tobacco product 88

in the schedule, in respect whereof, advertisements are to be

prohibited and its production, supply and distribution is

required to be regulated under the Act.

41. Section 31 is important for the present purpose, it

provides for power of the Central Government to make Rules.

The Central Government has power to frame rules by issuing

notification in the official gazette to carry out the provisions of

the Act, and in particular, to provide for the following matters,

viz.,

(a) specify the form and manner in which warning shall be given in respect of cigarettes or other tobacco products under clause (o) of section 3;

(b) specify the maximum permissible nicotine and tar contents in cigarettes or other tobacco products under the proviso to sub-

section (5) of section 7;

(c) specify the manner in which the specified warning shall be inscribed on each package of cigarettes or other tobacco products or its label under sub-section (2) of section 8;

(d) specify the height of the letter or figure or both to be used in specified warning or to 89

indicate the nicotine and tar contents in cigarettes or other tobacco products under section 10;

(e) provide for the manner in which entry into and search of any premises is to be conducted and the manner in which the seizure of any package of cigarettes or other tobacco products shall be made and the manner in which seizure list shall be prepared and delivered to the person from whose custody any package of cigarettes or other tobacco products has been seized;

(f) provide for any other matter which is required to be, or may be, prescribed.

42. Sub-clause (3) of Section 31 requires that every rule

made under the Act and every notification issued under Section

30 to be laid before each house of Parliament while it is session

for a total period of 30 days. It provides that if both the houses

agree in making any modification in the rule or notification, or

if both the houses agree that the rule or notification shall not be

made, then it will have effect with such modification or shall be

of no effect, as the case may be. It is thus clear that Section 31

provides for power in favour of the Central Government to make

Rules.

90

43. COTP RULES: Pursuant to the provision contained in

Section 31, COTP Rules, 2008, were framed by the Central

Government. These Rules were brought into force with effect

from 31.05.2009. They required all tobacco product packages to

carry a specified health warning (consisting of pictorial and

textual) covering 40% of the front panel of the packages.

44. By way of amendment to these Rules, COTP Amendment

Rules, 2014 were notified on 15.10.2014 to come into force with

effect from 01.04.2015. The amended rules proposed, inter alia,

to increase the size of the specified warning from 40% of the

front panel of tobacco product packages to cover 85% of both

sides of the packets. The material changes in the new Rules

compared to 2008 Rules can be understood by the comparative

chart given below.

Sl.

2008 Labelling Rules 2014 Amendment Rules No. 1 Notified on 28.11.2008 and Notified on 15.10.2014 and came into force on came into force on 31.05.2009 01.04.2015. 2 Rule 3(1)(b) - Specified Rule 3(1)(b) - Specified Health Warning shall Health Warning shall cover occupy at least 40% of the at least 85% of the

principal display area of the principal display area of the front panel of the pack and package of which 60% shall shall be positioned parallel cover pictorial health to the top edge of the warning and 25% shall package and in the same cover textual health direction as the information warning and shall be 91

on the principal display positioned on the top edge area: of the package and in the same direction as the Provided that for information on the conical packs, the widest principal display area:

end of the pack shall be considered as the top edge Provided that for of the pack. conical package, the widest end of the package shall be considered as the top edge of the package:

Provided further that on box, carton and pouch type of package, the specified health warning shall appear on both sides of the package, on the largest panels and for cylindrical and conical type of package, the specified health warning shall appear diametrically opposite to each other on two largest sides or faces of the package and the specified health warning shall cover 85% of each side or face of the principal display area of the package of which 60% shall cover pictorial health warning and 25% shall cover textual health warning.

3 Rule 3(1)(d) - no messages Rule 3(1)(d) - no messages, that directly or indirectly images or pictures that promote a specific tobacco directly or indirectly brand or tobacco usage in promote the use or general are inscribed on the consumption of a specific tobacco product package. tobacco brand or tobacco usage in general or any matter or statement which is inconsistent with, or 92

detracts from the specified health warning are inscribed on the tobacco product package.

4 Rule 3(1)(f) - the specified Rule 3(1)(f) - the textual warnings shall be inscribed warning shall be inscribed in the language/s used on in the language used on the the pack: package:

Provided that where Provided that where more than one language/s the language used on a is used on the pack the package or on its label is - specified warning shall appear in two languages, (a) English, the health one in which the brand warning shall be expressed name appears and the other in English; in any other language used on the pack. (b) English and Indian languages, the health warning shall be expressed in English and any one of the Indian languages in which the brand name appears;

(c) Hindi and other Indian languages, the health warning shall be expressed in Hindi and any one of the Indian language in which the brand name appears;

(d) any Indian language, the health warning shall be expressed in such Indian language;

(e) Indian languages, the health warning shall be expressed in any two Indian languages in which the brand name appears; 93

(f) foreign language, the health warning shall be expressed in English;

(g) foreign and Indian languages, the health warning shall be expressed in English and any one of the Indian languages in which the brand name appears:

Provided further that the textual health warning shall appear in not more than two languages used on the package:

Provided also that the textual health warning in one language shall be displayed on one side or face of principal display area and the textual health warning in the other language shall be displayed on the other side or face of principal display area of the package;

5 Rule 3(1)(h) - xxxx Rule 3(1)(h) - every package of cigarette or any other tobacco product shall contain the following particulars, namely:-

(a) Name of the product;

(b) Name and address of the manufacturer or importer or packer;

(c) Origin of the product (for 94

import);

(d) Quantity of the product;

(e) Date of manufacture; and

(f) Any other matter as may be required by the Central Government in accordance with the international practice.

6 Rule 5 - Rotation of Rule 5 - Rotation of specified health warnings.- specified health warning.- The specified health warning on tobacco packs shall be (1) The specified health rotated every two years from warning on tobacco product

the date of notification of the package shall be rotated rules or earlier, as the case every 24 months from the may be, as specified by the date of commencement of Central Government. these Rules or before the period of rotation as may be specified by the Central Government by notification.

(2) During the rotation period, there shall be two images of specified health warning for both smoking and smokeless form of tobacco products and each of the images of the specified health warning shall appear consecutively on the package with an interregnum period of 12 months.

(3) At the end of 12 months period, the first image of the specified health warning shall be replaced 95

with the second image of specified health warning, which shall appear for the next 12 months.

(4) At the end of each 12 months of the rotation period, the Central Government may allow the distributors, retailers and importers of cigarettes and other tobacco products a grace period, not exceeding two months to clear the old stock of package of tobacco products bearing the warning specified for the expired period of 12 months of the rotation period.

(5) The distributors, retailers and importers of cigarettes and other tobacco products shall not distribute or sell any package having the specified health warning of the expired period of 12 months after the grace period of 2 months.

45. Thus, the 2014 Amendment Rules have introduced

certain changes. Rule 3 mandates that specified health warning

has to be exactly as specified in the schedule to the Rules and

shall cover atleast 85% of the principal display area of the

package, of which, 60% shall cover pictorial health warning and 96

25% shall cover textual health warning and that it shall be

positioned on the top edge of the package and in the same

direction as the information on the principal display area. It

also provides that no tobacco product package or label shall

contain any information that is false, misleading or deceptive

regarding health effects and health hazards including use of

words or descriptors such as 'light, ultra light, mild, ultra mild,

low tar, slim, safer' or similar words or descriptors.

46. Rule 5 provides for rotation of specified health warning,

in as much as, the specified health warning on tobacco product

package shall be rotated every 24 months from the date of

commencement of the Rules or before the period of rotation as

may be specified by the Central Government. During the

rotation period, there shall be two images of specified health

warning for both smoking and smokeless form of tobacco

products and each of them shall appear consecutively on the

package with an interregnum period of 12 months. At the end

of 12 months, the first image shall be replaced with the second

image which shall appear for the next 12 months. At the end of

each 12 months of rotation, the Central Government may allow

a grace period upto and not exceeding two months to clear the 97

old stock. Schedule to the Rule as referred to in Rule 3

mandating that every package of cigarette or any other tobacco

product shall have the specified health warning exactly as

specified in the schedule to these Rules is also required to be

examined. The schedule consists of clauses 1 to 3 with the

specified pictorial images which have been referred earlier and

that are mandatorily required to be published in colour along

with textual warning.

47. Challenging the legality and validity of the Rules, several

contentions have been raised by learned Senior Counsel

Mr. Vijay Shankar, Mr. Sajan Poovayya and Mr. K.G.Raghavan.

The other learned counsel Mr. Rajeev Kumar Jain, Mr. Kohli,

Mr. Sanjai Kumar Pathak and Mr. Datar, have also addressed

arguments for other petitioners. Learned Assistant Solicitor

General, Mr.Krishna Dixit, has appeared for the Central

Government, learned Senior Counsel Mr. B.V.Acharya, learned

Counsel Mr. K.V.Dhananjay, Smt. Jayna Kothari and Mr.

Ravishankar.S.S., have appeared for the interveners viz.,

Cancer Patients Aid Association, Consortium for Tobacco Free

Karnataka, Citizens Forum for Justice, Health for Millions, to

assist the Court.

98

48. Learned Senior Counsel Mr. Vijay Shankar has raised two

fold contentions which go to the root of the matter regarding the

very authority of the Health Ministry, Government of India, to

frame these Rules and also regarding manifest arbitrariness

and unreasonableness of the Rules. In this regard, he has

urged the following contentions:

(i) the impugned Rules are not made and brought into

force in accordance with the provisions of the Constitution of

India, in particular, Article 77 of the Constitution of India;

(ii) the impugned Rules are manifestly arbitrary as the

procedure followed for making and brining the Rules into force

is opposed to the legislative consultative policy of the Central

Government and Article 118 of the Constitution and that the Rules

are vitiated for non-application of mind, bias and legal malice.

Regarding violation of Article 77 (1) and (2) of the Constitution of India

49. Elaborating his contentions on point No.1 above, learned

Senior Counsel Mr. Vijay Shankar has urged that the

notification dated 24.09.2015 notifying COTP Amendment

Rules, 2014, does not conform to Article 77, in as much as, the 99

same has not been expressed in the name of the President. It is

submitted by him that as per sub-clause (8) of Section 3 of the

General Clauses Act, 1897, Central Government means the

President. Section 31(1) of the COTPA states that the Central

Government may by notification in the official gazette make

Rules. The term 'Central Government' necessarily refers to the

President and the executive action of the Government of India

has to be expressed in the name of the President as per Article

77(1) and all orders and other instruments made in the name of

the President shall be authenticated in such manner as may be

specified in the Rules. It is his submission that neither the

Rules are expressed to have been made in the name of the

President, nor the provisions regarding authentication of the

said Rules as specified in the Rules of Business have been

followed.

50. The contention of learned Assistant Solicitor General Mr.

Dixit is that as per the judgment of the Apex Court in the case

of ASHOK LANKA & ANOTHER VS RISHI DIXIT & OTHERS -

(2005) 5 SCC 598, particularly in the light of the observations

made in paragraph 57, the rule making power of the executive

is not an executive power but a legislative power, and therefore, 100 Article 77 (1) and (2) have no application for exercise of rule

making power. In so far as non-publication of the Rules in the

name of the President is concerned, learned Assistant Solicitor

General has vehemently urged that non-publication of the

Rules in the name of the President does not result in violation

of Article 77(1) & (2) of the Constitution. In this regard, Mr.

Dixit has placed reliance on the judgment in the case of M/S.

SABLE WAGHIRE & COMPANY VS THE UNION OF INDIA &

OTHERS - (1975) 1 SCC 763. He invites the attention of the

Court to paragraph 20 of the said judgment to contend that

merely because notification was not published in the name of

the President, it will not get vitiated. He further urges that

authentication by the Joint Secretary in the Health Department

is a valid authentication.

51. On examination of the respective contentions in this

connection, it follows that as held by the Apex Court in M/s.

Sable Waghire & Company's case, merely because notification

publishing the Amendment Rules 2014 was not issued in the

name of the President but was issued by the Joint Secretary, it

cannot be said that the notification gets vitiated. The

notification publishing the Rules does not contain an executive 101

order but it is a piece of subordinate legislation. As long as it

was duly published in the Gazette of India under the signature

of the Joint Secretary who was authorized for the purpose, it

cannot be said that sub-clause (1) or sub-clause (2) of Article 77

have been contravened.

Regarding violation of Rules framed under Article 77 (3) of the Constitution of India

52. The next contention of Mr. Vijayshankar is based on

Article 77(3) of the Constitution of India. He refers to

Government of India (Allocation of Business) Rules, 1961 (for

short, 'AOB Rules') and the Government of India (Transaction of

Business) Rules, 1961 (for short 'TOB Rules'). These Rules are

framed for the convenient transaction of business of the Central

Government in accordance with the provisions contained in

Article 77(3) of the Constitution of India. As per Rule 2 read

with Rule 3 of AOB Rules, the legislative business of the

Government of India has been allocated to different Ministries

to empower them to act in the name of the Central Government.

The subject matters allocated to different Ministries are set out

in the Second Schedule to AOB Rules. It is urged that only

upon allocation of the matter to the Ministry, can that Ministry 102

exercise the power of the Central Government in relation to that

subject matter.

53. The contention of Mr.Vijayshankar is that 'tobacco' or

'tobacco legislation' is not allocated to Health Ministry,

therefore, the Rule making power under Section 31 of COTPA

could not have been exercised by the Health Ministry. He

points out that Health Ministry has been specifically allocated

other legislations such as Food Safety Standards Act, 2006 and

Prevention of Food Adulteration Act, 1954 and no item relating

to tobacco has been allocated till date to the Health Ministry

under the AOB Rules. He also points out from these Rules that

production, distribution (for domestic consumption and

exports) and development of plantation crops, tea, coffee,

rubber, spices, tobacco and cashew, and Tobacco Board has

been allocated to the Ministry of Commerce and Industry as per

item Nos.8, 10 (d) of AOB Rules. These AOB Rules are reviewed

from time to time for proposed changes. Amendments to the

AOB Rules are notified by the President; the Health Ministry

had indeed made a proposal to include 'tobacco control

programme' and 'tobacco legislation' as new items by way of

amendment to AOB Rules; this proposal of the Health Ministry 103

was not accepted, and therefore, tobacco legislation has not

been allocated to the Health Ministry. It is, therefore, urged that

the subject of regulation of tobacco products including

warnings to be carried on packages concerned various

Ministries like commerce, industry, agriculture, labour and

employment and it was not the exclusive domain of the Health

Ministry.

54. In this connection, Rule 4(1) of the TOB Rules is

emphasized to contend that when the subject matter concerns

more than one department, no decision could be taken or order

issued until all such departments had concurred; failing such

concurrence, the decision thereon has to be taken by or under

the authority of the cabinet. Explanation to Rule 4 of TOB Rules

provides that every case in which a decision, if taken in one

department, is likely to affect the transaction of business

allocated to another department, it shall be deemed to be a case

where the subject indeed concerned more than one department.

55. In the above background, it is contended that Health

Ministry, without consulting other Ministries, had unilaterally

framed 2006 Rules prescribing warnings on tobacco product

packages; the Union Cabinet intervened and empowered a 104

group of Ministers to decide the subject matter of warnings on

tobacco product packages and it is the said empowered group

of Ministers who decided with regard to the warnings on

tobacco packages: it was only thereafter, that COTP Rules,

2008 providing for 40% warning on the front panel of the

tobacco product packages was implemented with effect from

31.05.2005. In this regard, reliance has been placed on the

terms of reference dated 17.05.2007 to the Cabinet constituted

empowered group of Ministers. It is thus urged from the above

that even as per the understanding of the Central Government,

the issue of prescribing warnings on tobacco packages

concerned various Ministries and not the Health Ministry alone.

56. Learned Assistant Solicitor General Mr. Krishna Dixit has

made piquant effort to counter the arguments of Mr.

Vijayshankar. He has also urged that the subject matter falls

within the purview of Health Department. It is contended by

him that 'International Health Regulation' and WHO are the

subjects mentioned under the purview of Health Department as

per AOB Rules, hence, it is the Health Ministry which has the

power to make Rules. He has placed reliance on the judgment

in the case of M.S.M.SHARMA Vs DR.SHREE KRISHNA SINHA 105

AND OTHERS - AIR 1960 SC 1186 to contend that irregularity of

procedure in the legislature cannot be the subject matter of

legal scrutiny as it has the immunity from legal proceedings.

In the aforesaid judgment, it has been laid down that validity of

proceedings inside the legislature of the State cannot be called

in question on the allegation that procedure laid down by law

had not been followed; no court can go into this question which

is within the special jurisdiction of the legislature itself, which

has the power to conduct its own business.

57. It is apparent from the pleadings, contentions urged by

the respective parties with regard to this aspect and indeed

there is no dispute regarding the factual aspect that the Health

Ministry has prescribed new warnings on the tobacco product

packages by bringing into force the COTP Amendment Rules,

2014. Other Ministries concerned were not consulted and the

matter did not fall for consideration by the Cabinet. The

question, therefore is,

(I) whether tobacco control and tobacco legislation is not allocated to Health Ministry or for that matter to any particular Ministry as per Allocation of Business Rules?

106

(II) what is the effect of unilateral action of the Health Ministry in framing and notifying the 2014 Rules without following the Allocation of Business Rules?

58. Questions (I) & (II): Both these aspects are considered

together for the sake of convenience. In Convenience

Compilation Volume-III produced by the petitioner in

W.P.No.4470/2015, petitioner has produced the Government of

India (Allocation of Business) Rules, 1961, as amended upto

May 24, 2016 and Government of India (Transaction of

Business) Rules, 1961, as amended upto May 6, 2016.

Petitioner has also produced Review of Allocation of Business

Rules, 2010.

59. Rule 2 of AOB Rules reads as under:

"2. Allocation of Business - The business of the Government of India shall be transacted in the Ministries, Departments, Secretariats and Offices specified in the First Schedule to these rules (all of which are hereinafter referred to as "departments")."

60. Rule 3 of AOB Rules deals with Distribution of Subjects.

Sub-rule (1) of Rule 3 states that distribution of subjects among

the departments shall be as specified in the Second Schedule to 107

these Rules. The Second Schedule deals with Distribution of

Subjects among the Departments (Vibhag). It starts with

Department of Agriculture, Cooperation and Farmers Welfare.

'Tobacco Control and Legislation' is not included in the

Department of Agriculture. The next concerned Ministry viz.,

Ministry of Commerce and Industry is allocated with

production, distribution (for domestic consumption and

exports) and development of plantation crops, tea, coffee,

rubber, spices, tobacco and cashew at Sl. No.8 in the business

allocated to this department. At Sl. No.10(e) Tobacco Board is

mentioned. It is thus clear that Tobacco Control and Tobacco

Legislation is not mentioned even under the Ministry of

Commerce and Industry though tobacco and tobacco board fall

within its ambit. In respect of the Ministry of Health and

Family Welfare/Department of Health and Family Welfare, it is

mentioned at Sl. No.2 as under:

"2. All matters relating to the following institutions-

(a) ...

(b) ...

(c) ...

(d) ...

(e) ...

108 (f) ...

(g) ...

(h) ...

(i) ...

(j) ...

(k) International Health Regulations.

(l) World Health Organization (WHO).

61. In the case of Ministry of Labour and Employment also,

there is no mention regarding tobacco control and tobacco

legislation.

62. In exercise of the powers conferred by Clause (3) of Article

77 of the Constitution, the President made certain Rules to

amend the AOB Rules, 1961. This notification is produced at

page 178 of Convenience Compilation Volume-III filed in

W.P.No.4470/2015. Even in this amendment, though certain

alterations are made in the Second Schedule with regard to

certain Ministries and Departments, so far as the subject

pertaining to Tobacco and Tobacco Control Legislation is

concerned, no change is made. In addition, it has to be pointed

out that Health and Family Welfare Ministry sent a proposal to

include new entries as subject matter falling within its purview 109

which included tobacco control programme and tobacco

legislation. This is evident from the proposal made by the

Health Ministry. But, no change in the existing AOB Rules was

approved or accepted. Petitioner has produced the extract of the

proposal made for inclusion of these two subjects asserting that

the same has not been accepted. The accuracy, correctness and

the assertions made with regard to the subject matters

allocated in favour of different departments as adverted to

herein above is not challenged by the Central Government. Mr.

Dixit, has however contended that the subject tobacco

legislation falls within the ambit of the subject matter "World

Health Organization (WHO) and International Health

Regulations".

63. At the outset, it is apparent and very clear that tobacco

legislation and tobacco control programme is not included in

the subjects allocated to Health Department. Indeed, it is not

included under any of the departments. In such circumstances,

the TOB Rules 1961, which are framed by the President of India

in exercise of the power under Clause (3) of Article 77 of the

Constitution of India will come into operation. Rules 3 & 4(1)

are relevant for our purpose. They are extracted hereunder: 110

"3. Disposal of Business by Ministries.- Subject to the provisions of these Rules in regard to consultation with other departments and submission of cases to the Prime Minister, the Cabinet and its Committees and the President, all business allotted to a department under the Government of India (Allocation of Business) Rules, 1961, shall be disposed of by, or under the general or special directions of, the Minister-in-charge.

4. Inter-Departmental Consultations.- (1) When the subject of a case concerns more than one department, no decision be taken or order issued until all such departments have concurred, or, failing such concurrence, a decision thereon has been taken by or under the authority of the Cabinet.

Explanation- Every case in which a decision, if taken in one Department, is likely to affect the transaction of business allotted to another department, shall be deemed to be a case the subject of which concerns more than one department."

(emphasis supplied)

64. It is, therefore, clear that in terms of Rule 4 of TOB Rules,

as the subject pertaining to tobacco control and tobacco

legislation is not allotted to Health Department and as the

subject concerns more than one department, in as much as,

the Department of Commerce and Industry, Department of 111

Labour and Employment, and Department of Agriculture have

their stake in the matter which is indeed apparent from the

claims made by them before the Committee for Subordinate

legislation and which in fact was the reason for constituting

empowered group of ministers while framing 2008 Rules, no

decision could have been taken or order issued framing the

impugned Amendment Rules until all such departments had

concurred. Failing such concurrence, a decision was required to

be taken by or under the authority of the cabinet. In the instant

case, it is thus clear that though tobacco control and tobacco

legislation was not allocated to the Health Ministry and

although rival departments had divergent views expressed in

the matter pertaining to the nature and quantum of specified

health warning, the Health Department has unilaterally

finalized the Rules.

65. That the subject matter tobacco control and tobacco

legislation did not fall within the subjects allocated to Health

Department and that it indeed affected the interest of other

departments like Labour and Employment, Agriculture and

Industry and Commerce, becomes evident from the fact that as

rightly pointed out by Mr. Vijay Shankar, while framing the 112

Labeling Rules at the earliest point of time, because of lack of

unanimity in the various departments, cabinet constituted

empowered group of ministers. The empowered group of

ministers selected images which were to be published requiring

40% of the front panel. As a result, 2008 Rules were framed

incorporating the said suggestions. These Rules held the field

for nearly six years. But, 2014 Amendment Rules were

unilaterally framed by the Health Ministry without consulting

any other ministry which was concerned with the matter, nor

the matter was placed before the cabinet.

66. The assertion of learned Assistant Solicitor General Sri

Krishna Dixit is that the subject falls within the ambit of 'WHO'

or/and 'International Health Regulations' over which health

department has got jurisdiction. It has to be stated that such

an inference is impermissible. As the subject pertains to

Tobacco legislation, in the absence of any mention made

regarding this subject in the subjects allocated to Health

Department, it is not permissible to make such presumptions.

Even assuming that the subject falls under WHO or

International Health Regulations, as long as the subject affected

other departments, consultation with them was necessary. 113

67. The subject 'International Health Regulations' cannot be

construed to include Regulations or Rules framed under the

delegated power of Domestic Law so as to operate within the

Territory of India. COTPA Rules 2008 are framed in exercise of

the power conferred by sub-section (1) of Section 7, sub-section

(2) of Section 8, Sections 10 & 31 of the Cigarettes and Other

Tobacco Products, supply, and distribution Act, 2003. These

Rules nowhere make any reference to any International Health

Regulations. There is no material to show that they have to be

treated as part of International Health Regulations. None of the

provisions under Sections 7, 8, 10 & 31 of the 2003 Act make

any reference to any such International Health Regulations.

Merely because in the preamble to the COTPA 2003 reference is

made to Resolution passed by the 39th World Assembly dated

15.05.1986 and 43rd World Health Assembly urging the

Member States of WHO to implement the measures for effective

protection to non-smokers from involuntary exposure to

tobacco smoke and to protect children and young people from

being addicted to the use of tobacco and also to discourage the

use of tobacco and impose progressive restrictions on

advertising, promoting and sponsoring tobacco, it cannot be 114

said that the COTPA Rules framed partake the characteristics

of International Health Regulations or fall within the ambit of

WHO. Similarly, the impugned 2014 amendment made to the

2008 Rules do not contain any such reference to categorize

them as international regulations. The 2008 Regulations and

2014 Regulations are domestic health regulations and are not

international health regulations.

68. By a process of judicial interpretation, the scope and

ambit of expressions 'International Health Regulations' & 'WHO'

cannot be amplified to include Regulations/Rules made under

COTPA. A careful perusal of the nature of the subjects which

are enumerated as subjects falling within the scope of

Department of Health and other departments including the

Department of Industry and Commerce clearly show that such

amplification of the subjects by a process of inference is neither

permissible nor warranted in the present case.

69. The question is whether the departments concerned were

consulted and not as to who prepared and published the rules.

2008 Rules were the result of consultation of concerned

departments by the Government. The object and purpose of

COTPA as expressly declared and as is discernible from the 115

various provisions including Section 7 thereof is to regulate the

Trade and Commerce and production, supply and distribution

of cigarette and other tobacco products. Cigarette and other

tobacco products are the only significant trading commodities

produced from Tobacco. But for these products large network of

growing tobacco, manufacturing different tobacco products out

of the crop grown and trading in such products could not have

been established. There is complete interdependence between

growing tobacco by the agriculturists, manufacture of cigarettes

and other products and supply and distribution by trading in

them. When Rules are framed imposing several restrictions on

the tobacco products in manufacturing, trading, supplying and

distributing them including by way of treating the said products

as contraband products if rotation of pictorials textual warnings

were not adhered to, it cannot be said that such restrictions

placed on health grounds by the Health Department will have

no consequence or concern for tobacco cultivation falling under

Department of Agriculture or Trade and Industry in tobacco

falling under the Department of Industry and Commerce or for

that matter on lakhs of labourers engaged in the beedi

manufacturing industry. Therefore, even if the subject matter

fell within the ambit of a particular department say for example, 116

Department of Industries and Commerce or Department of

Health, etc., the regulations framed will have adverse effect on

other departments because of the interconnection of the matter

over several subjects. It is one thing to say that a subject comes

under a particular department but entirely another to say

whether rules framed on the subject affect other departments or

other subjects which fall under various departments for the

purpose of consulting them. If the pictorial and textual

warnings prescribed in the Rules to cover 85% of the front and

back panels of the package and the rule regarding rotation

prescribed rendering a legally manufactured product an illegal

commodity for trade on the expiry of the grace period could be

successfully attacked as violative of fundamental rights of the

manufacturers, producers, suppliers and distributors of

tobacco products, it is difficult to hold that such offending rules

framed by Health Department do not concern the Department

of Commerce and Industry under which tobacco industry, trade

in these products and also the Tobacco Board established to

protect the interest of tobacco growers, curers and importers

come. Merely because the rules are framed to protect public

health, it cannot be said that other affected interests need not

be consulted. Such an interpretation will frustrate the very 117

object behind Rule 4. Plain meaning of Rule 4 does not permit

such an interpretation.

70. Rule 7 of TOB throws considerable light even as regards

the mandatory nature of compliance of the requirement. Indeed,

while framing 2008 Rules, because of the difference of opinion

between different departments, the matter was referred to GOM

constituted by the cabinet. The 2008 Rules were finalized only

after consulting the affected and interested persons represented

by different departments. Inspite of the past experience and the

procedure followed while framing the very Rules in 2008, the

Health Department has consciously chosen to bypass the said

process which was well recognized and followed earlier.

Therefore, similar consultation was a must while effecting

amendment to the very Rules of 2008 that too when it was

proposed to impose greater rigors and restrictions in the form of

prescribing 85% of specified warnings on both the larger panels

of the package as against 40% on only one side of the package

that was agreed while framing 2008 Rules after due

consultation of the concerned departments which represented

the affected interests.

118

71. As regards the effect of unilateral action of the Health

Ministry in framing and notifying the 2014 Amendment Rules

without following AOB Rules, the matter is fully covered by the

decisions of the Apex Court. In the judgment in MRF LIMITED

Vs. MANOHAR PARRIKAR & OTHERS - (2010) 11 SCC 374, the

appellant had raised an issue with regard to nature of business

rules framed by the Government of Goa, i.e., whether the Rules

were directory or mandatory. It was contended before the High

Court that the rules of business of the State of Goa were

directory and not mandatory and failure to comply with such

rules would not nullify the decision taken by the State

Government. This argument was advanced based on the

decision in DATTATRAYA MORESHWAR PANGARKAR VS. STATE

OF BOMBAY - AIR 1952 SC 181 (see para 42 of the judgment).

In order to appreciate this contention, the Apex Court extracted

Article 166 of the Constitution of India in paragraph 65 of the

said judgment. Article 166 which is similar to Article 77 is again

referred to in paragraph 66 & 67 of the said judgment. In

paragraph 72 of the said judgment, the Apex Court has

observed as under:

"72. The High Court has observed, that the Rules of Business are framed in such a 119

manner that the mandate of the provisions of Articles 154, 163 and 166 of the Constitution are fulfilled. Therefore, if it is held that the non- compliance with these Rules does not vitiate the decisions taken by an individual Minister concerned alone, the result would be disastrous. In a democratic set-up the decision of the State Government must reflect the collective wisdom of the Council of Ministers or at least that of the Chief Minister who heads the Council. The fact that the decisions taken by the Minister alone were acted upon by issuance of notification will not render them decisions of the State Government even if the State Government choose to remain silent for a sufficient period of time or the Secretary concerned to the State Government did not take any action under Rule 46 of the Business Rules. If every decision of an individual Minister taken in breach of the Rules are treated to be those of the State Government within the meaning of Article 154 of the Constitution, the result would be chaotic. The Chief Minister would remain a mere figure head and every Minister will be free to act on his own by keeping the Business Rules at bay. Further, it would make it impossible to discharge the constitutional responsibility of the Chief Minister of advising the Governor under Article 163.

Therefore, it is difficult to accept the contentions 120

of the appellants that the Business Rules are directory."

72. In paragraph 73, the Apex Court while agreeing with the

view taken by the Bombay High Court and rejecting the

contentions urged by the appellant before it, observed that

business Rules 3, 6, 7 & 9 of the State Government were

mandatory and not directory and any decision taken by any

individual Ministry in violation of the said business Rules

cannot be termed as the decision of the State Government. In

this regard, the Apex Court has referred to the judgments in the

cases of K.K.BHALLA Vs. STATE OF M.P. - (2006) 3 SCC 581;

STATE OF U.P. Vs. NEERAJ AWASTHI - (2006) 1 SCC 667. The

Court also held that the decision of the Constitution Bench in

R.CHITRALEKHA Vs. STATE OF MYSORE - AIR 1964 SC 1823

had been misinterpreted, wherein it was held that the fact that

an order which was not expressed in the name of the Governor

in terms of Article 166 (1) & (2), could not vitiate the same as

the provisions of Article 166 were only directory and not

mandatory in character, inasmuch as, the context clearly

showed that the observation of the Apex Court in Chitralekha's

case referred only to clauses (1) & (2) of Article 166 and did not 121

refer to clause (3) which was not under consideration at all. In

paragraph 91, the Apex Court has observed as under:

"91. The Rules of Business framed under Article 166(3) of the Constitution are for convenient transaction of the business of the Government and the said business has to be transacted in a just and fit manner in keeping with the said Business Rules and as per the requirement of Article 154 of the Constitution. Therefore, if the Council of Ministers or the Chief Minister has not been a party to a decision taken by an individual Minister, that decision cannot be the decision of the State Governemnt and it would be non est and void ab initio. This conclusion draws support from the judgment of this Court in Haridwar Singh v Bagun Sambrui. This Court in the said case was dealing with the Business Rules of the State of Bihar framed under Article 166(3) of the Constitution of India and the observations of this Court on the issue apply to the case on hand in all force. This Court observed: (SCC pp. 895-96, paras 14-16)

"14. Where a prescription relates to performance of a public duty and to invalidate acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, such prescription is generally understood as mere instruction for the guidance of those upon whom the duty is imposed. ...

122 15. Where however, a power or authority is conferred with a direction that certain regulation or formality shall be complied with, it seems neither unjust nor incorrect to exact a rigorous observance of it as essential to the acquisition of the right or authority. ...

16. Further, Rule 10(2) makes it clear that where prior consultation with the Finance Department is required for a proposal, and the Department on consultation, does not agree to the proposal, the Department originating the proposal can take no further action on the proposal. The Cabinet alone would be competent to take a decision. When we see that the disagreement of the Finance Department with a proposal on consultation, deprives the Department originating the proposal of the power to take further action on it, the only conclusion possible is that prior consultation is an essential prerequisite to the exercise of the power."

73. Again in paragraph 108, the Apex Court has observed as

under:

"108. The appellants contended before this Court that another Division Bench of the High Court in its earlier judgment of 21.1.1999 had held that the Notification dated 1.8.1996 was clarificatory and that it did not create any extra financial liability on the 123

State Government requiring approval of the Cabinet in compliance with the Business Rules before it was brought into force. In our opinion the said notification cannot be treated as mere clarificatory. It is a notification issued purportedly in terms of a government decision. It was a decision finalized at the level of the Minister of Power alone and was taken in violation of the Rules of Business framed under Article 166(3) of the Constitution of India. The decision cannot be called a government decision as understood under Article 154 of the Constitution, though it may satisfy the requirements of authentication. Nevertheless, mere authentication as required under Article 166(2) of the Constitution did not make it a government decision in law nor would it validate a decision which is void ab initio. Thej validity of the notification will have to be tested with reference to the constitutional provisions and the Business Rules and not by their form or substance. Therefore, this contention of the appellants is liable to be rejected."

74. Tobacco or tobacco legislation has not been allocated to

the Health Ministry. Therefore, the rule making power under

Section 31 of COTPA could not have been exercised by the

Health Ministry unilaterally. While the Health Ministry has

been specifically allotted other legislation such as Food & Safety

Standards Act and Prevention of Food Adulteration Act, no item

relating to tobacco has been allocated to the Health Ministry 124

under the AOB Rules. The subject matter of production,

distribution (for domestic consumption and exports) and

development of plantation crops, tea, coffee, rubber, spices,

tobacco and cashew and Tobacco Board have been allocated to

the Ministry of Commerce and Industry as can be seen from

item Nos.8, 10(d) of the AOB Rules. The subject World Health

Organization is allocated to the Health Ministry. The proposal

made by the Health Ministry to include 'Tobacco Control

Programme' and 'Tobacco Legislation' as new items by way of

review of AOB Rules was not accepted. It is also clear that

tobacco legislation is not included within the ambit of

Commerce Ministry, though tobacco Board and production,

distribution and development of tobacco for domestic

consumption and exports are included therein. Hence, in terms

of Rule 4(1) of the TOB Rules, when the subject of a case

concerns more than one department, no decision be taken or

order issued until all such departments have concurred or

failing such concurrence a decision thereon has been taken by

or under the authority of the cabinet. It is evident that Health

Ministry without consulting other Ministries has unilaterally

promulgated these Rules. It is because of these objections

raised, the matter was referred to the Committee on 125

subordinate legislation and when the Committee interacted

with all the stakeholders and came up with concrete

recommendations, without taking note of the same, in the guise

of implementing exparte interim order granted by the Rajasthan

High Court, the Rules have been implemented. Therefore, there

is manifest illegality.

75. It is also relevant to notice here that COTP Rules, 2008

required tobacco products packages to bear 40% warnings on

the front panel. These Rules were promulgated and

implemented after a decision in this regard was taken by the

empowered group of Ministries. Whereas, COTP Amended

Rules, 2014 drastically increased the size of 40% warnings on

the front panel to 85% on the front and back panels. When this

variation of the previous decisions was taken and implemented,

the matter did not pass through the cabinet nor the group of

Ministries who had examined COTP Rules, 2008. There does

not appear to be any unanimity between the various Ministries

of Central Government in respect of COTP Amendment Rules,

2014 as is evident from the statement made before the

Parliamentary Committee on subordinate legislation for various

Ministries in relation to the warnings under the COTP 126

Amendment Rules, 2014. A perusal of the report of the

Committee would show that -

(a) The Ministry of Commerce and Trade stated that COTP Amendment Rules, 2014 would have severe and irreprehensible consequences without any corresponding benefit and therefore, recommended that the warnings of 40% on the front panel be continued, or at the most changed to 50% of the principal display area;

(b) The Ministry of Labour stated that increase in the size of warnings by COTP Amendment Rules, 2014 would adversely impact the bidi industry and the livelihood of bidi workers, and therefore, recommended an audio visual campaign as an alternative to the excessive and large gruesome warnings under the COTP Amendment Rules, 2014.

76. When these two departments have come up with specific

assertions before the committee on subordinate legislation

stating how the interest of their departments were involved and

alleging that unilateral action of the Health Department was

illegal, in the absence of these two departments being parties to

these writ petitions and behind their back, it cannot be said

that the present Rules do not concern them. Once it is found 127

that the restrictions imposed by the Rules (regarding 85% +

rotation) are arbitrary and violative of the rights of traders,

manufacturers and suppliers of cigarettes and other tobacco

products, it cannot be said that it will not concern Department

of Trade, Commerce, Agriculture and Labour.

77. In DELHI INTERNATIONAL AIRPORT LTD VS

INTERNATIONAL LEASE FINANCE CORPN. - (2015) 8 SCC 446,

the Apex Court in paragraphs 19, 20, & 22 while dealing with

the TOB Rules and its effect, has observed as under:

"19. Under the Government of India (Transaction of Business) Rules, 1961, the Government business is divided amongst the ministers and specific functions are reallocated to different ministries. Each ministry can therefore issue orders or notifications in respect of the functions which have been allocated to it under the Rules of Business. We may usefully refer to Government of India (Transaction of Business) Rules, 1961, as lastly amended by amendment dated 1.12.2014 made by the President in exercise of the provisions of sub- clause (3) of Article 77 of the Constitution of India for more convenient transaction of the business of the Government of India. Rule 3 provides that subject to certain exceptions made 128

thereunder, all business allotted to a department under the Government of India (Allocation of Business) Rules, 1961 shall be disposed of by or under the general or special directions of the Minister in Charge. Further Rule 4 provides for Inter-Departmental Consultations. Rule 4(1) reads as under :-

"4 Inter-Departmental Consultations. - (1) When the subject of a case concerns more than one department, no decision be taken or order issued until all such departments have concurred, or, failing such concurrence, a decision thereon has been taken by or under the authority of the Cabinet."

Sub-clause (2) of Rule 4 which is very much relevant in instant case can be reproduced here for convenience:

"4. (2) Unless the case is fully covered by powered to sanction expenditure or to appropriate or re-

appropriate funds, conferred by any general or special orders made by the Ministry of Finance, no department shall, without the previous concurrence of the Ministry of Finance, issue any orders which may-

129 (a) involve any abandonment of revenue or involve any expenditure for which no provision has been made in the Appropriation Act;

(b)-(c) *

(d) otherwise have a financial bearing whether involving expenditure or not;"

20. In State of Sikkim v. Dorjee Tshering Bhutia & Ors., (1991)4 SCC 243, it is observed as under:-

"14...The Government business is conducted under Article 166(3) of the Constitution in accordance with the Rules of Business made by the Governor. Under the said Rules the Government business is divided amongst the ministers and specific functions are allocated to different ministries. Each ministry can, therefore, issue orders or notifications in respect of the functions which have been allocated to it under the Rules of Business."

21. .........................

22. In terms of Rule 3 the alleged decision taken pursuant to meeting dated 26.3.2013 should have been sanctioned by 130

under the general or special directions of the Minister in Charge. Since in this case, stakes of different departments headed by different ministries are concerned, the provision of Rule 4 would apply i.e. alleged decision should have been taken by the concerned committee of the Cabinet. Since, the alleged decision involves the financial bearing also, it should have all concurrence of Finance Department also. Apparently alleged minutes of the meeting purportedly stated to be an order in writing by Central Government and later communicated to all concerned, are not disposed of in pursuance of Rule 4 i.e. neither the decision was sanctified by Cabinet nor the concurrence of Finance Department was taken"

78. Indeed, the Apex Court in this judgment has also referred

to the case of MRF LIMITED V. MANOHAR PARRIKAR & ORS.,

2010(11) SCC 374 and has extracted paragraph Nos. 67 to 73 in

support of its findings. It has finally concluded by observing as

under in paragraph No.25 of the judgment.

"25. According to the second respondent (Union of India), the meeting had been convened in the backdrop of Cape Town Convention and Protocol i.e. the Convention on International Interests in 131

Mobile Equipment which provides for the protection of the international interests in the aircrafts as well and India became signatory to this Convention on 31.3.2008. Union of India contends that in the meeting convened on 26.3.2013, it was decided that in order to honour the international obligations of India and to restore faith of international business community and investors, it was necessary to allow the aircrafts to be returned to the owners / lessors. Stand of UOI is that minutes of the meeting is the decision of the Central Government is in accordance with law and has the force of law. Such a decision involving financial implications must have been taken in terms of the constitutional scheme i.e. upon compliance of requirement of Article 77 of the Constitution. There is nothing on record to show that the minutes of the meeting had the concurrence of the Finance Department and was either confirmed or approved by the concerned minister and such directions were not shown to have been issued pursuant to any decision taken by a competent authority in terms of Rules of Business framed under Article 77 of the Constitution of India. The minutes of the meeting do not become a general or special order in writing by the Central Government unless the same was sanctified and acted upon by issuing 132

an order in the name of the President in the manner provided under Article 77 (2) of the Constitution."

79. As held by the Apex Court in the aforesaid two

judgments, where different departments headed by different

ministers are concerned with the subject, provision of Rule 4 of

Transaction of Business Rules, 1961, will be applicable and the

decision ought to be taken by the Cabinet. There is nothing on

record placed by the Central Government Health Department

which is arrayed as respondent in these writ petitions to show

that other departments, particularly Ministry of Labour and

Employment, Ministry of Industry and Commerce, and Ministry

of Agriculture were consulted. On the other hand, the report of

the committee of subordinate legislation makes it clear that

there were rival claims and discordant notes expressed by

different departments. In such situation, unless the competent

authority had taken decision in terms of Rule 4 of the AOB

Rules framed by the President in exercise of power under Article

77(3) of the Constitution, the decision to frame the 2014

Amendment Rules and notify them cannot be sustained. As a

result, the Rules so framed by the Health Department are illegal 133

being without authority and power over the subject matter and

also due to violation of Rule 4 of the AOB Rules.

80. It is also necessary to notice here that merely because the

Rules framed by the Health Department had been placed before

the Parliament as required under Section 31(3) of COTPA, the

same will not make any difference as regards the power and

jurisdiction of the Court to pronounce on the validity of the

Rules. Compliance with the laying procedure will not inoculate

the Rules from being challenged before the Courts of law if they

are otherwise illegal or unconstitutional. Mr. Vijayshankar is

right and justified in bringing to our notice a judgment of the

Apex Court in the case of DAI-ICHI KARKARIA PRIVATE

LIMITED VS UNION OF INDIA & OTHERS - 1995 (80) ELT 24

BOM. Relevant observations in this regard are found at

paragraph 8 of the said judgment.

81. To find out whether a particular rule is mandatory or is

only directory, the important test is the language used therein.

If the obligatory and mandatory nature of the duty cast coupled

with the consequences of not complying with the said obligation

are clearly spelt out in the relevant rule, then the obligation

cast has to be construed as mandatory. This proposition of law 134

is very well established by various judicial decisions. Useful

reference can be made to the following decisions in this regard.

82. In LALARAM AND ORS, VS. JAIPURA DEVELOPMENT

AUTHORITY AND ORS - 2016(4) SCJ 161, wherein earlier

decision in HARIDWAR SINGH VS. BAGUN SUMBRUI AND ORS -

(1973) 3 SCC 889 was adverted to dealing with the directory or

mandatory character of the constituents of Article 166 of the

Constitution of India, the Apex Court amongst other, quoted

with approval the following excerpts from its earlier decision in

Haridwar Singh's case, as under:

"13. Several tests have been propounded in decided cases for determining the question whether a provision in a statute, or a rule is mandatory or directory. No universal rule can be laid down on this matter. In each case one must look to the subject- matter and consider the importance of the provision disregarded and the relation of that provision to the general object intended to be secured. Prohibitive or negative words can rarely be directory and are indicative of the intent that the provision is to be mandatory..

78. Apart from noting the extract from the erudite work, Maxwell on Statutes, referred to hereinabove, this Court did refer as well to the following quote from the Halsbury"s Laws of England, 4th Edn. Reissue, Vol. 44(1) at para 1238:

"Mandatory and directory enactments.--The distinction between mandatory and directory enactments concerns statutory requirements and 135

may have to be drawn where the consequence of failing to implement the requirement is not spelt out in the legislation. The requirement may arise in one of two ways. A duty to implement it may be imposed directly on a person; or legislation may govern the doing of an act or the carrying on of an activity, and compel the person doing the act or carrying on the activity to implement the requirement as part of a specified procedure. The requirement may be imposed merely by implication.

To remedy the deficiency of the legislature in failing to specify the intended legal consequence of non- compliance with such a requirement, it has been necessary for the courts to devise rules. These lay down that it must be decided from the wording of the relevant enactment whether the requirement is intended to be mandatory or merely directory. The same requirement may be mandatory as to some aspects and directory as to the rest. The court will be more willing to hold that a statutory requirement is merely directory if any breach of the requirement is necessarily followed by an opportunity to exercise some judicial or official discretion in a way which can adequately compensate for that breach. Provisions relating to the steps to be taken by the parties to legal proceedings (using the term in the widest sense) are often construed as mandatory. Where, however, a requirement, even if in mandatory terms, is purely procedural and is imposed for the benefit of one party alone, that party can waive the requirement. Provisions requiring a public authority to comply with formalities in order to render a private individual liable to a levy have generally been held to be mandatory.

Requirements are construed as directory if they relate to the performance of a public duty, and the case is such that to hold void acts done in neglect of them would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty, without at the same time promoting the main object of the legislature. This is 136

illustrated by many decisions relating to the performance of public functions out of time, and by many relating to the failure of public officers to comply with formal requirements. On the other hand, the view that provisions conferring private rights have been generally treated as mandatory is less easy to support; the decisions on provisions of this type appear, in fact, to show no really marked leaning either way."

83. In the instant case, if Rule 4 of AOB Rules which is the

relevant rule for our purpose is examined, it becomes very clear

that as per sub-clause (1) of Rule 4 wherever the subject of a

case concerns more than one department, no decision can be

taken or order issued unless all such departments have

concurred or failing such concurrence, a decision thereon has

been taken by or under the authority of the cabinet. The first

part of sub-rule (1) of Rule 4 unambiguously and clearly enacts

that wherever the subject of a case concerns more than one

department, no decision can be taken or order issued unless all

such departments have concurred. The second part of sub-rule

(1) of Rule 4 makes it clear that in case of non-concurrence of

the various departments concerned, a decision has to be taken

by or under the authority of the cabinet. Therefore, applying the

test enumerated in the aforementioned cases, if the nature of

the duty cast regarding concurrence of the concerned 137

departments is examined, then the same has to be

characterized as mandatory and not directory. If such

mandatory direction is not complied with, then as held by the

Apex Court in the various judgments including the latest

judgments in the case of MRF Limited 2010(11) SCC 374 and

Delhi International Airport 2015(8) SCC 446, where different

departments headed by different ministries are concerned with

the subject, provision of rule 4 of TOB Rules will be applicable

and the decision ought to be taken by the cabinet in case of

non-concurrence of different departments.

84. For all the reasons stated above, it is held that the

impugned Rules which are unilaterally framed by the Health

Department without concurrence of the other concerned

departments, are illegal and void ab initio.

(II) Whether the Rules are manifestly arbitrary and unreasonable?

85. It is next urged by the learned Counsel for the petitioners

that 2014 Amendment to COTP Rules are manifestly arbitrary

and unreasonable and are therefore vitiated. In this connection,

following contentions have been raised.

138

(i) One of the recognized grounds for striking down a

subordinate legislation is manifest arbitrariness or

unreasonableness, to an extent where the court might well say

that the legislature never intended to give authority to make

such rules. Some of the factors which make up manifest

arbitrariness are non-consideration of relevant material,

consideration of extraneous material, non-application of mind,

lack of intelligent deliberation and care and legal malice.

(ii) The concept of 'manifest arbitrariness' takes within its

ambit the substance/content of the subordinate legislation, as

well as the manner in which the power to frame subordinate

legislation is exercised.

(iii) In the present case, the element of manifest

arbitrariness is evident both, in the manner in which the said

Rules have been framed and brought into force, as well as in

the content of the 2014 Amendment Rules.

86. Commenting on the manner in which the 2014

Amendment Rules were framed, Mr. Vijay Shankar, Mr.Sajan

Poovayya and Mr.Kohli have been highly critical of the method

adopted by the Ministry of Health and Family Welfare (for short, 139

'Health Ministry') unilaterally framing the Rules. It is urged

that in the year 2006 Rules known as the Cigarettes and Other

Tobacco Products (Packaging and Labelling) Rules, 2006, had

been framed which prescribed certain graphic health warnings

to be printed on tobacco product packages requiring that the

said warnings shall cover 50% of both sides of the packages.

Thereafter, the Central Government/Cabinet constituted an

empowered Group of Ministers to suggest alternative methods

of communication that were more subtle than the warnings

proposed by the Health Ministry as per 2006 Rules. The Group

of Ministers (GOM) selected more subtle images and proposed

to bring down the requirement of warnings from 50% of both

sides of the package to 40% on one (front) side of the package.

It is pursuant to the said decision, the COTP Rules, 2008, were

brought into force requiring specified health warnings to cover

40% of the front panel of a tobacco product package. However,

it is urged that at the time of framing of COTP Amendment

Rules, 2014, which changed the warnings to more gruesome

images and enlarged their size so as to cover 85% of both sides

of the package, the Health Ministry again acted unilaterally and

none of the other ministries concerned with the subject of

tobacco industry were engaged or consulted while framing 140

COTP Amended Rules, 2014. This unilateral decision of the

Health Ministry to change and enlarge the warnings, it is urged,

flies in the teeth of the decision of the Cabinet and the Group of

Ministries which resulted in framing 2008 Rules that were

followed for nearly seven years.

87. Mr. Vijay Shankar further points out that the graphic

health warnings as per 2014 Amendment Rules were the result

of recommendations made by "Committee of Experts", which

was constituted by the Health Ministry itself and did not

include any members of the Ministry of Commerce & Industry,

which is the nodal ministry for the subject of tobacco; nor the

Ministry of Labour and Employment or any other ministries

which were concerned with the subject participated in it, let

alone participation from the tobacco industry or the packaging/

printing industry. It is urged by him that the so-called

'Committee of Experts' comprised only of representatives of

Health Ministry and certain representatives from anti-tobacco

organizations. The said organizations, Mr. Vijay Shankar urges,

were funded from organizations based in foreign countries,

primarily the United States of America. It is thus urged that the

Health Ministry has unilaterally by abdicating its responsibility 141

in favour of Non-Governmental Organizations, has accepted the

recommendations of the Committee without any independent

application of mind and without consulting the stakeholders

concerned including other Ministries which are concerned with

the subject in question. Thus, it is urged, the process followed

has resulted in the Health Ministry giving a complete go by to

the pre-legislative consultative policy issued by the Ministry of

Law & Justice, urging ministries to hold consultations with the

stakeholders, including governmental departments and public

to facilitate a transparent decision making process.

88. So far as this aspect of the matter regarding the Health

Ministry unilaterally framing the Rules i.e., COTP Amendment

Rules 2014, it is already held that the subject matter pertaining

to Tobacco control or Tobacco legislation was not allocated to

any single ministry let alone the Health Ministry and therefore,

the Health Ministry could not have overlooked the provisions of

the AOB Rules and TOB Rules. Therefore, though this aspect

will have bearing on the issue of arbitrary and unreasonable

exercise of power, as the same has been already dealt with, it

need not be again answered. Suffice to state that action taken

by the Health Ministry shows non-consideration of relevant 142

aspects and non-application of mind and is therefore,

manifestly arbitrary and unreasonable.

89. Regarding the manner in which the amendment rules were

brought into force: It is contended by Mr. Vijay Shankar, that

Parliamentary Committee on subordinate legislation having

noticed that the provisions of 2014 Amendment Rules were

framed after they were examined only by the Health Ministry

and having felt the need that the views of other ministries had

to be taken and considered, recommended that the Rules be

kept in abeyance till final report was issued. The Health

Ministry following the recommendation of the committee issued

a notification/corrigendum which effectively deferred

commencement of 2014 Amendment Rules to such date as the

Central Government might appoint. Thereafter, exercise of

consulting various stakeholders was undertaken by the

Committee. As per the 11th Report (Final Report) issued by the

Parliamentary Committee on 15.03.2016, the Committee found

that the warnings proposed by Health Ministry were harsh and

recommended reduction in their size. Mr. Vijay Shankar points

out that before the Final Report of the Committee was

published, the Health Ministry had issued a notification on 143

28.09.2015, thereby bringing the 2014 Amendment Rules into

effect from 01.04.2016. This was allegedly in furtherance of the

interim order dated 03.07.2015 passed by the Rajasthan High

Court in W.P.No.8680/2015 filed by Rahul Joshi. In this

regard, it is urged that the said order of Rajasthan High Court

was an ex-parte ad interim order; the Health Ministry did not

make any effort seeking vacation of the interim order nor did it

attempt to challenge the maintainability of the petition in any

manner. Instead, the Health Ministry issued notification to

bring the 2014 Amendment Rules into effect from 01.04.2016

ignoring the fact that Parliamentary Committee was seized of

the issue and its final report was awaited.

90. It is further urged that though the final report of the

Parliamentary Committee was placed before the Parliament on

15.03.2016, the Health Ministry did not take any steps to defer

the implementation of the Rules to examine the final report. On

the other hand, the Ministry of Health and Family Welfare filed

an affidavit in the writ petition before the Rajasthan High Court

bringing the final report of the Parliamentary Committee on

record and contended that the legislative authority of the

Health Ministry was examining the final report, but no action 144

was taken on the said report as required under the Rules of

Procedure and Conduct of Business of the Lok Sabha and the

Speaker's directions. It is urged that even after the presentation

of the final report before the Parliament, the Health Ministry did

not take any steps to consider the contents and

recommendations made in the report by deferring the

implementation of the Rules as amended in the year 2014 as

they had been already notified to be effective from 01.04.2016.

It is thus apparent that there is non-application of mind to the

report and the report of the committee was totally disregarded.

91. It is very effectively contended by Mr.Kohli, learned

counsel for some of the petitioners that the process integrity

required to be adhered to while framing the Rules has been

violated allegedly due to the exparte interim order passed by the

Court followed by the contempt petition filed.

92. The Committee on Subordinate Legislation is a body

constituted under the Rules of Procedure and Conduct of

Business in Lok Sabha framed under Article 118 of the

Constitution of India. The Committee comprises cross section of

the members of the Lok Sabha nominated by the Speaker and

entrusted with the function to scrutinize and report to the 145

House whether delegated legislative powers are being properly

exercised within the limits of such delegation. The said

committee is also empowered to look into whether a

subordinate legislation is in accord with the general objects of

the Constitution or the parent Act pursuant to which it is

made. The Parliamentary Committee on Subordinate Legislation

is a permanent body as opposed to an ad-hoc or temporary

body. The Health Ministry has apparently not considered the

report, wherein it was clearly stated that size of the warnings

had to be reduced. The Health Ministry has issued the

notification bringing the Amendment Rules into force with effect

from 01.04.2016 by notification dated 28.09.2015 in

supersession of the corrigendum issued earlier deferring the

implementation of the Rules by taking note of the interim report

of the committee. The Health Ministry has acted in great haste

to implement the rules by virtue of the interim order passed by

the Rajasthan High Court in the public interest writ petition,

particularly because of the contempt proceedings initiated

complaining violation of the interim order. Instead of placing all

the relevant materials before the Court and seeking to either

defer the contempt proceedings or to vacate the interim order

till the main matter was disposed of, the Health Ministry has 146

chosen to publish the Rules without examining the implications

and without taking note of the recommendations made by the

Committee on sub-ordinate legislation.

93. It is well established that High Court exercising power

under Article 226 will not direct the Government to implement

or to bring into force proposed amendment to any rules by

issuing a writ, as the same would be a legislative act primarily

within the domain of the body competent to legislate. Nothing

prevented the Health Department to appraise the Court of all

relevant facts and seek vacation of the interim order. Hence, it

is apparent that the Rules as brought into force have not gone

through the required consultative process analysis and

examination. There is non-application of mind to the interests

of various stakeholders.

94. The next question interconnected with the above would

be whether mere fact that the Health Ministry failed to take

note of the recommendations made in the report of the

Parliamentary Committee would vitiate the amendment rules?"

95. Learned Assistant Solicitor General Sri Krishna Dixit has

contended that how the report has to be taken into 147

consideration by the Health Ministry? What is the effect of not

taking into consideration the said report, are not matters that

can be gone into by this Court, in as much as, procedural

safeguard envisaged in the Act under Section 31(3) was

complied with by laying the Rules before each House of

Parliament for a total period of 30 days; before the expiry of the

said period of 30 days, the Parliament has not chosen to make

any modification in the rule or notification; therefore,

amendment rules have validly come into existence.

96. It cannot be denied that one of the challenges that can be

laid against the delegated legislation is with regard to its

manifest arbitrariness. In the case of INDIAN EXPRESS

(BOMBAY) VS UNION OF INDIA - AIR 1986 SC 515, it has been

observed at page 73 that a piece of subordinate legislation does

not carry the same degree of immunity which is enjoyed by the

statute passed by the competent legislature. The subordinate

legislation may be questioned on any of the grounds on which

plenary legislation is questioned. It may also be questioned on

the ground that it is unreasonable, unreasonable not in the

sense of not being reasonable, but in the sense it is manifestly

arbitrary. Again in the case of CELLULAR OPERATOR 148

ASSOCIATION OF INDIA & OTHERS VS TELECOM REGULATORY

AUTHORITY OF INDIA & OTHERS - (2016) 7 SCC 703, the Apex

Court has set out the parameters of judicial review of

subordinate legislation. One of the grounds for such judicial

review has been stated as manifest,

arbitrariness/unreasonableness (to an extent where the court

may well say that the legislature never intended to give

authority to make such rules). Even in the case of SHARMA

TRANSPORT VS GOVERNMENT OF ANDHRA PRADESH - (2002) 2

SCC 188, the Apex Court has ruled that in order to strike down

the delegated legislation as arbitrary, it has to be established

that there is manifest arbitrariness.

97. It is useful to deal with some of the contentions of learned

Senior Counsel Mr. Sajan Poovayya who has also urged that the

Rules suffer from manifest arbitrariness violating Article 14 of

the Constitution of India. Elaborating this submission, he urges

the following points:

i) The 2014 Amendment Rules have the effect of the

Health Department unilaterally reversing the decision of the

cabinet and its empowered group of ministers.

149 ii) The Central Government (Health Department) has

abdicated its power to the 'expert committee'. - In this

connection, it is contended by him that 2014 Amendment Rules

have been admittedly promulgated pursuant to the

recommendations of the so-called expert committee. This

committee consisted of only non-governmental organizations

involved in anti-tobacco activities apart from the reports of the

Health Ministry. No other department or Ministry of the Central

Government was consulted by the so-called expert committee.

Hence, it is urged that the nature of pictorial images and

warnings to be used was entirely left to the voluntary health

association of India, and hence, the gruesome images

prescribed and the excessive size of warnings is not the result

of rational and reasonable choice made by the Central

Government.

iii) There was pre-determined approach on the part of

the Health Ministry - It is urged in this connection that the

notification publishing 2014 Amendment Rules was issued on

14.10.2014 barely five days after the report of the so-called

expert committee was submitted. Although the report

recommended size of 80% on the front and back panel, the 150

Health Ministry prescribed 85% on the front and back panel.

This disclosed the Health Ministry's pre-determined approach

and lack of transparency.

iv) Views of Parliamentary Committee and other

Ministries disregarded -

v) Pre-legislative Consultation Policy not adhered to

by the Health Ministry - In this connection, it is urged that

the Ministry or Department proposing a sub-ordinate legislation

is required to give wide publicity to the Rules inviting comments

or suggestions from the public before framing the Rules. The

Health Department has admittedly not adhered to this process.

That the implications of the proposed amendment including its

impact on the fundamental rights, lives and livelihood of the

affected people has not gone into the process of framing of

Rules as pre-legislative consultation process has not been

followed.

vi) Violation of Intellectual Property Rights - In this

connection, it is urged that the manufacturers of cigarettes and

other tobacco products have valuable rights in their trade mark

under statute and common law. The trade marks include not 151

only brand names, but also logos and other insignia, trade

dress and representations on the whole or on one or more faces

of the cigarette packages. Such usage of trade mark generates

goodwill over a period of time, but 2014 Amendment Rules

violated manufacturers right in their trade marks; thus, it

contravenes other plenary legislation viz., the rights under the

Trade Marks Act, 1999. In this connection, he has placed

reliance on the judgment in the case of INDIAN EXPRESS VS

UNION OF INDIA - AIR 1986 SC 515 inviting our attention to

paragraph 75. He also points out that right to use the trade

marks registered under the Trade Marks Act, 1999, is

statutorily protected under Section 28 of the Trade Marks Act,

1999. He also urges that even as per COTPA, this right is

preserved by proviso (a) to Section 5(2) of the 2003 Act. His

contention is, that the mandatory requirement now imposed to

cover 85% of the front and back panels of tobacco product

packages prevent the use of these registered trade marks on the

packages, and therefore, the Rules are liable to be struck down

as they violated the rights conferred by the Trade Marks Act,

1999.

152

vii) FCTC cannot be regarded as law and cannot justify

the 2014 Labelling Amendment Rules - Dealing with the

stand taken by the Health Ministry in the statement of

objections, it is urged that merely because India is a party to

the Framework Convention on Tobacco Control (FCTC), there

cannot be any justification for the Health Department to frame

2014 Labelling Amendment Rules in the guise of implementing

the obligations thereunder. The following decisions have been

relied upon in this regard.

a) MAGANBHAI ISHWARBHAI PATEL VS UNION OF INDIA - (1970) 3 SCC 400 (paragraphs 29, 77 & 80), to urge that any international treaty which affects the rights of citizens or modifies the domestic law in any manner is not binding and cannot be enforced unless parliament passes a legislation enacting such international treaty into a law.

b) CIVIL RIGHTS VIGILANCE COMMITTEE SLSRC COLLEGE OF LAW VS UNION OF INDIA - AIR 1983 KAR 65 (paragraph 17), to urge that 2003 Act is not enacted pursuant to Article 253; that Chavan Committee, in fact had suggested the inclusion of the statement to the effect that 'India being a signatory to the resolutions (39th & 43rd World Health Assembly Resolutions), it is considered necessary to implement the said resolutions and in 153

terms of Article 253 of the Constitution'. This proposal and suggestion to include the above statement in the preamble was not carried out and that is how in the preamble to the 2003 Act, it is not stated that the Act was made under Article 253.

Therefore, it is urged that the delegate cannot rely on any

international instrument to justify the validity of the Rules

framed under 2003 Act.

98. On careful consideration of the above contentions, it can

be found that FCTC came into effect as an international

instrument on 27.02.2005; the 2003 Act was enacted on

18.05.203; it was brought into force on 31.05.2004. Thus,

COTPA is prior in point of time to the FCTC. Hence, it is clear

that COTPA is not enacted pursuant to the FCTC or so as to

implement it. The 39th & 43rd World Health Assembly

Resolutions which have been referred to in the preamble to

COTPA 2003, do not require the members of the World Health

Assembly to impose pictorial warnings to such an extent. The

COTPA which empowers the Central Government to frame

Rules does not authorize the Central Government to adopt

measures which might be recommended by an international

convention. Though an amendment was brought to COTPA vide 154

2007 Amendment (Amendment Act 38 of 2007), the said

amendment is not pursuant to any international treaty or

convention not is it for implementation of FCTC. The stand of

the Health Ministry that being a delegate of the Parliament, it

has exercised powers to frame subordinate legislation by way of

Amendment Rules, 2014 to implement the provisions of the

international treaty or convention is untenable because as per

Article 253 of the Constitution, it is the parliament which has

the power to make any law for implementing any treaty or

agreement or convention entered into with any other country or

countries or any decision made at any international conference

or association or other body. Even assuming that the Health

Department has taken into consideration the provisions of

FCTC while framing the rules, that does not render the action of

the Health Ministry immune from challenge on the ground that

it had no jurisdiction or power to unilaterally frame such rules,

or for that matter, on the ground that they were manifestly

arbitrary and unreasonable.

99. Indeed, the provisions of FCTC specifically state that they

are subject to national laws and constitutional principles of the

member countries. Hence, provisions of FCTC cannot support 155

the rules or provide an answer to the challenge laid to the Rules

on various grounds including on the ground of violating the

constitutional and fundamental rights.

100. It is necessary to notice here that power conferred under

Rule 3(h)(f) is not sanctioned by any provisions of COTPA. It is

necessary to recapitulate what Rule 3(h), particularly Rule

3(h)(f) states. It reads as under:

"3. Manner of packing and labeling.- (1) Every person engaged directly or indirectly in the production, supply, import or distribution of cigarette or any other tobacco product shall ensure that:-

(a) ...

(b) ...

(c) ...

(d) ...

(e) ...

(f) ...

(g) ...

(h) every package of cigarette or any other tobacco product shall contain the following particulars, namely:-

(a) ...

(b) ...

(c) ...

(d) ...

(e) ...

156 (f) Any other matter as may be required by the Central Government in accordance with the international practice."

101. Thus, Rule 3(h)(f) is a case of self-empowerment because

it is de hors the power given under the Act, in as much as,

international practices do not become relevant while placing

restrictions on fundamental rights, as is alleged here. In

paragraph 76 of the judgment in the case of INDIAN EXPRESS

VS UNION OF INDIA - AIR 1986 SC 515, the Apex Court has

observed as under:

"76. .........On the facts and circumstances of the case, a subordinate legislation may be struck down as arbitrary or contrary to statute if it fails to take into account very vital facts which either expressly or by necessary implication are required to be taken into consideration by the statute or, say, the Constitution. This can only be done on the ground that it does not conform to the statutory or constitutional requirements or that it offends Article 14 or Article 19(1)(a) of the Constitution. It cannot, no doubt be done merely on the ground that it is not reasonable or that it has not taken into account relevant circumstances which the Court considers relevant."

157 102. In the case of CELLULAR OPERATORS ASSOCIATION OF

INDIA & OTHERS VS TELECOM REGULATORY AUTHORITY -

(2016) 7 SCC 703, the Apex Court has reiterated the principles

and the parameters of judicial review of subordinate legislation

as laid down in the case of STATE OF TAMIL NADU VS

P.KRISHNAMOORTHY - (2006) 4 SCC 517. In

P.Krishnamoorthy's case, the Apex Court, after adverting to the

relevant case law on the subject, laid down the parameters of

judicial review of subordinate legislation generally, thus:-

"There is a presumption in favour of constitutionality or validity of a subordinate legislation and the burden is upon him who attacks it to show that it is invalid. It is also well recognized that a subordinate legislation can be challenged under any of the following grounds???:

(a) Lack of legislative competence to make the subordinate legislation.

(b) Violation of fundamental rights guaranteed under the Constitution of India.

(c) Violation of any provision of the Constitution of India.

(d) Failure to conform to the statute under which it is made or exceeding the limits of authority conferred by the enabling Act.

(e) Repugnancy to the laws of the land, that is, any enactment.

158 (f) Manifest arbitrariness/unreasonableness (to an extent where the court might well say that the legislature never intended to give authority to make such rules).

The court considering the validity of a subordinate legislation, will have to consider the nature, object and scheme of the enabling Act, and also the area over which power has been delegated under the Act and then decide whether the subordinate legislation conforms to the parent statute. Where a rule is directly inconsistent with a mandatory provision of the statute, then, of course, the task of the court is simple and easy.

But where the contention is that the inconsistency or non-conformity of the rule is not with reference to any specific provision of the enabling Act, but with the object and scheme of the parent Act, the court should proceed with caution before declaring invalidity."

103. In the instant case, as already pointed out, there is

violation of the constitutional provision viz., Article 77(3), under

which the TOB and AOB Rules have been framed by the

President specifically providing the power and authority of

different Ministries regarding the extent and scope of their

jurisdiction on different matters. There is no justification offered

as to how 85% warning was necessitated, particularly because

while framing 2008 Regulations, the matter was entrusted to

group of ministers as empowered by the cabinet to prescribe the

percentage of display area and pursuant to the 159

recommendations made by the group of ministers, 2008 Rules

were framed requiring the pictorial and textual display to cover

40% of the front panel.

104. It is important to notice here the communication issued

by Health Department, Union of India in answer to the queries

sought by one of the petitioners under the RTI Act which has

been placed before us by the learned Counsel Mr. Sanjay

Kumar Phatak appearing for petitioner in W.P.No.34184/2016.

He represents manufacturers of chewing tobacco. He has

pointed out how the impugned Rules in prescribing 85%

coverage on each package of tobacco products with specified

warning and rotation of warning have contravened the

constitutional and statutory limits. He has pointed out that the

provisions under Sections 7, 8, 10 & 31 of COTPA being

relevant provisions, the Rules already in existence in the form

of 2008 Labelling Rules, if satisfied the criteria of being legible,

prominent and conspicuous as to size and colour in the matter

of printing the specified warning, there had to be very valid

ground made out by the Government to establish that the

existing requirement laid down in the Rules did not satisfy the

test of being legible, prominent and conspicuous and that 160

nothing less than 85% coverage would be legible, prominent

and conspicuous. Prescription of 85% ought to be shown as

reasonable restriction and that such prescription of 85% did

not take away the right of the petitioners recognized by the

proviso to Section 5(2) of the COTPA and other statutes like

Trade Marks Act. Mr.Pathak, therefore, urges that power of the

delegate (Central Government) in prescribing specified warning

is fully controlled by the criteria provided under Section 8(1). He

rightly emphasizes on the ruling of the Apex Court in the case

of KERALA SAMSTHANA CHETHU THOZHILALI UNION VS STATE

OF KERALA & OTHERS - (2006) 4 SCC 327, wherein at page 337,

the Apex Court has held that a rule is not only required to be

made in conformity with the provisions of the Act whereunder it

is made, but the same must be in conformity with the

provisions of any other Act, as a subordinate legislation cannot

be violative of any plenary legislation made by the Parliament or

the State Legislature. These observations are made in

paragraph 17 of this judgment.

105. Mr.Pathak has also urged that lack of classification has

resulted in inequality and arbitrariness and is, therefore, hit by

Article 14. He contends that if 85% coverage of the specified 161

warning is uniformly made applicable to cigarettes, beedis and

chewing tobacco manufacturers, it tantamounts to grouping

together unequals for equal treatment, thus resulting in

inequality. He urges, packaging itself is a complex subject, as

cigarette package is box type consisting of six sides, beedi

package is conical in shape, whereas, chewing tobacco is sold

in small sachets having only two sides. Hence, he urges that

chewing tobacco are worst hit by the impugned notification

because after 85% coverage of the specified warning on both

sides of the sachets, hardly any space is left to exercise rights

available under the proviso to Section 5(2) of COTPA or to

comply with the provisions of Legal Metrology Act, 2009 or for

that matter to exercise the right to brand the product according

to Trade Marks Act. It is also pointed out by him that the

ground urged by the Additional Solicitor General or for that

matter Mr. B.V.Acharya, learned Senior Counsel appearing for

the interveners taking support from Article 21 is not available

against chewing tobacco because it cannot have health hazard

on any person other than the willing consumer and it does not

cause any air pollution which may harm anybody. 162

106. In answer to this, the learned Assistant Solicitor General

and the Counsel for the Interveners would urge that nothing

prevents the beedi manufacturers and the manufacturers of

chewing tobacco to go in for box type packages.

107. Suffice to observe at this stage that the rule making

authority has to apply its mind to these aspects. The very

process adopted by the Health Department to frame the

impugned Rules is not only contrary to the AOB and TOB Rules

framed by the President in exercise of power under Article 77(3),

but is manifestly arbitrary because no attention is bestowed to

the inherent difference in the packaging of cigarettes, beedies

and chewing tobacco.

108. A very important point that Mr. Pathak has made out,

particularly as an answer to the arguments constructed on

behalf of the interveners, based on Article 47 of the

Constitution is that the said Article specifically mentions

intoxicating drinks and drugs which are injurious to health, but

efforts to bring in tobacco within the ambit of Article 47 along

with intoxicating drinks have failed in the past. He points out

that the subject was raised before the constituent assembly

when Article 47 (Article 38 in the draft constitution) was being 163

discussed. The constituent assembly refused to include tobacco

in Article 47. This issue was agitated before the Apex Court in

Khoday's Distilleries Case and was negatived. In the case of

GODAWAT PAN MASALA VS UNION OF INDIA - AIR 2004 SC

4057, the Apex Court while referring to Khoday's case

specifically formulated a question as to whether consumption of

tobacco be considered as inherently or viciously dangerous to

health and if so, is there any legislative ban for its use in the

country? The Supreme Court has held that whether an article

has to be prohibited as res extra commercium, is a matter of

legislative policy and must arise out of an Act of legislature and

not by a mere notification issued by an executive authority.

Attention of the Court is invited to paragraph 53 of this

judgment which is extracted hereunder.

"53. Is the consumption of pan masala or gutka (containing tobacco), or for that matter tobacco itself, considered so inherently or viciously dangerous to health, and, if so, is there any legislative policy to totally ban its use in the country ? In the face of Act 34 of 2003, the answer must be in the negative. It is difficult to accept the contention that the substance banned by the impugned notification is treated as res extra commercium. In the first place, the gamut of legislation enacted in this country which deals with tobacco does not suggest that Parliament has ever treated it as an article res extra 164

commercium, nor has Parliament attempted to ban its use absolutely. The Industries (Development and Regulations) Act, 1951 merely imposed licensing regulation on tobacco products under item 38(1) of the First Schedule. The Central Sales Tax Act, 1956 in Section 14(ix) prescribes the rates for Central Sales Tax. Additional Duties of Excise (Goods of Special Importance) Act, 1957 prescribes the additional duty leviable on tobacco products. The Tobacco Board Act, 1975 established a Tobacco Board for development of tobacco industries in the country. Even the latest Act, i.e. the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003, does not ban the sale of tobacco products listed in the Schedule except to minors. Further, we find that in the tariff schedule of the Central Sales Tax Act, there are several entries which deal with tobacco and also pan masala. In the face of these legislative measures seeking to levy restrictions and control the manufacture and sale of tobacco and its allied products as well as pan masala, it is not possible to accept that the article itself has been treated as res extra commercium. The legislative policy, if any, seems to be to the contrary. In any event, whether an article is to be prohibited as res extra commercium is a matter of legislative policy and must arise out of an Act of legislature and not by a mere notification issued by an executive authority."

109. In the wake of this clear and binding legal position laid

down by the Apex Court, the insistence on the part of some of

the interveners asserting that tobacco has to be treated as res 165

extra commercium is totally misconceived. This court cannot be

forced to engage in examining this question to lay down a

proposition which is contrary to the legislative policy underlying

COTPA and as laid down by the Apex Court.

110. Mr. Pathak also invites court's attention to the affidavit

filed on 13.12.2016 by the petitioner in W.P.No.34814/2016

and the RTI application dated 26.08.2016 addressed to the

Health Ministry and also the reply dated 27.09.2016. He rightly

urges that this reply given by the Health Ministry belies the

assertions made on behalf of the Central Government that after

taking into consideration all the relevant factors, the Ministry

decided to increase the pictorial and textual warnings to 85% of

both sides. The reply given makes it clear that no such concrete

material was available before the Ministry based on which the

decision was taken to prescribe the pictorial warning. This

reply, therefore, which has gone unrebutted, makes it clear that

percentage of warning prescribed as per 2014 Amendment

Rules, is without application of mind and is not based on any

study or material as to how such prescription would indeed

further the object and intent of the legislation and in what

manner and to what extent and also as to how it might have an 166

adverse effect on other stakeholders. He has also rightly

contended that the Rule Making Authority cannot be blind to

the real and substantial difference of packaging involved in

cigarettes, beedis and chewing tobacco. Chewing tobacco has

only two panels unlike the cigarette package which has four

panels.

111. At this stage itself, it is necessary to refer to the

arguments of Rajiv Kumar Jain who has appeared for the Beedi

Manufacturers. He has contended that manufacturing of beedi

involves manual process. Therefore, it could not have been

classified along with cigarettes for the purpose of prescribing

the mandatory requirements regarding display of warnings. It is

pointed out by Mr.Jain, learned counsel that Legal Metrology

(Packaging and Commodity) Rules, 2011, provided in Rule 6 (I)

(G) (a) (i) provision exempts beedies from displaying the date of

manufacture whereas Rule 3 (H) (e) requires that every package

of cigarette and any other tobacco product shall contain date of

manufacture. He, therefore, urges that there is inconsistency

in the COTP Rules and the Legal Metrology (Packaging and

Commodity) Rules, 2011. Mr. K.G.Raghavan, Senior Counsel

who has appeared for Beedi Industry Association in 167

W.P.No.53876-77/2015 has also extensively argued as to how

the Rules are unreasonable. He points out that there is

absolutely no rational behind the rotation nor has it been based

on any research or data. He points out that as per the rule

requiring rotation, the stock manufactured would be rendered

illegal for supply and distribution after the expiry of the period.

He, therefore, contends that such requirement is totally

arbitrary and unreasonable. He has also pointed out that Rule

3(1)(g) creates conflict between the Legal Metrology Rules, 2011;

that there is absolutely no application of mind. He has,

particularly, emphasized the adverse impact the Rules have on

beedi industry and how it affects the livelihood of several

workers involved in beedi manufacturing.

112. Mr. Jain has urged that beedi bundle does not have the

largest panel. Referring to the requirement of Rule 3(b), he

points out that the same cannot be complied by beedi

manufacturers because of the shape and size of the beedis and

its manual rolling. He also points out that requirement under

Rule 3(h) to mention date of manufacture that has been

exempted under Section 3 of the Legal Metrology Act of 2009

and Rule 6 of Packaging and Commodities Rules, 2011, has 168

resulted in the impugned Rules being arbitrary, unreasonable

and impossible of being complied with. It is his submission that

beedi product has no expiry period and expiry has been forced

on the manufacturers by virtue of Rule 5 pertaining to rotation.

He, therefore, urges that though all taxes are paid on the

product and are legally marketable, it is rendered illegal by the

concept of rotation introduced under Rule 5 which is irrational

and unreasonable. He urges that the manufacturer, supplier or

the distributor as the case may be has to throw the beedis or to

repack them after the expiry of prescribed period, in which

event it will undergo taxation again. Hence, he submits that

this rule regarding rotation is highly arbitrary and illegal. He

has also placed reliance on several judgments.

113. It is undeniable that a delegated legislation can be

challenged on the ground that it is contrary to some other

statute and that it is unreasonable and manifestly arbitrary.

This is evident from the ratio laid down by the Apex court in

Indian Express case which has been already referred to herein

above. It is evident from the discussion made above that there

is non-application of mind by the Health Ministry before

framing the rules as to whether prescription of 85% pictorial 169

and textual warning would result in violating the rights of the

petitioners protected under Section 28 of the Trade Marks Act,

1999; whether the existing requirement laid down in the rules

did not satisfy the test of being legible, prominent and

conspicuous and that nothing less than 85% of coverage will

amount to complying with the requirement of being legible,

prominent and conspicuous; whether prescription of 85% as

compulsory display area for pictorial and textual health

warnings uniformly with regard to cigarettes, beedis and

chewing tobacco was essential despite the fact that the

packages containing cigarettes, beedis and chewing tobacco are

inherently different, more so because in the case of sachets

containing chewing tobacco product, there are only two sides

and hardly any space is left to exercise the rights available to

the petitioners under the provisions of different enactments

such as Legal Metrology Act, 2009, Trade Marks Act, 1999, and

also as per Section 5(2) of COTPA.

114. As is evident from the reply dated 27.09.2016 given

pursuant to an RTI Application dated 26.08.2016 which are

produced in W.P.No.34184/2016, there was no concrete

material available before the Health Ministry based on which 170

decision was taken to prescribe the pictorial warning. This

amply demonstrates that uniform prescription of 85% specified

warning in respect of all these tobacco products was devoid of

any basis. More importantly, there has been no application of

mind as to how such prescription affected other stakeholders.

Even as regards the rational behind the rotation, there was no

material for the health department to take any decision. There

is non-application of mind to the adverse impact it would have

on different stakeholders. Therefore, it has to be held that the

petitioners have been able to make out that the rules are

manifestly arbitrary and unreasonable. However, it is made

clear that it is the domain of the rule making authority to

prescribe such reasonable criteria or prescription in accordance

with law based on relevant materials.

Regarding violation of Fundamental Rights

115. The other aspect on which considerable arguments have

been advanced have to be noticed. Learned Senior Counsel Mr.

Sajan Poovayya has contended that Rule 3(1)(b) of the 2014

Labeling Amendment Rules read with paragraph 1, 2 & 3(2) of

the Schedule thereto introducing 85% regime violates Article

19(1)(a) of the Constitution of India. It is urged by him that 85% 171

regime violates manufacturers fundamental rights for the

following reasons:

(i) It compels the manufacturer to state an

unsubstantiated statement - "Smoking Causes Throat Cancer"

as a textual warning occupying 25% of the front and back panel

of the cigarette packages;

(ii) It compels the manufacturer to print gruesome,

repulsive, misleading and untruthful images depicting a hole in

a person's throat which appears to be a "tracheotomy hole" and

a person's neck with diseased, infected and purulent growths

which appears to be an "ulcerous goiter" as pictorial warnings,

occupying 60% of the front and back panel of the cigarette

packages, and inaccurately connects these images to the

abovementioned unsubstantiated statements;

(iii) It is not a reasonable restriction in "the interests of

sovereignty and integrity of India", "the security of the State",

"friendly relations with foreign States", "public order", "decency

or morality", or "in relation to contempt of court, defamation or

incitement to an offence" under Article 19(2) of the

Constitution;

172 (iv) It is egregious excessive and unreasonable, both in

size and content;

(v) It abrogates the manufacturers' right to commercial

speech under Article 19(1)(a).

116. Mr. Sajan Poovayya also points out that 85% regime

introduced by 2014 Labeling Amendment Rules infringes the

manufacturers right against compelled speech which is

protected under Article 19(1)(a). He points out that

manufacturer has a right not to be compelled to disseminate

factually inaccurate, untruthful, distorted and controversial

messages against its products. According to him, as per Section

7(1) of the 2003 Act, Central Government can prescribe

warnings to appear on tobacco product packages, but these

warnings being compelled speech have to be necessarily based

on facts and be truthful and not misleading, otherwise they

cannot pass the test of being reasonable restrictions under

Article 19(2). He has invited the attention of the Court to the

judgment of the Apex Court in the case of UNION OF INDIA VS

MOTION PICTURES ASSOCIATION - AIR 1999 SC 2334, to urge

that a 'must carry' provision furthers informed decision making

which is the essence of right to free speech and expression. 173

Therefore, the same will not amount to any violation of the

fundamental right of speech and expression. However, if such a

provision compels a person to carry out propaganda or project a

partisan or distorted point of view, contrary to his wish, it may

amount to a restraint on his freedom of speech and expression.

It is essentially urged by the learned Counsel in this connection

that unlike the statement such as 'cigarette smoking is

injurious to health', the pictorial warnings consisting of

gruesome images of a hole in person's throat and infected

growths on a person's neck coupled with textual warning

stating 'smoking causes throat cancer', do not convey truthful

and reliable information to enable the consumer to make an

informed decision. According to him, the warnings contained in

the impugned amendment constitute to form a coercion as their

aim is to cause revulsion, trauma and guilt in the minds of

consumer of tobacco products through untrue and excessive

statements and images. It is emphatically urged by him that the

Health Ministry has neither pleaded nor produced any material

to establish the truthfulness of the warnings and it is not aware

whether the warnings are factual and truthful. Mr. Poovayya

invites the attention of the Court to the reply of the Health

Ministry to an RTI application filed by the petitioner in 174

W.P.No.34184/2016, wherein it is stated that no specific

information was available with the Health Ministry as to

whether the images were the real pictures of cancer patients

suffering from cancer caused by tobacco.

117. In fact, we have already referred to the contention of the

learned Counsel Mr. Pathak in this connection who appears in

the said writ petition for the petitioner. He has specifically

contended that admittedly there was no specific information

available with the Health Ministry as to whether the images

were the real images of human beings or were merely computer

edited representational images. He has pointedly referred to the

reply of the Health Ministry when asked to provide the source of

images, stating that 'pictures were collected from various

institutions/organizations and no such specific information is

available'. Learned Counsel has taken the Court through

various decisions including those rendered by the Courts in

foreign countries in support of his contentions.

118. He has next contended that 85% regime abrogates the

right to commercial speech under Article 19(1)(a) and also

affects the consumer's right to know. He urges that the

restrictions are based on the paternalistic assumptions of the 175

State that consumers are incapable of using truthful product

information to make a rational decision and this approach

violates the fundamental right to free speech. Even in this

regard, reliance has been placed on several judgments.

119. He has also contended that right to advertise on their

product packages by the manufacturers has been preserved by

the proviso (a) to Section 5(2) of the 2003 Act and the same

cannot be taken away. He has finally contended that the 2014

Labeling Amendment Rules are not and cannot be saved under

Article 19(2) of the Constitution of India, because they do not

fall under any one of the 'eight buckets' set out in Article 19(2),

apart altogether from the fact the restriction is not a reasonable

restriction. He urges that the 'general public interest' based on

which restriction is sought to be imposed is not one of the

subject matters under Article 19(2) and hence, it is not open to

the State to curtail freedom of speech for the purpose of

promoting general public interest. He has relied on the

judgment in the case of SHREYA SINGHAL VS UNION OF INDIA -

(2015) 5 SCC 1, particularly the observations made at

paragraph 15.

176

120. In this connection, having carefully considered the

various contentions urged by the learned Counsel for the

petitioner based on the fundamental right to speech and

expression under Article 19(1)(a) of the Constitution of India, as

it has been already held that 2014 Amendment Rules framed by

the Health Ministry are illegal and void ab initio, as the Health

Ministry did not have the power or authority to unilaterally

frame these Rules, it is not necessary to examine these

contentions urged by the petitioners, at this stage, because

such an exercise would be unnecessary. In addition, it has to

be pointed out that as a conclusion has been reached holding

that the Rules framed by the Health Ministry have not

undergone the legal process of consultation and concurrence of

the concerned departments and the amendment was enforced

even when the matter was seized by the committee on

subordinate legislation in the guise of enforcing the interim

direction issued in the PIL and also because Amendment Rules

may have to be framed afresh by following the required legal

process, it is not advisable to pronounce on these contentious

issues lest it may affect the independent and effective

application of mind by the rule making authority to the

desirability of choosing specific pictorial and/or textual 177

warnings and to prescribe the extent of such warnings to be

carried on the packages. However, as considerable arguments

have been advanced with regard to the provisions contained in

Sections 5, 7 & 9 of the 2003 Act and COTP Rules, 2008

(Unamended) are also challenged it is necessary to deal with

some of these contentions so that the effect of these provisions

in the context of the rule making power of the Central

Government and the right of the manufacturers, suppliers and

traders of cigarettes and tobacco products are better

appreciated. This exercise is undertaken in the light of the

contention urged by the learned Counsel for the petitioners that

if the Government intended to create awareness of the evils of

smoking or consuming tobacco, it has to undertake that

exercise itself by putting up hoardings and carrying on such

other advertisements displaying the ill-effects of consumption of

tobacco, but not by forcing the producers, suppliers or

distributors to publish such textual or pictorial warnings on the

packets and pouches manufactured by them to sell the

products because it affected their fundamental rights.

121. In this regard, straight away reference may be made to

Section 7(1) of the Act. It expressly mandates that no person 178

shall, directly or indirectly, produce, supply or distribute

cigarettes or any other tobacco products unless every package

of cigarettes or any other tobacco products, produced, supplied

or distributed by him bears thereon, or on its label, such

specified warning including a pictorial warning as may be

prescribed.

122. Similarly, Section 7(2) of the Act mandates that no person

shall carry on trade or commerce in cigarettes or any other

tobacco products unless every package of cigarettes or any

other tobacco products sold, supplied or distributed by him

bears thereon, or on its label, the specified warning.

123. Section 7(3) of the Act mandates that no person shall

import cigarettes or any other tobacco products for distribution

or supply for a valuable consideration or for sale in India unless

every package of cigarettes or any other tobacco products so

imported by him bears thereon, or on its label, the specified

warning.

124. Section 7(4) of the Act mandates that the specified

warning shall appear on not less than one of the largest panels

of the package in which cigarettes or any other tobacco 179

products have been packed for distribution, sale or supply for a

valuable consideration.

125. The Act is not challenged. Therefore, it is not open to

petitioners to say that their right under Article 19(1)(a) is

affected by the 2008 (Unamended) Rules framed requiring them

to carry specified warnings on the ground that public health

does not fall in any of the 8 heads based on which restriction

can be imposed. Restriction on the right is imposed by the

statute itself. A reading of Section 7 of COTPA makes it clear

that without printing and carrying the specified warning on

every package, no person can carry on trade or commerce in

cigarettes and any other tobacco products.

126. Section 5 provides for prohibition of advertisement of

cigarettes and other tobacco products. It reads as under:

"(1) No person engaged in, or purported to be engaged in the production, supply or distribution of cigarettes or any other tobacco products shall advertise and no person having control over a medium shall cause to be advertised cigarettes or any other tobacco products through that medium and no person shall take part in any advertisement which direct or indirectly suggests or promotes the 180

use of consumption of cigarettes or any other tobacco products.

(2) No person, for any direct or indirect pecuniary benefit, shall-

(a) display, cause to display, or permit or authorize to display any advertisement of cigarettes or any other tobacco product; or

(b) sell or cause to sell, or permit or authorize to sell a film or video tape containing advertisement of cigarettes or any other tobacco product; or

(c) distribute, cause to distribute, or permit or authorize to distribute to the public any leaflet, hand-bill or document which is or which contain an advertisement of cigarettes or any other tobacco product; or

(d) erect, exhibit, fix or retain upon or over any land, building, wall, hoarding, frame, post or structure or upon or in any vehicle or shall display in any manner whatsoever in any place any advertisement of cigarettes or any other tobacco product:

Provided that this sub-section shall not apply in relation to:-

(a) an advertisement of cigarettes or any other tobacco product in or on a package containing cigarettes or any other tobacco product;

(b) advertisement of cigarettes or any other tobacco product which is displayed at the entrance or inside a warehouse or a shop where cigarettes 181

and any other tobacco products are offered for distribution or sale.

(3) No person, shall, under a contract or otherwise promote or agree to promote the use or consumption of-

(a) cigarettes or any other tobacco product; or

(b) any trade mark or brand name of cigarettes or any other tobacco product in exchange for a sponsorship, gift, prize or scholarship given or agreed to be given any another person.

127. As regards the scope and effect of sub-clause (1) of

Section 5, elaborate arguments have been addressed at the bar,

particularly keeping in mind the language employed therein and

also in view of the provision contained in sub-clause (2) and the

proviso thereto.

128. Sri Sajan Poovayya submits that prohibition for

advertisement enacted in sub-clause (1) of Section 5 relates to

advertisement in a medium such as electronic or print media

and not to other advertisement because, other type of

advertisements are enumerated in sub-clause (2). He further

points out that if such meaning is not given to Section 5(1), it 182

will render sub-clause (2) and the proviso to sub-clause (2)

otiose.

129. Sri Kohli and Sri Sanjay Pathak, learned counsel

contend that while Section 5(1) contains prohibition against all

advertisements which suggest or promote the use or

consumption of cigarettes or any other tobacco products,

Section 5(2) prohibits everybody, for any pecuniary benefit, from

displaying advertisements of cigarettes and other tobacco

products, sell any film or video tape containing such

advertisements or distribute any leaflet or hand-bill of such

advertisement or erect, exhibit, fix or retain on any land,

building, wall etc., or shall display in any manner,

advertisement of cigarette. According to them, proviso (a) and

(b) are exceptions only to sub-clause (2) of Section 5 and they

permit only such advertisement on the packet that do not

suggest or promote the use or consumption of cigarettes directly

or indirectly which is prohibited in sub-clause (1) of Section 5.

130. A very careful and thorough analysis of the various

provisions of the Act in general and Section 5, Section 2(o) and

Section 9(2) in particular to understand the effect and purport 183

of Section 5(1) and 5(2) read with proviso to Section 5(2) has

been undertaken with the assistance of the learned counsel.

131. Analysis of Section 5(1) by understanding the plain

meaning of the language used therein by dismembering the

compound structure of the sentence and its adjective

expressions and also by looking at it as a whole, the following

legislative intent emerges.

(i) No person engaged in, or purported to be engaged in the production, supply or distribution of cigarettes or any other tobacco products shall advertise any advertisement which directly or indirectly suggests or promotes the use or consumption of cigarettes or any other tobacco products;

(ii) No person having control over a medium shall cause to be advertised cigarettes or any other tobacco products through that medium any advertisement which directly or indirectly suggests or promotes the use or consumption of cigarettes or any other tobacco products;

(iii) No person shall take part in any advertisement which directly or indirectly suggests or promotes the use or consumption of cigarettes or any other tobacco products.

184

132. Thus, Section 5(1) lays down an absolute prohibition on

advertisement that promotes or suggests the use of cigarettes

and other tobacco products.

133. Sub-clause (2) deals with specific types of display etc., of

such products which is also prohibited subject to two

exceptions as provided in proviso (a) and (b) to Section 5(2).

Therefore, in order to fall within the ambit of proviso (a) and (b),

the advertisement of cigarettes and other tobacco products on

the packet must not be such as to suggest or promote their use

and consumption. In addition, they shall not detract from the

specified warning which is provided in Section 9(2) of the Act.

For the sake of better appreciation, Section 9(2) is extracted

hereunder:

"No package of cigarettes or any other tobacco products or its label shall contain any matter or statement which is inconsistent with, or detracts from, the specified warning".

134. Therefore, there is no right in any person who is

engaged or purported to be engaged in the production, supply

or distribution of cigarettes or any other tobacco products to

advertise said products to suggest or promote their use and 185

consumption through any medium or method including

through the package containing such product. But,

advertisement of cigarettes or any other tobacco products which

does not promote or suggest its use and consumption is

permitted provided the same does not contain any matter or

statement which is inconsistent with or detracts from, the

specified warning as may be prescribed by Rules made under

this Act.

135. Thus, in the light of the express prohibition contained

for carrying any advertisement, matter or statement on the

package that tends to promote consumption of the products

and in view of the mandate contained in the Act that every

package shall bear specified warning including a pictorial

warning as may be prescribed by the Rules (see Section 7)

without which production, supply or distribution of the product

itself is prohibited and further in the light of the provisions

contained in Section 8 providing that the specified warning on a

package shall be-

(a) legible and prominent;

(b) conspicuous as to size and color;

(c) in such style or type of lettering, color, etc., - 186

it becomes very clear that the Act mandates compliance with such requirement and in the absence of any challenge to the provisions of COTPA, challenge made to the 2008 unamended Rules on various other grounds are untenable.

136. Suffice to observe that challenge laid on the ground that

the producers, suppliers and traders of cigarettes and tobacco

products cannot be forced to carry certain specified warning

because that itself tantamount to forced speech and violates

Article 19(1)(a) and therefore, such restriction imposed on the

fundamental right to speech and expression on the ground of

public health or public interest is unsustainable is a farfetched

argument. In the absence of any challenge to the provisions

contained in the 2003 Act, particularly to Section 7(1), the

argument canvassed contending that restriction imposed by the

Rules on the ground of interest of general public or public

health not falling under any one of the eight buckets recognized

under Article 19(2) on the freedom of speech and expression is

unconstitutional, cannot be accepted.

137. However, the arguments advanced by the learned Senior

Counsel, particularly Mr. Poovayya, that right under Article 187

19(1)(g) has been infringed by imposing unreasonable, arbitrary

and excessive restrictions not sanctioned or authorized by the

2003 Act, hence the rules are unconstitutional, could have been

examined but for the finding recorded with regard to the legal

question touching the authority and jurisdiction of the Health

Department of Union of India to unilaterally frame the Rules. In

addition, it has been held that the 2014 Amendment Rules are

manifestly arbitrary and hence unsustainable. As it is held in

favour of the petitioners on these vital issues and it is declared

that the impugned Rules are illegal, it is unnecessary to go into

this question. Therefore, no attempt is made to refer to and

consider the effect of several judgments relied on by the learned

counsel for both sides in this regard.

Ultra Vires the Parent Act

138. The next point that requires consideration is whether

the impugned Rules are ultra vires the Parent Act. It is

contended by Mr. Poovayya, that Tobacco Board Act, 1975, lays

down a legislative policy to support tobacco cultivation and not

to curtail it. One of the functions of the Board as per Section 8

of the said Act, is to promote development of tobacco. In the

case of GODAVAT PAN MASALA Vs UNION OF INDIA - AIR 2004 188

SC 4057, particularly in paragraph 35, 36 & 37, the

object of COTPA has been stated to be intended to prevent

passive smoking, advertisement and sale to minors and not to

ban tobacco on grounds of public health. He also points to the

observations made in paragraph 63 to urge that tobacco has

not been considered to be injurious to public health. After

referring to various provisions of COTPA, it is urged by him that

when Section 7(4) of COTPA stated that specified warning shall

appear on not less than one of the largest panels of the package

and Section 10 laid down that the size of letters and figures on

the specified warnings to be such as may be prescribed by the

Rules, it can only be said that the Parliament empowered the

Central Government to prescribe pictorial warnings and it did

not include the power to prescribe percentage of coverage on the

tobacco packages, muchless to an extent of 85%, so as to cover

both sides of largest panel. He also points out that the

requirement to increase the warning to cover 85% of front and

back panels contravenes proviso (a) to Section 5(2) which

expressly permits advertisement of cigarettes or any other

product in or on a package containing cigarettes or any other

tobacco product. He urges that the intention of the rule making

authority in prescribing the specified warnings is to deter 189

smokers and to motivate them to quit even as per the admitted

stand taken by the Central Government which travels beyond

the provisions of COTPA and is also contrary to the

provisions of the Tobacco Board Act. Hence, he urges that rules

are ultra vires the parent Act; repugnant to the Tobacco Board

Act, etc.

139. A careful perusal of the provisions of the enactment,

keeping in mind the object with which the COTPA has been

enacted to discourage the use of tobacco and impose

progressive restrictions and take concrete action to eventually

eliminate direct or indirect advertising or sponsorship

concerning tobacco, it is clear that parliament intends to

protect public health in discharge of the duty and obligation

cast by Article 47 of the Constitution on the State and

particularly in the light of the object of the legislation that it

intended not only to prohibit advertising, but also regulate

production, supply of cigarettes and other tobacco products and

for effective implementation of the enactment. It is in this

regard, Parliament has made provisions enabling the Central

Government to make rules for the purpose of prescribing the

contents of specified warnings, the language in which they are 190

to be displayed, the nature of pictorial and textual warning, the

manner in which they have to be specified, the size of letters,

etc. The Central Government has been delegated with the rule

making power clothing it with vast powers.

140. The contention of Mr. Poovayya that a reading of Section

7(4) of COTPA would indicate that the specified warning shall

appear only on one of the largest panels of the package and the

rule making authority cannot require display of specified

warning on both the largest panels of the package and

therefore, the Rules framed are ultra vires the parent Act,

cannot be accepted. Section 7(4) of COTPA states that specified

warning shall appear on not less than one of the largest panels

of the package. This cannot be construed to mean that the

specified warning shall appear on only one of the largest panels.

The rule making authority is vested with the discretion with a

broad guideline contained in Section 7(4) that the specified

warning shall appear in atleast one of the largest panels of the

package. The rule making authority will be justified in requiring

the manufacturers to carry the specified warning on both the

largest panels.

191

141. As already stated, at the outset, the provisions of COTPA

have not been challenged on the ground that they conferred

excessive rule making power in favour of the Central

Government. Therefore, only area falling for judicial scrutiny is,

whether the rules providing for pictorial and textual warning to

cover 85% of both the largest panels and as also the rule

providing for rotation of such warnings every 12 months by

substituting new images could be characterized as ultra vires

the parent Act.

142. The definition of the expression 'specified warning' to

mean such warnings against the use of cigarettes or other

tobacco products to be printed, painted or inscribed on

packages of cigarettes or other tobacco products in such form

and manner as may be prescribed by Rules made under the

COTPA (emphasis supplied) would clearly show that there is

ample power given to the Central Government to prescribe by

way of rules such warnings against the use of cigarettes as the

Central Government deems fit to implement and enforce the

object and purpose of COTPA. It is not for this Court to sit in

judgment as to which type of warnings have to be permitted to

be prescribed by making rules. It is also neither advisable, nor 192

possible for this Court to embark upon an enquiry to find out

whether the warnings prescribed by the Rules are gruesome,

false depiction or untrue. It is no doubt true that this exercise

is required to be undertaken by the rule making authority by

applying its mind to the relevant factors keeping in mind the

nature and scope of its powers and the object sought to be

achieved by the enactment. The reply furnished to the RTI

application by the Health Department demonstrates that there

has been no application of mind, nor the prescription of 85% of

the specified warnings and the nature of pictorial warnings was

based on any research or survey, etc. Juxtaposed to the

exercise undertaken by the Central Government at the time of

framing 2008 Rules, the 2014 Amendment Rules have not

undergone such scrutiny or analysis by the Rule making

authority. Therefore, as already held above, the Amendment

Rules are manifestly arbitrary.

143. Rotation of specified health warnings cannot be termed

as ultra vires the parent Act, inasmuch as Section 3(o) defining

specified warning and Section 7(1) and Section 8(2) read

together would make it clear that the nature of specified

warnings against the use of cigarette and other tobacco 193

products, the specification of such warnings including pictorial

warnings and the manner in which the specified warnings shall

be printed, painted or inscribed, are left to be specified by way

of rules to be made by the Central Government. If the intention

of the legislature is to dissuade the people by warning them

against the use of cigarettes or other tobacco products by

printing such warnings as the Government may deem fit, it

would, in its ambit and scope include the rotation of such

warnings from time to time, and therefore, merely because the

Central Government has prescribed the requirement of rotation

of pictorial warnings in 2008 Rules it cannot be termed as

exercise of power being ultra vires the parent Act. However, in

prescribing the rotation as per Amendment Rules, 2014, the

provision made providing for grace period not exceeding two

months to clear old stock of tobacco products bearing specified

warnings for the expired period of 12 months of the rotation

period is uninformed by the serious repercussion it would have

on the manufacturers, producers, retailers including even the

consumers. This is so because, there is total prohibition in

presenting the packages containing the old image from being

released by the manufacturers after the expiry of rotation period

and the grace period, if any. This will hit the bona fide traders, 194

particularly the retailers and thereby affect their economics.

There is no application of mind in this connection by the rule

making authority to any of the relevant aspects. Therefore,

while the rule providing for rotation cannot be termed as ultra

vires the parent Act, the manner in which the rotation has been

provided and grace period is restricted to two months is not

preceded by application of mind to the grievance of the affected

interest and therefore, as already held, this portion of the rule is

manifestly arbitrary.

144. Though some of the petitioners have challenged the

Cigarettes and Other Tobacco Products (Packaging and

Labelling) Rules, 2008 (unamended) also, no serious effort is

made by any of the learned counsel to demonstrate how the

2008 Rules which have been operating for the last more than 8

years, are illegal. The general arguments advanced with regard

to violation of fundamental right under Article 19 (i) (a) and

19 (i) (g) cannot be imported against the 2008 Rules. There is

no valid ground to entertain the challenge against the 2008

Rules sans 2014 amendment. None of the contentions urged

against the 2014 amendment are applicable against the 2008 195

Rules. Therefore, challenge made to 2008 Rules (unamended) is

rejected.

145. In the light of the above, these writ petitions are partly

allowed in the following terms:

i) The Cigarettes and Other Tobacco Products (Packaging and Labelling) Amendment Rules, 2014, are declared as illegal and are hereby set aside;

ii) The Central Government/the competent authority in terms of the Rules framed under Article 77 (3) of the Constitution of India is at liberty to undertake the exercise afresh in accordance with law and keeping in mind the findings recorded and the observations made in this order;

iii) The challenge made to the validity of the Cigarettes and Other Tobacco Products (Packaging and Labelling) Rules, 2008, (Unamended) is dismissed;

iv) Parties to bear their respective costs.

Sd/-

JUDGE

Kk/pks/jm/-

196

BSPJ & BVNJ: W.P.No.4470/2015 & conn.cases

PRONOUNCED ON 15/12/2017

Per Nagarathna J:

I have the benefit of reading the judgment of His

Lordship, Hon'ble B.S.Patil J., and I find that on certain

issues raised in these writ petitions, I would like to record

a separate opinion. With regard to certain other aspects, I

wish to amplify the scope of discussion as most of the

issues raised by the petitioners in these writ petitions

touch upon the constitutional validity of the amendments

made to the Cigarettes and Other Tobacco products

(Packaging and Labelling) Rules, 2008 by virtue of the

Amendment Rules, 2014, which are impugned in these writ

petitions (which shall hereinafter, be referred to as

"Amendment Rules, 2014", for the sake of convenience).

The Amendment Rules, 2014 have been made to the

Cigarettes and Other Tobacco Products (Packaging and

Labelling) Rules, 2008 (hereinafter, referred to as the 197

"Packaging and Labelling Rules, 2008", for the sake of

convenience).

2. As His Lordship has referred to the facts

leading to the filing of these petitions and contentions

advanced by the respective parties in detail, it would be futile

to reiterate the same. However, in light of the contentions

raised at the Bar, I propose to deal with them

on the following aspects:

(1) Whether the Amendment Rules, 2014 are vitiated on account of non-compliance with Article 77(1) and (2) of the Constitution of India (Constitution)?

(2) Whether under the Government of India (Allocation of Business Rules, 1961) and Government of India (Transaction of Business) Rules, 1961 (hereinafter, referred as the "Allocation of Business Rules" and "Transaction of Business Rules" respectively, for the sake of brevity), made under Article 77(3) of the Constitution of India by the President have been breached by the Department of Health and Family Welfare, functioning 198

under the Ministry of the same name, by unilaterally publishing the Amendment Rules, 2014 made to the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (hereinafter, referred to as "COTPA" for the sake of convenience)?

(3) Whether there has been breach of laying procedure before each House of Parliament as contemplated under Section 31(3) of COTPA?

(4) Whether the Amendment Rules, 2014 are violative of Article 19(1)(a) of the Constitution as they are not saved by Article 19(2)?

(5) Whether the Amendment Rules, 2014 are violative of Article 19(1)(g) of the Constitution as they are not saved by Article 19(6)?

(6) What Order?

3. I also wish to discuss the impact of the interim

order granted by the Rajasthan High Court in 199

W.P.No.8680/2015, which is a Public Interest Litigation on

the procedure subsequent to laying of the Rules before the

Parliament under Section 31(3) of COTPA in the instant case

and enforcement of the Rules even before submission of the

Final Report by the Parliamentary Committee on Subordinate

Legislation, which was seized of the matter at the time of

enforcement of the Amendment Rules, 2014 made to the

Packaging and Labelling Rules, 2008.

4. This is not a Public Interest Litigation. However,

the Intervenors, who represent anti-tobacco movement have

also been heard in these matters.

Bird's eye view of the controversy:

5. Article 47 of the Constitution, which is a part of

the Directive Principles of State Policy enunciated in Part

IV of the Constitution enjoins the State to raise the level of

nutrition and standard of living and to improve public

health. The said Article further enjoins that the State shall

endeavour to bring about prohibition of the consumption, 200

except for medicinal purposes of intoxicating drinks and of

drugs which are injurious to health. Tobacco and its products

are conspicuous by its absence in Article 47. That however,

would not have any impact on the powers of the State in

taking steps for the improvement of public health and in that

regard measures being taken for restricting the use and

consumption of tobacco and its products by the people of this

Country. It is nobody's case that tobacco is not harmful to

human health. It is the duty of the State to improve public

health. In other words, although trade and business in

tobacco and its products is not considered to be res extra

commercium by the State, there could still be measures

taken by the State to control or restrict its use.

6. On the other hand, one cannot lose sight of the

fact that tobacco is a cash crop cultivated in many parts of

the Country involving agricultural labour, whereas beedi

industry is labour intensive. Manufacture of cigarettes and

other tobacco products attracts employment in the 201

industrial sector and tobacco and its products is an item of

trade and commerce, both domestic and transnational, export

and import. It is in the aforesaid context that the Tobacco

Board Act, 1975 was passed by the Parliament constituting

the Tobacco Board for regulation of production and disposal

of virginia tobacco widely grown in India.

7. At the same time, having regard to Article 47 of

the Constitution, the Parliament had enacted the Cigarettes

(Regulation of Production, Supply and Distribution) Act, 1975.

The said Act inter alia, prescribed warnings to be put on

cigarettes and other tobacco products. The said Act being

repealed, has been substituted by COTPA. COTPA inter alia,

has, not only prohibitions, but also contains certain

restrictions, the discussion of which shall be made

hereinafter.

8. Secondly, the challenge to the constitutionality of

COTPA has been withdrawn by the petitioners herein. The

challenge is with regard to the Packaging and Labelling Rules,

2008 and to the Amendment Rules 2014. The 202

impugned Rules is a piece of subordinate legislation and while

considering the challenge made by the petitioners, the issues

in controversy referred to above shall be considered and

answered in seriatim.

Article 77 of the Constitution:

9. Learned senior counsel for the petitioners, Sri

S.Vijayashankar has raised a three-fold contention with

regard to there being non-compliance of Article 77 of the

Constitution while publishing the notification, amending

the Rules of 2008, by the Amendment Rules, 2014. He

contended that Article 77(1) of the Constitution mandates

that all executive action of Government of India should be

in the name of the President. According to him, the orders

and instruments made and executed in the name of the

President should be issued in accordance with the

Authentication (Orders and other Instruments) Rules,

2002, as required under Article 77(2) of the Constitution.

He further submitted that Article 77(3) enables the

President to make rules for the more convenient 203

transaction of the business of the Government of India and

for the allocation among Ministers of the said business. That

in the instant case, the Ministry of Health and Family Welfare

had no singular authority to make the Amendment Rules,

2014, which have amended the rules of 2008 under COTPA.

That the subjects "tobacco" and "tobacco legislation" are not

allocated to the Health Ministry and therefore, the rule

making power under Section 31 of COTPA could not have

been exercised by the Health Ministry. Moreover, it is the

Ministry of Commerce and Industry, which has been allocated

the subject of "tobacco" concerning its "production,

distribution and development" and "Tobacco Board" is a subject

allocated to the very same Ministry under the Allocation of

Business Rules. Therefore, the Ministry of Health and Family

Welfare was not authorized to frame the Amendment Rules,

2014. According to him, as the said Rules are not published in

the name of the President and are not authenticated in

accordance with Article 77(2) and the Rules made there

under are invalid. In the above premise, it is contended 204

by learned senior counsel that the Amendment Rules, 2014,

which have amended the 2008 Rules must be struck down en

masse as there is complete violation of Article 77 in

publishing and enforcing the said Rules. In support of his

submission, he placed great reliance on two decisions of the

Hon'ble Supreme Court namely, MRF Limited vs. Manohar

Parikkar reported in [(2010) 11 SCC 374] (MRF Limited)

and Delhi International Airport vs. International Lease

Finance Corporation reported in [(2015)8 SCC 446]

(Delhi International Airport).

10. Learned Assistant Solicitor General, however,

contended that there has been compliance with Article 77

of the Constitution in all respects. That under Article 77(1)

the expression, President must be read in light of the

definition given under Section 3(8)(b) of the General

Clauses Act, 1897, which defines "Central Government", to

mean the President. Therefore, when the impugned Rules

were notified under the authentication of the Joint

Secretary of the Department of Health and Family Welfare, 205

there was compliance with Article 77(1) as well as Article

77(2). He further submitted that there is also no infraction

on the requirement of inter-departmental consultation

while publishing the rules. That under Article 77(3),

Allocation of Business Rules and Transaction of Business

Rules have been made by the President. Under the said

Rules, the subject "International Health Regulation" and

"World Health Organization (WHO)" are expressly allocated

to the Department of Health and Family Welfare

and therefore, it is only that department which had the

authority to prepare and publish the Amendment Rules,

2014. He further submitted that once the rules are laid before

the Parliament, under Section 31(3) of COTPA, there is

always scope for amendment of the said rules and hence,

inter-departmental consultation before publishing the said

rules was not necessary in the instant case. He further

contended that there is no breach of Transaction of Business

Rules. That under Article 253 of the Constitution, Parliament

has given effect to the Resolutions passed during the World

Health Assemblies and hence, COTPA has 206

been enforced. The impugned Rules made under Section 31

of COTPA are based on the World Health Organization's

Frame Work Convention on Tobacco Control (FCTC), which is

an International Health Regulation and the latter subject

being allocated to the Department of Health and Family

Welfare, the said department could alone prepare and publish

the impugned rules. He concluded by submitting that there is

no breach of Article 77 of the Constitution and that there is

no merit in the submission of the petitioners in this regard.

11. Hon'ble B.S.Patil J., has considered the rival

contentions and has expressed that the Ministry of Health and

Family Welfare did not consult the other Ministries nor did the

matter concerning Amendment Rules, 2014, fall for

consideration by the Cabinet and hence, the question raised

is, whether tobacco control and tobacco legislation are

subjects allocated to Health Ministry or any other particular

Ministry as per Allocation of Business Rules. The second

question considered is, the effect of unilateral 207

action of the Health Ministry in framing and notifying the

Amendment Rules, 2014 without following the Allocation of

Business Rules. While dealing with the Allocation of

Business Rules, what is considered by his Lordship are two

subjects namely, "tobacco control programme" and

"tobacco legislation". It is held that these two subjects

do not fall under any ministry as such. That the subject

"tobacco legislation" would also not fall within the ambit of

the subject matter "International Health Regulations" and

"World Health Organization", which are specifically

allocated to the Department of Health and Family Welfare.

Further, as "tobacco control programme" and "tobacco

legislation" are not subjects allocated to the Department of

Health and Family Welfare, no decision could have been

taken or rules framed by that department, which are in the

nature of "tobacco control" and "tobacco legislation". That

other departments such as labour and employment,

agriculture and industry and commerce have an interest in

the subject of the Amendment Rules, 2014 and the said

departments not being consulted has resulted in the 208

Amendment Rules, 2014 being invalid on account of the

breach in Article 77(3) of the Constitution. His Lordship has

also stated that it is not permissible to infer that the

Amendment Rules, 2014 come within the ambit of the

subjects, "International Health Regulations" or "World Health

Organization", which are expressly allocated to the

Department of Health and Family Welfare.

12. In this regard, reliance is placed on the

decisions of MRF Limited and Delhi International Airport

cited on behalf of the petitioners to hold that there has

been non-compliance of the Allocation of Business Rules

and Transaction of Business Rules in the instant case and

hence, the Amendment Rules, 2014 are vitiated. That the

Rule making power under Section 31 of COTPA could not

have been exercised by the Health Ministry unilaterally, as

no item relating to "tobacco" has been allocated to Health

Ministry under Allocation of Business Rules. It is also held

by His Lordship that the "tobacco legislation" is not

included within the ambit of commerce ministry. Hence, 209

under Rules 4(1) of the Transaction of Business Rules, no

decision could have been taken or order made until all

departments concerned had concurred or, failing such

concurrence, a decision had to be taken under the authority

of the Cabinet. On the aforesaid basis, His Lordship has

declared the Amendment Rules, 2014 as illegal and void ab

initio.

13. With due respect, I propose to express a separate

opinion.

14. Before considering the rival contentions, it would

be necessary to understand the object and intent of Article 77

of the Constitution. Article 77 of the Constitution is almost in

pari materia with Article 166. Hence, while discussing on this

aspect, reference to Article 166 or decisions thereon are

useful and could be relied upon.

Article 77 reads as under:

"77. Conduct of business of the Government of India.- (1) All executive action of the Government of India shall be 210

expressed to be taken in the name of the President.

(2) Orders and other instruments made and executed in the name of the President shall be authenticated in such manner as may be specified in rules to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President.

(3) The President shall make rules for the more convenient transaction of the business of the Government of India, and for the allocation among Ministers of the said business."

15. The executive power of the Union, which is

vested in the President can be exercised by him either