K.S. Hegde JUDGMENT
J.C. Shah, J.
1. This appeal is filed with special leave against the judgment of the High Court of Mysore setting aside the order dated January 20, 1969, of the Director of Food & Civil Supplies of the State of Mysore under the Rice Milling Industry (Regulation) Act 21 of 1958.
2. The appellants established a rice mill many years ago in village Mudugoppa, District Shimoga, in the former Indian State of Mysore and carried on milling operations. The respondents--N. Teekappa Gowda & Bros.--established in 1963 a rice mill in village Kelandur at a distance of about 11/2 miles from the site of the appellant's mill. A notification under the Land Acquisition Act 1894 was issued in March 1966 for compulsory acquisition of the land and buildings on the site of the appellants' rice mill for use in the Sharavathi Hydro-Electric Project. In October 1967 an award acquiring the land and buildings was made. The award expressly recited that the appellants were entitled to remove the machinery of the rice mill.
3. The appellants in the meanwhile applied to the Special Officer for Rehabilitation of the State of Mysore to allot them a suitable new site in which their rice mill may be located. The Special Tahsildar for Rehabilitation sanctioned that the rice mill building may be shifted to a site in Survey No. 233 of Mudugoppa granted to the appellants by the State of Mysore. By order dated January 20, 1969, the Director of Food & Civil Supplies passed an order sanctioning the change in the location of the appellants' rice mill from its original site to the new site "as per the provisions contained in Section 8(3)(c) of the Rice Milling Industry (Regulation) Act, 1958", and rejected the objection raised by the respondents.
4. The respondents then moved a petition in the High Court of Mysore for a direction quashing the order dated January 20, 1969 passed by the Director of Food & Civil Supplies on the plea that the appellant's mill was moved to a place in the vicinity of their rice mill in the Kelandur village in contravention of Sections 5 and 8 of the Rice Milling Industry (Regulation) Act, 1958, and in consequence of the removal of the appellants' mill "their business was likely to be adversely affected".
5. The High Court held that permission under Section 8 (3)(c) was a condition precedent to the shifting of the location of the rice mill, and since the appellants did not obtain the previous permission to shift the mill, the order of the Director was liable to be "struck down as ultra vires". In the view of the Court, by the shifting of the appellants' rice mill the respondents' business was directly affected and they had a right to challenge the legality of the order. The High Court upheld the claim of the respondents on the sole ground that the order of the Director was made in violation of the mandatory injunction of the Rice Milling Industry (Regulation) Act 21 of 1958 and it prejudicially affected the business of the respondents as rice-millers.
6. The Parliament enacted the Rice Milling Industry (Regulation) Act 21 of 1958 to regulate rice milling. By Section 3(a) a "defunct rice-mill" is defined as meaning "a rice-mill in existence at the commencement of this Act but in which rice-milling operations have not been carried on for a period exceeding one year prior to such commencement". By Section 3(b) "existing rice-mill" means "a rice mill carrying on rice-milling operations at the c........