Full Judgment Text
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CASE NO.:
Appeal (civil) 1691 of 2001
PETITIONER:
A.P. BANKERS & PAWN BROKERS ASSOCIATION
Vs.
RESPONDENT:
MUNICIPAL CORPORATION OF HYDERABAD
DATE OF JUDGMENT: 02/03/2001
BENCH:
A.P. Misra & S.N. Variava
JUDGMENT:
S. N. VARIAVA, J.
Leave granted.
L...I...T.......T.......T.......T.......T.......T.......T..J
This Appeal is against a Judgment dated 27th November,
1998.
Briefly stated the facts are as follows :
The Appellants are an Association of money lenders and
pawn brokers. The Respondent-Corporation had in the year
1972 by a Notification dated 14th/15th April, 1972, notified
the business of money lenders and pawn brokers as one which
required a licence under Section 521 of the Hyderabad
Municipal Corporation Act. Having so notified a licence fee
of Rs.50/- was charged from all money lenders and pawn
brokers. At that time no challenge was made to the
Notification. However, by another Notification dated 11th
April, 1987, the licence fees was enhanced from Rs.50/- to
Rs.500/- in case of money lending and pawn broking business
and Rs.200/- in case of money exchange operations.
The Appellants filed a writ petition in the High Court
of Andhra Pradesh challenging the Notification dated 11th
April, 1987, inter alia, on the ground that Section 521 did
not empower the Commissioner to notify the trades of money
lending and pawn broking as being trades for which a licence
is necessary. The Writ Petition came to be dismissed by a
single Judge of the High Court on 18th of February, 1994.
The single Judge, inter alia, held that the business of
money lending and pawn broking were dangerous to property in
the sense that they involved a risk to property of the
persons who hypothecate the same with the money lenders and
that having regard to the manner in which and the
circumstances under which such business is carried on they
are likely to create nuisance.
Against the judgment of the learned single Judge, the
Appellants filed an Appeal. The Appeal came to be dismissed
by the impugned Judgment dated 27th November, 1998. By the
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impugned Judgment, the learned Judges have dis-agreed with
the single Judge and held that the business of money lending
or pawn broking is not dangerous to property. They have,
however, held that these are operations which are likely to
create a nuisance inter alia on the following reasoning:
"Approaching the term in the background of the above
meanings and definitions, more especially the concept of
"nuisance in fact"/"nuisance per accidens", one can say that
running of a money lending or pledge shop is likely to
create nuisance to the residents of locality at times. Let
us take a case where such a shop is set up in the thick of a
residential locality inhabited by middle class and poor
families and the proprietors resort to advertisements and
other types of canvassing so as to lure the vulnerable
sections of society to borrow money at high rates of
interest by pledging the jewellery and so on. A section of
population residing in that locality may feel annoyed or
entertain a feeling of insecurity. The activity of pledging
and money lending on security of articles held precious the
families may affect the susceptibilities of the family
members and other residents of the locality. The
ramifications or the impact of the business may not
necessarily be confined within the precincts of the shop,
but it may stretch beyond that and percolate into the day to
day life stream of the residents of the locality.
Let us take another example which equally holds good not
only for the money lender’s shop, but also for any other
trade in a City. Supposing the shop is set up at a crowded
place, just adjacent to, or encroaching on the foot path and
the pursuit of the business involves visits by large number
of customers. It is likely to cause obstruction or
inconvenience to the passers-by. Thus, the location of a
money lending or pawn broker’s shop more often assumes good
deal of importance. Viewed from this angle, the possibility
of a professional money lender’s shop causing nuisance in
some degree or the other cannot be ruled out. It may not
cause nuisance at all times and in all localities, but under
certain situations or circumstances or at certain times, the
running of such shop is likely to create nuisance to a
section of members of public. That is enough to justify the
formation of the opinion by the Commissioner. As already
observed, the Court cannot substitute its own view on the
question whether a particular trading activity is likely to
create nuisance. If the Commissioner had reached the
satisfaction that the trade or operation is likely to create
nuisance either by its nature or by reason of the manner in
which or the conditions under which the trading activity is
carried on, that is sufficient to uphold the Commissioner’s
notification. The judicial review of the opinion reached by
the Commissioner ought to be confined within limited
parameters as indicated above.
We have heard the parties at length. The question for
consideration is whether the Commissioner has powers under
Section 521 of the said Act to insist that money lenders and
pawn brokers only run their business on the basis of a
licence issued by the Respondents. Section 521 reads as
follows :
"521. Certain things not to be kept and certain trades
and operations not to be carried on, without a licence :-
(1) Except under and in conformity with the terms and
conditions of a licence granted by the Commissioner no
person shall -
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(a) keep, in or upon any premises, for any purpose
whatever :
(i) any article specified in Part I of Schedule ’P’.
(ii) any article specified in Part II of Schedule ’P’ in
excess of the quantity of such article which may at any one
time be kept in or upon the same premises without a licence;
(b) keep, in or upon any premises, for sale or for other
than domestic use, any article specified in part III of
Schedule ’P’;
(c) keep, in or upon any building intended for or used
as a dwelling or within fifteen feet of such building,
cotton, in pressed bales or boars or loose, in quantity
exceeding four cwts;
(d) keep or allow to kept in or upon any premises,
horses, cattle or other four footed animals -
(i) for sale;
(ii) for letting out on hire;
(iii) for any purpose for which any charge is
made or any remuneration is received; or
(iv) for sale of any produce thereof;
(e) carry on, allow to be carried on, in or upon any
premises -
(i) any of the trades or operations connected with trade
specified in Part IV of Schedule ’P’;
(ii) any trade or operation which in the opinion of the
Commissioner is dangerous to life, health or property, or
likely to create a nuisance either from its nature, or by
reason of the manner in which, or the conditions under
which, the same, is or is proposed to be carried on;
(f) carry on within the city or use any premises for the
trade or operation of a carrier.
(2) A person shall be deemed to have known that a trade
or operation is, in the opinion of the Commissioner,
dangerous or likely to careate a nuisance within the meaning
of paragraph (ii) of clause (e) of sub-section (1), after
written notice to that effect, signed by the Commissioner
has been served on such person or affixed to the premises to
which it relates.
(3) A person shall be deemed to carry on or to allow to
be carried on a trade or operation within the meaning of
paragraph (ii) of clause (e) of sub- section (1), if he does
any act in furtherance of such trade or is in any way
engaged or concerned therein whether as principal, agent,
clerk, master, servant, workman, handicraftsman or
otherwise.
(4) It shall be in the discretion of the Commissioner -
(a) to grant any license referred to in sub-section (1)
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to such restrictions or conditions, if any, as he shall
think fit to impose; or
(b) to withhold any such licence.
(5) Every person to whom a licence is granted by the
Commissioner under sub-section (3) shall keep such licence
in or upon the premises, if any, to which it relates.
(6) Nothing in this section shall be deemed to apply to
mills for spinning or weaving cotton, wool, silk, or jute to
any other large mill or factory which the Commissioner may,
from time to time, with the approval of the Standing
Committee specially exempt from the operation thereof."
It is admitted that the Notification is under Section
521(e)(ii). Section 521 provides for "certain things not to
be kept and certain trades and operations not to be carried
on without a licence". Sub-section 1 starts with the words
Except under and in conformity with the terms and
conditions of a licence granted by the Commissioner." Thus
the whole purpose of Section 521 is to ensure that the
Commissioner is in a position to regulate the trade or
operation or to prevent things from being kept except on
certain terms and conditions, which may be fixed by the
licence. It, therefore, automatically follows that if there
are no terms and conditions which can be imposed by a
Commissioner or the Municipality in respect of a particular
trade or operation then even if the Commissioner is of the
opinion that that trade or operation is dangerous to life or
health or property or that it is likely to create a nuisance
he would not be able to regulate or control that trade or
operation. Insistence on getting a licence, in such a case,
would be a useless formality and would not be authorised by
Section 521.
It is with this view in mind that this Court had on 23rd
of January, 2001 called upon the Respondents to produce a
licence, which had been issued to money lenders and pawn
brokers. This had been done with a view to see whether
there was any term or condition which could be imposed by
the Respondents on money lenders and pawn brokers.
At this stage it must also be mentioned that the trade
and operation of money lending and pawn broking is
controlled and governed by other Acts and other Laws like
the Andhra Pradesh Money Lenders Act, the Andhra Pradesh
Pawn Brokers Act, etc. Those Acts lay down all terms and
conditions on the basis of which such trade or operations
could be carried on. In the Hyderabad Municipal Corporation
Act there is no provision empowering the Respondents to
either carry out inspections or to take any measures to
ensure that such trade and operations are run properly and
that exploitation is avoided. This aspect has been noticed
by the High Court in the impugned Judgment. In pursuance of
the direction issued on 23rd of January, 2001, a copy of the
licence issued by the Respondents had been produced. On a
perusal of the licence it was clear that there was not a
single term or condition, in that licence, which could apply
to this trade or occupation. It was, however, sought to be
submitted that there were blank spaces provided in the
licence. It was submitted that in those blank spaces the
terms and conditions regulation such trade and operations
were hand-filled before a licence was issued. This oral
submission was denied by the Appellants. The Appellants
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pointed out that no licence was being issued and that all
that was being done was that a receipt for the licence fee
was being issued. Counsel for the Respondents was asked to
verify this fact and let this Court know what the correct
position was.
Written submissions have since been filed. In the
written submissions it is admitted that no licence is being
issued to the members of the Petitioner Association. It is
now admitted that only receipts for the fees collected are
issued. Now it is sought to be stated that on the receipt
it is stamped that the offices should be kept clean. It is
now stated that the regulation is to the extent of deciding
the location, maintenance of cleanliness and regulating
noise pollution. These are new points made out for the
first time in the written submission. Uptill now the case
has been that the Commissioner was of the opinion that this
particular trade or operation was dangerous to life or is
likely to create a nuisance i.e. under Section 521(e)(ii).
Maintenance of cleanliness deciding location and regulating
noise pollution would not fall within Section 521(e)(ii).
Also factually it has not been shown how cleanliness is
ensured or location is being controlled by means of licence.
There is also no explanation as to how and by what term or
condition noise pollution is sought to be regulated. In the
receipt issued there is no regulation regarding noise
pollution or location.
Faced with this position Mr. Nageshwar Rao relied upon
the case of Chief Constable of the North Wales police V.
Evans 1982 All E.R. 141, RV Radio Authority, ex parte Bull
& another 1997 ALL.E.R. 561, M.A. Rasheed & Ors. vs. The
State of Kerala 1974) 2 S.C.C. 687 and Narayan Govind
Gavate & Ors. vs.
State of Maharashtra & Ors. (1977) 1 S.C.C. 133.
Based on these authorities it is submitted that the opinion
of the Commissioner as to whether any activity is dangerous
or is likely to create nuisance is a subjective opinion. He
submits that judicial review in such a case is very limited
and the Court would not substitute its opinion for the
opinion of the Commissioner. There can be no dispute with
the legal proposition. However the opinion has to be based
upon some relevant material. In the present case no
material has been placed before us to show on what basis the
Commissioner considers such businesses to be dangerous and
are likely to cause nuisance. More importantly it has not
been shown how such trades and occupation are regulated by
the Respondent. The only circumstances are those extracted
above from the impugned Judgment. However, it is not shown
or averred that all shops are in residential areas inhabited
by middle class and poor families or that all members of the
Appellant Association issue advertisements or that all shops
are in crowded areas. If one or two or some shops are set
up on the thick of a residential locality inhabited by
middle class or poor families or set up in a crowded place
or issue an advertisement, the entire trade or occupation
cannot be termed to be dangerous to life, health or property
or likely to create a nuisance. To be noted that the
opening part of Section 521 talks of "trades and
operations". Similarly Section 521(e)(i) also talks of
trades and operations. However, Section 521(e)(ii) uses the
word "trade or occupation". Thus if a shop or some shops
are set up in crowded areas or require any regulation, then
it would be a matter for regulating that particular shop or
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those particular shops by laying down appropriate
conditions. Merely because a pawn broker or a money lender
is likely to set up a shop in the thick of a residential
locality or in a crowded place would be no ground for the
Commissioner to come to a conclusion that the entire trade
or occupation of money lending and pawn broking is dangerous
or likely to create nuisance. It is clarified that this
Court is not saying that the Commissioner cannot under
Section 521(e)(ii) Notify a particular trade or operation,
i.e. include all persons carrying on that particular trade
or operation. In this view of the matter we are of the
opinion that the impugned judgment cannot be sustained. The
same is accordingly set aside. The Writ Petition of the
Appellants is allowed. The Appeal stands disposed of
accordingly. There shall be no Order as to costs.