Full Judgment Text
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PETITIONER:
RASHID AHMED
Vs.
RESPONDENT:
THE MUNICIPAL BOARD, KAIRANA.THE UNION OF INDIA and THE STAT
DATE OF JUDGMENT:
19/05/1950
BENCH:
DAS, SUDHI RANJAN
BENCH:
DAS, SUDHI RANJAN
KANIA, HIRALAL J. (CJ)
FAZAL ALI, SAIYID
SASTRI, M. PATANJALI
MAHAJAN, MEHR CHAND
MUKHERJEA, B.K.
CITATION:
1950 AIR 163 1950 SCR 566
CITATOR INFO :
D 1952 SC 115 (4)
RF 1954 SC 220 (9)
RF 1954 SC 630 (3)
R 1957 SC 882 (6)
R 1958 SC 956 (26)
R 1959 SC 725 (8,11)
R 1960 SC 994 (13)
RF 1961 SC1506 (9)
R 1962 SC1621 (75,108)
R 1969 SC 556 (3)
ACT:
Constitution of India, Arts. 19 (1), 19 (6), 32--Funda-
mental right to carry on trade--Reasonableness of restric-
tions imposed-U.P. Municipalities Act, 1916, s. 241
(2)(a)--Municipal byelaw prohibiting carrying on wholesale
trade without permission--Absence of Provision for
issuing license to old traders--Provision permitting Grant
of monopoly--Legality of byelaw.
HEADNOTE:
Byelaw No.2 of the byelaws of a municipal board, which
came into force on the 1st January, 1950, provided that "no
person shall establish any new market or place for wholesale
transactions without obtaining the previous permission of
the board, and no person shall sell or expose for sale any
vegetable, fruit, etc. at any place other than that
fixed by the board for the purpose "; and bye-law No. 4
permitted the grant of a monopoly to a contractor to
deal in wholesale transactions at the place fixed as a
market. In anticipation of these byelaws the monopoly right
to do wholesale business in vegetable for three years was
auctioned by the municipal board and granted to the high-
est bidder And A place was also fixed as the market where
such business could be carried on. The petitioner who had
been carrying on wholesale business in vegetables at a
rented shop within the municipality for two years before the
byelaws came into force applied for a license to carry on
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his business at his shop but this was rejected on the ground
that there was no provision in the byelaws authorising the
grant of any such license, and he was prosecuted for contra-
vention of the byelaws. He applied under Art. 32 of the
Constitution for the enforcements of his fundamental right
as a citizen to carry on his business which was guaranteed
by Art. 19 (1) of the Constitution.
Held (i) that the prohibition in byelaw No.2 became
absolute in the absence of provision authorising the issue
of a license, and, inasmuch as the municipal board had,
further, put it out of its power to grant a license to the
petitioner by granting a monopoly, the restrictions imposed
were not reasonable within
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the meaning of Art. 19 (6) of the Constitution, and the
byelaws were accordingly void and the prosecution of the
petitioner illegal, (ii) that the fact that the Constitution
came into force only after the byelaws had come into force
did not affect the petitioners’s right to carry on his
business.
Held also, that an appeal under section 318 of the U. P.
Municipalities Act was not in the circumstances an adequate
legal remedy the existence of which would disentitle the
petitioner from maintaining this application.
JUDGMENT:
ORIGINAL JURISDICTION‘: Petition No. X of 1950.
This was an application under article 32 (1) of the
Constitution for the enforcement of the applicant’s funda-
mental right to carry on his business which was guaranteed
by article 19 (1) of the Constitution. The facts of the
case appear in the judgment.
Nur-ud-din, for the petitioner.
Radhelal Agarwala, for the opposite party.
M.C. Setalvad, Attorney-General for India, (S. M. Sikri,
with him), for the Union of India.
Pearylal Banerji, Advocate-General of U.P. (Shri Ram,
with him), for the State of Uttar Pradesh.
1950. May 19. The judgment of the Court was delivered
by
DAS J.--I am reading the judgment of the Court.
This is an application under article 32 of the Constitu-
tion of India made by Rashid Ahmed for enforcement of his
fundamental right to carry on his business which is said to
have been completely stopped by the respondent, the Munici-
pal Board of Kairana. The facts shortly are as follows:
The petitioner is an Aratia (commission agent) carrying
on wholesale business in vegetables and fruits at Kairana in
the District of Muzaffarnagar in the
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State of Uttar Pradesh. He has been carrying on this busi-
ness for the last two years at a rented shop in Bazar Jama
Masjid in the town of Kairana. Until recently there were no
bye-laws of the respondent Board regulating the sale of
vegetables and fruit within the limits of the municipality.
In March, 1949. the respondent Board published certain
proposed bye, laws made under section 298 of the U.P. Munic-
ipalities Act, 1916. These bye-laws were passed by the
respondent Board on the 19th April, 1949. After confirma-
tion by the Commissioner these bye-laws came into operation
on and from 1st January, 1950. In anticipation of these new
bye-laws coming into effect the respondent Board on the 21st
May, 1949, auctioned" the contract for wholesale of vegeta-
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bles, presumably meaning thereby the monopoly right to do
wholesale business in vegetables. The contract was given to
one Habib Ahmad, who was the highest bidder for three years
at and for Rs, 72,750 payable in equal quarterly instalments
in advance. On the 31st December, 1949, respondent Board
notified a place near Police Post Imam as the market for
wholesale purchase and sale of vegetables and fruits. The
petitioner applied for a license to carry on his wholesale
Aratia business at his shop. On or about the 22nd December,
1949, the respondent Board by resolution No. 188 rejected
the petitioner’s application. This decision was communicated
to the petitioner on the 9th February, 1950. The order of
the Chairman of the respondent Board was in these terms:
"According to resolution No. 188 dated 22-12-49 the applica-
tion of Mr. Rashid Ahmed is rejected and he be informed
accordingly." No reason was assigned by the respondent
Board’s resolution for the rejection of the petitioner’s
application. We are now informed by the learned Advocate
for the respondent Board that the application was rejected
as there. was no bye-law for entertaining such application
or granting such license as was prayed for. The fact that
the respondent Board had already auctioned the contract to
Habib Ahmad might conceivably have had some bearing on this
refusal to grant a license. to the petitioner. In the mean-
time on the 28th
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January, 1950, a notice was served on the petitioner in the
following terms:
"You are hereby informed that the Municipal Board,
Kairana, have given the contract of wholesale purchase and
sale of the vegetables, which is in force from the 1st day
of January, 1950. It has been repeatedly promulgated, in
the city by the beat of drum, through a Khakrob (sweeper)
that excepting the contractor of vegetables the Municipal
Board, Kairana, nobody shall deal in wholesale purchase and
sale of vegetables at a place other than the one approved by
the Municipal Board aforesaid (i.e. the place near Police
Post Imam). As against this, you in the first place kept
selling vegetables by wholesale, at the house near Jama
Masjid otherwise known as Qaziwala, despite occasional
verbal warnings requiring you to desist therefrom, which
were conveyed through an employee of the Board. On your
failure to comply, you were warned by a notice in writing,
dated the 3rd January, 1950. That notice was duly served on
you. But still you paid no heed. Accordingly a complaint
was lodged against you, under the bye-laws, quoted above, in
the Court of Pargana Officer, Tahsil Kairana. The complaint
is still pending. Now you are selling wholesale by auction,
vegetable at another place in Jama Masjid Bazar, which is a
thoroughfare.
Your above conduct is unlawful and in contravention of
the Municipal Board’s Bye-law 2 pertaining to vegetable
contract. Moreover, highly prejudicial as it is to the
interests of both the contractor and the Board, you are
warned that after this notice has been served on you, you
should cease to sell any more vegetable in breach of the
bye-laws above mentioned. Herein fail not."
This notice is rather disingenuous in that while it sug-
gests that everybody can deal in wholesale purchase and sale
of vegetables at the place approved by the Board, i.e., at
the place near Police Post Imam, the fact, as we are now
told by the learned Advocate for the respondent Board, is
entirely contrary, for it is
570
only the contractor Habib Ahmad who can carry on wholesale
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business at that place. The position, therefore, is that
the petitioner cannot do any wholesale business either at
the appointed market or at his own shop where he had admit-
tedly been doing wholesale. business for two years prior to
the bye-laws coming into force. In short, the petitioner’s
business has been wholly stopped and he is being prosecuted
for alleged breach of the bye-laws. The above notice was
headed as "Notice under bye-law 2 of the bye-laws pertaining
to contract of vegetables." Bye-law 2 runs thus:
"No person shall establish any new market or place for
wholesale transaction without obtaining the previous per-
mission of the Board and no person shall sell or expose for
sale any vegetable, fruit, etc., at any place other than
that fixed by the Board for the purpose."
The second part of this bye-law clearly contem-
plates that everybody will be entitled to do business at
the place fixed by the respondent Board, but as a result of
a monopoly in favour of the contractor Habib Ahmad having
been created, nobody else can do business at that place as
conceded by the learned Advocate for the respondent Board.
Under the first part of this bye-law no person can establish
a new market or place for wholesale transaction without
obtaining the permission of the respondent Board. This
part of the bye-law clearly contemplates that the Board may
permit the establishment of a new market for wholesale
dealings in vegetables. The petitioner applied for this
permission but it was refused. Bye-law 2 is still in force.
If it requires a license then under section 241 (2)(a) the
respondent Board cannot refuse such license except on the
ground that the place where the market or shop is estab-
lished fails to comply with any condition prescribed by, or
under, the Act. It’ is conceded that the rejection of the
petitioner’s application was not based on any such ground
but that it was because there was no bye-law authorising the
issue of any license. The Constitution by article 19 (1)
guarantees
571
to the Indian citizen the right to carry on trade or busi-
ness subject to such reasonable restrictions as are men-
tioned in clause (6) of that article. The position, howev-
er, under bye-law 2 is that while it provided that no person
shall establish a market for wholesale transactions in
vegetables except with the permission of the Board, there is
no bye-law authorising the respondent Board to issue the
license. The nett result is that the prohibition of this
bye-law, in the absence of any provision for issuing li-
cense, becomes absolute. Further: bye-law 4 contemplates the
grant of a monopoly to a contractor to deal in wholesale
transactions at the place fixed as a market. Acting upon
that provision, the respondent Board has granted monopoly to
Habib Ahmad and has put it out of its power to grant a
license to the petitioner to carry on wholesale business in
vegetables either at the fixed market place or at any other
place within the municipal limits of Kairana. This certainly
is much more than reasonable restrictions on the petitioner
as are contemplated by clause (6) of article 19. This being
the position, the bye-laws would be void under article 13
(1)of the Constitution. On the other hand, if there is no
bye-law requiring the petitioner to take out license, then
there can be no justification for the respondent Board to
stop the petitioner’s business or to prosecute him.
Learned counsel for the respondent Board faintly con-
tended that the’ bye-laws having come into force on 1st
January, 1950, i.e., before the Constitution came into
force, the petitioner no longer had any right to continue
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the business and, therefore, his case is not governed by
article 19 (1) (g). There is no substance in this argument
for, if it were sound, article 19 (1) (g) would only protect
persons who were carrying on business before the Constitu-
tion came into force.
Learned Advocate-General of Uttar Pradesh appearing
for the intervener drew our attention to section 318 of the
U.P. Municipalties Act, 1916, and submitted that the peti-
tioner having adequate remedy by way of appeal, this Court
should not grant any writ in the nature of the prerogative
writ of mandamus
572
or certiorari. There can be no question that the existence
of an adequate legal remedy is a thing to be taken into
consideration in the matter of granting , writs, but the
powers given to this Court under article 32 are much wider
and are not confined to issuing prerogative writs only. The
respondent Board having admittedly put it out of its power
to grant a license and having regard to the fact that there
is no specific bye-law authorising the issue of a license,
we do not consider that the appeal under section 318 to the
local Government which sanctioned the bye-laws is, in the
circumstances of this case, an adequate legal remedy.
We are satisfied that in this case the petitioner’s
fundamental rights have been infringed and he is entitled to
have his grievance redressed. The proper order in such
circumstances would be to direct the respondent Board not to
prohibit the petitioner from carrying on the trade of whole-
sale dealer and commission agent of vegetables and fruits
within the limits of the Municipal Board of Kairana, except
in accordance with the bye-laws as and when framed in future
according to law and further to direct the respondent Munic-
ipal Board to withdraw the pending prosecution of the peti-
tioner and we order accordingly. The respondents to pay the
costs of the petitioner.
Petition allowed.
Agent for the petitioner: Naunitlal.
Agent for the opposite party : Tarachand Brijmohanlal.
Agent for the Union of India: P.A. Mehta.
Agent for Uttar Pradesh: Tarachand Brijmohanlal.
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