Full Judgment Text
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PETITIONER:
KISHAN CHAND ARORA
Vs.
RESPONDENT:
COMMISSIONER OF POLICE, CALCUTTA
DATE OF JUDGMENT:
09/12/1960
BENCH:
WANCHOO, K.N.
BENCH:
WANCHOO, K.N.
SINHA, BHUVNESHWAR P.(CJ)
KAPUR, J.L.
GAJENDRAGADKAR, P.B.
SUBBARAO, K.
CITATION:
1961 AIR 705 1961 SCR (3) 135
CITATOR INFO :
RF 1967 SC 829 (6)
R 1984 SC1030 (37)
ACT:
Eating House-Power to grant license-Discretion vested in
Police Commissioner -- Constitutionality Calcutta Police
Act, 1866 (IV of 1866), s. 39-Constitution of India, Arts.
19(1)(g), 19(6).
HEADNOTE:
By s. 39 of the Calcutta Police Act, 1866, "The Commissioner
of Police, may, at his discretion from time to time, grant
licenses to the keepers of such houses or places of public
resort and entertainment as aforesaid for which no licence
as is specified in the Bengal Excise Act, 1909 is required
upon such conditions,
(1) (1934) L.R. 61 I.A. 398.
136
to be inserted in every such license, as he, with the
sanction of the said State Government from time to time
shall order, for securing the good behaviour of the keepers
of the said houses or places of public resort or
entertainment, and the prevention of drunkenness and
disorder among the persons frequenting or using the same;
and the said licenses may be granted by the said
Commissioner, for any time not exceeding one year".
The petitioner, whose application for a license in respect
of an eating house was refused by the Commissioner of
Police, Calcutta, under the section, challenged its
constitutional validity on the ground that it conferred
arbitrary and unguided powers on the Commissioner to grant
or refuse a license without hearing the applicant and was,
therefore, an unreasonable restriction on his fundamental
right to carry on his trade guaranteed by Art. 19(1)(g) of
the Constitution.
Held, (per Kapur, Gajendragadkar and Wanchoo, JJ.), that in
order to decide whether a provision in a pre-Constitution
statute, like the one in question, satisfies. the test of
constitutionality laid down by Art. 19(i)(g) read with Art.
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19(6) of the Constitution, the impugned section has to be
read as a whole in a fair and reasonable manner and it
should not be declared void simply because the
considerations relevant to those Articles are not
immediately apparent from its language. It is not correct
to say that the discretion conferred on the Commissioner by
the first part of the section is absolute and that the
question of imposing the two conditions mentioned by the
second part can arise only after the grant of the license.
The two parts, read together, can lead only to the
conclusion that the discretion vested in the Commissioner is
guided by the two conditions mentioned in the section,
namely, the securing of good behaviour and the prevention of
drunkenness and disorder and a third by necessary impli-
cation, that the applicant must have actual and effective
control and possession of the place where he keeps the
eating house.
Section 39 of the Calcutta Police Act, 1866, therefore, con-
fers no arbitrary or uncanalised discretion on the
Commissioner, unguided by any criteria, and does not
constitute an unreasonable restriction on the fundamental
right to carry on trade under Art. 19(i)(g) of the
Constitution.
Rustom jamshed Irani v. Harley Kennedy, (1901) I.L.R. 26
Bom. 386, inapplicable.
Although there can be no doubt that procedural provisions of
a statute also enter into the verdict as to its
reasonableness, it cannot be laid down as a general
proposition that if a licensing statute omits to provide for
a hearing or for the giving of reasons for refusal, such
omission must necessarily constitute an unreasonable
restriction on a fundamental right. The Commissioner in
passing an order under the section acts administratively and
although he must act reasonably, there is no duty cast on
him
137
to act judicially. Regard being had to the setting in which
the impugned section appears in the Act and the
circumstances of ,.this case, it could not be said that s.
39 of the Act was such a restriction.
State of Madras v. V. G. Row, [1952] S.C.R. 597, Nagendra
Nath Bora v. The Commissioner of Hills Division and Appeals,
Assam, [1958] S.C.R. 1240, Nakkuda Ali v. M. F. De S.
jayaratne, 1951 A.C. 66 and Express Newspapers (P.) Ltd. v.
The Union of India, [1959] S.C.R. 12, relied on.
If an applicant thinks that he has fulfilled the three con-
ditions and the Commissioner has unreasonably rejected his
application, he has his remedy under Art. 226 of the
Constitution.
Per Subba Rao, J.-It is well settled that restrictions on
fundamental rights must not be arbitrary or excessive or
beyond what is required in the interest of the general
public. Such restrictions have to be tested both from the
substantive and the procedural aspects. An uncontrolled or
uncanalised power constitutes an unreasonable restriction.
Even though the statute may clearly express the legislative
policy that cannot be enough unless it provides a suitable
machinery for implementation of that policy in accordance
with the principles of natural justice. Restrictions are
justifiable and in deciding whether a restriction is
reasonable or not, the Court cannot attach much importance
to the fact that the impugned statute vests discretion in
the State Government or a high officer. Nor can the
distinction between an administrative authority and a
judicial one have much relevance except that the Court may
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be more inclined to uphold the discretion if vested in an
impartial judicial authority rather than in an
administrative one.
State of Madras v. V. G. Row, [1952] S.C.R. 597, Thakur
Raghubir Singh v. Court of Wards, Ajmer, [1953] S.C.R. 1049
and M/s. Dwarka Prasad Laxmi Narain v. The State of Uttar
Pradesh, [1954] S.C.R. 803, relied on.
Babulal Chandra v. Chief justice and judges, High Court of
Patna, A.I.R. 1954 S.C. 524, Harishankar Bagla v. The State
Of Madhya Pradesh, [1955] 1 S.C.R. 380, Union of India v.
Bhana Mal Gulzarimal Ltd., [1960] 2 S.C.R. 627 and Mineral
Development Ltd., State of Bihar, [1960] 2 S.C.R. 609
considered.
Thus viewed, the plain words of the impugned section cannot
be said to lay down any policy reasonably capable of
controlling the discretion vested in the Commissioner.
The word ’may’ coupled with the words ’at his discretion’ in
the first part of the section clearly emphasises the
intention of the Legislature to confer absolute power on the
Commissioner. The second part deals with the nature of the
conditions to be inserted in the license. But the scope of
the discretion to issue
18
138
the license and the power to impose conditions in a license
are two different matters.
Even if the two conditions mentioned in the second part
could be read into the first, the discretion conferred by
the section would still be arbitrary since the section
neither requires that the Commissioner should give
reasonable opportunity to the applicant to prove that he
satisfies both the tests prescribed by it nor that he should
give reasons for refusing the license and no appeal is
provided for.
Consequently , from the substantive as much as the proce-
dural aspect, s. 39 of the Act infringes the fundamental
right of the petitioner guaranteed by Art. 19(i)(g) of the
Constitution.
JUDGMENT:
ORIGINAL JURISDICTION: Petition No. 22 of 1960.
Petition under Art. 32 of the Constitution of India for
enforcement of Fundamental Rights.
H.J. Umrigar and B. P. Maheshwari, for the petitioner.
A.C. Mitra, B. Das and P. K. Bose, for the respondents
Nos. 1 and 2.
P. K. Mukherjee, for respondent No. 3.
1960, December 9. The Judgment of Kapur, Gajendragadkar and
Wanchoo, JJ., was delivered by Wanchoo, J., and that of
Sinha, C.J., and Subba Rao, J., was delivered by Subba Rao,
J.
WANCHOO, J.-This petition under Art. 32 of the Constitution
challenges the constitutionality of s. 39 of the Calcutta
Police Act, No. IV of 1866, (hereinafter called the Act).
The facts necessary for our purpose are these. On August
11, 1954, the petitioner entered into an agreement with one
Haripada Bhowmick, who is respondent No. 3 with respect to
an eating house named ’Kalpatoru Cafeteria’, situate in No.
2 Chowranghee Road, Calcutta. The petitioner was appointed
a contractor by this agreement and was given the exclusive
use and occupation of the said eating house upon certain
terms and conditions. A licence has to be taken out with
respect to an eating house under s. 39 of the Act. It
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appears that originally the licence was in the name of
Bhowmick, and one of the conditions of the licence was that
the eating house should not be sublet
139
without permission of the Commissioner of Police
(hereinafter referred to as the Commissioner). On the date
of the agreement, Bhowmick held a licence for the eating
house, which was to expire on March 31, 1955. It is said
that under the agreement the licence was to remain in the
name of Bhowmick while the petitioner was to carry on the
business as a contractor. The petitioner carried on the
business from after the date of the agreement and no
application for a fresh licence was made by him before March
31, 1955, when the licence in the name of Bhowmick was to
expire. It was only on August 8, 1955, that an application
for licence was made by the petitioner on behalf and in the
name of Bhowmick, though the business was continued to be
run by him all the time after March 31, 1955. It appears
that the application made in the name of Bhowmick was
rejected on December 27, 1956; but in the meantime Bhowmick
was prosecuted on September 10, 1955, for running the eating
house without a licence and was fined on December 12, 1955.
Thereafter a notice was issued to Bhowmick on September 7,
1956, to show cause why his application for licence should
not be refused inasmuch as he had not applied in time and
violated the condition of the licence by sub-letting the
eating house to the petitioner. Thereafter the petitioner
applied on September 21, 1956, for the issue of a licence in
his own name. It may be mentioned that in the meantime
there had been disputes between Bhowmick and the petitioner
and a suit had been filed by Bhowmick against the petitioner
in October 1956 in that connection. It may also be
mentioned that though the petitioner applied for the first
time on September 21, 1956, for licence he had already been
prosecuted in October, 1955, for keeping an eating house
without a licence and convicted in November 1955. The
application made by the petitioner on September 21, 1956,
was eventually rejected on March 30, 1958, though in the
meantime the petitioner was all along continuing the
business of the eating house without having obtained a
licence. After the rejection of his application the
petitioner applied to the High
140
Court under Art. 226 of the Constitution challenging the
constitutionality of s. 39 and also challenging the order of
the Commissioner rejecting his licence on various grounds.
This application was dismissed on August 7, 1958. Thereupon
the petitioner went up in appeal to a Division Bench of the
High Court which was disposed of on March 4, 1959. The
Division Bench held s. 39 to be constitutional. It further
held that as extraneous matters had been taken into account
in rejecting the application of the petitioner for a licence
the rejection was not in accordance with law. However, as
the period of one year for which a licence is valid under s.
39 had expired in September 1957, and the judgment was being
delivered in March 1959, the appeal was dismissed on the
ground that application could not be considered in 1959.
Thereupon the petitioner made another application to the
Commissioner on March 30, 1959, for the period from April 1,
1959 to March 31, 1960. During all this time the petitioner
was carrying on his business as a keeper of the eating house
without a licence. This application was found defective and
another application was made on May 14, 1959. In the
meantime, the petitioner again applied to the High Court on
or about May 8, 1959, under Art. 226 of the Constitution in
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order to compel the Commissioner to issue him a licence or
in the alternative to compel him not to prosecute him for
keeping an eating house without a licence and for such other
orders as the High Court might deem fit to pass. It may be
mentioned that day to day prosecution of the petitioner had
begun from February 1956 under s. 40 of the Act for
continuing to keep an eating house without a licence. This
writ application filed in the High Court was withdrawn by
the petitioner on May 13, 1959, as his application to the
Commissioner of March 30, was defective. On May 30, 1959,
the Commissioner rejected the application of the petitioner
for a licence on the ground that his antecedents and his
present conduct showed that he would not keep good behavior
and further that he would not be able to prevent drunkenness
or disorder among the persons frequenting or using the
eating
141
house’ The petitioner’s complaint is that he was not heard
before the order rejecting his application was passed. Then
on June 15, 1959, the petitioner again applied under Art.
226 of the Constitution to the High Court against the
rejection of his application on May 30. On February 11,
1960, the High Court allowed the petitioner to withdraw the
application with liberty to move such application as he may
be advised before, this Court, in case such liberty was
necessary. Thereafter the petitioner moved this Court by
his present application on February 15, 1960.
His main contention before us is that s. 39 of the Act
confers naked and uncanalised powers on the Commissioner to
grant or refuse a licence and that no criteria have been
laid down anywhere in the Act to guide the discretion of the
Commissioner. Further, no opportunity is provided to an
applicant for a licence to be heard either orally or in
writing before passing orders on an application for licence;
in consequence, the Commissioner has been given completely
arbitrary powers either to grant or to refuse a licence and
this amounts to an unreasonable restriction on the
fundamental right of the petitioner to carry on the trade of
eating house keeper. Besides this attack on the
constitutionality of s. 39 the petitioner also contends that
the order is mala fide and should be struck down on this
ground. There are some other grounds in the petition but
they have not been pressed before us and it will not be
necessary to consider them.
The first question therefore that falls for consideration is
whether s. 39 of the Act is a reasonable restriction within
the meaning of Art. 19(6) on the fundamental right to
practise any profession or to carry on any occupation, trade
or business contained in Art. 19 (1)(g). Sec. 39 is in
these terms:-
"The Commissioner of Police, may, at his
discretion, from time to time, grant licences
to the keepers of such houses or places of
public resort and entertainment as aforesaid
for which no licence as is specified in the
Bengal Excise Act, 1909, is required upon such
conditions, to be inserted in every such
142
licence, as he, with the sanction of the said
State Government from time to time shall
order, for securing the good behaviour of the
keepers of the said houses or places of public
resort or entertainment, and the prevention of
drunkenness and disorder among the persons
frequenting or using the same; and the said
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licences may be granted by the said
Commissioner, for any time not exceeding one
year."
Learned counsel for the petitioner contends that the
language of s. 39 shows that an absolute discretion;
untrammelled by any considerations, is conferred on the
Commissioner by this section and there is nothing either in
the section or anywhere in the Act to guide the discretion
of the Commissioner in the matter of granting such licences.
Therefore, according to learned counsel, the power conferred
on the Commissioner is arbitrary and unguided and such power
is necessarily to be struck down on the ground that it
cannot be a reasonable restriction on the fundamental right
to carry on trade. There is no doubt that if the section
empowers the Commissioner to grant or refuse a licence
without any criteria to guide him, it would be an
unreasonable restriction on the right to carry on trade. We
have therefore to see whether there is any guidance either
in the section or in the Act to regulate the exercise of
discretion of the Commissioner in the matter of granting
such licences. In this connection it must be remembered
that the Act was passed in 1866 when there were no
fundamental rights and we cannot expect that meticulousness
of language which should be found in statutes passed after
January 26, 1950. It may also be mentioned that the Act
replaced two earlier Acts, namely, Act XIII of 1856 and
XLVIII of 1860. The Act of 1860 also contained provisions
for licences for eating houses in ss. II and 12 thereof,
though the language of those sections was somewhat
different. Sec. 11 laid down that in the towns of Calcutta,
Madras and Bombay no eating house shall be kept without
licence and provided for a penalty for the same. See. 12
then laid down that the Commissioner shall from time to time
grant licences to
143
keepers of such houses upon conditions for securing the good
behaviour of the keepers of the said houses and for the
prevention of drunkenness and disorder among the persons
frequenting or using the same. The language of s. 39,
however, is different inasmuch as it provides that the
Commissioner may at his discretion from time to time grant
licences. The Act of 1860 was interpreted by the Bombay
High Court in Rustom J. Irani v. H. Kennedy (1) as giving no
discretion to the Commissioner to refuse a licence if the
person applying for the licence was willing to fulfil the
conditions imposed thereunder. In the case of Calcutta,
however, s. 39 made a change in the language contained in
the earlier Act giving discretion to the Commissioner in the
matter of grant of licences. The question therefore is
whether the word "discretion" introduced by s. 39 means an
absolute and unguided discretion and would therefore now
become an unreasonable restriction on the fundamental right
of a citizen to carry on the trade of keeping an eating
house. There is no doubt, as we have already indicated,
that the section does not say as many of the provisions of
laws passed after January 26, 1950, do that the Commissioner
would grant licence on certain specified considerations.
The contention on behalf of the petitioner is that the first
part of s. 39 confers an absolute discretion on the
Commissioner to grant or to refuse a licence just as he
pleases and that the second part of the section merely
provides for certain conditions to be imposed in case the
Commissioner pleases to grant a licence. We are however of
opinion that when we are judging a law passed in 1866 to
decide whether it satisfies the test of constitutionality
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based on Art. 19(1)(g) and Art. 19(6), we should take the
section as a whole and see whether on a fair reading of the
section it can be said that there is no guidance for the
Commissioner in the matter of granting or refusing licences
and his power is arbitrary. If such guidance can be found
on a fair reading of the section, there would be no reason
for striking it down simply because it has not been worded
in a manner which
(1) (1901) I.L.R. 26 Bom. 396.
144
would show immediately that considerations arising from the
provisions of Art. 19(1)(g) and Art. 19(6) were in mind-
naturally those considerations could not be in the mind of
the legislature in 1866. We have therefore to see whether
an Act passed before the Constitution came into force can be
reasonably and fairly read as containing guidance in the
matter of licensing, as in this case. If it can be fairly
and reasonably read to contain guidance it should not be
struck down. If, on the other hand, on a fair and
reasonable construction of the section as a whole, we come
to the conclusion that there is no guidance in it and the
discretion vested in the Commissioner is absolute and
arbitrary it will have be struck down.
What then does the section provide? It certainly gives
powers to the Commissioner to grant licences at his
discretion. Those words, however, by themselves do not
necessarily mean that the Commissioner has the power to act
arbitrarily and grant licences where he pleases and refuse
where he does not please to do so. The section provides
further that the licence has to be granted upon certain
conditions and those conditions have to satisfy two objects,
namely, (i) securing of the good behaviour of the keepers of
the said houses or places of public resort and entertainment
and (ii) the prevention of drunkenness and disorder among
the persons frequenting or using the same. Of course, it is
implicit in the section that a licence will only be granted
to a person who is the keeper of an eating house. We cannot
read the section as laying down that the discretion is
absolute and that the im. posing of conditions for the
aforesaid two objects only arises after that absolute
discretion has been exercised in favour of the grant of
licences. We see no unfairness or unreasonableness in
reading the section to mean that the Commissioner shall
satisfy himself (i) that the person applying for a licence
is the keeper of an eating house, meaning thereby that he
has a place where he can carry on the business or trade and
that he actually and effectively has control and possession
of that place, (ii) that the keeper is a person of good
behaviour so that the eating house may not become
145
a resort of criminals and persons of ill-repute, and (iii)
that the keeper is in a position to prevent drunkenness and
disorder among those who come to the eating house. This
section appears in the Police Act, the purpose of which is
to maintain law and order and that is why we find that the
two objects to be secured when granting licences are the
good behaviour of the keeper himself and the prevention of
drunkenness and disorder among those who frequent the eating
house. It seems therefore to us that s. 39 clearly provides
that the Commissioner will use his discretion in deciding
whether the person applying for a licence is in actual and
effective control and possession of the place where the
eating house is to be kept and is thus the keeper thereof.
He will also satisfy himself that the keeper is a person of
good behaviour and further that he is able to prevent
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drunkenness and disorder in the eating house. If he is
satisfied on these three matters, it seems to us that the
section contemplates that the discretion will be exercised
in favour of the grant of a licence. We cannot accept that
even though the Commissioner may be satisfied that the
person applying for a licence has actual and effective
control of the place where he is going to keep the eating
house, is a person of good behaviour and can prevent
drunkenness and disorder among the clientele, he will still
go on to refuse the licence. The discretion that is given
to him is to satisfy himself on these three points and if he
is satisfied about them he has to grant the licence. On the
other hand if he is not satisfied on any one or more of
these points he will exercise the discretion by refusing the
licence. As for the conditions which will be inserted in
the licence, they are only for the purpose of carrying on
the two objects specified in the section. They will
naturally be more detailed in order to carry out the two
objects aforesaid. But these two objects in our opinion
along with the obvious implication in the section that the
person applying must have actual and effective control of
the place where he is going to keep the eating house are the
criteria which will govern the exercise
146
of discretion by the Commissioner in the matter of granting
or refusing a licence. We cannot agree with the learned
counsel for the petitioner that the two parts of s. 39
should be read separately, as if one has no effect on the
other. Reading them together, it is in our opinion fair and
reasonable to come to the conclusion that the discretion of
the Commissioner in this matter is guided by the two objects
mentioned in the section and by the necessary implication
contained in it that the person applying must be in actual
and effective control and possession of the place where he
is going to keep the eating house. The argument therefore
that s. 39 confers an arbitrary and uncanalised power
Without any criteria for guiding the discretion of the
licensing authority must fail and the section cannot be held
to be an unreasonable restriction on the right to carry on
trade on this ground.
Then it is urged that even if there is guidance in the
section it provides for no hearing either oral or written of
the person applying for a licence. Further it provides for
no grounds to be given for refusing a licence. Therefore,
though there may be some guiding principle in the matter of
granting licences, the absence of a provision for hearing
and for giving reasons for refusal would also make the
provision unconstitutional as an unreasonable restriction on
a fundamental right. Reference in this connection was made
to State of Madras v. V. G. Row (1) where it was observed
that-
"In considering the reasonableness of laws
imposing restrictions on fundamental right,
both the substantive and procedural aspects of
the impugned law should be examined from the
point of view of reasonableness and the test
of reasonableness, wherever prescribed, should
be applied to each individual statute impugned
and no abstract standard or general pattern
of reasonableness can be laid down as
applicable to all cases."
There is no doubt that procedural provisions of a statute
also enter into the verdict as to its reasonableness; but at
the same time there can be no abstract or
147
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general principles which would govern the matter and each
statute has to be examined in its own setting. It is
undoubtedly correct that no provision has been made for
giving a hearing to a person applying for a licence and the
Commissioner has not to give reasons when refusing the
licence; but it cannot be laid down as a general proposition
that where in the case of licensing statute no provision is
made for hearing and there is no provision for giving
reasons for refusal the statute must be struck down as
necessarily an unreasonable restriction on a fundamental
right. No case has been cited before us which lays down
such a general proposition. We have therefore to examine
the section in its setting to decide whether the absence of
a provision for hearing and for requiring the Commissioner
to give reasons for refusal would make this section
unconstitutional. The section appears in the Police Act,
which deals generally with matters of law and order and the
two objects specified in the section are also for the same
purpose. The discretion is vested in a high police officer
who, one would expect, would use it reasonably. There is no
provision for appeal and there is no lis as between the
person applying for a licence and the Commissioner; the
exercise of the discretion depends upon the subjective
satisfaction of the Commissioner as to whether the person
applying for a licence satisfies the three conditions
mentioned above. It is true that the order when made one
way or the other affects the fundamental right of carrying
on trade, but in the circumstances it cannot but be an
administrative order (see, Nagendra Nath Bora v. The
Commissioner of Hills Division and Appeals, Assam (1)), and
though the Commissioner is expected to act reasonably there
is no duty cast on him to act judicially. In Nakkuda Ali v.
M. F. De S. Jayaratne (2), the Privy Council pointed out
that it was Quite possible to act reasonably without
necessarily actinG judicially and that it was a long step in
the argument to say that because a man is expected to act
reasonably he cannot do so without a course of conduct
analogous to the judicial process. The compulsion of
hearing before
(1) [1958] S.C.R. 1240,1253.
(2) [1951] A.C. 66.
148
passing the order implied in the maxim ’audi alteram partem’
applies only to judicial or quasi-judicial proceedings:
(see, Express Newspapers (P.) Ltd. v. The, Union of India
(1)). Therefore, the fact that no hearing is required to be
given by the Commissioner before he decides to grant or
refuse a licence would not make the provisions as to
licensing in the circumstances of this case unreasonable
restrictions on the fundamental right of carrying on a
trade. For- the same reasons it cannot be said that because
the reasons for refusal are not communicated to the person
applying that would make the licensing provision
unconstitutional. The person applying knows that under the
law there are three conditions (already set out above) which
the Commissioner has to consider in granting or refusing the
licence. If he thinks that he fulfills the three conditions
and the Commissioner has acted unreasonably in rejecting his
application he is not without a remedy; he can apply to the
High Court under Art. 226 and compel the Commissioner to
disclose the reasons for refusal before the Court and if
those reasons are extraneous or are not germane to the three
matters arising under s. 39, the High Court will compel the
Commissioner to act within the scope of s. 39. We are
therefore of opinion that in the circumstances of this case
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and in the setting in which s. 39 appears the mere absence
of a provision for a hearing or a provision for
communicating the reasons for refusal to the person
applying, does not make s. 39 unconstitutional as an
unreasonable restriction on a fundamental right. The attack
therefore on the constitutionality of s. 39 must fail.
Then we turn to the question of mala fides. It is not the
case of the petitioner that the Commissioner has any
personal animus against him or that he is favouring
Bhowmick. What he says in ground 41 of his petition in this
connection is that the reasons given by the Commissioner in
his order dated May 30, 1959, for refusing the licence are
not correct and that the Commissioner is annoyed with him
because he went to the High Court by means of a writ
application.
(1) [1959] S.C.R. 12. 106.
149
These in our opinion are no grounds for holding that the
order of the Commissioner passed in this case on May 30,
1959, is malafide.
The petition therefore fails and is hereby dismissed with
costs.
SUBBA RAO, J.-We regret our inability to agree with Wanchoo,
J. Our learned brother in his judgment has stated the facts
fully and it is not necessary to restate them here.
The petitioner applied to the Commissioner of Police,
Calcutta, for a licence to enable him to carry on the
business of an eating house known as "Kalpatoru Cafeteria".
The Commissioner by his order dated May 30, 1959, rejected
the application made by the petitioner for a licence on two
grounds, namely, that he was not satisfied that from "the
antecedents and resent conduct" of the petitioner it would
be reasonable to think that the petitioner would keep good
behaviour and would be able to prevent drunkenness or
disorder among the persons frequenting the eating house.
The application was rejected under s. 39 of the Calcutta
Police Act, No. IV of 1866 (hereinafter called the Act).
The short question raised is whether s. 39 of the Act is
constitutionally valid. Section 39 of the Act reads:
"The COMMISSIONER of Police, may, at his.
discretion, from time to time, grant licenses
to the keepers of such houses or places of
public resort and entertainment as aforesaid
for which no license as is specified in the
Bengal Excise Act, 1909, is required upon such
conditions, to be inserted in every such
license, as he, with the sanction of the said
State Government from time to time shall
order, for securing the good behaviour of the
keepers of the said houses or places of public
resort or entertainment, and the prevention of
drunkenness and disorder among the persons
frequenting or using the same; and the said
licenses may be granted by the said
Commissioner, for any time not exceeding one
year."
Learned counsel for the petitioner contends that
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the petitioner has under Art. 19(1)(g) of the Constitution a
fundamental right to carry on the business of an eating
house and that the provisions of s. 39 of the Act impose
unreasonable restrictions on the exercise of his right and,
therefore, the said section is void.
Before scrutinising the provisions of that section it would
be convenient at the outset to notice the relevant aspects
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of the law vis-a-vis the concept of reasonable restrictions
on a fundamental right. The concept of reasonableness has
been clearly defined by Patanjali Sastri, C. J., in State af
Madras v. V. G. Row (1) thus:
"It is important in this context to bear in
mind that the test of reasonableness, wherever
prescribed, should be applied to each
individual statute impugned, and no abstract
standard, or general pattern, of reasonablenes
s
can be laid down as applicable to all cases.
The nature of the right alleged to have been
infringed, the underlying purpose of the
restrictions ’imposed, the extent and urgency
of the evil sought Co be remedied thereby, the
disproportion of the imposition, the
prevailing conditions at the time, should all
enter into the judicial verdict".
There the constitutional validity of s. 15(2)(b) of the
Indian Criminal Law Amendment Act, 1908, was impugned on the
ground that it fell outside the scope of authorized
restrictions in Art. 19(4) of the Constitution. The issue
of a notification by the State Government declaring an
association unlawful was made to depend upon its subjective
satisfaction of certain objective factors. The Act also
provided for an enquiry before an Advisory Board and the
subsequent review of the order by the Government on the
basis of the said enquiry. It was pressed upon this Court
to hold that the said restriction passed the test laid down
in Art. 19(4) of the Constitution. In rejecting the con-
tention, Patanjali Sastri, C. J., observed thus:
"The formula of subjective satisfaction of the
Government or of its officers, with an
Advisory
(1)[1952] S.C.R. 597, 607, 608.
151
Board thrown in to review the materials on
which the Government seeks to override a basic
freedom guaranteed to the citizen, may be
viewed as reasonable only in very exceptional
circumstances and within the narrowest limits,
and cannot receive judicial approval as a
general pattern of reasonable restrictions on
fundamental rights."
The learned Chief Justice adverting to the procedural aspect
of the restriction criticised the absence of a provision in
the impugned Act for personal service on the association and
thus depriving its members of the opportunity to make their
representations.
Compared with s. 39 of the Act, the impugned provisions of
the Criminal Law Amendment Act impose more stringent control
on the exercise of the discretionary power by the
Government. Yet the Court struck down the provisions. The
attempt made to distinguish that decision on the ground that
it related to the fundamental right of freedom of speech
cannot be justified as the freedom to do business is also
one of the important fundamental rights under the
Constitution,
The case of Thakur Raghubir Singh v. Court of Wards, Ajmer
(1) was concerned with the question of the reasonableness of
the provisions of s. 112 of the Ajmer Tenancy and Land
Records Act (XLII of 1950) which provided that "if a
landlord habitually infringes the rights of a tenant under
this Act, he shall, notwithstanding anything in s. 7 of the
Ajmer Government Wards Regulation, 1888 (1 of 1888), be
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deemed to be a ’landlord who is disqualified to manage his
own property’ within the meaning of s. 6 of the said
Regulation and his property shall be liable to be taken
under the superintendence of the Court of Wards." The
determination of the question whether a landlord habitually
infringed the rights of a tenant was left to the Court of
Wards. This Court held that section was void as being
unreasonable restriction on the right in property as the
restriction made the enjoyment of that right to depend upon
the mere discretion of the
(1)[1953] S.C.R. 1049, 1055.
152
executive. Mahajan, J., as he then was, observed as under:
"When a law deprives a person of his
possession of his property for an indefinite
period of time merely on the subjective
determination of an executive officer, such a
law can, on no construction of the word
"reasonable" be described as coming within
that expression, because it completely
negatives the fundamental right by making its
enjoyment depend on the mere pleasure and
discretion of the executive, the citizen
affected having no right to have recourse for
establishing the contrary in a, civil court."
Though s. 112 of the Ajmer Tenancy and Land Records Act laid
down an objective test, namely,"a landlord habitually
infringing the rights of tenants under that Act", and,
therefore, may be said to have laid down some policy for the
exercise of the discretion by the Court of Wards, the
section was struck down as the discretion was uncanalised
and no effective procedure was prescribed to remedy the
grievance of an aggrieved party.
It cannot be said that the Commissioner of Police has a
higher status than the Court of Wards or that the taking
over of the management of an estate affects a larger right
than preventing a person from doing his business.
The decision in Messrs. Dwarka Prasad Laxmi Narain v. The
State of Uttar Pradesh (1) dealt with cl. 4(3) of the Uttar
Pradesh Coal Control Order, 1953, whereunder the licensing
authority was given absolute power to grant or refuse to
grant, renew or refuse to renew, suspend, revoke, cancel or
modify any licence under the said Order and the only thing
he had to do was to record reasons for the action he took.
Under the clause the State Coal Controller could delegate
power to any other officer. This Court held that the said
Order was void as it imposed unreasonable restrictions on
the freedom of trade and business guaranteed under Art.
19(1)(g) of the Constitution and not coming within the
protection afforded
(1)[1954] S.C.R. 803, 811.
153
by cl. (6) of the Article. Mukherjea, J., as he then was,
observed to the following effect:
"The power of granting or withholding licences
or of fixing the prices of the goods would
necessarily have to be vested in certain
public officers or bodies and they would
certainly have to be left with some amount of
discretion in these matters. So far no
exception can be taken; but the mischief
arises when the power conferred on such
officers is an arbitrary power unregulated by
any rule or principle and it is left entirely
to the discretion of particular persons to do
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anything they like without any check or
control by any higher authority."
We shall now notice some of the decisions cited at the Bar
on behalf of the Commissioner in support of the validity of
the impugned provisions. In Babul Chandra v. Chief Justice
and Judges, High Court of Patna (1) it was held that the proviso to s
ub-s. (1) of s. 9 of the Indian Bar Councils
Act was not void as being an unreasonable restriction upon
the freedom to practise a profession, or to carry on an
occupation, trade or calling. The proviso to s. 9(1) states
expressly that the rules "shall not limit or in any way
affect the power of the High Court to refuse admission to
any person at its discretion". Under s. 8 of the Indian Bar
Councils Act, no person is entitled as of right to practise
in any High Court, unless his name is entered in the roll of
the Advocates of that Court maintained under the Act. Under
s. 9 of that Act, the Bar Council can frame rules with the
sanction of the High Court to regulate the admission of
persons as Advocates. The proviso saves the overriding
power of the High Court to refuse admission in its
discretion. It was contendedthat an unfettered and
uncontrolled discretion wasgiven to the High Court and
that was unreasonable. This Court pointed out that there
could not be a better authority than the High Court in that
State to which the discretion could be entrusted. This
decision turned upon three considerations, namely, (1) no
person was entitled as of right to practise; (2) the
discretion to refuse was vested in the
(1)A.I.R. 1954 S.C R. 524.
20
154
highest judicial body in the State; and (3) it was implicit
in the power of discretion that the High Court would give
notice before rejecting an application. On that basis this
Court held that the restrictions imposed by the proviso to
s. 9(1) were reasonable.
Nor does the decision in Harishankar Bagla v. The State of
Madhya Pradesh (1) lay down any different principle. There
this Court was concerned with cl. 3 of the Cotton Textile
(Control of Movement) Order, 1948, promulgated by the
Central Government under s. 3 of the Essential Supplies
(Temporary Powers) Act, 1946, which required a citizen to
take a permit from the Textile Commissioner to enable him to
transport cotton textiles purchased by him. It was
contended in that case that the requirement of a permit was
an unreasonable restriction on the citizen’s right under
sub-cls. (f) and (g) of Art. 19(1) of the Constitution.
This Court rejected the contention and affirmed the validity
of the law. Mahajan, C. J., speaking for this Court gave
four reasons in support of his conclusion and they were: (1)
the Legislature passed the Essential Supplies (Temporary
Powers) Act during a period of emergency when it was
necessary to impose control on the production, supply and
distribution of commodities essential to the life of the
community; (2) cl. 3 of the Control Order did not deprive a
citizen of the right to dispose of or transport cotton
textiles purchased by him, but only required him to take a
permit from the Textile Commissioner to enable him to
transport them; (3) if transport of essential commodities by
rail or other means of conveyance was left uncontrolled, it
might well have seriously hampered the supply of these
commodities to the public; and (4) the policy underlying the
Order was clearly enunciated by the provisions therein and
that policy governed the exercise of the discretion by the
Textile Commissioner. On these considerations this Court
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maintained the validity of that Order. The said decision
has no analogy to the provisions of s. 39 of the Act in
question.
The decision in Union of India v. Bhana Mal Gulzarimal Ltd.
(2) related to the question of validity of
(1) [1955] 1 S.C.R. 380.
(2) [1960] 2 S.C.R. 627, 641.
155
cl. 11B of the Iron and Steel (Control of Production and
Distribution) Order, 1941. This Court held, having regard
to the provisions of that Order and those of the Essential
Supplies (Temporary Powers) Act, 1946, that the Legislature
had clearly enunciated its legislative policy and that cl.
11B of the Order laid down the object which was intended to
be achieved. Gajendragadkar, J., delivering the judgment of
the Court, observed thus:
"Therefore reading cl. 11B by itself we do not
see how it would be possible to hold that the
said clause is violative of Art. 19. In fact,
if ss. 3 and 4 are valid and cl. 11B does
nothing more than prescribe conditions for the
exercise of the delegate’s authority which are
consistent with s. 3 it is only the actual
price structure fixed by the Controller which
in a given case can be successfully challenged
as violative of Art. 19."
The learned Judge considered the price structure fixed by
the notification and observed that the respondents therein
did not seriously challenge the validity of the notification
in respect of price structure and, that apart, it was not
proved that the notification adversely affected a large
class of dealers taken as a whole. The judgment, therefore,
does not help the respondents.
Nor is the decision of this Court in Mineral Development
Ltd. v. State of Bihar (1) of any help to the respondents.
There the constitutional validity of s. 25(1) of the Bihar
Mica Act (10 of 1948) was impugned as violating the
petitioners’ fundamental right under Art. 19(1)(f) and (g),
of the Constitution. Under s. 25(1)(c) of that Act
discretion was given to cancel a licence to the State
Government, but cl. (c) was hedged in by two important
restrictions, namely, (i) the failure to comply with the
provisions of that Act or the rules made thereunder should
be a repeated failure and not a mere sporadic one, i.e., the
defaulter must be a recalcitrant one; (ii) before canceling
the licence the State Government should afford reasonable
opportunity to the licensee to show cause why his license
(1) [1960] 2 S.C.R. 609, 619.
156
should not be cancelled. This Court in upholding the
validity of the said section observed thus:
"The power given to the State Government is
only to achieve the object of the Act, i.e.,
to enforce the said provisions, which have
been enacted in the a interest of the public;
and that power, as we have indicated, is
exercisable on the basis of objective tests
and in accordance with the principles of
natural justice. We cannot, therefore, hold
that s. 25(1)(c) of the Act imposes an
unreasonable restriction on the petitioner’s
fundamental rights under Art. 19(1)(f) and (g)
of the Constitution."
This decision far from helping the respondents is, to some
extent, against their contention.
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The result of the discussion may briefly be summarized in
the form of the following propositions: A fundamental right
to do business can be controlled by the State only by making
a law imposing in the interest of the general public
reasonable restrictions on the exercise of the said right;
restrictions on the exercise of a fundamental right shall
not be arbitrary or excessive or beyond what is required in
the interest of the general public; the reasonableness of a
restriction shall be tested both from substantive and proce-
dural aspects; an uncontrolled and uncanalised power
conferred on an officer is an unreasonable restriction on
such right; though a legislative policy may have been
clearly expressed in a statute, it must also pro. vide a
suitable machinery for implementing that policy in
accordance with the principles of natural justice; whether a
restriction is reasonable or not is a justiciable concept
and it is for the Court to come to one conclusion or the
other having regard to the considerations laid down by
Patanjali Sastri, C.J., in State of Madras v. V. G. Row
(1).and similar others; in taking an overall picture of the
relevant circumstances, the Court may legitimately take into
consideration the fact that the discretion is entrusted to a
State Government or a highly placed officer, but that in it-
self is of minor importance for the simple reason that the
fundamental right itself is guaranteed against the
(1)[1952] S.C.R. 597.
157
action of the State, which is defined to include not only
the Union or the State Governments but also Parliament,
Legislatures and all local or other authorities within the
territory of India; the distinction between an
administrative authority and a judicial authority is not of
much relevance in the context of a reasonable restriction,
except perhaps a Court may more readily be inclined to
uphold a restriction if a matter is entrusted to an
impartial judicial authority than to an executive authority.
Bearing the aforesaid principles in mind, let us look at the
impugned provisions of the Act. The section has been
extracted supra. The first part of the section confers a
free and unqualified discretion on the Commissioner to grant
a licence. A discretionary power to issue a licence
necessarily implies a power to refuse to issue a licence.
The word "may" is an enabling one and in its ordinary sense
means "Permissible". When coupled with the words "at his
discretion" it emphasises the clear intention of the legis-
lature to confer on the Commissioner an unrestrained freedom
to act according to his own judgment and conscience. If the
section stops there, it is common case that the power of the
Commissioner is.uncontrolled and uncanalised. The second
part of the section deals with the nature of the conditions
to be inserted in the licence. The conditions to be imposed
are for securing the good behaviour of keepers of public
resort and for the prevention of drunkenness and disorder
among the persons frequenting or using such places. No
doubt the said conditions must have the sanction of the
State Government. This part, therefore, ensures the
peaceful and orderly conduct of business. The section is
clear and unambiguous in terms and it is not disputed that
the plain terms of the section will not enable the
conditions of a licence to be projected into the matter of
the exercise of the discretion. But what is contended is
that the conditions laid down a precise policy for guiding
the discretion of the Commissioner to give or not to give a
licence. There are many objections to this approach
158
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to the problem. Firstly, it is to rewrite the section. If
the legislature intended to guide the discretion by laying
down objective criteria it would have stated so in express
terms; it would not have left the matter to the absolute
discretion of the Commissioner. Secondly, if the two
conditions only of the licence control the exercise of the
discretion, the Commissioner cannot travel beyond the said
two conditions. As a result the amplitude of the discretion
is drastically cut down. The Commissioner would be able to
refuse a licence only if he was satisfied that the applicant
could not be relied upon to comply with the said conditions;
if he was so satisfied, he could not refuse a licence in
spite of the fact that there were many other good and
relevant reasons for doing so. Thirdly, if the conditions
are not exhaustive but only illustrative, the section would
continue to suffer from the same vice, as it would still be
open to the Commissioner to refuse a licence for any other
reason. Fourthly, discretion based upon an anticipatory
breach of conditions will be as arbitrary as in the case of
absolute discretion, particularly in the case of new
applicants, as more often than not it will have to be
exercised on the basis of surmises, gossip or information,
which may be false or at any rate untested. Lastly, by this
unwarranted search for an undisclosed policy in the crevices
of the statute, this Court will not only be finding an
excuse to resuscitate an invalid law but also be encouraging
the making of laws by appropriate authorities in derogation
of fundamental rights.
The provisions of ss. 47 and 48(3) of the Motor Vehicles
Act, 1939 (IV of 1939), bring out in bold relief the
distinction between the exercise of a discretion to issue a
licence and the imposition of conditions in a licence.
Section 47 enjoins on the Regional Transport Authority in
considering an application for a stage carriage permit to
have regard to the matters enunciated in that section.
Section 48(3) enables the Regional Transport Authority to
attach to the permit the conditions detailed in that sub-
section. While the former section regulates the exercise
159
of the discretion of the Regional Transport Authority
issuing a permit, the latter describes the nature of the
conditions to be inserted in the permit. These provisions
no doubt cannot be invoked to construe the provisions of s.
39 of the Act, but we are referring to them only to show the
legislative practice in such matters and to emphasize the
fact that the scope of the discretion to issue a licence and
that of the power to impose conditions in a licence are
different. Therefore, on a true construction of the plain
words of the statute we cannot hold that any policy
reasonably capable of controlling the discretion of the
Commissioner has been laid down.
Even if the two conditions can be read into the first part
of s. 39, the arbitrariness is writ large in the manner of
exercising the so-called guided discretion. In this context
it is not necessary to come to a definite conclusion on the
question whether the discretion is judicial or executive,
for whatever be the nature of the discretion it must be
tested from the standpoint of reasonableness of the
restrictions imposed on a person’s right to do business. A
citizen of India, for the purpose of eking out his
livelihood, seeking to do an extensive business of an eating
house, applies to the Commissioner for a licence, for
without that licence he cannot do business, and if he does
he will be liable to prosecution. The Commissioner can
reject the application on two grounds, namely, (1) from his
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antecedents and present conduct it would be unreasonable to
think that the petitioner would keep good behaviour, and (2)
the Commissioner is not satisfied that the petitioner would
be able to prevent drunkenness and disorder among the
persons frequenting or using the eating house. Admittedly
this order is made without giving any opportunity to an
applicant to prove that he would satisfy both the tests laid
down by s. 39 of the Act. The Commissioner is not legally
bound to give any reasons for his refusal to give a licence.
Even if reasons are given, there is no machinery for getting
such an order revoked or vacated. The section does not
impose a duty on the Commissioner to give reasonable
opportunity to an
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applicant to clear his character or to disprove any un-
warranted allegations made against him or to prove that he
would satisfy both the tests laid down by s. 39 of the Act.
Nor does the section provide for an appeal against the order
of the Commissioner to an appropriate authority. The
suggestion that the authority is a high officer in the
police department and that he can be relied upon to exercise
his discretion properly does not appeal to us for two
reasons, namely, (1) as we have already pointed out, the
Constitution gives a guarantee for the fundamental right
against the State and other authorities; and (2) the status
of an officer is not an absolute guarantee that the power
will never be abused. Fundamental rights cannot be made to
depend solely upon such presumed fairness and integrity of
officers of State, though it may be a minor element in
considering the question of the reasonableness of a
restriction. Therefore, it is clear to our mind that the
exercise of the power also suffers from a statutory defect
as it is not channelled through an appropriate machinery.
We have, therefore, no hesitation to hold that s. 39 of the
Act infringes the fundamental right of the petitioner under
Art. 19(1)(g) of the Constitution both from substantive and
procedural aspects.
The next question is whether a mandamus will issue against
the Commissioner. The Commissioner admittedly has launched
criminal proceedings against the petitioner under the
provisions of the Act for not taking out a licence under s.
39 of the Act. As we have held that s. 39 of the Act is
constitutionally void, a writ of mandamus will issue against
the Commissioner of Police, Calcutta, directing him not to
take any further proceedings against the petitioner for not
taking out a licence under the provisions of the Act.
BY COURT. In accordance with the opinion of the majority,
this Petition is dismissed with costs.
161