Rashid Ahmed Vs. The Municipal Board,
Kairana  INSC 13 (19 May 1950)
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)
Constitution of India, Arts. 19 (1), 19 (6),
32--Fundamental right to carry on trade--Reasonableness of restrictions
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.
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 highest 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 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 contravention 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 567 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
ORIGINAL JURISDICTION`: Petition No. X of
This was an application under article 32 (1)
of the Constitution for the enforcement of the applicant's fundamental 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 Constitution 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 Municipal 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 568 State of Uttar Pradesh. He has been
carrying on this business 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. Municipalities
Act, 1916. These bye-laws were passed by the respondent Board on the 19th
April, 1949. After confirmation 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 vegetables, 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 installments 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 application 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 meantime on the 28th 569 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 there from,
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 suggests 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 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 admittedly 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 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."
The second part of this bye-law clearly contemplates 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 established 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 business subject to such reasonable restrictions as are
mentioned in clause (6) of that article. The position, however, 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 net result
is that the prohibition of this bye-law, in the absence of any provision for
issuing license, 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 contended 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 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 Constitution came into force.
Learned Advocate-General of Uttar Pradesh
appearing for the intervener drew our attention to section 318 of the U.P. Municipalities
Act, 1916, and submitted that the petitioner 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 wholesale 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 Municipal Board to withdraw the pending prosecution of the petitioner
and we order accordingly. The respondents to pay the costs of the petitioner.
Agent for the petitioner: Naunitlal.
Agent for the opposite party : Tarachand
Agent for the Union of India: P.A. Mehta.
Agent for Uttar Pradesh: Tarachand