Kishan Chand Arora Vs. Commissioner of
Police, Calcutta  INSC 282 (9 December 1960)
SINHA, BHUVNESHWAR P.(CJ) KAPUR, J.L.
CITATION: 1961 AIR 705 1961 SCR (3) 135
CITATOR INFO :
RF 1967 SC 829 (6) R 1984 SC1030 (37)
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),
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
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.
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 implication, 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, confers 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
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,  S.C.R.
597, Nagendra Nath Bora v. The Commissioner of Hills Division and Appeals,
Assam,  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,  S.C.R. 12,
If an applicant thinks that he has fulfilled
the three conditions 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 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,  S.C.R.
597, Thakur Raghubir Singh v. Court of Wards, Ajmer,  S.C.R. 1049 and
M/s. Dwarka Prasad Laxmi Narain v. The State of Uttar Pradesh,  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,  1 S.C.R. 380, Union of India v.
Bhana Mal Gulzarimal Ltd.,  2 S.C.R.
627 and Mineral Development Ltd., State of Bihar,  2 S.C.R. 609
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 procedural aspect, s. 39 of the Act infringes the fundamental right of
the petitioner guaranteed by Art. 19(i)(g) of the Constitution.
ORIGINAL JURISDICTION: Petition No. 22 of
Petition under Art. 32 of the Constitution of
India for enforcement of Fundamental Rights.
H.J. Umrigar and B. P. Maheshwari, for the
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 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
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 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 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 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
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
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 imposing 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
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 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)  S.C.R. 1240,1253.
(2)  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 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)  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,
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
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 150 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 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
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 contention, Patanjali Sastri, C. J., observed
"The formula of subjective satisfaction
of the Government or of its officers, with an Advisory (1) S.C.R. 597,
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 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)
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) 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 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
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
(2) related to the question of validity of
(1)  1 S.C.R. 380.
(2)  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
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 there
under 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)  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.
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
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 procedural 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 itself is of minor importance for the simple reason that the
fundamental right itself is guaranteed against the (1) 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
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
legislature 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 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 subsection.
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 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 160
applicant to clear his character or to disprove any unwarranted 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
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.