Pyare Lal Vs. New Delhi Municipal
Committee & ANR  INSC 122 (20 April 1967)
20/04/1967 MITTER, G.K.
WANCHOO, K.N. (CJ) BHARGAVA, VISHISHTHA
CITATION: 1968 AIR 133 1967 SCR (3) 747
CITATOR INFO :
RF 1975 SC2178 (9) 1989 SC1988 (2,9,17)
Punjab Municipal Act 1911 (3 of 1911), ss.
173, 188-Power to regulate sale of edibles on public streets-Street vendors
whether have fundamental right to carry on their trade-Food Adulteration Act,
1954 and Rules made there under-Their effect on powers tander s. 173 of
The petitioners were vendors of potato chops
and other edibles which they sold on public streets. The New Delhi Municipal
Committee issued them licences for some time and later on tried to give them
alternative sites for carrying on their trade. Finally however on 30th April
1965 it passed a resolution banning the sale of cooked edibles on public
streets. The vendors filed a petition for writ in the High Court which failed.
With special leave they appealed to this Court.
It was urged on behalf of the appellants that
: (i) in the absence of bye-laws framed under s. 188 of the Punjab Municipal
Act the Municipal Committee had no power under s.
173 of the Act to prohibit their trade; (ii)
After the passing of the Prevention of Food Adulteration Act, 1954 the powers
under s. 173 could not be used to regulate the sale of food from the purity
aspect; (iii) the power of the Municipality under s. 173 was only to regulate
the trade but it could not be used to contravene the fundamental right of the
petitioners to carry on their business.
HELD : (i) The powers of the Municipality
under s. 173 to allow encroachments on public streets and to permit sale of
food or stalls to be set up was meant for special occasions like festivals,
etc. Section 188 was not designed for the purpose of. framing bye-laws to
regulate the conditions on which persons like the petitioners, could be allowed
to carry on trade on public streets and thus create permanent unhygienic
conditions. This should never have been permitted by the Municipality.[753 M]
(ii) The object of the Food Adulteration Act was that food which the public
would buy was prepared packed and stored under sanitary conditions so as not to
be injurious to the health of the people consuming it. The rules made there under
would override rules or bye-laws made by a municipality only if they covered
the same field. Under s. 173(1) of the Punjab Municipal Act, however, it was
open to the Municipal Committee to take steps to prevent sale of any cooked
food however pure if the sale thereof on public streets would offer obstruction
to passersby or create insanitary conditions. [755 D-F] (iii) Out of sympathy
for the street hawkers and squatters the N.D.M.C. had permitted the continuance
of the trade for a long time. But no objection could be taken to their exercise
of power under s. 173 of the Punjab Municipal Act to eradicate the evil. The
power was confined merely to preventing obstruction to traffic. Every person
has a right to pass and repass along a public street. But he cannot be heard to
say that he ha,;; a fundamental right to carry on street trading and
particularly in a manner which is bound to create insanitary and unhygiene
conditions in the neighbourhood. [758 A-B] 7 48 Roberts v. Hopwood,  A.C.
578, Pyx Granite Co. v. Ministry ,of Housing,  1 All E.R. 625, C. S. S.
Motor Service v. Madras State A.I.R. 19053 Mad. 279 and Westminister
Corporation v. London and North Western Railway  A.C. 426, referred to.
CIVIL APPELLATE JURISDICTION : Civil Appeals
Nos. 4865492 of 1967.
Appeals by special leave from the orders
dated August.4, 1966 of the Punjab High Court, Circuit Bench at Delhi in
Letters Patent Appeals Nos ' 84-D, 70-D, 72-D, 73-D, 71-D, 55-D and 79-D of
Madan Bhatia and D. Goburdhun, for the
appellants (in all the appeals).
Bishan Narain and Sardar Bahadur, for
respondent No. 1 (in C. As. Nos. 486-488 of 1967) and the respondent (in C.A. No.
489 of 1967).
Sardar Bahadur, for respondent No. 1 (in C.
As. Nos. 490492 of 1967).
R. N. Sachthey, for respondent No. 2 (in C.
As. Nos. 486488 and 490 to 492 of 1967).
The Judgment of the Court was delivered by
Mitter, J. These are seven appeals, by special leave, from a a judgment and
order of the Punjab High Court in a Letters Patent Appeal from a judgment and
order of a single Judge dated April 7, 1966.
The facts in all these appeals bear a close
resemblance and these cases were dealt with by a common judgment of the High
Court. The facts in Appeal No. 486 of 1967 i.e. Pyare Lal's case, as laid in
his petition, may be stated by way of specimen. By his petition dated October
12, 1965 Pyare Lal moved the Punjab High Court for the issue of a writ or
direction restraining the New Delhi Municipal Committee from interfering with
his right to carry on his trade at the site referred to in paragraph 1 of his
petition, or, at any rate, without allotting an alternative site to him. He was
a seller of potato chops and squatted at a site beside the service lane at the
back of a shop off Janpath, New Delhi.
There were other squatters who occupied sites
in the same service lane. Although in the petition it was claimed that the site
was not part of a public street, this was not pressed before the High Court and
we will proceed on the basis that as a matter of fact, be was squatting on a
public street. He claimed to have. been carrying on his trade at the same site
from before 1950. He became a member of an association of squatters within the
area of New Delhi Municipal Committee known as the New Delhi Rehri Owners
Association formed for the purpose of pressing 749 the demands of its members
for grant of licences and other facilities by the said Municipal Committee.
Reference is made in the petition to assurances said to have been given by the
President and Vice-President of the Municipal Committee to the association in
1956 for giving the members of the association certain protection on conditions.
it is said that the Vice-President of the Municipal Committee gave an assurance
that if the squatters formed themselves into a co-operative society for
preparation of edibles and built trolleys of specified designs and agreed to
carry on their trade at places allotted, licences would be issued to them.
In response to this, a co-operative society
was. formed and the Health Officer of the Municipal Committee informed the
association of the sites which had been approved by the Municipal Committee for
the purpose. Before the licences could be issued, the office bearers of the
Municipal Committee were changed and the new incumbents sought to go back upon
the assurances given by their predecessors. After a long spell of contest and
uncertainty the then President of the Municipal Committee made a press
announcement in May 1963 that all squatters and stall-holders within the area
of the New Delhi Municipal Committee who had been squatting or holding stalls
since 1957 would be granted licences for the same. This was followed by a.
survey of all squatters and a list of them including the petitioner was
prepared. On December 20, 1963, the New Delhi Municipal Committee passed a
resolution for the grant of licences to these squatters.
The relevant portion of the same is as
follows :"1. Temporary tehbazari permits would be issued to verified
2. The hawkers/squatters would be required to
sit at the site as might be specifically allotted by the committee and during
such hours as might be prescribed.
3. The tehbazari fee would be charged from
such squatters at the rates given in the scheme prepared by the SVP (senior
VicePresident) dated 22-7-1962.
4. The squatters should be required to pay
three months' tehbazari fee in advance before the issue of the temporary
6. The conditions of the tehbazari permit as
mentioned above were approved subject to the condition (a) Condition No. 7 be
(b) The word licencee' shall be substituted
750 (c) The last condition would be as
suggested by the L.A. in his note dated 20-12-1963.
7. The selection and allotment of sites would
be done by a sub-committee consisting of P.M.C., S.V.P. and J.V.P." The
petitioner was granted a licence to run his potato chops trade at a monthly fee
of Rs. 25 and he was allotted a specific site mentioned earlier. Sometime in
July 1964 the respondent Committee sought to impose a condition to the effect
that all hawkers/squatters should remove their stalls every day after sunset and
re-establish them after sunrise.
Various stall-holders challenged the
aforesaid condition as unreasonable by way of writ petitions and civil suits.
Thereupon, the Committee stopped accepting
licence fee from these squatters/hawkers. Ultimately most of them withdrew
their cases pending in court on assurance being given that they would not be
disturbed in their trade. Thereafter, the New Delhi Municipal Committee called
upon the squatters/hawkers to submit declarations that they had paid the
tehbazari fee up to 30-6-1965 and that they had been allotted alternative
accommodation by the respondent in lieu of the sites previously occupied. In
return the Committee assured them that it would accept tehbazari fee from them
and allow the occupation by them of the former sites held by them until
allotment of alternative accommodation. It is stated that the petitioner
submitted the desired declaration and the New Delhi Municipal Committee
accepted the sum of Rs. 225 as licence fee up to 30-6-1965. In the matter of allotment
of alternative sites however, the respondent practised discrimination and did
not allot any site to the petitioner although it granted such facility to
Further, the employees of the N.D.M.C. from
time to time threatened the petitioner with removal of all his articles etc.
with which he carried on his trade from the site occupied by him. The
petitioner submitted that the N.D.M.C.
was preventing him from carrying on his trade
as a seller of potato chops unreasonably and in gross abuse of its power. It
was submitted further that it was not open to the respondent to act arbitrarily
and interfere with the petitioner's trade until the resolution, granting the
licence was annulled by a subsequent resolution. It was also submitted that the
N.D.M.C. had no power under s. 173 of the Punjab Municipal Act to withdraw
permission. for encroachment on a public street unless reasonable prior notice
was given. The :grounds formulated in the petition were inter alia as follows
1. The N.D.M.C. has no power to take away the
fundamental right of the petitioner to carry on his trade. It could only
regulate the common law right of the petitioner to sell his wares on a public
street under s. 173 751 of the Punjab Municipal Act only so far as it was
necessary in the interest of the safety or convenience of the public.
2. That no resolution having been passed
annulling the grant of licence to the petitioner, the action of the N.D.M.C.
was illegal and without jurisdiction.
3. The action of the N.D.M.C. in preventing
the petitioner from carrying on his trade without allotting an alternative site
was discriminatory and unconstitutional.
In the counter affidavit by the Secretary to
the New Delhi Municipal Committee (hereinafter referred to as the N.D.M.C.) it
was stated that the petitioner had no fundamental right of the kind mentioned
in the petition and his right, if any, to early on his business was subject to
such reasonable restrictions as the N.D.M.C. might think tit to impose under
the provisions of the Punjab Municipal Act.
The restrictions actually imposed upon the
squatters/hawkers were reasonable and within the ambit of the powers of the
N.D.M.C. The petitioner had been granted a temporary tehbazari permit under the
temporary tehbazari permit scheme and according to condition No. 2 of the
permit the N.D.M.C.
reserved to itself the right to cancel the
same without assigning any reason whatsoever. The permit did not confer any
right in property to the petitioner and his right to carry on business had been
banned to his knowledge by resolution No. 36 dated 30th April, 1965 passed by
the N.D.M.C. The petitioner was carrying on ;the business in violation of the
resolution of the committee. On the merits of the case, it was stated that the
N.D.M.C. had considered a scheme prepared by the senior Vice President
regarding reorganisation of procedure about the issue of licences to, hawkers,
squatters, etc. and by a resolution of 29th June 1962 it was resolved that in
future a sub-committee would go into the matter of determining the persons or
category of persons who would be given licences. After prolonged discussions
and consideration, the resolution was passed on 20th December 1963. By this the
terms and conditions of a permit to be granted to hawkers/squatters were decided
upon a pro-forma of a temporary permit was also settled and on the reverse
thereof the conditions regarding the grant of permit were incorporated. Due to
violation of the provisions of the Punjab Municipal Act by the squatters and
because of certain practical difficulties, the committee resolved on 13th March
1964 that temporary permits would be issued to verified hawkers for the
day-time only and that the sites occupied must be left clear during the night.
A sub-committee consisting of several municipal officers went round to various
places in New Delhi to inspect the sites already selected 7 52 for allotment to
hawkers/squatters. They were unable to select any further new sites and made a
report to the President of the Committee. As many as 264 squatters out of 725
were allotted the sites approved. The progress of the allotment of approved
sites was not appreciable as many of the squatters did not find the new sites
to their choice.
The Committee by its resolution dated 17th
July 1964 decided that temporary tehbazari permit fees should be deposited by
the verified squatters who had not been allotted sites till then on condition
that "site to be fixed" was to be mentioned in the permits of such
squatters. 483 squatters deposited requisite charges upto the period ending
30th September 1964. It was noticed however that the squatters were not
complying with the conditions of the temporary tehbazari permit scheme. In
order to enforce these conditions, day and light raids were conducted and
tarpaulin sheds of various squatters were removed as also goods of those who
stayed on the sites at night. Ultimately, by reason of non-compliance of the
conditions of the temporary permit scheme by hawkers, the scheme itself was
suspended with effect from 1-9-1964. The sale of cooked articles of food gave
rise to such insanitary conditions that a resolution was passed by the
committee on the 30th April 1965 banning the sale of cooked food including,
tea, kulcha, choley, dahi bara, etc.
It was submitted in the counter affidavit
that the petitioner as a holder of a temporary tehbazari permit had no right or
interest in the land belonging to the N.D.M.C.
and that his right was subject to permission
by the N.D.M.C.
to carry on his trade. The petitioner had
submitted a declaration to the effect that he had ceased to squat in the
N.D.M.C area. He never made an application for allotment of a platform at
Ramakrishnapuram (a facility granted to many) but applied for change of trade
from potato chops dealer to that of a general merchant. He was informed on 2nd
December 1964 about the cancellation of the temporary tehbazari permit granted
under S. 173 of the Punjab Municipal Act. He had never been granted any
licence. He along with the other squatters were carrying on a business which
tended to create slums on some of the important roads in New Delhi and as such
the temporary tehbazari permit scheme had to be suspended and permission for
sale of cooked food was withdrawn.
The contentions of the petitioner were turned
down by the learned single Judge and his appeal in common with that of a number
of appeals of other squatters and hawkers to the Division Bench met with the
same fate. The first contention pressed before us in this appeal was that it
was not open to the Municipal Committee to stop the petitioner and others from
carrying on their trade by a resolution under S. 173 of the Punjab Municipal
Act. The relevant portion of the section runs as follows 753 "(1) The
Committee may grant permission in writing, on such conditions as it may deem
fit for the safety or convenience of persons passing by, or dwelling or working
in the neighbourhood, and may charge fees for such permission, and may at its
discretion withdraw the permission, to any person to(a) place in front of any
building any movable encroachment upon the ground level of any public street or
over or on any sewer, drain or watercourse or any movable overhanging structure
projecting into such public street at a point above the said ground level.
(b) (c) deposit or cause to be deposited
building materials, goods for sale, or other articles on any public street, or
(d) (e) erect or set up any fence, post, stall or scaffolding in any public
It was argued that s. 173 only made general
provisions but it was open to the N.D.M.C. to frame bye-laws under s. 188 and
in the absence of such bye-laws a resolution under s. 173(1) could not be
passed so as to affect the petitioner's rights. S. 188 provides that a
committee may, and shall if so required by the State Government frame. Bye laws.
The nature of the bye-laws is specified in cls. (a) to (v) of s. 188 and cl.
(u) reads :
" regulate the conditions on which and
the periods for which permission may be given under sub-section (1) of section
172 and subsection (1) of section 173, and provide for the levy of fees and
rents for such permission;" It was urged that so long as bye-laws are not
framed under the above clause, the conditions on which and the periods for
which permission could be given under s. 173 (1) could not be altered. In our
opinion the bye-laws under s. 188(u) had to be made for an altogether different
purpose. Ss. 172 and 173 are generally aimed at preventing any encroachments
-over public streets which cause obstruction thereon. The expression
"goods for sale" in cl. (c) of s. 173(1) or "stall" in cl.
(e) of s. 173(1) have to be read in that connection. The placing of goods for
sale or erecting stalls in public street may be allowed by the municipality on
stated occasions as in the case of some festivals etc.
Again it may be necessary to seek the
permission of the municipality to make 754 .holes or excavation on any street
or remove materials from beneath any street or to take up or alter the payment
or deposit building materials thereon for the purpose of erecting a new
building or making an alteration to an existing one and the power to regulate
the conditions for grant of permission and the fees to be paid in connection
therewith by bye-laws under s. 188 has that object in view.
S. 188 was not designed for the purpose of
framing bye-laws to regulate the conditions on which persons like the
petitioner could be allowed to carry on trade on public streets and thus create
permanent unhygienic conditions thereon. This should never have been permitted
by the municipality and the fact that it has by resolution tinder S. 173
purported to stop that practice cannot go against it.
It was then urged that s. 173 in so far as it
purported to give the municipality power to prevent the sale of cooked food was
repealed by the provisions of the Prevention of Food Adulteration Act, 1954 and
the Rules framed there under.
Our attention was drawn to ss. 23, 24 and 25
of the Prevention of Food Adulteration Act. S. 23(1) of this Act gives the
Central Government power to make rules subject to certain conditions. Under sub
cl. (a) such rules may specify articles of food or classes of food for the
import of which a licence is required prescribe the form and ,conditions of
such licence., the authority empowered to issue the same and the fees payable
there under. Under cl. (c) such rules may lay down special provisions for
imposing rigorous control over the production, distribution and sale of any
article or class of articles of food which the Central Government may, by
notification in :the Official Gazette, specify in this behalf including
registration of the premises where they are manufactured, maintenance of the
premises in a sanitary condition and maintenance ,of the healthy state of human
beings associated with the production. distribution and sale of such article or
class of articles. Under cl. (g) such rules may also define the conditions of
sale or conditions for licence of sale of any article of food in the interest
of public health. S. 24(1) empowers the State Government. subject to certain
conditions, to make rules for the purpose of giving effect to the provisions of
this Act in matters not falling within the purview of S. 23. S. 25 (1) provides
that "If, immediately before the commencement of this Act, there is in
force in any State to which this Act extends any law corresponding to this Act,
that corresponding law shall upon such commencement stand repealed." Rules
have been framed under this Act known as Prevention of Food Adulteration Rules,
1955. R. 50(1) of the rules provides that no person shall manufacture, sell,
stock, distribute or exhibit 755 for sale any of the articles of food specified
therein except under a licence. Such articles include "sweetmeats and
savourly". Our attention was also drawn to sub-rr. (5), (10) and (11) 'of
r. 50Under sub-r (5) the licensing authority must inspect the premises and
satisfy itself that it is free from sanitary defects before granting a licence
for the manufacture, storage or exhibition of any of the articles of food in
respect of which a licence is required Under sub-r. (10) no person can
manufacture, store or expose for sale or permit the sale of any article of food
in any premises not effectively separated from any privy, urinal, sullage,
drain or place of storage of foul and waste matter to the satisfaction of the
licensing authority, and under sub-r. ( 1 1 ) all vessel s used to r the
storage or manufacture of the articles intended for sale must have proper
covers to avoid contamination. It was argued on the strength of the above that
these rules covered the field of sale of cooked food at stalls on public
streets and therefore the provisions of s. 173(1) of the Punjab Municipal Act
which might otherwise have empowered the municipality to proceed there under
stood repealed on the promulgation of these rules. This argument is fallacious.
The object of s. 23(1) and the different
sub-rules. under r. 50 was entirely different from that behind s. 173(1) of the
Punjab Municipal Act. The object of the Food Adulteration Act, as its preamble
shows, was to make provision for the prevention of adulteration of food and
adulteration in this connection had a special significance under s. 2 of the
The object of this Act was to ensure that
food which the public could buy was inter alia prepared, packed and stored
under sanitary conditions so as not to be injurious to the health of the people
consuming it. The rules framed there under would only over-ride rules or bye
laws, if any, made by any municipality if they covered the same field.
Under s. 173(1) of the Punjab Municipal Act
it is open to a municipal committee to take steps to prevent sale of any cooked
food however pure if the sale thereof on public streets would offer obstruction
to passersby or create insanitary condition.,, because waste matter was bound
to be thrown on the street an washing up of articles used in the trade
introduce unhygienic conditions in the neighbourhood and create nuisance. We
cannot accept the contention that s. 173(1) had only the object of ensuring the
free passage of persons and traffic along the public street and so long as
there was no such obstruction powers under s. 173 could not be utilised for any
oblique purpose like preventing person,, from carrying on a lawful trade.
It was further argued that s. 56(1) (g) of
the Punjab Municipal Act showed that "all public streets, not being land
owned by Government and the pavements, stones and other materials thereof and
also trees growing on, and erections, materials, implements and things provided
for such streets" vested in and were under the 756 -control of the
committee. According to the learned counsel this ,only empowered the committee
to regulate trade on public streets and not altogether prevent the same.
Our attention was drawn to Halsbury's Laws of
-33 (Third Edition), article 998 at page 586
headed "regulation of street trading". The learned author thus
summarised the law in England:"Subject to certain exceptions it is
unlawful for any person to engage in street trading in or from a stationary
position in any street within a metropolitan borough, or to engage in street
trading in any designated street whether or not in or from a stationary
position, unless he is authorised to do so by a street trading licence.....
Nothing in the foregoing provisions (1)
restricts the right of any person to carry on the business of a pedlar or
hawker in accordance with a pedlar's certificate or hawker's licence which he
holds; or (2) applies to the sale or exposure or offer for sale of newspapers
or periodicals by any person who does not use in connection with the sale,
etc., any receptacle which occupies a stationary position in a street, other
than a receptacle which is exclusively used in connection with the sale etc. .
. . " It would appear that street trading is regulated by certain statute,,
in England and we have nothing of the kind here.
On the basis of the above passage, it cannot
be said that persons in India have a lawful right to pursue street trading and
such trading may be regulated but not altogether prevented. On the authority of
Roberts v. Hopwood(1) it was argued by learned counsel that s. 173 at best gave
a discretion to the Committee to regulate street trading and therefore the same
has to be exercised reasonably and could not altogether be prevented. Reference
was also made to Pyx Granite Co. v. Ministry of Housing(2) where it was held
that the planning authority under the Town and Country Planning Act, 1947, was
not at liberty to use their powers for art ulterior object, however desirable
that object may seem to them to be in the public interest. In our view, hone of
these decisions have any bearing on the question before us.
There was no ulterior object behind the
resolution of the N.D.M.C. in this case. Clearly the presence of the stallholders
on public streets and sale of cooked food was against public hygiene and S.
173(1) could be availed of to stop the same. Learned counsel also cited the
case of C. S.
S. Motor Service v. Madras State(1). There it
was argued that the (1)  A.C. 578. (2)  1 All E. R. 625.
(3) A.I.R. 1953 Madras 279.
7 5 7 petitioners had a right to carry on
motor transport business and that this was a right guaranteed under Art. 1 9
(1) (g) of the Constitution. It was held that the regulation of motor traffic
must be determined with the object of serving the interests of the public.
Further it was held that a system of licensing which had for its object the
regulation of trade was not repugnant to Art. 19(1) (g). We do not think that
the observations in that case are of any assistance to the appellants before
As a branch of the above argument it was also
contended that the resolution under s. 173 on which the municipal committee
relied in this case gave uncontrolled power to the committee to do what they
It was argued that under the guise of
regulation the committee sought to take away the right of the petitioner and
others to carry on their trade at their sweet will.
Reliance was placed in this connection on a
judgment of the House of Lords in Westminster Corporation v. London and North
Western Railway(1). There it was observed that a public body invested with
statutory powers must take care not to exceed or abuse them and that it must
act in good faith and reasonably. We do no," think that these observations
help the appellants because it has not been shown to its that there was any bad
faith which prompted the N.D.M.C.
to pass the resolution complained of, nor did
they act unreasonably.
It was argued however that the counter
affidavit of the respondent as regards the allocation of alternative sites was
not correct and comment had been made thereon by the learned single Judge of
the High Court. However that may be, it is apparent from the judgment that not
all the, squatters applied for alternative accommodation and not all of them
approved of the sites which were allotted to them. It was beyond the
jurisdiction of the N.D.M.C. to provide persons like the appellants with sites
at Ramakrishnapuram. That was under the jurisdiction of the Director of Estates
and it appears that this authority had been approached for helping persons like
the appellants. Further, no question of discrimination can arise because all
the hawkers/ squatters did not apply for such sites or could not be provided
with such sites. The resolution of 30th April 1965 clearly showed that the
N.D.M.C. was out to stop the sale of cooked food including tea, kulche choley
etc., inasmuch as the sale of cooked food presented an exceptionally difficult
problem because facilities like running water, sewer connection etc.
necessary for the minimum standard of
sanitation could not be made available.
It appears to us that this series of
litigation was the result of the N.D.M.C. allowing trade of a kind on public
streets which it (1)  A. C. 426.
758 should have never allowed. Out of
sympathy for them the N.D.M.C. had permitted the continuance of the trade for a
Ion,-, time. But no exception can be taken to their exercise of power under s.
173 of the Punjab Municipal Act to eradicate the evil. After all every person
has a right to pass and re-pass along a public street. He cannot be heard to
say that he has a fundamental right to carry on street trading and particularly
in a manner which is bound to create insanitary and unhygienic conditions in
The appeals therefore fail, and are
dismissed. G.C. Appeals dismissed.