1963 (10) TMI 28 - SC - Indian Laws

Supreme Court strikes down clause restricting trade, upholds the rest.

The Supreme Court held that the clause in Section 437 (1) (b) making the Corporation's opinion conclusive and non-justiciable was an unreasonable ... - Issues Involved:1. Proper filing of prosecution.2. Applicability of Section 437 (1) (b) to the electric transformer house.3. Danger or nuisance posed by the transformer house.4. Constitutionality of Section 437 (1) (b) under Article 19 (1) (g) of the Constitution.5. Nature of the fee imposed - whether it is a tax or a fee.Detailed Analysis:1. Proper Filing of Prosecution:The Magistrate held that the prosecution was properly filed. This point was not contested further in the higher courts, indicating acceptance of the Magistrate's decision on this procedural matter.2. Applicability of Section 437 (1) (b) to the Electric Transformer House:The Magistrate determined that the transformer house was meant for the trade carried on by the respondent and thus fell under the purview of Section 437 (1) (b). This interpretation was upheld, indicating that premises used for trade purposes, such as converting electricity for tramcars, are subject to licensing requirements under the Act.3. Danger or Nuisance Posed by the Transformer House:The Magistrate concluded that the Corporation had properly formed the opinion that the transformer house posed a danger to life, health, or property and was likely to create a nuisance. Although the Magistrate noted the conclusiveness of the Corporation's opinion, the High Court found this aspect unconstitutional, emphasizing that such conclusiveness could lead to capricious or unreasonable decisions by the Corporation.4. Constitutionality of Section 437 (1) (b) under Article 19 (1) (g):The High Court ruled that the provision making the Corporation's opinion conclusive and non-justiciable was unconstitutional as it imposed an unreasonable restriction on the right to carry on trade under Article 19 (1) (g). The Supreme Court agreed, stating that the power conferred on the Corporation could lead to arbitrary or capricious decisions, thus constituting an unreasonable restriction. The Court emphasized that the restriction must be examined on its merits in each case to determine its reasonableness.5. Nature of the Fee Imposed - Whether it is a Tax or a Fee:The High Court did not decide on this issue due to its ruling on the constitutionality of Section 437 (1) (b). The Supreme Court remanded the case to the Magistrate, allowing the respondent to raise this point and present relevant evidence.Conclusion:The Supreme Court found the parenthetical clause in Section 437 (1) (b) making the Corporation's opinion conclusive and non-justiciable to be an unreasonable restriction on the right to carry on trade. This clause was struck down, but the rest of Section 437 (1) (b) was upheld. The case was remanded to the Magistrate for further proceedings, allowing the respondent to challenge the Corporation's opinion and the nature of the fee imposed.