Municipal bye-laws creating an absolute trade prohibition, without an effective licensing scheme, violate the right to carry on business.

A municipal bye-law requiring permission for a new wholesale market was held, as applied, to impose an absolute prohibition rather than a reasonable restriction, because no operative licensing framework existed and the Board had effectively created a monopoly in favour of one contractor. The refusal of licence was not based on any statutory defect in the premises, and the scheme was found inconsistent with Articles 19(1)(g) and 13(1). The existence of an appeal under the U.P. Municipalities Act did not bar relief under Article 32, because the statutory remedy was not effective in the circumstances. Constitutional relief was therefore granted to protect the right to trade.

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Issues: (i) Whether the municipal bye-laws and the refusal of a licence unlawfully infringed the petitioner's fundamental right to carry on trade or business by imposing an absolute prohibition and an unreasonable restriction. (ii) Whether the existence of an appeal under the U.P. Municipalities Act, 1916 barred relief under Article 32 of the Constitution of India.

Issue (i): Whether the municipal bye-laws and the refusal of a licence unlawfully infringed the petitioner's fundamental right to carry on trade or business by imposing an absolute prohibition and an unreasonable restriction.

Analysis: The bye-law required permission for a new wholesale market, but the Board had not framed any operative licensing provision enabling lawful grant of such permission. At the same time, the Board had created a monopoly in favour of a contractor, with the result that the petitioner could neither carry on business at the notified market nor continue at his existing place. The restriction therefore ceased to be a mere regulation under Article 19(6) and operated as a complete prohibition. The refusal was not based on any statutory non-compliance of the premises, and the bye-laws, as applied, left the Board powerless to permit the petitioner to trade. Such a scheme was held inconsistent with Articles 19(1)(g) and 13(1) of the Constitution of India.

Conclusion: The restriction was unconstitutional and the petitioner's fundamental right to carry on business was infringed.

Issue (ii): Whether the existence of an appeal under the U.P. Municipalities Act, 1916 barred relief under Article 32 of the Constitution of India.

Analysis: Although the existence of an alternative remedy is a relevant consideration, the constitutional remedy under Article 32 is wider. In the circumstances, the statutory appeal was not treated as an adequate remedy because the Board had already placed itself in a position where it could not grant a licence and there was no effective bye-law authorising such grant.

Conclusion: The statutory appeal did not bar relief under Article 32.

Final Conclusion: The municipal action was restrained, the pending prosecution was directed to be withdrawn, and constitutional relief was granted to protect the petitioner's business from unlawful obstruction.

Ratio Decidendi: A municipal bye-law that, in the absence of an effective licensing framework, creates an absolute prohibition on carrying on a lawful trade and effectively confers a monopoly in one trader's favour imposes an unreasonable restriction and is void to that extent.

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