1965 (8) TMI 95 - HC - Indian Laws

Municipality's bye-laws restricting wholesale fruit sales to four shops declared ultra vires under Section 188(e)(ii) Punjab Municipal Act

Municipal Committee Versus Haji Ismail And Anr.

The HC dismissed the municipality's appeal challenging a lower court ruling that declared its bye-laws ultra vires. The municipality had restricted ... Monopoly for the wholesale sale of vegetables and fruits in favour of four persons only who obtain right to do so on a public auction in regard to the four shops in the Sabzi Mandi of Malerkotla - Municipality is on the power for the 'proper regulation of markets' - meaning of the word 'regulation' - Whether the bye-laws in question are ultra vires the provisions of the Punjab Municipal Act, 1911 - HELD THAT:- The restriction placed by the appellant Municipality in the impugned bye-laws confining the business of the sale, wholesale or by auction, of fruits and vegetables to just four shops in Sabzi Mandi of Malerkotla is, to use their Lordships' expression, more than a reasonable restriction on the right of the respondents in this case. The respondent was denied a licence for the sale of fruits and vegetables whether wholesale or retail or by auction within the municipal limits of Malerkotla on the sole ground that he was not one of the four persons who had successfully bid for one of the four shops for that purpose in Sabzi Mandi of Malerkotla. This, the learned Judge rightly considered, was not a valid and a legal ground in view of the ultra vires nature of the impugned bye-laws and the restriction imposed by the same on the right of the respondent to carry on that particular business, which restriction has been found to be far from reasonable. The word 'regulation' has to be read in the context in which it has been used. It appears from the very meaning of this word in 76 Corpus Juris Secundum 615 that it is variously defined as meaning a rule prescribed for conduct; a rule or order prescribed for management or Government; a rule, order, or direction from a superior or competent authority; a governing direction; a regulating principle, a precept; a law; a prescription; a method. The word is also defined as meaning an exercise of control; the act of regulating; the act of reducing to order; or of disposing, in accordance with rule or established custom. A little later the statement is that 'it embraces both Government and restrictions, but is not confined to the imposition of restrictions, and it may include designation and all directions by rule of the subject-matter.' When these meanings are taken into consideration, it becomes clear that ordinary meaning of this word is prescription of rules for control of conduct. In Sub-clause (ii) of Clause (e) of Section 188, the word is used in this sense when it is considered with the whole context of that sub-clause along with other matters that are dealt with in that sub-clause and when the meaning is taken in the light of those matters. The word is not to be read in isolation, but it is to be read in the context in which it has been used and in that context it does not bear the meaning which the learned counsel has tried to give it. Under Section 188 (e) (ii) the appellant Municipality has not the power to make the type of regulation that it has done in confining the business of sale, wholesale or by auction, of fruits and vegetables to four shops in the Sabzi Mandi. In this respect too I agree, with respect, with the opinion of the learned Judge. In this view, the appeal of the appellant Municipality fails and is dismissed with costs. Issues Involved:1. Whether the bye-laws in question are ultra vires the provisions of the Punjab Municipal Act, 1911.2. Whether the bye-laws create a monopoly for the wholesale sale of vegetables and fruits in favor of four persons only.Detailed Analysis:Issue 1: Ultra Vires of the Punjab Municipal Act, 1911The primary question was whether the bye-laws framed by the Municipal Committee of Malerkotla were ultra vires the provisions of the Punjab Municipal Act, 1911. The bye-laws restricted the sale of vegetables and fruits, wholesale or by auction, to only four shops in the Sabzi Mandi of Malerkotla. The learned Judge relied on precedents such as Ghanaya Lal v. Municipal Committee, Montgomery, AIR 1928 Lah 540, Mula Mal v. Emperor, AIR 1929 Lah 607, and Wariam Singh v. Municipal Committee, Nabha, AIR 1953 Pepsu 127, which supported the view that the bye-laws were ultra vires.The judgment highlighted that Clause (d) of Section 197, which allowed a municipal committee to fix places for the sale of food or drink, was repealed in 1923. The current Clause (a) of Section 197 only allowed the prohibition of such sales in unlicensed premises, but did not grant the power to fix specific places for the sale. Therefore, the bye-laws did not conform to the power under Clause (a) of Section 197 and were rightly held to be ultra vires.Issue 2: Creation of a MonopolyThe second issue was whether the bye-laws created a monopoly by limiting the sale of fruits and vegetables to four persons who obtained the right through a public auction. The learned Judge relied on Rashid Ahmed v. Municipal Board, Kairana, AIR 1950 SC 163, which dealt with a similar situation where a monopoly was granted to one person. The judgment clarified that a monopoly does not necessarily have to be confined to one person; it can extend to multiple persons as long as they have exclusive rights.The judgment cited Black's Law Dictionary to define a monopoly as a privilege or peculiar advantage vested in one or more persons, giving them exclusive rights to carry on a particular business or trade. The learned Judge concluded that the restriction imposed by the bye-laws was more than a reasonable restriction and was thus unconstitutional under Article 19 of the Constitution.ConclusionThe judgment concluded that the bye-laws were ultra vires the provisions of the Punjab Municipal Act, 1911, and created an unreasonable monopoly. The respondent was denied a license solely because he was not one of the four highest bidders, which was not a valid legal ground. The appeal of the appellant Municipality was dismissed with costs, affirming the learned Judge's decision.Separate Judgments:The judgment was delivered by Mehar Singh, with D. Falshaw, C.J., concurring.