TaxTMI 
TaxTMI 
1958 (10) TMI 65
X X X X Extracts X X X X
X X X X Extracts X X X X
....ate, i.e. 2-3-1951, civil administration of the City of Nagpur is conducted and managed by the Corporation under the provisions of the Act. Prior to that date, civil administration of the City of Nagpur was conducted and managed by the Municipal Corporation of Nagpur under various Municipal Acts passed from time to time, the first one was passed in the year 1864 and the last one being the Central Provinces and Berar Municipalities Act II of 1922, hereinafter, referred to as the Municipalities Act. 3. For the purpose of administration, the municipality of Nagpur had, divided itself into two committees, the City Municipal Committee and the Civil Station Sub-Committee. Each of the two Committees exercised jurisdiction over certain defined areas and each of them had made its own byelaws. The byelaws with which we are concerned however are very similar and we would be referring to the byelaws framed by the City Municipal Committee of Nagpur. 4. It is not in dispute that in the City of Nagpur sale of meat and the markets in which meat was sold were under the control of and were regulated by the aforesaid municipal committees in accordance with the provisions of the Municipalities A....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l be sold or exposed for sale except the flesh of animals slaughtered at the places fixed for this purpose under Section 140 of the Central Provinces and Berar Municipalities Act, 1922. Clause (3) thereof provides that all meat intended for sale shall be produced before the slaughter-house inspector appointed by the committee, who shall examine it, and if he passed it as fit for human consumption, shall stamp it in ink as class I, II or III with meat stamps approved by the committee. No meat shall be sold unless it has been so passed and stamped. Clause (4) of the said byelaw provides that meat not sold on the day on which it was passed and stamped shall not be sold, unless it is re-examined and passed in accordance with Clause (2) of this byelaw. Byelaw No. 10 provides that if, during the course of the day, meat which has been passed and stamped deteriorates and becomes unfit for human consumption, it shall no longer be exposed or sold. Byelaw No. 12 provides that no person shall sell meat or expose it for sale to the public within the limits of the municipality without a licence which shall be issued and renewed by the secretary or any officers of the committee specially empowere....
X X X X Extracts X X X X
X X X X Extracts X X X X
....walas sell heads, hoofs, liver etc of goats. Besides the aforesaid 141 stalls, there are also 12 single stalls built either by the municipal committee or the Corporation in different parts of the City. They are known as nakas and are also included in the term 'Municipal meat markets'. We are informed that some of the meat markets and nakas are very near the weekly markets. Licenced mead sellers occupying stalls, kenas or nakas in the municipal markets have to pay certain fees either on monthly or yearly basis. These fees are settled either by auction or otherwise by the municipal officers. It is common ground that last time when auction was held was in the year 1948. Thereafter an attempt was made to hold auction in the year 1952 but it was of no avail. The stall holders are exempt from paying two annas every day as are required to be paid by meat sellers in the weekly markets. 10. It appears that besides the aforesaid weekly markets and municipal meat markets, meat was also allowed to be sold in eight private stalls and to them two types of licences were issued; one licence was for selling meat and the other was for selling meat in that particular place. It is not clear....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... " 22 255-0-0 " " 23 270-0-0 " * * * * NOTE: Since many complaints are received against the shop-keeper of private meat shops, licenses to run private meat shops should not be given and Corporation should build shops owned by it wherever necessity for meat shops exists. Similarly, licenses should not be given to those licensees who sell meat after giving Re. 0-8-0 as license fee. But license should be given to those who sell meat in shops licensed by the Corporation. These licensees who are in arrears of rent on 1-4-58 should not be given the concession of renewing the leases." 12. Acting in pursuance of the decision taken in this resolution the Market Superintendent, in the first instance, served a notice on 30-3-58 on all the stall holders in Hansapuri and Machhisath municipal markets. The translation of that notice is admitted by all the parties, is as given in Exhibit A-2 in Special Civil Application No. 222 of 1958. It reads: * * * "Mr. ----- is hereby given notice that you took the licence (parvana) for 1957-58 of the Corporation shop No.----- in your possession in the ----- mutton marke....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oximate increase effected by the aforesaid resolution was from Rs. 5 and Rs. 9 to Rs. 20 and Rs. 25 per month per stall and from Rs. 3 to Rs. 6 per kena per month. 15. Feeling aggrieved by the aforesaid action of the Corporation, 159 persons (petitioners in Special Civil Applications Nos. 198/58 and 286/58) who claim to be doing business of selling meat in weekly markets; 42 persons (petitioners in Special Civil Application No. 222 of 1958), who claim to be the stall-holders or the kenawalas in Hansapuri and Machhisath, municipal meat markets and 5 per sons (petitioners in Special Civil Application No. 243 of 1958), who say that they want to do business of selling meat in private stalls have approached this Court under Article 226 and 227 of the Constitution. 16. Though a large number of allegations were made and various reliefs were asked in these applications at the stage of arguments reference was not made to all of them. We therefore do not consider it necessary to reproduce in detail the pleas raised and the reliefs asked. It will be convenient to refer to the material pleas raised when we deal with the applications specifically. 17. Turning now to Special Civil Appli....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion, it would be noticed that there are two limitations imposed on the power of the State to make a law relating to restrictions of the carrying on of a trade or occupation or business and those restrictions are that the law must be in the interests of the general public and the restrictions must be reasonable. 19. In the instant cases it cannot be doubted that the petitioners were, at any rate, some of them had been carrying on the business of selling meat in weekly markets and as a result of the aforesaid resolution and the intimation posted on the slaughter houses they have now been prohibited from selling meat in weekly markets. This has resulted in imposing restriction on their freedom to do their business in weekly markets. It has therefore to be first seen whether there is any valid law under which this restriction has been imposed, and if there is any valid law to sustain this restriction then it would be necessary to see whether the restriction imposed was in the interests of the general public and whether it is reasonable. 20. Shri Bobde, learned counsel for the petitioners in these two petitions, in the first instance, contends that the action taken by the Corpora....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ight to the meat. This could have been achieved without putting meat sellers to unnecessary expense. Now, if meat sellers have to carry on the business they would be required to hire six different stalls in six different markets. These stalls they could use only once or twice in a week and yet they would be required to pay Rs. 50/- per stall per month. Even if they build their own stalls they would be required to build six stalls in six different markets and each stall might easily cost about Rs. 1500/-. Thus the cost involved either in hiring stalls in six weekly markets or in building private stalls being exorbitant the meat sellers would be forced to stop their business. The restrictions, thus Shri Bobde contends, are not reasonable but are excessive. 21. Shri Phadke, learned counsel for the Corporation, on the other hand contends that the Corporation is authorised to prohibit sale of meat in weekly markets by passing a resolution under the provisions of Section 57(1)(m) of the City of Nagpur Corporation Act. He further contends that byelaw No. 1 only fixes the outer boundary of the market within the limits of which meat can be allowed to be sold. It does not fix the place wi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the C.P. and Berar Municipalities Act. 24. It is common ground that there is no section in the Municipalities Act authorising municipal committees to regulate markets save and except by making byelaws and these byelaws could be made under the provisions referred to above. Section 57(1)(m) of the Corporation Act provides that the Corporation shall make adequate provision, by any means or measures which it may lawfully use or take, for each of the following matters, namely: * * * "(m) the construction and maintenance of public markets and slaughter-houses and the regulation of all markets and slaughter-houses." On the strength of this clause, the first contention of Shri Phadke is based. According to him, though under the Municipalities Act there was no provision empowering a municipal committee to regulate markets apart from the provisions made in the byelaws, now under the Corporation Act itself Clause (m) of Sub-section (1) of Section 57 specifically confers a power to regulate markets on a municipal committee. The action of the Corporation in prohibiting sale of meat by passing a resolution was therefore an action authorised by law. It is not possible ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....byelaws in that respect. The municipal committees had made byelaws regulating meat markets as appear at page 91 of the Book. Under Sub-section (2) of Section 3 of the Corporation Act those byelaws would be deemed to be the byelaws made under the Corporation Act. That sub-section gave an option to the Corporation to alter, modify, cancel or suspend a byelaw. The Corporation has not chosen to do so. In these circumstances it will have to be assumed that though the Corporation had a right to regulate meat markets by making resolutions it has by its own action circumscribed its alleged power under Section 57(1)(m) by making the byelaws and therefore the action which the Corporation could lawfully taken in regulating meat markets could only by acting under the byelaws and not by passing a resolution. 25. Looking at the case from another aspect, by allowing these byelaws to remain in force the Corporation has represented to the general public that it would regulate meat markets in accordance with those byelaws. It would not therefore be open to the Corporation to act in excess of the byelaws in regulating meat markets. 26. There is also another aspect to this case. Looking to the p....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndant by the passing of the Amending Act of 1934. Byelaw No. 1 appearing at page 64 appears to be a byelaw made prior to 1934. It cannot therefore be relied on for regulating the sale of meat in meat markets. Byelaws appearing at page 91 are made in July 1939 and are specifically made under Section 179(1)(b-1) and it would therefore be these byelaws which would govern the regulation of meat market. Further, even assuming that byelaw No. 1 appearing at page 64 is a valid byelaw, it is a byelaw in the nature of a general provision while byelaw No. 1 appearing at page 91 specifically deals with the regulation of the sale of meat and when there is a specific provision relating to a particular topic so far as that topic is concerned it would be that specific provision alone that would govern that topic and not a general provision. It is therefore not possible for us to uphold the action of the Corporation prohibiting the sale of meat on the strength of byelaws appearing at page 64 of the Book. It is also possible for us to accept the contention of Shri Phadke that byelaw No. 1 appearing at page 91 fixes the outer limits of the market and not the place within that limit where meat is all....
X X X X Extracts X X X X
X X X X Extracts X X X X
....which the resolution dated 28-3-1958 was passed or intimation dated 29-5-1958 was posted on the slaughter houses. The intention of the Corporation was that meat should not be sold in weekly markets on the open ground as it was being done before, that it should be sold in built stalls which would afford protection to the meat against sun, rain, mud and flies, that the Corporation is ready and willing to grant licenses to those persons who are ready to build stalls in weekly markets and negotiations on this basis were carried on with the meat sellers but they were not willing to accept this condition and therefore the Corporation had to prohibit the sale of meat. Now, on the byelaws as they stand today, refusal to build stalls for selling meat is not one of the ground on which licenses to sell meat could be refused. The Corporation, therefore, as the matters stand today, had no authority in law to put such a condition for the granting of licenses to meat sellers to sell meat in weekly markets. 29. For the reasons stated above in our opinion, the first contention of Shri Bobde must succeed. The action of the Corporation in prohibiting the sale of meat in weekly markets not being au....
X X X X Extracts X X X X
X X X X Extracts X X X X
....oof or any protection from sun, rain, mud, flies or encroaching dogs. Meat is exhibited for sale on ground which becomes muddy whenever rain falls and people are required to purchase meat in that condition. When any considerable rain falls selling becomes impossible and the sellers are put to great losses because much meat remains unsold and becomes unfit for sale unless heavy costs are incurred for its preservation. The only exceptions to this are that in Budhwari Market platforms for sale are constructed, floor is paved and the place is screened by old iron sheets. In Mangalwari market platforms are constructed for sale though their number is not adequate." (Para 13 of Sp. C.A. No. 286 of 1958). If these be really the conditions and on admission of the petitioners they are the conditions prevailing in the market, it cannot be said that the action of the Corporation in prohibiting the sale of meat was mala fide. True, we have held that the action taken by the Corporation in prohibiting the sale of meat in the instant cases has to be set aside but that is only because the action impugned in these petitioners was taken merely by passing a resolution and by posting an intimation o....
X X X X Extracts X X X X
X X X X Extracts X X X X
....that which is commensurate with the services rendered by the Corporation to the stall holders. In support of this contention, Shri Phadke referred us to various facts and figures appearing in the returns as well as schedules which he filed before us. It is first necessary to see whether the amount which the Corporation is authorised to demand for the occupation of stalls is, in law, a fee, or rent. 32. It is common ground that the fees fixed by the resolution of 28-3-1958 were under the powers conferred on the Corporation by byelaw No. 3 appearing at page 64. That byelaw reads thus: "3(a) Fees shall be charged for the use of shops and stalls in any market, such fees being determined in the manner following. (b) Every year in the month of March, the shops and stalls in any market shall be leased out for one year beginning with the 1st of April, next following. (c) The fees payable for the lease shall be settled by public auction or in such other manner as may be determined by the market sub-committee." Reading these three clauses of byelaw No. 3 together it would be noticed that the so-called fees is only a charge for the use and occupation of the st....
X X X X Extracts X X X X
X X X X Extracts X X X X
....an amount for use and occupation of its property and not fees in the legal sense, i.e. charges for the service which is rendered by the Corporation to the occupiers of that property. That however does not mean that it is open to the Corporation to charge or claim any amount it likes as rent for the occupation of its property like markets, stalls etc. It is an accepted principle in the American law that though municipalities may required the payment of fees from those occupying stands or stalls in a public market the charge has to be reasonable. In 64 C.J.S. page 316, paragraph 1829 under the heading "Permits and Licenses" it is observed: "Municipalities may require the payment of a reasonable amount as a license fee from those occupying stands or stalls in a public market, even under the general power of regulation and control, unless restricted by Statute. Charges for licenses or market privileges must, however, be reasonable and without discrimination, and cannot be imposed as a means of raising revenue but the requirement of a reasonable license fee is not objectionable as a tax for revenue." There can be no doubt that this principle, at any rate, would come into pla....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nicipal meat markets and municipal nakas. It is the case of the petitioners that they had applied for licences to sell meat and in their applications had stated their preference of the places where they wanted to do the business. The applications of petitioners 2 to 5 were rejected on the ground that no space was available to them. The application of petitioner No. 1 Yadavrao, however, has not been disposed of. Shri Jayawant, learned counsel for the petitioners, contends that it is not open to the Corporation to refuse a licence on the ground that there is no place for the petitioners to do their business. He says that it is the bounden duty of the Corporation to provide market places. The Corporation must therefore provide places for all those who desire to do business of selling meat. The Corporation in refusing to grant licences has failed to perform its duty. He further contends that byelaw No. 1 and Clauses (i) and (ii) of byelaw 14, are ultra vires of the Constitution inasmuch as they are unreasonable restrictions on the right guaranteed to a citizen to do his business by Article 19(1)(g) of the Constitution. It is not possible for us to accept any of these contentions raised....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... meats, etc., a municipality may prevent their being retailed outside the public markets." 38. The claim of the petitioners is that they must be allowed to do business at places outside the places fixed for the sale of meat. This demand of the petitioners cannot be conceded. It would be very difficult for the Corporation to keep a check over such persons who would be scattered all over the City of Nagpur which in its turn would result in the possibility of a danger to the health of the meat-heating population of the City. Now, when the sale of meat has to be confined to certain places, it would necessarily follow that the accommodation available in those fixed places would be limited. Clause (ii) of byelaw 14 which empowers the Corporation to refuse a licence on the ground that there is no place or stall in the meat market available for the applicant cannot by itself he said to be an unreasonable restriction on the right of the petitioners to do business. It is true that the Corporation must make adequate provision to meet the demands of the City relating to the sale of meat. Whether the arrangements made are adequate or not must be judged in the light of the demand both of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ticed that the Act makes a provision for an appeal against the decision of a subordinate officer of the Corporation. May be, that some officers in certain cases may act capriciously or arbitrarily but then there is an adequate provision made in the Act to get their orders set aside by way of an appeal. In these circumstances this contention of Shri Jaywant also must fail. 41. The test to be applied in considering whether the restrictions imposed by law are reasonable or not within the meaning of Clause (6) of Article 19 of the Constitution is laid down by a Division bench of this Court in C.R.H. Readymoney Ltd. v. State of Bombay, AIR1958Bom181 . In our opinion, it is w ell summarised in the first placitum of the report: "When a Legislature imposes restrictions upon the fundamental rights of a citizen the Court must not judge these restrictions by any absolute standard. Whether the restrictions are reasonable or not must largely depend upon what is that object the Legislature in seeking to achieve by legislation and what is the mischief it is aiming at. If the restrictions are necessary and essential in order to achieve the object and to remove the mischief, then ordina....