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PETITIONER: CORPORATION OF CALCUTTA

       Vs.

RESPONDENT: CALCUTTA TRAMWAYS CO. LTD.

DATE OF JUDGMENT: 04/10/1963

BENCH: WANCHOO, K.N. BENCH: WANCHOO, K.N. GAJENDRAGADKAR, P.B. SUBBARAO, K. SHAH, J.C. DAYAL, RAGHUBAR

CITATION:  1964 AIR 1279            1964 SCR  (5)  25  CITATOR INFO :  RF         1969 SC 707  (45)  RF         1973 SC1461  (1219)  RF         1981 SC 818  (22)  R          1989 SC1949  (10)

ACT:     Constitution of India, Art. 19(1) (g) and (f)--Enactment making opinion of Corporation conclusive and non-justiciable If reasonable restriction--Severability--Calcutta  Municipal Act,  1951  (W.B. Act 33 of 1951), s. 437(1) (b).

HEADNOTE:     The  respondent  company got its supply  of  electricity from  the Calcutta Electric Supply Co., converted  the  same from alternate current to direct current in its  transformer house for running its tram-cars.  The appellant  Corporation was  of opinion that the use of the premises as  transformer house  was  dangerous to life, health and property  and  was likely to cause a nuisance and asked the respondent to  take a licence under s. 437(1)(b) of the Calcutta Municipal  Act, 1951.   The  respondent refused to do so and  was  therefore prosecuted  under s. 537 of the Act.  The  trial  Magistrate held in favour of the appellant and convicted the respondent and  sentenced  it  to  pay a fine of  Rs.  100  only.   The respondent moved 26     the  High Court in revision.  That Court held  that  the provision  in  s,  437(1) (b) which  made  the  opinion  the Corporation  conclusive   and  non-justiciable  unreasonably restricted the fundamental right enshrined in Art. 19(1) (g) of the Constitution and since that provision was inseverable the  entire  section was unconstitutional.  The  corporation appealed  to this Court.  Section 437(1)(b) of  the      Act provided as follows’                "(1) No person shall use or permit or  suffer               to  be  used  any  premises  for  any  of  the               following  purposes without or otherwise  than               in  conformity  with the terms  of  a  licence               granted  by the Commissioner in  this  behalf,

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             namely,--               (a)                        (b)  any  purpose which  is,  in  the               opinion  of  the  Corporation  (which  opinion               shall   be   conclusive  and  shall   not   be               challenged  in any court) dangerous  to  life,               health  or  property, or likely  to  create  a               nuisance."        Held:   The power conferred on the Corporation by  s. 437(1)(b)  of  the  Calcutta Municipal  Act,  1951,  in  the parenthetical clause "which opinion shall be conclusive  and shall  not  be  challenged in any court" which  was  in  the nature  of  a  procedural  provision,  was  an  unreasonable restriction  within  the  meaning  of  Art.  19(6)  of   the Constitution and must be struck down.  The clause makes  the opinion of the Corporation, however unreasonable, capricious and  arbitrary, conclusive and non-justiciable  and  thereby places  trade  and  business  within  the  municipal  limits entirely at the mercy of the Corporation, even though it may not act mala fide.        The  decision  of  this  Court  in  Joseph  Kuruvilla Vellukunnel  v. Reserve Bank of India, must be  confined  to the special circumstances of the trade of banking and cannot be  extended as a matter of course to other cases  involving substantially  similar  provisions and each case  should  be judged on its own merits.        Joseph Kuruvilla Vellukunnel  v. The Reserve Bank  of India, [1962] Supp. 3 S.C.R. 632, held inapplicable.        So judged in the light of the principles laid down by this Court, the parenthetical clause was severable from  the rest  of the section and, consequently, that  clause  alone, and not the entire section should be struck down. The scheme of  the section was not  so integrated as to  indicate  that the Legislature wanted it to be operative as a whole.        Dr.  N.B. Khare v. State of Delhi, [1950] S.C.R.  519 and R.M.D. Chamarbaugwalla v.  Union of India, [1957] S.C.R. 930, relied on.

JUDGMENT:        CRIMINAL APPELLATE JURISDICTION:  Criminal Appeal No. 117 of 1961. 27            Appeal  from the judgment and order  dated  March 21,  1960’, of the Calcutta High Court in Criminal  Revision No. 376 of 1957. A.N. Sinha and P.K. Mukherjee, for the appellant M.C.  Setalvad,  Sukumar  Ghose  and  B.N.  Ghosh,  for  the respondent.           October  4,  1963. The Judgment of the  Court  was delivered by           WANCHOO  J.--This  is an appeal on  a  certificate granted  by  the Calcutta High Court.  The  respondent,  the Calcutta Tramways Co. Ltd., is running tramcars in the  city of Calcutta.  It gets electricity in bulk from the  Calcutta Electric  Supply  Company and gets the same  converted  from alternate  current to direct current at a high  voltage  for electric traction for running tram-cars of the company.  For this purpose it has an electric transformer house in 129/4-A and 130-D, Cornwallis Street.  The appellant Corporation was of  opinion that the premises were being used for a  purpose which  was  dangerous to life, health or  property  and  was likely  to  create  a nuisance.  It  therefore  ordered  the respondent to take out a licence under s. 437 (1) (b) of the

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Calcutta  Municipal  Act, No. XXXIII of  1951,  (hereinafter referred  to  as the Act) and fixed a  fee  therefore.   The respondent  however  refused  to  take  out  a  licence  and consequently it was prosecuted under s. 537 of the Act.  The respondent raised a number of points in defence, namely, (i) that the prosecution had not been properly filed; (ii)  that the  electric transformer house was neither a factory nor  a place  of trade, nor a place of public resort and  therefore s. 437 (1) (b) had no application; (iii) that the use of the transformer  house  for converting  high  voltage  alternate current  into  low and medium pressure  direct  current  was neither  a  use  which  was dangerous  to  life,  health  or property  nor the same was likely to create a nuisance;  and (iv) that as s. 437 (1) (b) of the Act vests absolute  power in the Corporation to form the opinion required  thereunder, it was an unreasonable restriction on the freedom of trade 28   guaranteed under Art. 19 (1) (g) of the Constitution   and therefore that provision is unconstitutional.      The  Magistrate  held that the complaint  was  properly filed.   He  further held that the  transformer  house.  was meant  for the trade which the respondent was   carrying  on and  therefore was covered by s. 437 (1) (b). He  also  held that the Corporation had properly   formed the opinion  that the use of the transformer house was likely to be  dangerous to life, health or property and was also likely to create  a nuisance. He further seems to have held that even though  s. 437  (1) (b)made the opinion of the  Corporation  conclusive and  final,  there  could be no doubt that the  use  of  the transformer house was dangerous to life, health or  property and  was  likely to create a nuisance. Finally he  seems  to have  held  that  s.  437  (1)  (b)  as  it  stood  was  not unconstitutional.  He therefore convicted the respondent and sentenced it to a fine of Rs. 100 only.         The  respondent  then went in revision  to  the  High Court,  and  the  main  point  urged  there  was  that   the provisions of s. 437 (1) (b) were unconstitutional. The High Court held that inasmuch s. 437 (1) (b) made the opinion  of the  Corporation conclusive and not liable to be  challenged in any court, the provision was unconstitutional inasmuch as it   amounted   to  an  unreasonable  restriction   on   the fundamental  right enshrined in Art. 19 (1) (g).   The  High Court  further held that the provision with respect  to  the conclusiveness and non-justiciability of the opinion of  the Corporation  was so embedded in s. 437 (1) (b) that  it  was not severable and therefore it struck down s. 437 (1) (b) as a whole as unconstitutional.  Another point which was  urged before the High Court was that the fee of Rs. 500 was in the nature of a tax which neither the State Legislature nor  the Corporation of Calcutta could levy.  The High Court did  not decide  this  question  in  view  of  its  decision  on  the constitutionality of s. 437 (1) (b).  The present appeal has been brought to this Court by the appellant on a certificate granted by the High Court. 29     Two main questions therefore that arise for our decision are:   (1)  whether the provision in s. 437  (1)  (b)  which makes  the  opinion of the Corporation conclusive  and  non- justiciable   in  any  court  amounts  to  an   unreasonable restriction on the right to carry on trade etc. enshrined in Art.  19  (1)  (g); and (2) even if it be  so,  whether  the provision relating to conclusiveness and  non-justiciability is severable or not.               Section 437 (1) (b) reads as follows:               "(1)  No person shall use or permit or  suffer

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             to  be  used  any  premises  for  any  of  the               following  purposes without or otherwise  than               in  conformity  with the terms  of  a  licence               granted  by the Commissioner in  this  behalf,               namely,--               (a)                  (b) any purpose which is, in the opinion of               the   Corporation  (which  opinion  shall   be               conclusive and  shall  not  be  challenged  in               any  court)   dangerous  to  life,  health  or               property, or likely to create a nuisance;               (c) The  contention  on  behalf of the appellant  is  that  even though  the  opinion  of  the  Corporation  has  been   made conclusive  and  non-justiciable, the restriction  on  trade resulting from the imposition of licence-fee on the basis of such   conclusiveness    and   non-justiciability    is    a reasonable   restriction   in  the interest of  the  general public.   On the other hand it has been urged on  behalf  of the respondent that by making the opinion of the Corporation in  such  matters conclusive and  non-justiciable,  the  law makes  it  possible  that any opinion  of  the  Corporation, howsoever capricious or unreasonable it may be, must prevail and  therefore the provision is an unreasonable  restriction on the right to carry on any trade etc. enshrined in Art. 19 (1) (g).  Reliance in this connection has been placed on the decision  of this Court in Joseph Kuruvilla  Vellukunnel  v. The  Reserve  Bank of India.(1)  It is urged that  the  mere fact that the opinion of the Corporation has been made con (1) [1962] Supp. 3 S.C.R. 632 30 clusive  and  non justiciable would not make  the  provision unreasonable with respect to carrying on any trade etc.   In that case, s. 38 (1) of the Banking Companies Act,  provided that  notwithstanding  anything contained in  the  Companies Act,  1956, the High Court shall order the winding up  of  a banking  company, if an application for its winding  up  has been made by the Reserve Bank under s. 37, or this  section. It was urged in that case that the provision amounted to  an unreasonable restriction on the right to carry on banking as the  whole  procedure  was a denial  of  the  principles  of natural justice, chiefly as it denied access to courts,  for ordinarily it was for the court to be satisfied after a fair trial  that an order of winding up a company was called  for and  the  court  was free to. reach  a  decision  after  the company had shown cause and there was also a right of appeal against  such decision.  This Court held by a majority  that in  view of the history of the establishment of the  Reserve Bank as a central bank for India, its position as a banker’s bank,  its  control over banking companies  and  banking  in India,  its  position  as the issuing  bank,  its  power  to license  banking  companies and cancel  their  licences  and numerous other powers, the provision could not be challenged as unreasonable as the Reserve Bank makes an application for winding up only where it is satisfied that it was  necessary to  wind  up a tottering or unsafe banking  company  in  the interest  of  the depositors.  We are of  opinion  that  the decision  in that case must be confined to the very  special circumstances  of  the  trade of banking, which  is  a  very sensitive  credit  organisation  and  to  the  very  special position  the Reserve Bank occupies in the banking world  in this country.  That decision cannot be extended as a  matter of  course  to  other  cases  where  substantially   similar provisions  are made in other laws relating to exclusion  of the jurisdiction of courts. In other cases of this kind, the

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question  has to be examined on the merits in each  case  to see  whether the restriction created by  conclusiveness  and non-justiciability  is  a  reasonable  restriction  in   the circumstances of the particular case. 31     We  must  therefore proceed to consider whether  in  the circumstances of this case the restriction contained in  the parenthetical  clause ins. 437 (1) (b) by which the  opinion of  the  Corporation  has  been  made  conclusive  and  non- justiciable,  can be said to be a reasonable restriction  on the  right to carry on trade etc. enshrined in Art.  19  (1) (g).  In Dr. N.B. Khare v. The State of Delhi,(1) this Court held  that  a law providing reasonable restrictions  on  the exercise  of  the rights conferred by Art.  19  may  contain substantive provisions as well as procedural provisions  and the  court  has  to  consider  the  reasonableness  of   the substantive provisions as well as the procedural part of the law.   The parenthetical clause which makes the  6pinion  of the  Corporation  conclusive and non-justiciable is  in  the nature of a procedural provision and we have to see  whether in  the  circumstances  of  this  case  such  a   procedural provision  is  reasonable  in the interest  of  the  general public.  It has been urged that the Corporation which is  an elected body would exercise the power conferred on it  under s.  437 (1) (b) reasonably and therefore the provision  must be  considered  to be a reasonable provision.  This  in  our opinion  is no answer to the question whether the  provision is  reasonable  or not. It is of course true  that  malafide exercise of the power conferred on the Corporation would  be struck  down  on that ground alone; but it is  not  easy  to prove  mala  fide,  and in many cases it  may  be  that  the Corporation  may act reasonably under the provision  but  it may  equally be that knowing that its opinion is  conclusive and non-justiciable it may not so act, even though there may be  no  mala fides.  The vice in the provision  is  that  it makes  the opinion of the Corporation, howsoever  capricious or arbitrary or howsoever unreasonable on the face of it may be, conclusive and non-justiciable. The conferment of such a power on a municipal body which has the effect of,  imposing restrictions on carrying on trade etc. cannot in our opinion be  said to be a reasonable restriction  within the  meaning of Art.  (1) [1950] S.C.R. 519. 32 19  (6).  Such a provision puts carrying on trade  by  those residing  within  the limits of  the  municipal  Corporation entirely at its mercy, if it chooses to exercise that  power capriciously,  arbitrarily or unreasonably, though not  mala fide.   We  therefore  agree with the High  Court  that  the conferment  of such a power on the Corporation as it  stands in  the parenthetical clause in s. 437 (1),(b) must be  held to  be an unreasonable restriction on the right to carry  on trade etc.     This  brings  us  to  the  next  question  whether  this parenthetical  clause  is  severable from the  rest  of  the provision.   In this connection it may be observed  that  in the Calcutta Municipal Act, 1923, which was repealed by  the Act, the corresponding provision was contained in s. 386 and there was no provision making the opinion of the Corporation conclusive  and non-justiciable.  In similar  provisions  of other laws also there is no provision making the opinion  of the  Corporation  conclusive  and  non-justiciable.  In  the Madras  City  Municipal  Act, No. IV of 1919,  there  was  a similar provision in s. 287 read with Sch.VI, which provided for  licences where a place was used for any purpose in  any

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area which in the opinion of the Commissioner was likely  to be dangerous to human life or was likely to create or  cause nuisance. Similarly in the Delhi  Municipal Corporation Act, No.  66  of 1957, there is a provision in s. 417  (1)  which provides  that no person shall use or permit to be used  any premises  for  any  purpose  which in  the  opinion  of  the Commissioner  was dangerous to life, health or  property  or likely to create a nuisance.  We have referred to these Acts and  the provision in the Calcutta Municipal Act  which  was the predecessor of the Act to show that it is quite possible to  work  such  a  provision  without  the  opinion  of  the Corporation being made conclusive and non-justiciable.   The question  therefore is whether this provision  contained  in the  parenthetical clause in s. 437 (1) (b) can  be  severed from the rest of the provision. 33     The principles governing severability were considered by this  Court  in  R.M.D. Chamarbaugwalla  v.   The  Union  of India.(1)  Seven  principles were there laid  down  in  that connection,  of  which three are material for  our  purpose, namely--                     " (1)  In determining whether the  valid               parts  of ,1. statute are separable  from  the               invalid parts thereof, it is the intention  of               the   legislature  that  is  the   determining               factor.  The test to be applied is whether the               legislature would have enacted the valid  part               if  it had known that the rest of the  statute               was invalid.                     "(2) If the valid and invalid provisions               are so inextricably mixed up that they  cannot               be  separated  from  one  another,  then   the               invalidity  of  a portion must result  in  the               invalidity of the Act in its entirety.  On the               other  hand  if  they  are  "so  distinct  and               separate  that  after  striking  out  what  is               invalid, what remains is in itself a  complete               code  independent of the rest then it will  be               upheld  notwithstanding  that  the  rest   has               become unenforceable".                     "(3) Even when the provisions which  are               valid  are  distinct and separate  from  those               which are invalid, if they all form part of  a               single   scheme  which  is  intended   to   be               operative as a whole, then also the invalidity               of  a part will result in the failure  of  the               whole."     Learned  counsel  for  the  appellant  urges  that   the parenthetical clause in s. 437 (1) (b)is  severable in  view of  the  first two principles set out above.  On  the  other hand, learned counsel for the respondent urges that in  view of the third principle the parenthetical clause with respect to  conclusiveness and non-justiciability is not  severable. The  High  Court has also taken the view that  even  if  the parenthetical clause is distinct and separate from the  rest of  the provision, the whole provision contained in  s.  437 (1) (b) constitutes a single scheme intended to be operative (1) [1957] S.C.R..093 1 SCI/64--3 34 as a whole and therefore s. 437 (1) (b) must be struck down.     We are of opinion that the view taken by the High  Court is  not  correct.  We have already pointed out that  such  a provision did riot exist in the earlier Act relating to this very  Corporation and it is no one’s case that without  such

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provision  the  earlier provision did not work.   The  first question  therefore is whether it was the intention  of  the legislature  when it passed s. 437 (1) (b) that if  it  knew that the parenthetical clause was invalid it would not  have enacted  the  rest of s. 437 (1) (b).  The  answer  to  this question  in  our opinion can only be one.  In view  of  the corresponding provision in the Calcutta Municipal Act, 1923, we  cannot  accept  that  the  Legislature  would  not  have provided for the licensing of premises which in the  opinion of  the  Corporation  were  used  for  purposes  which  were dangerous  to  life, health or property or  were  likely  to create a nuisance, unless that opinion was to be  conclusive and non-justiciable.   Similar provision had existed in  the earlier law without the provision relating to conclusiveness and  non-justiciability  in respect of  using  premises  for purposes which were dangerous to life health or property  or were  likely to create a nuisance.  Such a provision in  our opinion  is a very reasonable provision in the  interest  of the  general public and we do not see why it should be  held that the Legislature would not have enacted such a provision unless  the  opinion of the Corporation was also  to  become conclusive  and non-justiciable.  The first proposition  out of  the  three  set  out above is  in  our  opinion  clearly applicable  to  this  case and we have  no  doubt  that  the Legislature would have enacted the provision contained in s. 437 (1) (b) without the parenthetical clause.      So far as the second principle is concerned, we are  of opinion that the valid and invalid provisions in s. 437  (1) (b)  are  not  so inextricably mixed  that  they  cannot  be separated.   On the other hand we are of opinion  that  they are distinct and separate 35 and  even  if we strike out the parenthetical clause  as  to conclusiveness  and  non-justiciability what remains  is  in itself   a   complete  code  for  the   particular   purpose independent  of the invalid part.  Therefore, the  remaining provision  contained  in s. 437 (1) (b) can  and  should  be upheld   notwithstanding  that  the   parenthetical   clause providing  for  conclusiveness  and  non-justiciability   is invalid.     Finally  we  are of opinion that the  third  proposition does  not  apply  in the present  case.    That  proposition applies only where the valid and the invalid provisions even when  they are separate and distinct form part of  a  single scheme which is intended to be operative as a whole;if  that is  really  so,  then  the whole must go  and  there  is  no question  of  severability.  But making  a  certain  opinion conclusive   and  non-justiciable  is  a   separate   matter altogether  and it cannot be said that it is so embedded  in s.   437  (1)  (b)  as  to  make  conclusiveness  and   non- justiciability  of the opinion of the Corporation a part  of the  scheme for licensing which is provided therein.  As  we read  s. 437 (1) (b) it cannot be said that the whole of  it is  a  part  of a single scheme which  was  intended  to  be operative  as one whole.  This is really another  aspect  of the  first  proposition  relating to the  intention  of  the Legislature and it seems to us that the scheme in s. 437 (1) (b)  is not such a single scheme that it must be  said  that the  Legislature must have intended it to be operative as  a whole. We see no difficulty in holding that the provision in the  parenthetical  clause cannot be said to be  part  of  a single scheme of such a nature that either the whole must be operative  or nothing at all.  We are therefore  of  opinion that the parenthetical clause consisting of the words "which opinion  shall be conclusive and shall not be challenged  in

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any court" is severable from the rest of s. 437 (1) (b)  and therefore  only  these words of this section can  be  struck down and not the whole of the section.  It may be added that the  respondent  does  not  rely on  any  of  the  remaining principles set out in R.M.D. Chamarbaugwalla’s  case.(1) (1) [1957] S.C.R. 930. 36        The  order of the High Court striking down the  whole of s. 437 (1) (b) must therefore be set aside  and only  the portion  in  parenthesis  which makes  the  opinion  of  the Corporation conclusive and non-justiciable struck down as an unreasonable  restriction’  on the right to carry  on  trade etc. under Art.  19  (1) (g).      In  the  view  we  have  taken  the  judgment  of   the High  Court must be set aside.  It has been urged on  behalf of  the  respondent that as the Magistrate  dealt  with  the matter  on the looting that the opinion of  the  Corporation was  conclusive  and non-justiciable it should be  given  an opportunity  to show before the Magistrate that the  opinion of the Corporation  that the purpose for which the  premises in  this  case  were used was dangerous to life,  health  or property  or was likely to create a nuisance was wrong.   It is  also  urged that the point whether the  impost  in  this particular  case  was  a fee properly so  called  or  a  tax which  was taken before the High Court arises in this   case and  opportunity  should be given to  the  respondent     to raise this point before the Magistrate.  In view    of  this contention we set aside the order of the Magistrate also and remand  the  case to him for decision    according  to  law, including  the  above  two points. The parties  will  be  at liberty to adduce such relevant   evidence as they think fit to do.                              Case remanded. 37