http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 7  

PETITIONER: STATE OF MYSORE

       Vs.

RESPONDENT: H. SANJEEVIAH

DATE OF JUDGMENT: 16/01/1967

BENCH: SHAH, J.C. BENCH: SHAH, J.C. RAO, K. SUBBA (CJ) SIKRI, S.M. RAMASWAMI, V. VAIDYIALINGAM, C.A.

CITATION:  1967 AIR 1189            1967 SCR  (2) 361  CITATOR INFO :  RF         1979 SC1459  (33)  RF         1981 SC 711  (11)  D          1982 SC1016  (9)  RF         1985 SC 660  (17)  R          1989 SC2015  (8)  RF         1990 SC 820  (31)

ACT:      Madras  Forest Act (11 of 1900), s. 37--Power  to  make rules   regulating  transit  of  forest   produce--Rule   2, provisos--These   prohibiting  removal  of  forest   produce between  10 p.m. and sun-rise and  conditionally  permitting removal  between sun-set and 10 p.m.--Such  restrictions  on Contractors   whether  prohibitory  or   regulatory--Whether within rule making power.      Constitution of India, Arts. 301, 304, 305--Freedom  of trade--Proviso to Rule 2 framed under s. 37 of Madras Forest Act  whether restrictive of such freedom, whether  saved  by Art.  304--Whether  ’existing law’ for the purpose  of  Art. 305.

HEADNOTE:      Section  37 of the Madras Forest Act, 1900, gave  power to Government to make rules regulating the transit of forest produce.   Rule framed thereunder prohibited the removal  of forest  produce without permit.  After the  promulgation  of the Constitution in 1950 two provisos were added to the said rule  the  first of which prohibited the  issue  of  permits allowing  forest produce to be removed between  sun-set  and sunrise,  while  the second permitted such  removal  between sun-set  and 10 p.m. on certain conditions.  The  respondent who  was  a forest contractor filed a writ petition  in  the High  Court challenging the validity of the provisos on  the ground that they were beyond the rule making power under  s. 37  of  the Madras Forest Act and were  restrictive  of  his freedom  of trade and commerce declared by Art. 301  of  the Constitution.   The  petition  was  allowed  and  the  State appealed. HELD  :  (i)  Power to impose  restrictions  of  the  nature

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 7  

contemplated by the two provisos to r. 2 is not to be  found in any of the clauses of sub-s. (2) of s. 37.  By sub-s. (1) the State Government is invested with the power to  regulate transport  of forest produce "in transit by land or  water." The power which the State Government may exercise is however power  to regulate transport of forest produce, and not  the power  to  prohibit or restrict transport.  Prima  facie,  a rule which totally prohibits the movement of forest  produce during the period between sun-set and sunrise is prohibitory or restrictive of the right to transport forest produce.   A rule regulating transport in its essence permits  transport, subject to certain conditions devised to promote  transport: such a rule aims at making transport orderly so that it does not  harm  or  endanger other persons  following  a  similar vocation  or the public, and enables transport  to  function for the public good. [364 G-H; 365 A] Automobile Transport (Rajasthan) Ltd. v. State of Rajasthan, [1963] 1 S.C.R. 491, relied on.- If  the  Provisos are in truth restrictive of the  right  of transport  of the forest produce, however good  the  grounds apparently  may be for restricting the transport  of  forest produce.,  they cannot on that account transform  the  power conferred  by the provisos into a power  merely  regulatory. [365 H] (ii) Article  301 in terms prohibits the imposition  of  any restriction  on trade, commerce and  intercourse  throughout the territory of India and 361 362 by the enactment of the two provisos clearly restriction  is imposed  on the freedom of trade.  The provisos to the  rule must  therefore  be deemed to be invalid as  infringing  the guarantee  under Art. 301 of the freedom of  trade  commerce and intercourse. [366 C-D] The  provisos  were not protected by Art. 305.   Section  37 which  conferred  power  to make rules  was  "existing  law" within the meaning of that expression in Art. 305., but  the rules made in exercise of that power after the  Constitution cannot  be deemed to be "existing law".  The mere fact  that there  was authority in the State under  a  pre-Constitution Act  to make rules which may impose restrictions  on  trade, commerce and intercourse, but which was not exercised,  will not  make the rule made in exercise of the  authority  after the  Constitution "existing law" within the meaning  of  the Constitution. [366 G] Kalvani Stores v. State of Orissa, A.I.R. (1966) S.C.  1686, relied on. Kasi  Prasad  v. Sate of Orissa, A.I.R.  (1963)  Orissa  24, disapproved. Article  304  which  is  an exception to  Art.  301  had  no application  to the case because that Article saved  certain laws from the operation of Art. 301 if the law was passed by the Legislature of a State,.  The provisos to s. 2 were  not made by the Legislature of the State; they were made by  the Executive  Government  in exercise of  delegated  authority. Moreover   they  had  not  been  shown  to   be   reasonable restr iction   on   the  freedom  of  trade   commerce   and intercourse imposed in the public interest so as to  satisfy the terms of Art. 304(b). [367 D-E]

JUDGMENT: CIVIL  APPELLATE  JURISDICTION : Civil Appeal  No.  1010  of 1965. . Appeal  by special leave from the judgment and  order  dated

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 7  

July 11, 1963 of the Mysore High Court in Writ Petition  No. 1601 of 1962. S.   V.  Gupte, Solicitor-General, R. Ganapathy Iyer and  R. H. Dhebar, for the appellant. G.   R.  Ethiarajulu Naidu, K. Rajendra Chaudhuri and K.  R. Chaudhuri, for the respondent. The Judgment of the Court was delivered by Shah,  J. By S. 37 of the Mysore Forest Act 11 of  1900  the State Government is authorized to make rules to regulate the "transit  of  .  . . forest produce".  In  exercise  of  the powers conferred by S. 37 the State Government of Mysore has framed  rules to regulate the "transit of timber,  firewood, charcoal  and  bamboos from all lands." By r.  2  framed  on October 13, 1952 it was provided that no person shall import forest  produce  into, export forest produce from,  or  move forest  produce within, any of the areas specified  in  Sch. ’A’ (hereinafter referred to as the Scheduled area),  unless such forest produce is accompanied by a permit prescribed in r.  3.  On  April  15, 1959 the State  of  Mysore  issued  a notification adding a proviso to r. 2 which read as  follows :                "Provided that no such permit shall authorise               any person to transport forest produce between               sun-set  and  sun-rise  in any  of  the  areas               specified in Schedule "A".                             363 By another notification dated September 14, 1960, the  State Government introduced the second proviso to r. 2 which  read :                "Provided  further  that  permission  may  be               granted   to   timber   merchants   on   their               requisition to transport timber up to 10  P.M.               (22 hrs.) under the following conditions :-                (i)  the  party  who wishes to avail  of  the               concessions  should pay a cash deposit of  Rs.               1,000 as security for due compliance with  the               timber transit rules as in force;                (ii) that  the  deposit may be  forfeited  to               Government for breach of any of the conditions               of the Timber Transit Rules." The  respondent who is a dealer in timber filed  a  petition under Art. 226 of the Constitution for an order quashing the two provisos to r. 2, on the grounds inter alia that the two provisos were beyond the rule-making authority conferred up- on the State Government by s. 37 of the Mysore Forest Act 11 of  1900,  and  that  in  any  event  the  provisos  imposed unauthorised restrictions on the freedom of trade,  commerce and  intercourse. The High Court of Mysore held that by  the provisos  inserted  in r. 2 the State Government  had  while seeking  to  regulate  the  transport  of  timber   "stopped transport altogether", and in doing so the State  Government acted in excess of the powers conferred upon it by s. 37  of the Act. The High Court also held that the two provisos were not  saved  by  Art 305 of the Constitution  and  since  the function  of  the  two  provisos  was  not  regulatory   but prohibitory,  they  were  violative  of  Art.  301  of   the Constitution     and    must    be    struck     down     as unconstitutional.With  special leave granted by this  Court, the State of Mysore has appealed to this Court. Section 37(1) of the Mysore Forest Act 11 of 1900 provides                          "The  control  of  all  rivers  and               their banks as regards the floating of timber,               as  well as the control of all forest  produce               in transit by land or water, is vested in  the               State  Government  which  may  make  rules  to

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 4 of 7  

             regulate the transit of any forest produce."                Sub-section (2) provides :            " Such rules may, among other matters,            (a)...................                          (b)  prohibit the  import,  export,               collection, or moving of  forest       produce               without  a pass from an officer authorised  to               issue   the   same,  or  otherwise   than   in               accordance with the  conditions of such pass;" 364 By r. 2 which is framed in exercise of the power under s. 37 (2) (b), a person intending to transport forest produce must obtain a pass from an authorised officer.  The rule so  made is  clearly  regulatory ,of the right  to  transport  forest produce.   But  a restriction is imposed on  the  right  to transport forest produce by the two provisos incorporated in the  rule in 1959 & 1960.  By the first proviso  the  holder ,of  a  pass is not authorised to transport  forest  produce between  the  hours  of sun-set and  sun-rise  in  any  area specified  in  Sch.  ’A’, and by the second  proviso  it  is provided  that the restriction imposed by the first  proviso may  be relaxed between the hours of sun-set and 10 P.M.  if the  person wishing to avail of the concession makes a  cash deposit of Rs. 1,000 as security for due compliance with the "timber  transit rules".  By the terms of the  two  provisos there  is an absolute prohibition against transportation  of forest  produce between the hours of 10 P.M.  and  sun-rise, and a qualified prohibition between the hours of sun-set and 10  P.M.  If a transporter of forest produce  makes  a  cash deposit  of  Rs. 1,000 as security, he may be  permitted  to transport forest produce between the hours of sun-set and 10 P.M. provisos were regulatory and not prohibitory.  It was  urged that every injunction in the form of a prohibition cannot be regarded  as a restriction upon the right to transport,  and reliance  was placed upon the form of cls. (b), (j) and  (1) of  sub-s. (2) of s. 37.  What is decisive in each case,  it was  submitted,  is  not  the form  of  the  rule,  but  the substance  thereof, and that the provisos sought  merely  to regulate  transport  of forest produce.  Clause  (b)  of  S. 37(2)  prohibits import, export, collection and movement  of forest  produce without a pass.  The prohibition is,  it  is common  ground, regulatory of the right to transport  forest produce.    Under  cl.  (j)  rules  may  be  made   imposing prohibition  against  the closing up or obstruction  of  the channel,  or  banks of any river used for the  transport  of forest  produce,  and  under  cl.  (1)  rules  may  be  made prohibiting   absolutely  or  subject  to  conditions,   the establishment  of sawpits, or saw mills or any other  sawing contrivance.  But cls. (j) & (1) do not operate to  prohibit or restrict the transport of any forest produce. Power  to impose restrictions of the nature contemplated  by the G two provisos to r. 2 is not to be found in any of  the clauses  of  subs. (2) of s. 37.  By sub-s.  (1)  the  State Government is invested with the power to regulate  transport of  forest produce "in transit by land or water." The  power which the State Government may exercise is however power  to regulate  transport of forest produce, and not the power  to prohibit or restrict transport.  Prima facie, H a rule which totally prohibits the movement of forest produce during  the period  between  sun-set  and  sun-rise  is  prohibitory  or restrictive  of  the right to transport forest  produce.   A rule regulating trans- 365 port  in its essence permits transport, subject  to  certain

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 5 of 7  

conditions, devised to promote transport : such a rule  aims at  making  transport orderly so that it does  not  harm  or endanger  other persons following a similar vocation or  the public,  and  enables transport to function for  the  public good.   It  was observed by one of us (Subba Rao,  J.),,  in Automobile   Transport   (Rajasthan)  Ltd.   v.   State   of Rajasthan.(1)                "Restrictions  obstruct the freedom,  whereas               regulations  promote it.  Police  regulations,               though   they  may  superficially  appear   to               restrict  the  freedom of  movement,  in  fact               provide the necessary conditions for the  free               movement.   Regulations such as provision  for               lighting, speed, good conditions of  vehicles,               timings, rule of the road and. similar others,               really  facilitate  the  freedom  of  movement               rather     than retard it.  So too,  licensing               system with compensatory  fees  would  not  be               restrictions but regulatory provisions:  for               without    it,   the   necessary   lines    of               communications,such  as roads, water-ways  and               air-ways cannot effectively be maintained  and               the freedom declared may in practice turn  out               to  be  an  empty one.   So  too,  regulations               providing for necessary services to enable the               free  movement of traffic, whether charged  or               not  cannot also be described as  restrictions               impeding the freedom." It  was  asserted in the affidavit filed on  behalf  of  the State in, reply to the petition that the restriction imposed by the rules on the freedom of citizens to transport timber, fire-wood, charcoal and bamboos is a reasonable  restriction and  in  the public interest, i.e. to  prevent  unauthorised felling  of  trees and bamboos and smuggling them  from  the State  forests.  It was said that checking transport of  the forest produce during nights would require enormous increase in  the number of checking staff of the  Forest  Department, that  such  staff will have to work in two or  three  shifts every day if they have to check transport of forest  produce during nights also, further that such staff will have to  be equipped  with lanterns and warm clothings if they  have  to work during nights, that persons who indulge in smuggling of timber  find nights more convenient to avoid detection,  and that smuggling of forest produce is a serious menace to pre- servation  of forests in the State and safeguarding  of  the property  of  the  State.  Whether or  not  these  are  good grounds  for  imposing restrictions on transport  of  forest produce  is  not  a matter with which we  are  concerned  in dealing with the power of the State by rules to restrict the right to transport forest produce.  The power conferred upon the State Government is merely "to regulate the transit"  of forest produce and not to restrict it.  If the provisos  are in  truth restrictive of the right to transport  the  forest produce,  however,  good the grounds apparently may  be  for restricting the transport of forest (1)  [1963] 1 S.C.R. 491, 549. 366 produce,  they  cannot on that account transform  the  power conferred  by the provisos into a power  merely  regulatory. The High Court was, therefore, in our view, right in holding that  the  two  provisos  to r. 2  are.  not  regulatory  in character, but are restrictive. The  alternative ground on which the High Court has  decided against  the  State  Government  must  also  be   sustained. Article 301 provides:

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 6 of 7  

              "Subject  to  the other  provisions  of  this               Part,   trade,   commerce   and    intercourse               throughout  the  territory of India  shall  be               free." The  provisos  are  undoubtedly  restrictive  of  trade  and commerce  and on that account would prima facie be void,  as derogating  from the freedom declared by Art. 301.   It  has been held by this Court in Automobile Transport  (Rajasthan) Ltd.’s case(1) that regulatory measures, which do not hamper trade,  commerce and intercourse, but facilitates them,  are not  hit by Art. 301 of the Constitution.  But it cannot  be said  of  the  two  provisos, that they  are  in  any  sense regulatory.  The plea that Art. 301 does not come to the aid of  the respondent because of the reservation made  in  Art. 305  has,  in  our judgment,  no  substance.   Article  305, insofar, as it is material, provides :                "Nothing in articles 301 and 303 shall affect               the provisions of any existing ’law except  in               so far as the President may by order otherwise               direct;" The expression "existing law" is defined in Art. 366(10)  as meaning   any  law,  Ordinance,  order,  bye-law,  rule   or regulation  passed  or made before the commencement  of  the Constitution by any Legislature, authority or person  having power to make such a law, Ordinance, order, bye-law, rule or regulation.   Undoubtedly the Forest .Act was passed  before the  Constitution and it was brought into force before  that date.  Rule 2 (as it stood originally) was promulgated after the  Constitution,  but  that,  as  already  observed,   was regulatory  of  the  right  to  transport  forest   produce. Section  37  which  .conferred  power  to  make  rules   was undoubtedly  "existing  law" within the  meaning  of  that expression used in Art. 305, but the rules made in  exercise of that power after the Constitution cannot be deemed to  be "existing  law".  The mere fact that there was authority  in the  State under a pre-Constitution Act to make rules  which ,may impose restrictions on trade, commerce and intercourse, but which was not exercised, will not make the rule made  in exercise  of the authority after the Constitution  "existing law" within the meaning of the Constitution.  This Court  in Kalvani Stores V.   The  State  of Orissa (2)  held  that  a notification issued after the Con- (1) [1963] 1 S.C R, 491, 549. (2) A.1 R. 1966 S.C. 1686. 367 sitution  imposing additional duty under the power  reserved under  S.  90 read with s. 27 of the’ Bihar  &  Orissa  Act, 1915, was not existing law within the meaning of Art. 305 of the Constitution read with Art. 366(10) and the notification was  invalid  unless it complied with  the  requirements  of Arts. 302, 303 or 304 of the Constitution.  It was held by a majority of the Court that "existing law within the  meaning was therefore the provision contained in S. 27 of the  Bihar &  Orissa Act 2 of 1915 authorising the State Government  to issue  a  notification  imposing a duty at  the  rate  fixed thereby, and the notification issued pursuant thereto before the Constitution." The decision of the Orissa High Court  in Kasi Prasad v. State of Orissa(1) in which it was held  that rules  framed  in 1958 after the coming into  force  of  the Constitution in exercise of the power conferred by s. 41  of the Orissa Forest Act, 1927, were existing law," and on that account  not  open to challenge because of Art. 305  of  the Constitution, even though they violated the guarantee  under Art. 301, cannot be regarded as correct. Article  304  which  is  an exception to  Art.  301  has  no

http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 7 of 7  

application to this case, because that Article saves certain laws from the operation of Art. 301 if the law is passed  by the  Legislature of a State.  The provisos to r. 2  are  not made by the Legislature of the State; they are    made    by the executive Government in exercise of delegated authority. The  rules  have  the force of law, but when  made  did  not become  part  of the Act : (see s. 77 of the  Mysore  Forest Act).  Again Art. 304(b) exempts from the operation of  Art. 301  reasonable  restrictions  on  the  freedom  of   trade, commerce and intercourse with or within the State as may  be required in the public interest.  There is no evidence of an enquiry  made by the State before the provisos were  framed, and   no  case  is  made  out  that  they   are   reasonable restrictions   on  the  freedom  of  trade,   commerce   and intercourse imposed in the public interest.  Article 301  in terms prohibits the imposition of any restriction on  trade, commerce and intercourse throughout the territory of  India, and  by  the  enactment  of  the  two  provisos  clearly   a restriction  is  imposed  upon the freedom  of  trade.   The provisos  to the rule enacted by the State  Government  must therefore  be  deemed  to  be  invalid  as  infringing   the guarantee  under Art. 301 on the freedom of trade,  commerce and intercourse. The appeal fails and is dismissed with costs. G.C.                          Appeal dismissed. (1) A.I.R. 1963 Orissa, 24. 368