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PETITIONER: THE TULSIPUR SUGAR CO. LTD.

       Vs.

RESPONDENT: THE NOTIFIED AREA COMMITTEE, TULSIPUR

DATE OF JUDGMENT27/02/1980

BENCH: VENKATARAMIAH, E.S. (J) BENCH: VENKATARAMIAH, E.S. (J) DESAI, D.A.

CITATION:  1980 AIR  882            1980 SCR  (2)1111  1980 SCC  (2) 295  CITATOR INFO :  R          1981 SC1127  (17)  RF         1986 SC 515  (76)  F          1990 SC 261  (14,26)  RF         1991 SC1893  (14,27)

ACT:      Administrative law-Conditional  legislation-Subordinate legislation-Power to  extend the area of Municipal Committee whether  subordinate  legislation-Audi  alteram  partem-When necessary.

HEADNOTE:      The plaintiff (appellant) was a sugar manufacturer with its factory  in a suburb of Tulsipur Town. By a notification issued on  August 22,  1955 under section 3 of the U.P. Town Area Act, 1914 the limits of the Tulsipur Town were extended bringing the  factory area  within the  jurisdiction of  the Town Area  Committee. In  October, 1959 a draft notification was issued  by which  objections and  representations to the levy of  octroi on goods brought into the limits of the Town Area Committee  for the purposes of sale, use or consumption were invited.  Later a final notification dated December 15, 1959 was  issued under section 39. In both the notifications however though  reference was  made to  two schedules to the notifications in  neither  was  the  second  schedule  which referred to the limits of the Town Area, added.      This defect  was cured  by notification dated April 14, 1960 incorporating  Schedule II  in the  Notification  dated December 15, 1959. The plaintiff was then called upon to pay octroi on  some of the materials and stores brought into the factory.      The plaintiff  thereupon questioned the validity of the Notification dated  August 22,  1955 extending the limits of the Town  Area Committee  bringing its  factory  within  the limits  of  the  Town  Area  Committee  and  the  subsequent notifications on  the grounds  that (i)  the first  of  them dated August  22, 1955  did not  give an  opportunity to all concerned to make representations regarding the advisability of extending the limits of the Town Area Committee (ii) that the  notification  dated  December  15,  1959  was  inchoate because  neither   the  draft  notification  nor  the  final notification contained  the second  schedule and  (iii) that

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this defect  could not be cured by issue of the Notification dated April 14, 1960 in that it was issued without following the procedure prescribed by section 39 of the Act.      The Trial  Court held  that the  notification of August 22, 1955  was not  open to question, that there was no valid levy because  the draft  notification the final notification and the  amending notification  were invalid and ineffective for the  reason that the omission of the second Schedule was a material  illegality and the subsequent notification could not validate an irregular notification.      On appeal  by the  defendant the  civil judge,  and  on further appeal  the High  Court, dismissed  the  plaintiff’s suit.      In appeal to this court it was contended that since the declaration of  any area  as  a  town  area  involved  civil consequences, exercise of power by the State 1112 Government under  section 3 by necessary implication imposed a duty  on the  State Government  to give  publicity to  its proposals  and   failure  to   comply  with  such  procedure invalidated a declaration made under section 3.      Dismissing the appeal, ^      HELD :  1. Where  a function  performed  by  the  State Government   is   judicial   or   quasi-judicial   involving adjudication of  the rights of any person resulting in civil consequences it  becomes necessary  to follow the maxim audi alteram  partem  (hear  the  other  side)  before  taking  a decision. [1118E]      2. In  order to establish that a duty to act judicially applies to the performance of a particular function it is no longer necessary  to show  that the function is analytically of a  judical character  or involves  the determination of a lis  interpreters,   though  the  presumption  that  natural justice must be observed will arise more readily where there is an express duty to decide only after conducting a hearing or inquiry  or where  the  decision  is  one  entailing  the determination of  disputed questions of law and fact. Prima- facie a duty to act judicially will arise in the exercise of a power  to deprive  a person  of his  livelihood or  of his legal status  where the  status is  not merely terminable at pleasure or  to deprive  a person  of  liberty  or  property rights or  other legitimate  interest or  expectation or  to impose a  penalty on  him; though  the conferment  of a wide discretionary power  exercisable in  the public interest may be indicative  of  the  absence  of  an  obligation  to  act judicially. Where  a discretionary  power to  encroach  upon individual rights  is exercised,  the  factors  pointing  to whether it  must be  exercised judicially include the nature of the  interests to be effected, the circumstances in which the power  falls to  be exercised  and  the  nature  of  the sanctions if  any involved.  Exceptionally  a  duty  to  act judicially may  arise in the course of exercising a function not culminating  in a binding decision if the wording of the grant of  power or  the context indicate that a fair hearing ought to  be extended  to persons likely to be prejudicially affected by  an investigation  or recommendation.  [1118F-H, 1119A-C]      Halsbury’s Laws  of England Vol. I, 4th Edition page 77 referred to.      3. Where  an administrative decision affects the rights of persons,  it becomes  the duty of the authority concerned to give  notice of  the proposed action to the persons to be affected  and  to  take  a  decision  after  giving  a  fair opportunity  to   the   person   concerned   to   make   his

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representation in that regard. [1119C-D]      A. K.  Kraipak &  Ors. Etc.  v. Union  of India  & Ors. [1970] 1 S.C.R. 457; Mohinder Singh Gill & Anr. v. The Chief Election Commissioner, New Delhi & Ors. [1978] 2 S.C.R. 272; Maneka Gandhi v. Union of India [1978] 2 S.C.R. 621 referred to.      4. Where a public officer has power to deprive a person of his  liberty or  his property,  the general  principle is that it  has not  to be  done without  his  being  given  an opportunity of  being heard and of making representations on his own behalf. [1119E]      5(a) The  power of  the  State  Government  to  make  a declaration under  section 3  of the  Act is  legislative in character  because  the  application  of  the  rest  of  the provisions of  the Act  to the  geographical area,  which is declared as 1113 a town  area, is  dependent upon such declaration. Section 3 of the  Act is  in the  nature of a conditional legislation. [1119H, 1120A]      In the  instant case the maxim audi alteram partem does not become applicable by necessary implication. [1121G]      (b) The  contention that  the declaration  to  be  made under section  3 of  the Act is in the nature of subordinate legislation is  not tenable.  It is not possible to equate a declaration to be made under section 3 of the Act with rules made under section 39. [1122A, B]      Sub-section 3  of section 39 does not in terms apply to a declaration to be made under section 3 of the Act. [1122B]      (c)  The   contention  of   the  plaintiff   that   the declaration made  by the State Government under section 3 of the Act declaring the area in which the sugar factory of the plaintiff is situated as a part of the Tulsipur Town Area is invalid is  not tenable. A notification issued under section 3 of  the Act  which  has  the  effect  of  making  the  Act applicable to  a geographical  area  is  in  the  nature  of conditional legislation.  It cannot  be characterised  as  a piece of subordinate legislation. [1126B-C]      (d) The  notification dated  December 15, 1959 by which octroi was  sought to  be levied  was valid.  In the instant case the omission to mention the boundaries of Tulsipur Town in the  draft notification and in the final notification did not make  the final  notification ineffective as there could be no  room for  doubt about  the local  area  within  whose limits the  said impost  would be  effective. The  procedure prescribed for  the imposition  of octroi  was valid because representations and  objections to  the proposed  levy  were invited and  a valid notification was issued. A notification so published  is conclusive  proof that  the  tax  had  been imposed in  accordance  with  the  provisions  of  the  Act. [1128G-H, 1129A-C]

JUDGMENT:      CIVIL APPELLATE  JURISDICTION : Civil Appeal No. 577 of 1970.      From the  Judgment and  Order dated  17-1-1968  of  the Allahabad High Court in Second Civil Appeal No. 462 of 1964.      Mr. Anil  B. Diwan,  J. S. Sinha and K. J. John for the Appellant.      Mr. J.  P. Goyal,  S. K.  Jain and  S. M.  Jain for the Respondent.      The Judgment of the Court was delivered by      VENKATARAMIAH, J.-This appeal by certificate arises out

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of Suit  No. 416  of 1960 on the file of the Munsif, Utraula at  Gonda   instituted  by   the  Tulsipur   Sugar   Company (hereinafter referred  to as  ’the plaintiff’)  against  the Town Area  Committee, Tulsipur  (hereinafter referred  to as ’the defendant’)  for a permanent injunction restraining the defendant from  levying octroi  on goods  brought  into  the premises of  the sugar  factory belonging  to the  plaintiff pursuant to  the Notification bearing No. 540/XXIII-102 (58- 59)-7 dated  December 15, 1959 issued by the Commissioner of Faizabad Division in exercise of the 1114 powers conferred  on him by sub-section (2) of section 39 of the  U.P.  Town  Area  Act,  1914  (U.P.  No.  II  of  1914) (hereinafter  referred  to  as  ’the  Act’)  read  with  the Notification bearing  No. 1375(1)/XXIII-102(58-59)-24  dated April 14,  1960. The  name of the defendant was altered into the Notified  Area Committee  of Tulsipur  by virtue  of  an order made  by the  Munsif on  August  18,  1962  since  the defendant which  was originally  a Town  Area Committee  had been re-constituted as a Notified Area Committee with effect from March  15, 1962. The plaintiff is a company carrying on the business of manufacturing sugar in its factory which was established in  the year 1936 in Shitlapur village which was situated in the suburb of Tulsipur Town. By the Notification bearing No.  1853-IX-86 T-51  dated December 22, 1955 issued by the Governor of Uttar Pradesh under section 3 of the Act, the limits  of the Tulsipur Town Area were extended so as to bring within  its limits  the village of Shitlapur. Thus the sugar factory  of  the  plaintiff  was  brought  within  the jurisdiction of  the Tulsipur  Town Area  Committee. In  the year 1959,  it was  proposed to levy octroi on certain goods which were brought into the limits of the Tulsipur Town Area Committee for  purposes of  sale, use or consumption and for that purpose  a draft  notification was published on October 28, 1959 notifying the proposed rules which would govern the levy of  octroi and  inviting objections and representations thereto.  The   final  Notification  was  published  by  the Commissioner on  December 15,  1959 under  section 39 of the Act notifying  the rules governing the levy of octroi in the Town Area  of Tulsipur.  In both  these notifications, there was a reference to two Schedules-Schedule No. 1 and Schedule No. 2 but in fact neither of the two notifications contained the second  schedule. The  first schedule  referred  to  the rates of  octroi leviable on the goods specified therein and the second schedule referred to the limits of the Town Area. When the  Commissioner noticed  that the  Notification dated December 15, 1959 by which the octroi rules were promulgated did  not   contain  the  second  schedule,  he  published  a notification dated  April 14, 1960 in the U.P. Gazette dated April 23,  1960 setting  out the  octroi limits  of the Town Area of  Tulsipur by  way of  amendment to  the Notification dated December  15, 1959  incorporating the  second schedule containing the  limits of  the Town  Area of Tulsipur in the latter notification.  By the  said notification  dated April 14,  1960,  item  No.  29  in  the  first  schedule  of  the Notification dated December 15, 1959 was also directed to be omitted. After  the publication  of the  Notification  dated December 15,  1959, the  plaintiff was  called upon  to  pay octroi on some of the materials, articles and stores brought into its  sugar factory which was situated within the limits of the Tulsipur 1115 Town Area  for being  used in  the manufacture  and sale  of sugar. Aggrieved  by the said levy, the plaintiff instituted the above suit on November 18, 1960 for permanent injunction

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as stated above questioning the validity of the Notification dated August  22, 1955  issued  by  the  Governor  of  Uttar Pradesh extending the limits of the Tulsipur Town Area so as to include  the area  in which  the factory of the plaintiff was situated  and also  the Notification  dated December 15, 1959  and   the  amendment   of  the  said  Notification  by Notification dated April 14, 1960 issued by the Commissioner of Faizabad.      The contention  of the  plaintiff with  regard  to  the Notification dated  August 22,  1955 was  that since  it had been promulgated  without giving  a prior opportunity to all those  concerned   to  make   representation  regarding  the advisability of  extending the  limits of  the Tulsipur Town Area Committee  so as  to include  the village  of Shitlapur within  whose  limits  the  factory  of  the  plaintiff  was situated, it was liable to be declared as void. In so far as the Notification  dated December  15, 1959 was concerned, it was urged  by the  plaintiff that it was liable to be struck down on  the ground  that it  was  inchoate  as  the  second schedule defining  the limits  of the Tulsipur Town Area had not been incorporated either in the draft notification dated October 28, 1959 or in the final Notification dated December 15, 1959.  It was also urged that the above defect could not be cured  by the  issue of  the Notification dated April 14, 1960 by  which the  Notification dated December 15, 1959 was amended without  following all  the procedure prescribed for promulgating  rules   under  section  39  of  the  Act.  The defendant pleaded  that neither of the two contentions urged by the  plaintiff was  tenable. The  defendant pleaded  that since all  the legal  formalities required for the extension of its  limits and for the imposition of the octroi had been followed, it  was not  open to the plaintiff to question any of the  above notifications.  The trial  court held that the validity of  the Notification  dated August 22, 1955 was not open to  question before  the civil  court  but  it  however declared the  draft Notification issued on October 28, 1959, the final  Notification issued  on December 15, 1959 and the amending Notification  dated April  14, 1960  as invalid and ineffective on  the ground  that the omission to include the second schedule  containing the  octroi limits  in the draft Notification and  the Notification  dated December  15, 1959 was a  material illegality  and the Notification dated April 14, 1960  which had  been issued  without following  all the formalities could  not have  the effect  of  validating  the Notification dated  December 15,  1959. In view of the above finding, the  trial court  held that there was no valid levy of octroi  by the  defendant. Accordingly,  the trial  court passed a decree restraining the 1116 defendant from  levying  octroi  on  goods  brought  by  the plaintiff into  its factory.  The defendant  filed an appeal against the  said decree before the District Judge, Gonda in Civil Appeal  No. 2  of  1963.  The  plaintiff  filed  cross objections in  that appeal.  That appeal  was heard by Civil Judge, Gonda  who allowed  the same  and dismissed the cross objections.  The   suit  instituted  by  the  plaintiff  was consequently dismissed.  The plaintiff  thereafter  filed  a second appeal  before the  High Court  of Allahabad (Lucknow Bench) in  Second Civil  Appeal No.  462 of 1964 questioning the decree  passed by  the first  appellate  court.  By  its judgment dated  January 17,  1968, the  High Court dismissed the second  appeal. On  the basis of a certificate issued by the  High   Court  under   Article  133   (1)  (b)   of  the Constitution, the  plaintiff has  come up  in appeal to this Court.

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    We  shall   first  examine   the  correctness   of  the contention advanced  on behalf  of the plaintiff relating to the validity  of the  Notification  dated  August  22,  1955 declaring the  area  in  which  the  sugar  factory  of  the plaintiff is  situated as a town area. The said Notification reads as follows:-                                            22nd August, 1955      No.  1853A-IX   86  T-51-In   exercise  of  the  powers      conferred by clause (a) of sub-section (1) of section 3      of the  U.P. Town  Area Act,  1914 (U.P.  Act No. II of      1914), the  Governor of  Uttar Pradesh  is  pleased  to      declare the  town of Tulsipur in Gonda district to be a      town area  for the  purpose of  the said  Act and under      clause (b)  of sub-section (1) of section 3 of the said      Act to define the limits of the said town area as shown      in the schedule hereto.   SCHEDULE BOUNDARIES OF TULSIPUR TOWN AREA DISTRICT GONDA           North: Janakpur forest road crossing at Nakti Nala      to station road upto Public Works Department inspection      house railway crossing.           West:  From  the  terminating  point  of  Northern      Boundary of  Public Works  Department Inspection  House      railway crossing  towards south  upto plot  No. 223  of      village Tulsipur on Tulsipur Chaudhari Dih Road.           South: From  plot No.  2418 of village Tulsipur to      the 3rd furlong pillar of 18th mile on Balrampur Road  and therefrom  upto plot No. 359 on Tulsipur      Chaudharidih pucca  Road and from there to plot No. 223      of village Tulsipur. 1117           East:  From  the  terminating  point  of  southern      Boundary at  plot No.  2418 towards  north parallel  to      Nakti Nala  upto the  point where  Pachperwa Road meets      and therefrom  upto  Sugar  Factory  railway  crossing,      Sugar Factory  railway line  to the eastern side of the      Sugar  Factory   upto  the  terminating  point  of  the      Northern Boundary at Nakti Nala." Section 3 of the Act reads: "3. Declaration and definition of town areas:-      (1)  The State  Government may,  by notification in the           Official Gazette-      (a)  declare  any   town,  village,  suburb,  bazar  or           inhabited placed to be a town area for the purpose           of this  Act, and  may unite,  for the  purpose of           declaring the area constituted by such union to be           a town  area, the  whole or  a  portion  of  town,           village, suburb, bazar or inhabited place with the           whole or  a portion  of any  other town,  village,           suburb, bazar or inhabited place;      (b)  define the  limits of  any town  area for the like           purposes;      (c)  include or  exclude any  area in  or from any town           area so declared or defined; and      (d)  at any  time cancel  any notification  under  this           section;           Provided that an agricultural village shall not be      declared, or included within the limits of a town area.           (2) The  decision of the State Government that any      inhabited area  is not  an agricultural  village within      the meaning  of the  proviso to sub-section (1) of this      section  shall   be  final   and  conclusive   and  the      publication in  the Official  Gazette of a notification      declaring such  area to  be a  town area  or within the      limits of a town area shall be conclusive proof of such      decision."

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    The Act  does not  provide that  the  State  Government should give  previous publicity  to its  proposal to declare any area  as a  town area  and should  make such declaration after  taking   into  consideration  any  representation  or objection filed in that behalf by the members of the public. It is not in dispute that no such previous 1118 publication was  made in the instant case. The contention of the plaintiff  is that  even though  the  statute  does  not expressly   require    such   previous    publication    and consideration of  representations and objections made to the proposal to  declare  any  area  as  a  town  area  since  a declaration of  any area  as a  town area  involves  certain civil consequences  such as the obligations arising from the implementation of the provisions of the Act in that area, we should hold  that the  exercise of  the power  of the  State Government  under   section  3   of  the  Act  by  necessary implication imposes a duty on the State Government to follow the principles  of natural justice i.e. to give publicity to its proposal  to declare  any area  as a  town area  and  to decide the  question whether any declaration under section 3 of  the  Act  should  be  made  or  not  after  taking  into consideration the representations or objections submitted by the members  of the  public in  that regard  and failure  to comply with  such procedure would invalidate any declaration made under  section 3.  The above contention is based on the assumption that  the duty imposed on the State Government is in the  nature of an administrative power in the exercise of which the  State Government  should follow the principles of natural justice.      The  solution   to  the   question  raised   before  us principally depends  upon the nature of the function that is performed by  the State  Government under  section 3  of the Act.  If   that  function   is  judicial  or  quasi-judicial involving adjudication of the rights of any person resulting in civil  consequences, it  no doubt  becomes  necessary  to follow the  maxim audi  alteram partem (hear the other side) before taking  a decision.  It is also true that in order to establish that  a duty  to act  judicially  applies  to  the performance of  a  particular  function,  it  is  no  longer necessary to  show that  the function  is analytically  of a judicial character  or involves  the determination  of a lis inter partes; though a presumption that natural justice must be observed  will arise  more  readily  where  there  is  an express duty  to decide  only after  conducting a hearing or inquiry  or   where  the   decision  is  one  entailing  the determination of  disputed questions  of law and fact. Prima facie, moreover,  a duty to act judicially will arise in the exercise of a power to deprive a person of his livelihood or of  his   legal  status  where  the  status  is  not  merely terminable at pleasure, or to deprive a person of liberty or property  rights   or   another   legitimate   interest   or expectation, or  to impose  a penalty  on  him;  though  the conferment of  a wide discretionary power exercisable in the public interest  may be  indicative of  the  absence  of  an obligation to act judicially. Where a discretionary power to encroach upon individual rights is 1119 exercised, the  factors  pointing  to  whether  it  must  be exercised judicially  include the nature of the interests to be affected,  the circumstances  in which the power falls to be exercised  and the  nature  of  the  sanctions,  if  any, involved. Exceptionally,  a duty to act judicially may arise in the  course of exercising a function not culminating in a binding decision,  if the  wording of the grant of powers or

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the context  indicates that  a  fair  hearing  ought  to  be extended to  persons likely  to be prejudicially affected by an investigation  or recommendation’.  (Halsbury’s  Laws  of England, Vo1. I, Fourth Edition, Para 65 at p. 77).      A. K.  Kraipak &  Ors. etc.  v. Union  of India & Ors., Mohinder  Singh   Gill  &   Anr.  v.   The  Chief   Election Commissioner, New Delhi & Ors. and Maneka Gandhi v. Union of India which  were decided  in the light of the ever widening and expanding horizons of natural justice also lay down that it is  only where  an administrative  decision  affects  the rights of  persons, it  becomes the  duty of  the  authority concerned to  give notice  of the  proposed  action  to  the person to  be affected and to take a decision after giving a fair  opportunity  to  the  person  concerned  to  make  his representation in  that regard.  The decision  in Schmidt v. Secretary of  State for  Home Affairs  which was followed by this Court  in Maneka  Gandhi’s case  (supra) summarises the above principle  as follows:  ’Where a  public  officer  has power to  deprive a  person of  his liberty or his property, the general  principle is that it has not to be done without his being  given an opportunity of being heard and of making representations on  his own  behalf’. In all these cases one significant common  factor is that the administrative action is directed  against a  person. None  of them, however, is a case where the question whether in the absence of an express provision requiring  it to  do so, an authority which has to exercise a legislative function should follow the principles of natural  justice before  discharging such  function arose for consideration.      We are  concerned in the present case with the power of the State  Government to  make a  declaration constituting a geographical area  into a  town area  under section 3 of the Act which does not require the State Government to make such declaration after giving notice of its intention so to do to the members of the public and inviting their representations regarding such action. The power of the State 1120 Government to  make a declaration under section 3 of the Act is legislative  in character  because the application of the rest of  the provisions  of the Act to the geographical area which is  declared as  a town  area is  dependent upon  such declaration. Section  3 of  the Act  is in  the nature  of a conditional  legislation.   Dealing  with   the  nature   of functions of  a non-judicial authority, Prof. S. A. De Smith in Judicial  Review of Administrative Action (Third Edition) observes at page 163:-           "However,  the   analytical  classification  of  a      function may  be a  conclusive factor  in excluding the      operation of  the  audi  alteram  partem  rule.  It  is      generally assumed  that in  English law the making of a      subordinate legislative instrument need not be preceded      by  notice   or  hearing   unless  the  parent  Act  so      provides".      In Bates  v. Lord Hailsham of St. Marylebone & Ors. the facts were these: In 1964, the British Legal Association was formed. Out of about 26,000 practising solicitors some 2,900 were  members   of  the  association.  The  Lord  Chancellor announced on  May, 1,  1972, that  the scale  of fees  under Schedule I  to the Solicitors’ Remuneration Order, 1883 were proposed to  be abolished  and  that  for  all  conveyancing transactions the system of quantum meruit was to be applied. On June  6, pursuant to section 56 (3) of the Solicitors Act 1957, the Law Society was sent by the committee set up under section 56  (1) a  draft of  the order  proposed to  be made under section  56 (2).  The draft order was published in The

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Law Society’s  Gazette on  June 21.  The association set out two circulars about the proposed order, the first at the end of May, to all solicitors, and the second on July 17, making a series  of accusations against the Lord Chancellor and the Law Society.  On  July  11,  the  association  sent  printed submissions to  the statutory committee, requesting that the order should  not be  approved at this juncture and that the Lord Chancellor  should seek  further consultations with the profession and  professional organisations.  On July 14, the association wrote to each member of the committee asking for further time and a deferment of the decision for two months. The Lord  Chancellor’s reply  dated July 18, was that he saw no reason  for postponing the meeting or for refraining from making the order in such terms as the committee approved. On July 18, the plaintiff as a member of the national executive committee of  the association,  took out  a writ against all members of  the statutory  committee, seeking  a declaration and an  injunction,  and  on  July  19,  at  2  P.M.  having previously 1121 notified the  Treasury Solicitor  of the intention, he moved the court  ex parte,  seeking to restrain the committee from holding the  meeting which  was to  be held  at 4.30 P.M. on that day.  The motion  was dismissed  by Megarry,  J. and we feel rightly with the following observations:           "In the  present case,  the committee  in question      has an  entirely different  function: It is legislative      rather than  administrative or  executive. The function      of the  committee is  to  make  or  refuse  to  make  a      legislative  instrument  under  delegated  powers.  The      order, when  made, will  lay down  the remuneration for      solicitors generally;  and the  terms of the order will      have to  be considered  and construed  and  applied  in      numberless cases  in the  future. Let me accept that in      the sphere of the so-called quasi-judicial the rules of      natural justice  run, and that in the administrative or      executive field  there is  a general  duty of fairness.      Nevertheless, these considerations do not seem to me to      affect the  process of  legislation, whether primary or      delegated.  Many   of  those   affected  by   delegated      legislation, and effected very substantially, are never      consulted in  the process of enacting that legislation,      and yet  they have  no remedy.  Of course  the informal      consultation   of    representative   bodies   by   the      legislative authority  is a commonplace, but although a      few statutes  have specifically  provided for a general      process of  publishing draft  delegated legislation and      considering objections  (see for example, the Factories      Act 1961,  Schedule 4),  I do  not know  of any implied      right to  be  consulted  or  make  objections,  or  any      principle  upon   which  the   courts  may  enjoin  the      legislative process  at the  suit of  those who contend      that   insufficient    time   for    consultation   and      consideration has  been given.  I accept  that the fact      that the  order will  take  the  form  of  a  statutory      instrument does  not per se make it immune from attact,      whether  by   injunction  or  otherwise;  but  what  is      important is  not its  form but  its nature,  which  is      plainly legislative".      We are,  therefore, of  the view  that the  maxim ’audi alteram partem’  does not  become applicable  to the case by necessary implication.      The second limb of the argument in support of the above contention is  that the  declaration made under section 3 of the Act  being in  the nature of subordinate legislation, it

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was the duty of the State 1122 Government to follow the same procedure which was applicable to the  promulgation of  rules under  section 39 of the Act. Our attention  was drawn  in this  connection to sub-section (3) of  section 39  of the Act which provided that the power to make  rules under  the said  section was  subject to  the condition  of   the  rules   being   made   after   previous publication. We  are of  the view that it is not possible to equate a  declaration to  be made under section 3 of the Act with rules made under section 39. Sub-section (3) of section 39 of the Act does not in terms apply to a declaration to be made under  section 3  of the  Act. The  contention that the declaration to  be made under section 3 of the Act is in the nature of  a subordinate legislation is also not tenable. We may refer  at this  stage to  the decision  of the  Judicial Committee of  the Privy  Council  in  The  Queen  v.  Burah. Section 9  of Act No. XXII of 1869 of the Indian Legislature which camp  up for consideration in that case conferred upon the Lieutenant  Governor of  Bengal the  power to  determine whether that  Act or  any part  of it should be applied to a certain area within his jurisdiction. It read as under:-           "9. The  said Lieutenant-Governor may from time to      time, by  notification in  the Calcutta Gazette, extend      mutatis mutandis all or any of the provisions contained      in the other sections of this Act to the Jaintia Hills,      the Naga  Hills, and to such portion of the Khasi Hills      as for the time being forms part of British India.      Every such notification shall specify the boundaries of the territories to which it applies."      Repelling the  contention urged against the validity of the aforesaid  section 9, Lord Selborne observed at page 193 thus:           "Legislation  which  does  not  directly  fix  the      period for  its own commencement, but leaves that to be      done by  an external  authority, may with quite as much      reason be  called incomplete,  as that  which does  not      itself immediately determine the whole area to which it      is to  be applied,  but leaves  this to  be done by the      same external authority. If it is an act of legislation      on the  part of  the external  authority so  trusted to      enlarge  the  area  within  which  a  law  actually  in      operation is to be applied, it would seem a fortiori to      be an  act of  legislation to  bring the law originally      into   operation   by   fixing   the   time   for   its      commencement". 1123      Proceeding further,  the learned  Lord observed at page 195:           Their Lordships  think that  it is  a  fallacy  to      speak of the powers thus conferred upon the Lieutenant-      Governor (large  as they  undoubtedly are)  as if, when      they were  exercised, the  efficacy of  the  acts  done      under them  would  be  due  to  any  other  legislative      authority than that of the Governor-General in Council.      Their whole  operation is,  directly  and  immediately,      under and  by virtue of this Act (XXII of 1869) itself.      The proper Legislature has exercised its judgment as to      place, person,  laws, powers;  and the  result of  that      judgment has  been to legislate conditionally as to all      these things. The conditions having been fulfilled, the      legislation is  now absolute.  Where plenary  powers of      legislation exist as to particular subjects, whether in      an imperial  or in  a provincial  legislature, they may      (in  their  Lordships’  judgment)  be  well  exercised,

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    either  absolutely   or   conditionally.   Legislation,      conditional on  the use of particular powers, or on the      exercise of  a limited  discretion,  entrusted  by  the      Legislature to persons in whom it places confidence, is      no uncommon  thing; and,  in many circumstances, it may      be highly  convenient. The British Statute Book abounds      with examples of it; and it cannot be supposed that the      Imperial Parliament  did  not,  when  constituting  the      Indian   Legislature,    contemplate   this   kind   of      conditional legislation  as within  the  scope  of  the      legislative  powers   which  it   from  time   to  time      conferred".      Following the  decision in  The Queen  v. Burah (supra) the High  Court of  Australia held  in Haxter v. Ah Way that sub-section (g) of section 52 of the Customs Act, 1901 which provided  that  all  goods  the  importation  of  which  was prohibited  by   a  proclamation  should  be  considered  as prohibited imports was not a delegation of legislative power but  conditional   legislation  and  was  within  the  power conferred on  Parliament by  sub-sections (i)  and  (ii)  of section 51 of the Australian Constitution.      The   essential    distinction   between    conditional legislation and delegated legislation was considered for the first time  by this Court in In re The Delhi laws Act, 1912. After  considering  the  decision  in  The  Queen  v.  Burah (supra), Mukherjea, J. observed at page 980:      "The  same   principle  was  applied  by  the  Judicial      Committee in  King v.  Benoari Lal Sharma (72 I.A. 57).      In 1124      that case,  the validity  of an  emergency ordinance by      the Governor-General of India was Challenged inter alia      on the  ground that  it  provided  for  setting  up  of      special  criminal   courts  for   particular  kinds  of      offences, but  the actual  setting up of the courts was      left  to   the  Provincial   Governments   which   were      authorised to  set them  up at  such time  and place as      they considered  proper. The  Judicial  Committee  held      that "this  is not  delegated legislation at all. It is      merely an example of the not uncommon legislative power      by which  the local  application of the provisions of a      statute is  determined  by  the  judgment  of  a  local      administrative body as to its necessity.           Thus, conditional  legislation has  all along been      treated in  judicial pronouncements not to be a species      of delegated  legislation at  all.  It  comes  under  a      separate category, and, if in a particular case all the      elements  of   a  conditional  legislation  exist,  the      question does  not arise  as to  whether in leaving the      task  of   determining  the  condition  to  an  outside      authority, the  legislature acted  beyond the  scope of      its powers."      In Basant  Kumar Sarkar  & Ors.  v. Eagle Rolling Mills Ltd. & Ors. this Court was required to consider the question whether section  1(3) of the Employees’ State Insurance Act, 1948  was   valid.  One  of  the  conditions  urged  by  the appellants in that case was that the said provision suffered from the vice of excessive delegation on the ground that the power  given   to  the   Central  Government  to  apply  the provisions of  that Act  by notification,  conferred on  the Central Government  absolute  discretion,  the  exercise  of which was  not guided  by any legislative provision and was, therefore, invalid.  Gajendragadkar, C.J. rejected the above contention with the following observations:-      "We are  not impressed  by this argument. Section 1 (3)

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    is really  not an illustration of delegated legislation      at all;  it  is  what  can  be  properly  described  as      conditional legislation. The Act has prescribed a self-      contained code  in  regard  to  the  insurance  of  the      employees covered  by  it;  several  remedial  measures      which the  Legislature thought  it necessary to enforce      in regard  to such workmen have been specifically dealt      with and appropriate provisions have been made to carry      out the policy of the Act as laid down 1125      in its  relevant sections.  Section  3(1)  of  the  Act      purports  to   authorise  the   Central  Government  to      establish a  Corporation for  the administration of the      scheme of Employees’ State Insurance by a notification.      In other  words, when the notification should be issued      and in  respect of  what factories it should be issued,      has  been   left  to  the  discretion  of  the  Central      Government and  that is  precisely what is usually done      by conditional  legislation. What  Lord  Selborne  said      about the  powers conferred  on the Lieutenant-Governor      by virtue  of the relevant provisions of Act 22 of 1869      in Queen  v. Burah  (5 I.A. 178 at p. 195), can be said      with equal  justification about the powers conferred on      the Central Government by s. 1 (3)."      Following the decision in Baxter v. Ah Way (supra) this Court in  Bangalore Woollen, Cotton and Silk Mills Co. Ltd., Bangalore v. The Corporation of the City of Bangalore by its Commissioner, Bangalore  City upheld the validity of section 97(e) of  the City  of Bangalore  Municipal Corporation Act, 1949 by which the Bangalore Municipality had been authorised by the State Legislature to levy certain taxes. In the course of the said decision, Kapur, J. observed thus:           "In the  present case,  the Legislature  has  laid      down the  powers of  the Municipality  to  tax  various      goods. It  has enumerated  certain articles and animals      and Clause  VIII read  with s,  97(e) of  the  Act  has      authorised the  Municipality to  impose  tax  on  other      articles and goods. This power is more in the nature of      conditional delegation  as was held in Baxter v. Ah Way      [1909] 8  C.L.R. 626  where it  was held  that under s.      52(g) of  the (Australian)  Customs Act,  1901, a power      given to  prohibit by  proclamation the  importation of      certain articles  was not  a delegation  of legislative      power   but   conditional   legislation   because   the      prohibition of  importation was  a legislative  act  of      Parliament itself and the effect of sub-s. (g) of s. 52      was only to confer upon the Governor-General in Council      the discretion  to determine  to which  class of  goods      other than  those specified  in the  section and  under      what conditions  the prohibition should apply. All that      the legislature has done in the present case is that it      has specified certain articles on which octroi duty can      be imposed and it has also 1126      given to  the Municipal  Corporation the  discretion to      determine on what other goods and under what conditions      the tax should be levied."      We are,  therefore, of  the view  that  a  notification issued under  section 3  of the  Act which has the effect of making the  Act applicable  to a geographical area is in the nature of  a conditional  legislation and  that it cannot be characterised as a piece of subordinate legislation. In view of the  foregoing,  we  hold  that  the  contention  of  the plaintiff that  the declaration made by the State Government under section  3 of  the Act declaring the area in which the

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sugar factory  of the plaintiff is situated as a part of the Tulsipur town area is invalid is not tenable.      The other  submission made  in this connection that the area in  which the factory of the plaintiff was situated was a part  of  an  agricultural  village  which  could  not  be included within the limits of a town area committee has also got to  be rejected  in view of sub-section (2) of section 3 of the  Act which  provides that  the decision  of the State Government that  any inhabited  area is  not an agricultural village within the meaning of the proviso to sub-section (1) of  section   3  shall  be  final  and  conclusive  and  the publication  in  the  Official  Gazette  of  a  notification declaring such  area to  be a town area or within the limits of a  town area  shall be conclusive proof of such decision, since it is not disputed that the notification had been duly published in the Official Gazette.      The next  question  relates  to  the  validity  of  the notification dated  December 15,  1959 by  which octroi  was sought to  be levied by the Town Area Committee of Tulsipur. There is  no dispute  that the  procedure prescribed for the imposition of  octroi was  followed in  the instant  case. A draft of  the octroi rules containing the schedule of octroi rates which were proposed to be levied on different kinds of goods was  published inviting  representations and objection to the  proposed levy  and that  a final  notification dated December 15,  1959 was  published in the Official Gazette as required by  the Act.  Subsection (4)  of section 15B of the Act provides  that the  notification so  published shall  be conclusive proof that the tax has been imposed in accordance with the  provisions of  the Act.  What is,  however, argued before us  is that  the Notification dated December 15, 1959 which did  not contain  the second  schedule specifying  the octroi limits  could not  be read  as levying  octroi as the omission to specify the octroi limits was not curable in the circumstances  of   the  case   and  that   the   subsequent notification issued on April 14, 1960 could not cure 1127 the said  defect. In  order to appreciate the contention, it is  necessary   to  set   out  the  relevant  parts  of  the Notification dated December 15, 1959:                                            December 15, 1959           No.  540/XXIII-102  (58-59)-7-In  continuation  of      notification No.  190/XXIII-102 (58-59)-5 dated October      28, 1959,  and in  exercise of  the powers conferred by      sub-section (2)  of section  39 of  the U.P.  Town Area      Act, 1914  (U.P. Act No. II of 1914), the Commissioner,      Faizabad Division,  is pleased  to make  the  following      rules for  the assessment  and collection  of octroi in      the Town  Area, Tulsipur,  District Gonda,  after their      previous publication  in the  aforesaid notification as      required by  sub-section (3)  of section 39 of the said      Act.                            Rules           1. Octroi  shall be  levied according to the rates      and description  given  in  Schedule  I  on  goods  and      animals brought  within the  octroi limits of Town Area      Tulsipur  (hereinafter   called  the   town  area)   as      specified in  Schedule II  for consumption, use or sale      therein.           2. No  person shall bring within the limits of the      Town Area any laden vehicles or laden animal in respect      of which octroi is leviable under these rules until the      octroi due  in respect of the commodities has been paid      to such  persons (hereinafter called the Moharrirs) and      at  such   barriers  as   the   Town   Area   Committee

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    (hereinafter called  the Committee)  may  appoint  from      time to time.           3. No laden coolie from whom octroi is leviable in      respect of  commodities under  his charge,  shall enter      the limits  of the  Town Area  until he  has  paid  the      octroi for such commodities in the manner aforesaid.      ......          ......                 ......      Schedule of Octroi rates in Town Area, Tulsipur ----------------------------------------------------------- S. No.       Name of goods        Rates              Remarks ------------------------------------------------------------ ...          ......                ..."      The  opening  part  of  the  above  notification  dated December 15,  1959 clearly  states that  the rules mentioned therein had  been made  for the assessment and collection of octroi in  the Town  Area, Tulsipur,  District  Gonda  after their previous publication. The rates at 1128 which the  octroi was  leviable on different commodities are stated in the schedule. After inviting our attention to Rule 1 of  the Rules  which provides  that octroi shall be levied according to  the rates  and description  given in the first schedule on  goods and  animals brought  within  the  octroi limits of  the Town  Area, Tulsipur  (hereinafter called the town  area)   as  specified   in  the  second  schedule  for consumption, use  or sale  therein, learned  counsel for the plaintiff contends  that Rule 1 postulates the incorporation in the notification of the second schedule containing octroi limits of  the Town  Area of Tulsipur and by the omission of the  second   schedule  the   levy  of   octroi  has  become ineffective. It is argued that the expression ’octroi limits of the  town area’ should be construed as different from the expression ’town  area’ appearing in the opening part of the Notification dated  December 15, 1959 and hence the omission to set  out the  octroi limits  in the  second schedule  was fatal to  the Notification. It is further contended that the amendment of the above notification made by the notification dated April  14, 1960  also could  not validate  the levy of octroi by  the notification  dated December  15, 1959 as the said amending  notification had not been made after previous publication. It  is true  that Rule  1 refers  to the second schedule in  which the  octroi  limits  of  town  area  were proposed to  be set  out but  we are  of opinion  that  such omission is not fatal to the notification dated December 15, 1959. It  is not  disputed that  the  opening  part  of  the notification dated  October 28, 1959 containing the draft of the octroi  rules also  stated that  it was proposed to make provision for the assessment and collection of octroi in the Town Area,  Tulsipur. In that notification also there was no specific reference  to the octroi limits as such. The octroi being a  tax on  the entry  of goods  into a  local area for consumption, use or sale therein, it cannot be said that the members of  the public  who were  interested in opposing the levy of  octroi by  way of making any representation in that behalf were  misled as  to the  local area  in which  octroi would be  levied. On  a fair  reading of Rule 1 we feel that the authority  which promulgated  the rules only intended to set out  in the  second schedule the limits of the Town Area which had  already been  published in the notification dated August 22,  1955 under  section 3  of the  Act declaring the geographical area  situated within  the boundaries  set  out therein as  the Town  Area of  Tulsipur. By the notification dated April  14, 1960,  the notification  dated December 15, 1959 was  amended by  incorporation of  the second  schedule with the  very same boundaries of the Town Area found in the

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notification dated  August 22,  1955. Since the intention of the authority  imposing octroi  in the Town Area of Tulsipur is made  explicit in  the opening  part of  the notification dated December 15 1129 1959, we  do not  think that  the omission  to set  out  the boundaries of  Tulsipur Town  in that  notification can make the levy of octroi ineffective as there could be no room for any doubt  about the local area within whose limits the said impost would  be effective.  The declaration  made on August 22, 1955  under section  3 of  the Act  specifies  the  said limits. In  the circumstances,  it has  to be  held that the notification dated  December 15, 1959 was neither incomplete nor ineffective.  The omission  to  incorporate  the  second schedule was  only  an  inconsequential  mistake  which  was rectified by  the subsequent  notification dated  April  14, 1960. We  do not,  therefore, find  any  substance  in  this contention also.      For the  foregoing reasons, we do not find any error in the judgment  of the  High Court.  In the result, the appeal fails and  is hereby  dismissed but  in the circumstances of the case without any order as to costs. N.K.A.                                     Appeal dismissed. 1130