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PETITIONER: RASHID AHMED

       Vs.

RESPONDENT: THE MUNICIPAL BOARD, KAIRANA.THE UNION OF INDIA and THE STAT

DATE OF JUDGMENT: 19/05/1950

BENCH: DAS, SUDHI RANJAN BENCH: DAS, SUDHI RANJAN KANIA, HIRALAL J. (CJ) FAZAL ALI, SAIYID SASTRI, M. PATANJALI MAHAJAN, MEHR CHAND MUKHERJEA, B.K.

CITATION:  1950 AIR  163            1950 SCR  566  CITATOR INFO :  D          1952 SC 115  (4)  RF         1954 SC 220  (9)  RF         1954 SC 630  (3)  R          1957 SC 882  (6)  R          1958 SC 956  (26)  R          1959 SC 725  (8,11)  R          1960 SC 994  (13)  RF         1961 SC1506  (9)  R          1962 SC1621  (75,108)  R          1969 SC 556  (3)

ACT:     Constitution of India, Arts. 19 (1), 19 (6),  32--Funda- mental  right to carry on trade--Reasonableness of  restric- tions   imposed-U.P.  Municipalities  Act,  1916,   s.   241 (2)(a)--Municipal  byelaw prohibiting carrying on  wholesale trade  without  permission--Absence      of  Provision   for issuing  license to old traders--Provision permitting  Grant of monopoly--Legality of byelaw.

HEADNOTE:     Byelaw  No.2 of the byelaws of a municipal board,  which came into force on the 1st January, 1950, provided that  "no person shall establish any new market or place for wholesale transactions  without obtaining the previous  permission  of the  board, and no person shall sell or expose for sale  any vegetable,        fruit, etc. at any place other  than  that fixed  by  the board for the purpose "; and  bye-law  No.  4 permitted  the  grant of a monopoly     to a  contractor  to deal  in  wholesale  transactions at the place  fixed  as  a market.  In anticipation of these byelaws the monopoly right to  do wholesale business in vegetable for three  years  was auctioned  by  the municipal board and granted to the  high- est  bidder And A place was also fixed as the  market  where such  business could be carried on.  The petitioner who  had been  carrying  on  wholesale business in  vegetables  at  a rented shop within the municipality for two years before the byelaws  came into force applied for a license to  carry  on

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his business at his shop but this was rejected on the ground that  there was no provision in the byelaws authorising  the grant of any such license, and he was prosecuted for contra- vention  of  the byelaws. He applied under Art.  32  of  the Constitution  for the enforcements of his fundamental  right as  a citizen to carry on his business which was  guaranteed by Art. 19 (1) of the Constitution.    Held  (i)  that  the prohibition in  byelaw  No.2  became absolute  in the absence of provision authorising the  issue of  a  license, and, inasmuch as the  municipal  board  had, further,  put it out of its power to grant a license to  the petitioner by granting a monopoly, the restrictions  imposed were not reasonable within 567 the  meaning  of Art. 19 (6) of the  Constitution,  and  the byelaws  were accordingly void and  the prosecution  of  the petitioner illegal, (ii) that the fact that the Constitution came  into force only after the byelaws had come into  force did  not  affect  the petitioners’s right to  carry  on  his business.     Held also, that an appeal under section 318 of the U. P. Municipalities Act was not in the circumstances an  adequate legal  remedy  the existence of which would  disentitle  the petitioner from maintaining this application.

JUDGMENT: ORIGINAL JURISDICTION‘: Petition No. X of 1950.     This  was  an application under article 32  (1)  of  the Constitution  for the enforcement of the applicant’s  funda- mental  right to carry on his business which was  guaranteed by  article  19 (1) of the Constitution.  The facts  of  the case appear in the judgment. Nur-ud-din, for the petitioner. Radhelal Agarwala, for the opposite party.     M.C. Setalvad, Attorney-General for India, (S. M. Sikri, with him), for the Union of India.     Pearylal  Banerji, Advocate-General of U.P.  (Shri  Ram, with him), for the State of Uttar Pradesh.     1950.  May 19.  The judgment of the Court was  delivered by DAS J.--I am reading the judgment of the Court.     This is an application under article 32 of the Constitu- tion  of India made by Rashid Ahmed for enforcement  of  his fundamental right to carry on his business which is said  to have been completely stopped by the respondent, the  Munici- pal Board of Kairana. The facts shortly are as follows:     The petitioner is an Aratia (commission agent)  carrying on wholesale business in vegetables and fruits at Kairana in the District of Muzaffarnagar in the 568 State of Uttar Pradesh.  He has been carrying on this  busi- ness  for the last two years at a rented shop in Bazar  Jama Masjid in the town of Kairana.  Until recently there were no bye-laws  of  the respondent Board regulating the  sale   of vegetables and fruit within the limits of the  municipality. In  March,  1949.  the respondent  Board  published  certain proposed bye, laws made under section 298 of the U.P. Munic- ipalities  Act,  1916.  These bye-laws were  passed  by  the respondent  Board on the 19th April, 1949.  After  confirma- tion by the  Commissioner these bye-laws came into operation on and from 1st January, 1950. In anticipation of these  new bye-laws coming into effect the respondent Board on the 21st May, 1949, auctioned" the contract for wholesale of  vegeta-

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bles,  presumably meaning thereby the monopoly right  to  do wholesale business in vegetables.  The contract was given to one Habib Ahmad, who was the highest bidder for three  years at and for Rs, 72,750 payable in equal quarterly instalments in  advance.  On the 31st December, 1949,  respondent  Board notified  a  place near Police Post Imam as the  market  for wholesale  purchase and sale of vegetables and fruits.   The petitioner  applied for a license to carry on his  wholesale Aratia business at his shop.  On or about the 22nd December, 1949,  the respondent Board by resolution No.  188  rejected the petitioner’s application. This decision was communicated to  the petitioner on the 9th February, 1950. The  order  of the  Chairman  of the respondent Board was in  these  terms: "According to resolution No. 188 dated 22-12-49 the applica- tion  of  Mr. Rashid Ahmed is rejected and  he  be  informed accordingly."  No  reason  was assigned  by  the  respondent Board’s  resolution  for the rejection of  the  petitioner’s application.   We are now informed by the  learned  Advocate for  the respondent Board that the application was  rejected as  there. was no bye-law for entertaining such  application or  granting such license as was prayed for. The  fact  that the  respondent Board had already auctioned the contract  to Habib Ahmad might conceivably have had some bearing on  this refusal to grant a license. to the petitioner. In the  mean- time on the 28th 569 January, 1950, a notice was served on the petitioner in  the following terms:     "You  are  hereby  informed that  the  Municipal  Board, Kairana, have given the contract of wholesale   purchase and sale  of the vegetables, which is in force from the 1st  day of  January, 1950.  It has been repeatedly  promulgated,  in the  city by the beat of drum, through a  Khakrob  (sweeper) that  excepting the contractor of vegetables  the  Municipal Board, Kairana, nobody shall deal in wholesale purchase  and sale of vegetables at a place other than the one approved by the  Municipal Board aforesaid (i.e. the place  near  Police Post  Imam).  As against this, you in the first  place  kept selling  vegetables  by wholesale, at the  house  near  Jama Masjid  otherwise  known  as  Qaziwala,  despite  occasional verbal  warnings  requiring you to desist  therefrom,  which were  conveyed  through an employee of the Board.   On  your failure  to comply, you were warned by a notice in  writing, dated the 3rd January, 1950.  That notice was duly served on you.   But still you paid no heed. Accordingly  a  complaint was lodged against you, under the bye-laws, quoted above, in the Court of Pargana Officer, Tahsil Kairana.  The complaint is still pending.  Now you are selling wholesale by auction, vegetable at another place in Jama Masjid Bazar, which is  a thoroughfare.     Your  above conduct is unlawful and in contravention  of the Municipal Board’s Bye-law 2 pertaining     to  vegetable contract.   Moreover,  highly prejudicial as it  is  to  the interests  of  both the contractor and the  Board,  you  are warned  that after this notice has been served on  you,  you should  cease  to sell any more vegetable in breach  of  the bye-laws above mentioned. Herein fail not."    This notice is rather disingenuous in that while it  sug- gests that everybody can deal in wholesale purchase and sale of  vegetables at the place approved by the Board, i.e.,  at the  place  near Police Post Imam, the fact, as we  are  now told  by the learned Advocate for the respondent  Board,  is entirely contrary, for it is 570 only  the contractor Habib Ahmad who can carry on  wholesale

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business  at that place.  The position, therefore,  is  that the  petitioner cannot do any wholesale business  either  at the appointed market or at his own shop where he had  admit- tedly been doing wholesale. business for two years prior  to the bye-laws coming into force.  In short, the  petitioner’s business has been wholly stopped and he is being  prosecuted for  alleged breach of the bye-laws.  The above  notice  was headed as "Notice under bye-law 2 of the bye-laws pertaining to contract of vegetables."  Bye-law 2 runs thus:     "No  person shall establish any new market or place  for wholesale   transaction without obtaining the previous  per- mission of the Board and no person shall sell or expose  for sale  any  vegetable, fruit, etc., at any place  other  than that fixed by the Board for the purpose."     The   second   part  of  this  bye-law  clearly  contem- plates  that everybody will  be entitled to do  business  at the place fixed by the respondent Board, but as a result  of a  monopoly in favour of the contractor Habib  Ahmad  having been  created, nobody else can do business at that place  as conceded  by the learned Advocate for the respondent  Board. Under the first part of this bye-law no person can establish a  new  market or place for wholesale  transaction   without obtaining   the  permission of the respondent  Board.   This part of the bye-law clearly contemplates that the Board  may permit  the  establishment  of a new  market  for  wholesale dealings  in  vegetables.  The petitioner applied  for  this permission but it was refused.  Bye-law 2 is still in force. If it  requires a license then under section 241 (2)(a)  the respondent  Board cannot refuse such license except  on  the ground  that  the place where the market or shop  is  estab- lished fails to comply with any condition prescribed by,  or under, the Act. It’ is conceded that the  rejection of   the petitioner’s  application was not based on any  such  ground but that it was because there was no bye-law authorising the issue  of  any license. The Constitution by article  19  (1) guarantees 571 to  the Indian citizen the right to carry on trade or  busi- ness  subject  to such reasonable restrictions as  are  men- tioned in clause (6) of that article.  The position,  howev- er, under bye-law 2 is that while it provided that no person shall  establish  a  market for  wholesale  transactions  in vegetables except with the permission of the Board, there is no  bye-law  authorising the respondent Board to  issue  the license.   The nett result is that the prohibition  of  this bye-law,  in  the absence of any provision for  issuing  li- cense, becomes absolute. Further: bye-law 4 contemplates the grant  of  a monopoly to a contractor to deal  in  wholesale transactions  at the place fixed as a market.   Acting  upon that provision, the respondent Board has granted monopoly to Habib  Ahmad  and  has put it out of its power  to  grant  a license to the petitioner to carry on wholesale business  in vegetables either at the fixed market place or at any  other place within the municipal limits of Kairana. This certainly is much more than reasonable restrictions on the  petitioner as are contemplated by clause (6) of article 19.  This being the  position, the bye-laws would be void under  article  13 (1)of  the Constitution. On the other hand, if there  is  no bye-law  requiring the petitioner to take out license,  then there  can be no justification for the respondent  Board  to stop the petitioner’s business or to prosecute him.     Learned  counsel for the respondent Board  faintly  con- tended  that  the’ bye-laws having come into  force  on  1st January,  1950,  i.e.,  before the  Constitution  came  into force,  the petitioner no longer had any right  to  continue

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the  business  and, therefore, his case is not  governed  by article 19 (1) (g).  There is no substance in this  argument for, if it were sound, article 19 (1) (g) would only protect persons  who were carrying on business before the  Constitu- tion came into force.      Learned  Advocate-General  of  Uttar  Pradesh appearing for the intervener drew our attention to section 318 of  the U.P.  Municipalties Act, 1916, and submitted that the  peti- tioner  having adequate remedy by way of appeal, this  Court should  not grant any writ in the nature of the  prerogative writ of mandamus 572 or certiorari.  There can be no question that the  existence of  an  adequate legal remedy is a thing to  be  taken  into consideration  in  the matter of granting , writs,  but  the powers  given to this Court under article 32 are much  wider and are not confined to issuing prerogative writs only.  The respondent  Board having admittedly put it out of its  power to grant a license and having regard to the fact that  there is  no specific bye-law authorising the issue of a  license, we do not consider that the appeal under section 318 to  the local  Government which sanctioned the bye-laws is,  in  the circumstances of this case, an adequate legal remedy.      We  are  satisfied that in this case  the  petitioner’s fundamental rights have been infringed and he is entitled to have  his  grievance redressed.  The proper  order  in  such circumstances would be to direct the respondent Board not to prohibit the petitioner from carrying on the trade of whole- sale  dealer and commission agent of vegetables  and  fruits within the limits of the Municipal Board of Kairana,  except in accordance with the bye-laws as and when framed in future according to law and further to direct the respondent Munic- ipal Board to withdraw the pending prosecution of the  peti- tioner and we order accordingly.  The respondents to pay the costs of the petitioner. Petition allowed.  Agent for the petitioner: Naunitlal.  Agent for the opposite party : Tarachand Brijmohanlal.  Agent for the Union of India: P.A. Mehta.  Agent for Uttar Pradesh: Tarachand Brijmohanlal. 573