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Narayan Gopal Karadkar v. Hanumant Ramrao Palkar
Factual and Procedural Background
The appellant (who was the complainant in the Court below) challenged an order of acquittal granted by the learned Judicial Magistrate, First Class, Vadgaon (Mawal), in Criminal Case No. 475 of 1966. The complaint had been filed by Karadkar, an officer of the Lonavala Municipal Borough, on behalf of the Borough Municipality.
The factual basis for the prosecution was that the accused, manager of a canteen run by the Railwaymen's Co-operative Society at Lonavala, had conducted the canteen without obtaining the requisite municipal licence after 1962–63. The Borough Municipality passed a resolution on March 15, 1966, authorising the prosecution, and the complaint was filed on May 13, 1966. The prosecution alleged that conducting the canteen without the necessary licence for the years 1963–64 to 1965–66 constituted an offence punishable under Section 172 read with Section 61(1)(b)(ii) of the Bombay Municipal Boroughs Act, 1925.
At trial the accused's defence was that the canteen was conducted on behalf of a Co-operative Society for the benefit of members only and without any profit motive, and therefore no licence under the Bombay Municipal Boroughs Act was required. The learned Magistrate accepted that defence and acquitted the accused. The Borough Municipality appealed against that acquittal.
Legal Issues Presented
- Whether the definition of "catering establishment" in the Borough Municipality's rules and by-laws includes a co-operative canteen conducted without any motive of earning profits.
- Whether, in light of Section 61(1)(b)(ii) of the Bombay Municipal Boroughs Act and the municipal by-laws framed thereunder, a licence was required for the canteen in question despite its alleged non-profit character.
- Whether the accused committed an offence under Section 172 (specifically Section 172(2)) of the Bombay Municipal Boroughs Act by operating the canteen without obtaining the licence for the years 1963–64 to 1965–66.
Arguments of the Parties
Appellant's Arguments (Borough Municipality — represented by Mr. Chitale)
- The municipal definition of "catering establishment" in the rules and by-laws is wide enough to include every canteen or hotel, including those run without a profit motive.
- The object of the municipal rules and by-laws is to promote and preserve sanitation and public health; when construing such rules the question whether a canteen is run for profit is irrelevant to whether it falls within the regulatory scheme.
- A beneficial construction should be given to the definition of "catering establishment" — preferring an interpretation that promotes the object of the Act (i.e., public health and sanitation).
Accused's Arguments (Defence)
- The canteen was run on behalf of a Co-operative Society for the benefit of members only and without a profit motive; therefore no licence under the Bombay Municipal Boroughs Act was necessary and no offence was committed.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| State of Bombay v. Hospital Mazdoor ((1960) 62 Bom. L.R. 558, S.C.) | Distinction and definitions of "trade" and "business": that 'trade' implies exchange for profit while 'business' is wider and can mean any occupation; supports treating inclusive definitions expansively. | The court relied on this authority to show that "business" need not connote profit-making and to support the view that the municipal inclusive definition of "catering establishment" can extend to non-profit canteens. |
| Logsdon v. Booth [1900] 1 Q.B. 401 and Logsdon v. Trotter [1900] 1 Q.B. 617 | Instances of applying statutory provisions to institutions operated for charitable purposes, demonstrating beneficial construction where the statute's object is to protect health. | The court cited these English decisions as examples where the court applied an enactment intended to secure sanitary conditions to charitable or non-profit institutions; used to support including co-operative/charitable canteens within the municipal regulatory scheme. |
| Gilbert v. Jones [1905] 1 K.B. 691 | Held that whether an institution is carried on for profit is not decisive when determining whether a statutory provision (aimed at safeguarding health) applies; statutory purpose controls. | The court relied on this decision to reinforce that non-profit charitable institutions are not excluded from statutes intended to safeguard public health and sanitation, and thus co-operative canteens fall within "catering establishment." |
Court's Reasoning and Analysis
The court undertook a textual and purposive analysis of the municipal by-laws and the relevant provisions of the Bombay Municipal Boroughs Act. It began by noting that Section 61(1)(b)(ii) authorises municipalities to prescribe conditions and circumstances for licensing places involved in the manufacture, preparation, storage, sale or supply "for the purpose of trade of any article or thing intended for human food or drink." The Borough's by-laws define "catering establishment" as any place used for the business of sale of any article of food or drink for consumption on the premises, and expressly include hotels, eating houses, tea or coffee shops, and certain small food vendors.
The court observed (drawing on the cited Supreme Court authority) that the word "business" is wider than "trade" and need not necessarily carry the connotation of profit-making. Because the municipal definition is inclusive (it first defines a category and then expressly states things it includes), the court held that an inclusive definition should not be read restrictively.
The court then considered the object and scope of the municipal rules and by-laws — namely, to promote and preserve sanitation and public health and to prevent the spread of disease. Given that object, the court found it difficult to exclude canteens run on a no-profit or co-operative basis from the regulatory scope, since cleanliness and public health concerns apply equally regardless of profit motive.
The court further invoked the rule of beneficial construction: where the usual meaning of language falls short of the legislative object, a more extended meaning may be given if reasonably possible. It relied on English decisions (Logsdon and Gilbert) where statutes protecting health were held to apply to charitable or non-profit institutions. By analogy, the court concluded that "catering establishment" should be interpreted to include co-operative canteens.
On that basis, the court found the learned Magistrate erred in concluding that no licence was necessary for a catering establishment conducted without a profit motive. The accused, by failing to obtain the licence for the years 1963–64 to 1965–66, had breached the municipal rules and by-laws and therefore fell within the mischief of Section 172(2) of the Bombay Municipal Boroughs Act.
Holding and Implications
Holding: The appeal is allowed; the order of acquittal is set aside; the accused is convicted under Section 172(2) of the Bombay Municipal Boroughs Act.
Disposition imposed: The accused is sentenced to a fine of Rs. 20 and to one week's simple imprisonment in default of payment.
Implications: The direct consequence of the decision is the reversal of the magistrate's acquittal and the conviction and sentence of the accused for operating a canteen without the required municipal licence for the specified years. The court's reasoning clarifies that an inclusive municipal definition of "catering establishment" and the public-health purpose of the regulatory scheme bring cooperative or non-profit canteens within the licensing requirements. The opinion does not state that it is laying down a broader new precedent beyond applying established principles of statutory interpretation (inclusive definition and beneficial construction) to the facts of this case.
1. The appellant, who was the complainant in the Court below, has filed this appeal with a view to challenge the order of acquittal passed by the learned Judicial Magistrate, First Class, Vadgaon (Mawal), in Criminal Case No. 475 of 1966 on his file.
2. The person by whom the complaint in the Court below was filed was one Karadkar, an officer of the Lonavala Municipal Borough. There is a Railwaymen's Co-operative Society at Lonavala and a canteen was being conducted by that Society within the limits of the Municipal Borough at Lonavala. The accused in the Court below was the Manager of that canteen. Although he had taken out the necessary licence for the purpose of conducting that canteen during the year 1962-63, he continued to conduct the canteen during the following years without applying for and taking out the requisite licence on payment of the requisite fee to the Borough Municipality of Lonavala. The Borough Municipality, therefore, passed a resolution (exh. 6) dated March 15, 1966, sanctioning the prosecution of this accused and in accordance with that resolution, the complaint in the Court below was filed by Mr. Karadkar on May 13, 1966. It was the ease of the prosecution that the accused having conducted the canteen It Lonavala from the year 1963-64 till 1965-66 without the necessary licence had committed an offence punishable under Section 172 read with Section 61(1)(b)(ii) of the Bombay Municipal Boroughs Act, 1925.
3. The defence of the accused was that the canteen in question was being conducted on behalf of a Co-operative Society and the same being conducted for the benefit of the members only without any motive of profit-making, no licence under the Bombay Municipal Boroughs Act was necessary and no offence was committed by him in not taking- out the licence after 1963.
4. That contention of the accused having found favour with the learned Magistrate, the accused came to be acquitted of the charge levelled against him and that acquittal is now being challenged on behalf of the Borough Municipality of Lonavala in this appeal.
5. The argument of Mr. Chitale on behalf of the complainant-appellant was three-fold. In the first place, he contended that the definition of a "catering establishment" appearing in the 'rules and by-laws framed by the Municipality was wide enough to include every canteen or hotel, including a canteen conducted without any motive of earning profits. Secondly, he contended that the object of the rules and by-laws framed by the Borough Municipality was to promote and preserve sanitation and public health and while construing rules and by-laws framed with that object, the question whether a particular canteen was or was not being run with a view to earn profits was altogether irrelevant. Thirdly, he urged that beneficial construction ought to be put on the rule containing the definition of "catering establishment" and that construction must be preferred which would promote the object of the Act. There is, I think, substance in all these contentions of Mr. Chitale.
6. Section 61(1)(b)(ii) provides:
(1) A municipality may from time to time, with the previous sanction of the State Government, make, ...by-laws not inconsistent with this Act-...
(b) prescribing the conditions on or subject to which and the circumstances in which and the areas or localities in respect of which licences may be granted, refused, suspended or withdrawn for the use of any place not belonging to the municipality-...
(ii) for the manufacture, preparation, storing, sale or supply for the purpose of trade of any article or thing intended for human food or drink, whether such food or drink is to be consumed in such place or not;
It is in pursuance of these provisions that the Borough Municipality of Lonavala has framed its rules and by-laws for licensing and regulating the places for use of hotels, eating houses, tea or coffee shops and restaurants within the Municipal Borough and in Part I, which contains definitions, "catering establishment" has been defined as meaning any place used for the business of sale of any article of food or drink for consumption on the premises and including hotel, eating house, tea or coffee shop or restaurant, pan bidi shops and sugarcane juice shop. This definition would clearly show that a catering establishment means any place used for the business of sale of articles of food or drink and as pointed out by the Supreme Court in State of Bombay v. Hospital Mazdoor (1960) 62 Bom. L.R. 558, S.C. (p. 556) :
...'trade' according to Halsbury, in its primary meaning, is 'exchange of goods for goods or goods for money', and in its secondary meaning it is ' any business carried on -with a view to profit whether manual or mercantile, as distinguished from the liberal arts or learned professions and from agriculture '; whereas ' business ' is a wider term not synonymous with trade and means practically ' anything which is an occupation as distinguished from a pleasure'.
7. It would thus be seen that the concept of earning profits is not a necessary appurtenant of the expression "business" and looked at from this point of view, a place used for the business of sale of any article of food or drink does not cease to be so merely because it is not being conducted with a view to earn profits. Anyway, the definition contained in the rules and by-laws of the Borough Municipality is an inclusive definition. After saying that a catering' establishment means any place used for the business of sale of any article of food or drink for consumption, it further goes on to say that it includes a hotel or an eating house, etc. and in the same Supreme Court decision, to which a reference has already been made, it has been pointed out that the words used in an inclusive definition denote extension and cannot be treated as restricted in any sense. Where the Courts are dealing with an inclusive definition it would be inappropriate to put a restrictive interpretation upon terms of wider denotation. Therefore, having' regard to the inclusive definition in this ease, it is clear that the definition of "catering establishment" does mean and include a cooperative canteen conducted without any motive of earning profits.
8. If the object and scope of the rules and by-laws framed by the Borough Municipality are examined, there can be- no difficulty in holding that a catering establishment does include any canteen, whether conducted for the purpose of earning profits or not. If we examine the rules and by-laws, it is clear that the object with which they have been framed is to promote and preserve sanitation and public health and to prevent the spread of disease within the municipal limits and if that was the object, it is difficult to see how canteens conducted on no loss and no profit: basis could be excluded from the definition of a "catering establishment". It is as much necessary to preserve cleanliness ,and public health in commercial establishments as in the establishments conducted by co-operative societies like the one in this case. In this very connection, the following' passage appearing at pages 58 and 59 of Maxwell on the Interpretation of Statutes, 1962 edn., may be quoted with advantage:
It is in the interpretation of general words and phrases that the principle of strictly adapting the meaning to the particular subject-matter with reference to which the words are used finds its most frequent application. However wide in the abstract, they are more or less elastic and admit of restriction or expansion to suit the subject-matter. While expressing truly enough all that the legislature intended, they frequently express more in their literal meaning and natural force ; and it is necessary to give them the meaning which best suits the scope and object of the statute without extending to ground foreign to the intention. It is, therefore, a canon of interpretation that all words, if they be general and not express and precise, are to be restricted to the fitness of the matter. They are to be construed as particular if the intention be particular; that is, they must be understood as used with reference to the subject-matter in the mind of the legislature, and limited to it.
Mr. Chitale is, therefore, clearly right in urging that words and phrases used in the rules and by-laws of the Borough Municipality at Lonavala must be given the meaning which best suits the scope and object of the statute.
9. The matter can be looked at from yet another point of view. Under the rule of beneficial construction it is the duty of the Judge to make such construction of a statute as shall suppress the mischief and advance the remedy. Even where the usual meaning of the language falls short of the whole object of the Legislature, a more extended meaning may be attributed to the words, if they are fairly susceptible of it. A striking instance of beneficial construction is afforded by the three English decisions in Logsdon v. Booth [1900] 1 Q.B. 401, Logsdon v. Trotter [1900] 1 Q.B. 617 and Gilbert v. Jones [1905] 1 K.B. 691. Section 3 of the Common Lodging Houses Act, 1853 provided;
A person shall not keep a common lodgong-house, unless his name as the keeper thereof be entered in the register kept under the Common Lodging Houses Act, 185].
The object of the enactment being to secure for the poor using these houses conditions safeguarding health and preventing the spread of disease, which people better off are supposed to be able to secure for themselves, it was held to apply to a shelter kept for a charitable purpose and not for gain. The contention urged in those cases was that the fact that no payment was made by the inmates of the house prevented it from being a common lodging-house within the meaning of the Common Lodging Houses Act, 1851 and while repelling that contention, it was pointed out in Gilbert v. Jones, that in determining whether any particular house or institution is a common lodging-house, the question whether the house or institution is carried on for profit is not to be taken into consideration; and that being so, there could be no distinction in principle between a charitable institution where a small payment is required from the inmates, possibly for the purpose of keeping a sort of check on the class of people using the place,, but at any rate not as a source of gain to the institution, and one where no payment at all is made.
10. In this case also, therefore, the same beneficial construction must be put on the expression "catering establishment" and if that is done, it is difficult to see how a co-operative canteen can be -excluded from the purview of this definition. In the view I have taken, Mr. Chitale is clearly right in saying that the learned Magistrate was in error in holding that no licence was required for a catering establishment conducted without any motive of earning profits. In not taking out the licence for the years 1963-64 to 1965-66. the accused had clearly committed a breach of the rules and by-laws and, therefore, came within the mischief of Section 172(2) of the Bombay Municipal Boroughs Act, The order of acquittal passed by the learned Magistrate must, therefore, be set aside. The punishment provided in Section 172(2) is a fine not exceeding Rs. 25 and in the present case a fine of Rs. 20 would, I think, meet the requirements of this case.
11. The appeal is accordingly allowed, the order of acquittal is set aside and the accused is convicted under Section 172(2) of the Bombay Municipal Boroughs Act. and sentenced to a fine of Rs. 20 and one week's simple imprisonment in default.
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